SYN prop e tech SA
BOVESPA:SYNE3
US |
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
|
US |
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
|
US |
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
|
US |
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
|
US |
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
|
US |
American Express Co
NYSE:AXP
|
Financial Services
|
|
US |
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
|
US |
Visa Inc
NYSE:V
|
Technology
|
|
CN |
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
|
US |
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
|
US |
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
|
US |
Coca-Cola Co
NYSE:KO
|
Beverages
|
|
US |
Target Corp
NYSE:TGT
|
Retail
|
|
US |
Walt Disney Co
NYSE:DIS
|
Media
|
|
US |
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
|
US |
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
3.92
11.29
|
Price Target |
|
We'll email you a reminder when the closing price reaches BRL.
Choose the stock you wish to monitor with a price alert.
Johnson & Johnson
NYSE:JNJ
|
US | |
Estee Lauder Companies Inc
NYSE:EL
|
US | |
Exxon Mobil Corp
NYSE:XOM
|
US | |
Church & Dwight Co Inc
NYSE:CHD
|
US | |
Pfizer Inc
NYSE:PFE
|
US | |
American Express Co
NYSE:AXP
|
US | |
Nike Inc
NYSE:NKE
|
US | |
Visa Inc
NYSE:V
|
US | |
Alibaba Group Holding Ltd
NYSE:BABA
|
CN | |
3M Co
NYSE:MMM
|
US | |
JPMorgan Chase & Co
NYSE:JPM
|
US | |
Coca-Cola Co
NYSE:KO
|
US | |
Target Corp
NYSE:TGT
|
US | |
Walt Disney Co
NYSE:DIS
|
US | |
Mueller Industries Inc
NYSE:MLI
|
US | |
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Good afternoon. Ladies and gentlemen, and thank you for standing by. Welcome all to SYN's audio conference to discuss results relative to Q2 2021, and this being the first earnings announcement for the company under its new corporate name. The audio and respective slides are being broadcast over the Internet at the company's RI site, ri.syn.com.br. [Operator Instructions]
Before moving on, we'd like to say that forward-looking statements contained in this conference concern future events and are submitted to risks and uncertainties, which may lead such forward-looking statements not to materialize or be considerably different from those expected. Those forward-looking statements refer to the opinion made on the date they are made, and they're not obliged to update them in light of new information.
Here with us today, we have Mr. Thiago Muramatsu, CEO, CFO and IRO; and Mr. Hector LeitĂŁo, Financial Superintendent.
Please, Mr. Muramatsu, you may carry on.
Well, first of all, good afternoon, everyone, and thank you very much for making time for us today. I know you're all very busy, but thank you. This is the first earnings call for SYN, our new corporate name, and we have adopted a slightly different model of making the announcement. There isn't a video this time.
So kicking off, going straight to Slide #5. We were talking about our new brand. We've been talking about it with investors. Our IR team has been in close contact with the market to talk about this new brand and more than just the name our signature, prop and tech. What does that entail after all?
All that emerged from a desire that we had from the management, from the shareholders to be able to position the company, a company, which already is a benchmark in real estate -- commercial real estate, especially here in Sao Paulo, the main buildings in Faria Lima -- have the most complete portfolio on Faria Lima. They call that and link it with technology because that's something we see as very promising in terms of growth. And what sets us apart, unlike other tech companies, we do have real assets. So the name SYN comes from synergy. So the idea is to create that synergy across people, business and technology much more than simply take our business to the digital realm between best in your business models and related parties for the real estate market.
Now moving on to the next slide, Slide #6, a bit of what happened in the second quarter. Number one, we had our 13th debentures issuance to the tune of BRL 300 million in 2 series, while the first one mature in 3 years, the CDI was 1.70 as free, 1.75 rather; and a second series of BRL 200 million, fourth and fifth year amortization, CDI plus 2.04 was concluded in April of 2021. This is something we've been doing for some time now in trying to maintain the level, not only the leverage level of the company, but also the amortization ladder, all of that in line with our revenue streams. So the amortization line would be as flat as possible. And we've been doing that, extending that and making new issuances with that objective in mind.
Also important accomplishment in the quarter, it will appear on our next slide, our leasing operations, especially leasing the AAA properties. We closed the quarter with 100% of lease on Faria Lima and JK 455 (sic) [ JK 1455 ], a little over 3,000 square meters in the quarter; and JK, 1,000 square meters.
Moving on to Slide #7 to continue in terms of new operations. The Faria Lima Financial Center, we had some leases, the net result was an increase of over 4,000 square meters of lease there; and at the JK Tower, another 1,000 square meters. Right now, they are 100% leased at this quarter. So we have a very positive outlook for the AAA portfolio on Faria Lima.
For AAA Sao Paulo, we are almost full capacity, full occupancy. And we have some more things to come, [ RA ] in 2022. So we do believe that this was a very timely moment to do that.
Another important subsequent event and is quite relevant and has to do with our new brand and with the new positioning we're trying to take on moving forward, the appointment of 3 new independent members to the Board from the previous Board. I'd like now to take the opportunity to thank our Board members who have resigned to make room for these new Board members. They spent so many years at the company. So a big thank you for your support throughout those years. And they were kind enough to provide space for 3 new members.
So in addition to Elie and Leo, they remain on the board. Claudio also remains in the Board, an independent Board member, who is very, very experienced in real estate. So we have the Founder and the CEO of BR Properties that's been around since the foundation in 2016. He chose to be the Chairman of the Board of BR Malls, Jose Carlos MagalhĂŁes, a very experienced individual, very knowledgable in terms of capital allocation. Flavio Pripas, one of the founders and the Head of CUBO Itau Bank's start-up innovation center for some time and now he is one of the partners at Redpoint, a venture capital firm, very much involved with the start-ups and tech companies who are emerging.
And lastly, Kristian Huber, one of the co-founders and CEO for new businesses -- new business executive and used to be the CFO for Loft, a prop tech -- a native prop tech company, one of the most valuable in Brazil. So we are sure that this new team gathered at the Board will contribute to our business in a very significant manner. And of course, we also have very important names to provide support in terms of guidance towards the tech journey.
A little bit about the COVID impact on the next slide, Slide #9. The second wave impact caused a big impact on the business. There are 2 main facts that stand out, that help us contribute to this recovery. The first one is the fact that our portfolio is very much concentrated in Sao Paulo. We have 4 shopping malls in Sao Paulo, in the metropolitan area of the city. Out of the 6 that we manage, 4 are in Sao Paulo. And those 4 have a very good share in terms of sales and leasing when you compare that to malls outside of Sao Paulo.
And secondly -- and that was eventually a factor that sort of hindered the recovery. It was the Cidade de Sao Paulo Shopping Mall. Until February 2020 ranked as 1 of the the 3 largest lease values in Latin America. It still has a very high level of lease and value. But the recovery was hindered because it relies on the office population that works on -- they are just now going back to in-person work and also relies on tourism on the weekend, which is also only now beginning to resume on the weekends.
Now with -- as the vaccination rollout advances, we do believe this will be mitigated and we see a very positive result in same-store sales for Sao Paulo as a whole. When we look at the results from late June and early July, you see promising results in terms of recovery for sales.
And now moving on to Slide #11, we decided to include a couple of observations about ESG, a recurring in topic in our discussions with investors as a whole. And then we do not advertise what we do most of the time in terms of ESG, but we are already working on our sustainability report. And this is a brief summary of some of the initiatives we have around ESG, environment, social and governance.
On the environmental front, we have a LEED certification in most buildings that we manage. Some of the buildings which are not here in Faria Lima are to be included. We have a chart to show the representativeness of the properties where we have close to 90% of the cash that we generate in terms of office lease come from properties that have LEED certification and also malls that have LEED certification.
We also adopt the use of energy from the free market both for malls and properties. We incentivize energy. We do have waste management, sewage treatment in most of our properties and malls. We do have malls that are autonomous for water use. So that's something we've been doing since 2002, 2003 when we started developing the first buildings here in Faria Lima.
As for the social front, we have the SYN Institute, the CCB Institute as it used to be called, now it is the SYN Institute, a heritage from Mr. Elie. We also have the Cyrela Institute. They have a pillar -- a social -- part of the company's profit is allocated to the institute. Today, they work around 4 main pillars: employability, entrepreneurship, volunteering and relationship. And all those 4 pillars are put around developments that we have in shopping malls mainly. So we have -- that's part of what we said in our release.
We have initiatives around training for a first job. Then I personally take part in some mentorship programs for our first job for young professionals, volunteer programs within the mall. We have a collaborative store for people who live in the community. We do have a booth to service refugees here in the city of Sao Paulo. So we've tried to be very active both in terms of employability and in terms of entrepreneurship and the environment in the surrounding areas of our malls. And so that sort of permeates across all pillars. That's something we do with a lot of passion and been doing for a long time.
In terms of diversity, we do have a diversity committee. We have made fostering diversity actions, and we want to encourage the participation of everyone. Everyone is welcome. So we do have diversity across the company, and we have people from all walks of life getting engaged in the committee's activities. This has been going on for 1.5 years now. Recently, we have a partnership with Zumbi dos Palmares College with their President, the university for the Afro-Brazilian community. We had an activity going on during Black Awareness Day last year, and we do have dedicated outlets in some malls dedicated to the Afro culture.
And on the COVID front, we made ourselves available to local governments to provide areas for vaccination. So some of our malls have been used as vaccination hubs. We have already seen 100,000 people being vaccinated in our malls. We do have a health committee, too, And we have several other projects in place, which are part of the SYN Institute to try and help mitigate the impact from the COVID crisis.
In terms governance, we are a company that is listed in the Novo Mercado since the spin-off of Cyrela. Most of our policies are announced publicly to all investors. We are very, very strict in that respect. We've had for at least 7 years a hotline for reports or in terms of data protection. We were one of the first companies to embrace that new law for data protection. And this restructuring of the Board, we now have 2/3 of the Board are composed of independent members. So that's also part of the -- of governance efforts on our part.
Now moving on to the operating performance for the quarter on Slide #15. We have an occupancy snapshot. We have improved occupancy -- in terms of financial occupancy. The second quarter improved from the first quarter, slightly but it did. And this imbalance that we saw had to do with the reduction of idle spaces in AAA properties to the detriment of an increase in vacancy in Class A properties. And that, of course, reflects into the physical occupation as well.
Now specifically about shopping malls on Slide 16. We saw a very significant growth in same-store sales in the Q2 when compared to the same period of last year. But a more fair comparison would be to compare those numbers in 2019. And then we had a drop, as you can see, of 20%. And I talked about the fact that sales were impacted in our portfolio because of the reasons I've mentioned. But the good news is that when we look at the results, and it's an up-trending number for June, we already see that same-store sales from minus 30%. And today, we are at a level of 10 something, minus 18% of drop in same-store sales when compared with June 2019. And that's good news provided we still have some restrictions. And now we hope to see a strong recovery going forward.
And in terms of commercialization, we see that -- we see retailers seeking to expand. We see that happening in our malls. So over the coming quarters, we will have positive news to share in terms of malls.
Now a bit about our financial performance, I'll give it over to Hector to continue. Hector, over to you.
Thank you, Thiago. Thank you. Thanks, everyone, for being here in our earnings call today. I think results acknowledge what Thiago has mentioned about the operational performance. When we compare leasing revenue, we compare quarters-on-quarters last year. This year, we see a growth of 21.5%, quite concentrated on shopping malls. The office is quite flat, quite resilient in the second quarter. And the shopping malls saw a great gain as restrictions were lifted, lockdowns were lifted. And that, of course, brings about revenue concerning parking lots, which also saw a significant drop in the first quarter, which impacted net revenues in a positive way, too.
Also, there is an inertia around discounts. And then we've been accumulating large balance of discounts from March last year, and that sort of mitigates the growth we would see in net revenues combined with the gross revenue. And so better parking lot, we have revenue and better service revenue. So we grow net revenues by 21%.
Moving on to Slide 19 and talking about the NOI. It is also in line with gross net and gross revenue with a growth of 13.6%, very much impacted by the shopping mall's performance or good performance. But we see a drop in margin of 5%, quite concentrated on the increase in the cost of vacancies for Class A properties. So we have increased revenues for malls in a relevant manner. We have increased in the second quarter the office revenue streams. But we do have a vacancy cost, which is concentrated, and we've been talking about it for the past quarters. And we have a small portion of retail, which is leased now. So the NOI grew by something close to 14% in the quarter because of that.
Now moving on to adjusted EBITDA on top of the NOI. We had operating expenses, SG&A and others, we have a growth, which is even more robust, boosted by the SG&A efficiency and also by the services revenue stream, which is outside of the NOI. So we have a very significant growth of 41%, reaching the level of BRL 74 million in the quarter.
Then moving on to Slide #20. Net profit follows along EBITDA, adding financial expenses -- the financial results rather, and then we have a result of 150%, also quite significant. The difference there drops -- the absolute difference both for the net income and the adjusted FFO because of financial expenses.
We've been following an increase in CDI, which has a direct impact on our debt. And I'll talk about it in a moment about the increase in our -- the cost of our debt because of IPCA variations, inflation variations. So we do have a growth of 25.5% in FFO, close to BRL 40 million at the end of the quarter.
When we look at the pro forma numbers, we see a drop of 8% coming from 2 main drivers. Number one being, we saw a drop in NOI for shopping malls, which was quite concentrated in Sao Paulo, where we have a relevant share of the market. But at the same time, we've seen quick fast recoveries starting in this quarter and also because of debt. We have about 80% of our debt is corporate debt. So there is a higher impact on pro forma than IFRS. That's why you have this 8% drop.
Now moving on to the next slide, Slide 21, and talking about our debt. As Thiago mentioned, we issued our 13th series of debentures. So here for cash, we had basically $300 million, which were raised, the debentures, and there was no cash burn event in the quarter. So we maintained net debt at a stable level with a slightly higher EBITDA. So we see a marginal improvement also along that indicator. Net debt EBITDA for the last 12 months, closing the quarter at 4.4x, which is quite comfortable vis-a-vis our main covenant, which is 7x. The limit would be 7x. So we are quite comfortable at 4.46x.
And then looking at the history line of our financial expenses, you see that the company managed to explore an important drop of CDI from 2019 when they were close to 6.5 or 7 of SELIC rate and then close to 2% in the second quarter of last year, in the middle of the chart. Then as we all know, scale-up and inflation this year, the IPCA went up above 8% in the first half of the year, last 12 months, July. So that also led to an increase in the SELIC rate. And so those are the 2 main impacts in our debt, an increase in the SELIC rate, CDI plus and also 20% of our debt, which is IPCA bagged, suffering an important monetary pressure on that side. So a good portion of the gains we had until the EBITDA. We had this headwind in terms of financial expenses, if I may.
And then moving on to the next slide, still about indebtedness. We see amortization schedule for our debt. The debt profile that we have is quite flat, quite well spread out throughout the years, in line with our cash flow, in line with our operational cash flow. So in terms of our 13th debenture issuance, it was something we did to reinforce our cash whether or not at a more volatility scenario next year when we will have presidential elections. So this way, we will be quite comfortable until the end of last year. This will prevent us from going to market for more cash, especially in a moment where there's so much uncertainty.
In terms of indexation, I have had said that our debt is quite concentrated on CDI, about 80% of it. And then we have a cost of corporate debt. That's where we are more concentrated, a cost close to 6.5 and on average close to 7. So that's the -- the takeaway is that we are quite comfortable in what concerns liquidity and also in terms of needing to raise more funds next year.
So this is it from my end, and I give it -- turn it over to the operator for the Q&A session.
[Operator Instructions] Our first question from [ Andre Diaz ] from Itau BBA.
I have 2 questions. Number one about leasing. You made an important announcement about AAA leasings. Could you comment on what's helping that movement and also if you are getting better prices for leasing? I remember that in April, if you could talk about this process that started in in April.
okay. Andre, the sound was terrible. It was very, very difficult to understand your question. I'll try to guess what you said because it was an impossible -- terribly bad connection that you had. So anyway -- so the main leases, here, our company is linked to the financial segment. So financial institutions and asset management funds are our main clients in terms of leasing. So in terms of leasing conditions and level of leasing conditions, we have had no type of concession, if you will, nothing much different from what we did before. So today, we're talking about a grace period of 4 to 6 months. In terms of amounts, it was sort of flat. We're talking about levels which are quite close to what we had in 2020, late '19. So prices came to standstill even 2019. Even though there was an increase in inflation, IPCA, we're talking about amounts which sit close to what we have at the end of 2019.
As to your second question, can you please correct me because I couldn't really understand what you said. But about the XP, one of the conditions was to -- concerning the raising of resources. We delayed the closure of that negotiation because of the tax reform. So that brought about some instability as a whole. So the economy as a whole is affected, especially real estate companies were affected by the new tax reform.
So still, we really understood what was happening, what impact we would be suffering from that. So we sort of left that in the back burner. So that lasted for about 3, 4 weeks, but we are now back in the game and the XP fund is already out on their road shows. We should finish our funding early September for we to finalize the transaction. I've been talking with people from XP, and they see very, very little risk in terms of execution. So that's a transaction we should be announcing in the coming 20 days, I'd say.
Our next question was sent via webcast by Mr. [ Thiago ] from [ VTI Investimentos ].
What is the reason for the vacancy rate to be so high in Class A properties, BrasĂlio Machado, Suarez Trade and Birmann 10? Why the high vacancy rate?
So thank you, [ Thiago ], for your question. I think they have high percentage rates. But what's really meaningful there both in terms of revenue -- located area are Birmann 10 and ITM. So the first property, Suarez Trade, it's located in Salvador in Bahia. Undoubtedly, the best property in Salvador, but it is located in a much more challenging market, not very many businesses are closed in the city.
As a coincidence, this week, we are signing a leasing contract there this week, coincidentally. But that's a slow negotiation. And we do have a price of around BRL 40. So based on the size of the area and the price that we're leasing that, that does not mean a big impact on our numbers.
As for the BrasĂlio Machado property that you mentioned also, it is a property which is well located, but it's slightly older than the average. We share control over that property. So we'd like to conduct some retrofitting works but it's not that easy. It's going through a legalization process. But we're quite confident, in summary, that it is well located. And as the economy picks up, it has a very strong appeal.
As for the Birmann 10, just to put it into perspective, we acquired that in July 2019. The property was totally vacant. We conducted a small retrofit, and then we leased it in 2019. We leased 50% for KPMG. At the time, we had negotiations which were ongoing with 2 other potential lessors. We finalized the whole lease -- or the leasing of the whole building. But that's exactly when the pandemic hit. So those 2 other prospects delayed their decision-making process.
As we see a recovery of the economy here in this region for Faria Lima, so we see some opportunities for flat price. So we have resumed some negotiations we had stopped at the Birmann 10. So we have a good outlook for that in the second half of the year, third quarter.
Now for -- as for the ITM, which is the main offender of our vacancy rate -- or high vacancy rate. We're talking about our own area of 17,000 square meters, which was occupied by Itau. Its vacancy came about because Itau changed their policy. Now they have this hybrid model of work. So they have shrunk networking areas not only for us, but for other properties as well. And that's a property they had already scheduled to reduce occupancy before the COVID, actually. So half of the whole area was scheduled to be returned. So the pandemic hit, and so they went forward and returned everything, the whole building.
We do not manage the development -- not development, the commercial acquisitions we have to provide support to the landlords, proprietors, owners as best as we can. There are some negotiations which are ongoing, but nothing really can create -- or material to share at this point.
Our next question comes from Mr. [ Marcel Sampaio ] [indiscernible].
What is your expectation for leasing Class A properties?
I did mention a bit of it when I answered a previous question. But Suarez Trading is slightly more difficult. But we are doing some businesses, nothing major. BrasĂlio Machado, once we adjust documentation and some regularization procedures and once the market picks up a bit, we have a good forecast for that. As for Birmann 10, we are resuming negotiations we had started before the pandemic. So I do believe we'll have good news going forward for Birmann 10. And for ITM, we're not doing the trading itself, the sales ourselves, but we have been talking to the administrators of the building, and we have good signs that it will get better.
Our next question comes from [ Mr. Arnaldo Luis ] from [indiscernible].
About the recycling of offices -- AAA offices when compared to Class A, are you taking that into account? Do you have any intention to increase exposure in that segment? And why? AAA as opposed to A?
Thank you for the question, [ Arnaldo ]. We've been saying -- we're talking about the importance of recycling assets to increase profitability for the company's shareholders. So today, if I were to tell you where the focus is, it would be on our A portfolio. We've been talking about some of the difficulties we had in terms of leasing the A portfolio, but we are not discarding a recycling of AAA assets as well and also acquisitions.
So we can do everything. We are trying to act on a timely manner very opportunistically. So the sale of some malls were strategic as we told XP. But we also have been assessing some acquisitions which are more opportunistic, especially because the market now is not very stable. So there is no price stable level, which is quite clear, especially for sellers. We know what we could pay, but there are not as many opportunities in the acquisition market, okay?
Our next question from Mr. [ Victor Hugo ].
What do you expect for the ITM asset? Would it be a last-mile logistics asset for you?
We have conducted some studies to transform it into a logistics center, last-mile center, but partially. That's my answer. There are some other technical challenges to be faced, which make it difficult for us to transform the whole asset. At least based on the first assessments we've made, a full last-mile transformation would be difficult. So we're thinking about a more hybrid transformation. But that's an ongoing discussion. But at the same time, we have a high demand for offices. So that's what we have been concentrating on, how we could migrate even partially for the ITM. But no decision has been made yet about that.
[Operator Instructions] Our next question comes from [ Victor Borosini ].
Can you comment on the share buyback program? What has been done? And what are your plans going forward? What seems to be the best investment right now?
Victor, that was our main dilemma. We executed 2 buyback programs last year. And when you compare the implicit price of the assets with the share price, that's the best investment we could make. But we will come across the problem we had last year, which is liquidity. Our share is not very -- we have a flow change of about 40%, a volume of 3 million to 4 million a day. And whenever we have a buyback program, whenever we have a buyback program, we effect that movement. And we want to be going to be a company that is -- has liquidity to try and remove that mismatch between the real price of our assets and the price of shares.
One of the things we did last year after the 2 buyback programs was a dividend payout. The buyback is also a way for you to increase the share of shareholders in the company and dividend payout is when you distribute shares to shareholders So that's the way we thought to improve the profitability of our shares. But now going forward, we have been assessing other alternatives. I'd say buyback is not the most obvious thing to do because of liquidity issues, because the liquidity levels now sits at around 40%, and we do not want to see it go deeper than that 40%.
Next question comes from [ Mr. Fernando Teles ].
About the XP deal, what are the plans to use the capital coming from the sales of shares in malls, new acquisitions, debt amortizations, new developments, all of the above?
Well, thank you for the question. It's a transaction of BRL 265 million. It's not a cash deal. A first installment of BRL 175 million will be paid at the signing, and then the remaining will be paid in 4 installments. So for those first BRL 175 million, we intend to reinforce our cash.
Debt amortization might not be the best use for those resources because of the cost and the term that we have for our debt. When we look for the duration vis-a-vis cost to amortize now, doesn't seem to be that favorable. And given that we have this new strategy in place around technology, we might use part of those resources in technology. But as you said, it's a bit of all of the above. It's now in the company's cash flow. And that will help us in our amortization program throughout the coming 2 or 3 years.
If you could comment on the joint venture with [ SPX ], is the intention to get revenue from administration fees, consultancy fees or to become a partner? Any potential fee creation programs?
Well, actually, it's a bit of both. Today, you have a JV, when we have 50% of the managers and [ SPX ] also holds 50%. And there is a commitment to put in seed money in BRL 300 million, BRL 150 million each actually, in the funds that are raised by [ SPX ] in those first 2 years. So we already have a fund being developed. [ SPX ] is now doing their roadshows, trying to explain the program. So I'd rather let them explain that to the market.
So as for this first fund, we're already gathering investments, but the idea is for us to work toward a dilution of capital exposure, something close to 10% of the size of the funds and then manage assets and then manage the fund itself and then in addition, fees on top of the results of the investments themselves.
Next question from [ Mr. Felipe ].
I mean something that caught my attention is the difference between the price filed for transactions in the secondary market for properties, AAA market in the more noble -- in Sao Paulo and the market prices. What are the strategy that the company has to be able to reduce that gap in pricing?
Thank you for the question. It is difficult. One of the things we've been doing, and I did mention that before. One of the main problems is around liquidity. The liquidity does not reflect the value of our assets, but we've been trying to show investors. And during our earnings announcement, the analysts who cover SYN will also tell you that there is a very big gap between the company's NAV when compared to market prices.
So we need to try and show the real value of our assets and show the potential that we have in terms of growth and cash generation and also this robustness of the company, our capital structure. All of that is quite favorable, especially in the moment that we live right now. And that's basically no -- not much more I can tell you.
We have divested in order to show the real value of our assets. Secondary transactions. A transaction that just happened, the sale of the complex building JK to the tune of BRL 30,000 per the square meter. And Faria Lima, the value was superior. When you compare that to our square meter prices, our malls are close to 0, when you make the comparison. That's a steep road for us to have conducted a very analytical, qualitative analysis -- qualitative analysis of the adequate price for us. We are quite discounted to say the least.
[Operator Instructions] This concludes our Q&A session, and I'd like to turn the floor back over to Mr. Muramatsu for his final remarks.
Well, this was very, very, very nice. A lot of interaction from you. Thank you. My final message is very optimistic. I think from the second quarter until now, that's about 40 days -- as far as those 40 days, we've felt quite a meaningful change both in corporate and in shopping malls. New leasings happening across both fronts and the market in our portfolio. Our portfolio is close to 100%, as I said. When we talk about shopping malls, a very interesting, growing flow in sales when compared to previous months.
And I think the the main driver for all that is the vaccination rollout. So we do believe that in Sao Paulo this weekend, this coming weekend, all adults above 18 will be able to be vaccinated. So this massive vaccination effort will reassure people -- they'll be more reassured in going to shopping malls, going out on the street, going back to their offices. And that's what we've been watching as of recent. And this will help us in our portfolios, of course.
So the outlook for our business is positive. I hope that the second quarter represented the last scare that pandemic gave us, and that from now on, things start getting back to normal both on a personal level and also on a professional level. We are quite We are quite optimistic with what lies ahead. Thank you and have a nice day, everyone.
Since teleconference is now over. Thank you all for participating and have a nice day, everyone.
[Statements in English on this transcript were
spoken by an interpreter present on the live call.]