In an interview with REsource, TEPP11 manager André Gnanni Nardi explained the rationale behind the transaction:

“The acquisition aligns with the Fund’s value-add strategy, based on three pillars: location, transformation potential, and operational efficiency. We choose assets in resilient locations, capable of weathering economic cycles. At Top Center, we see a clear repositioning opportunity, as we have achieved at Condomínio São Luiz and Edifício Passarelli, improving both quality and rental value. Additionally, we identified room to optimize condominium expenses and operational management, making the asset more competitive and attractive for tenants — directly benefiting our investors in the medium term.”

Nardi also highlighted Avenida Paulista’s resilience as one of Brazil’s most stable corporate markets, combining low vacancy, liquidity, and consistent demand for prime locations:

“Strengthening our presence in this region is strategic for TEPP11. It increases the Fund’s exposure to an axis that endures economic cycles with greater stability. The Top Center also offers key attributes we value: excellent accessibility, a complete service offering, and convenience for users — all of which enhance the property’s attractiveness and tenant retention.”

Regarding the chosen payment structure, Nardi emphasized:

“The installment model, indexed to IPCA, and the earn-out structure were designed to maximize returns in a disciplined manner. This financial framework allows the Fund to capture above-market returns — especially in a high-interest environment — while aligning payments with the Fund’s cash flow reality.”

Finally, he shared Tellus’ expectations for asset appreciation and portfolio performance:

“We expect to achieve a turnaround through active management, a process that has proven effective across other portfolio assets. We see potential to enhance property quality, rental rates, and overall asset value through retrofit and structural improvements, aiming to unlock value and generate superior returns for investors.”