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sonaeimobiliária
Consolidated Report&Accounts 02
sonaeimobiliária
Consolidated Report&Accounts 02
Index
consolidated report
Report and strategy 9
Summary of performance in 2002 12
macroeconomia
The macro-economic background 15
analysis of the business
Shopping and leisure centres 27
Shopping and leisure centre development 28
Investment in Shopping and leisure centres 33
The Managment and letting of Shopping and leisure centres (Property Management) 39
Shopping Centres Brazil 46
Environmental Management 50
SPEL (Car Parks) 52
Residential Development 55
Corporate Centre 55
Open Market Value of Sonae Imobiliária Properties 56
Financial Situation and Results 59
Share Capital of Sonae Imobiliária, SGPS, S.A. 62
Own Shares held by Sonae Imobiliária, SGPS, S.A. 62
Dividend Proposal from the Board of Directors 62
Organisation and People 63
Prospects 63
Final Notes 64
Notes to the directors report as 31 december 2002 66
consolidated accounts
Consolidated Balance Sheets 71
Consolidated Statements of Profit and loss by nature 72
Consolidated Cash Flow Statements 73
Notes to the Consolidated Finantial Statements 76
statutory auditors’ report and audit report 120
report and opinion of the statutory board of auditors 124
real estate assets valuation 126
sonaeimobiliária
Financial Highlights 2002
> Net profit of €144.4 million (€ 120.9 million),
increased by 19.4%
> Nav of € 1,037 million (€ 934 million),
increased by 11,1%
> NAV per share of € 27.67 (€ 24.90 in 2001)
> EBITDA of € 95.5 million (€ 73.8 million in 2001),
increased by 30%
Business Highlights 2002
> Owns (or co-owns) 1,140,532 m2 of GLA (789,903 m2 in 2001),
an increase of 44.4%
> Rents and other income of € 223.9 million increased by 58.7%
over 2001
> OMV of Sonae Imobiliária’s own share of the shopping centres and
galleries in operation amounted to € 1,471.2 million, at
31/12/2002, an increase of € 407 million
> Manages 1,516,821 m2 of GLA (1,128,033 m2),
an increase of 34.5%
> 5,089 shop rental contracts (3,949 in 2001),
an increase of 28.9%
> approximately 377 million visits, during 2002, in the centres under
management in Portugal, Spain and Brazil, an increase of 6.5%
compared with 2001.
consolidated report
Report and Strategy
Introduction Markets Focus:
Sonae Imobiliária is a European company, in- Sonae Imobiliária started its international ex- Sonae Imobiliária concentrates on its main core
corporated in Portugal in 1989. It was listed on pansion in 1997 and is now operating in the fol- business of the development of shopping and
the Lisbon and Porto Stock Exchange from De- lowing target markets: leisure centres, of holding them as an invest-
cember 1997 to December 2001, and was > Europe: Portugal, Spain, Greece, ment, and of managing them, creating desti-
part of the BVL-30 index. Germany, Austria and Italy; nations of choice for its customers by:
After the special session of the Stock Ex- > South America: Brazil. > Treating the shopping and leisure centre
change on 29th November 2001 and the sub- industry in an integrated way, where
sequent acquisition of all the remaining shares, Innovation added value is achieved, not only
its principal shareholders SONAE, SGPS, SA through development, but also through
(Portugal) and GROSVENOR (UK) became the Sonae Imobiliária has played an important role active management of the properties;
owners of 100% of the company’s shares, in the modernisation of the shopping centre con- > Taking a global view of the shopping and
leading to SONAE, SGPS (Portugal) directly cept by introducing into Portugal new integrated leisure centre business;
and indirectly holding 67.04%, and retail and leisure formats and innovative ideas. > Aiming, in all targeted markets, to
GROSVENOR (UK) directly and indirectly hold- innovate and introduce new concepts,
ing 32.96%. Prizes through local partnerships on the basis
of a long-term view of investment. Sonae
Activity The quality and innovative designs of its prod- Imobiliária is and wants to continue to be
ucts has brought Sonae Imobiliária many in- the "partner of choice";
Sonae Imobiliária is a specialist company in the ternational awards. It has received more > Creating and developing concepts and
shopping and leisure centre sector, and its ac- awards for its shopping centres than any other services that add value to retail
tivities include real estate development, in- company in the sector, including 6 awards at properties, which produce, directly or
vestment and the management of the devel- ICSC-Europe, 2 at ICSC-Las Vegas, 4 ICSC Mar- indirectly, a growth in income;
opments in which it participates. keting Awards, 3 at MIPIM, 1 from Procos and
The shareholders of the company are active in one Real Estate Oscar. In Spain in March 2001 Growth:
supporting its business. Sonae Imobiliária: Sonae Imobiliária was awarded the prize of "De-
> Is the clear leader in its sector in veloper of the Year", sponsored by the Span- Sonae Imobiliária´s objective is to grow, by
Portugal; ish magazine "Spanish Real Estate" and in 2003 more than doubling its "Net Asset Value" (NAV)
> Takes an integrated approach to its the Company was distinguished with the "Eu- in the next five years, and to continue to gen-
business; ropean Prize" of Procos as the "Best European erate high levels of return for its shareholders.
> Has created new retail formats and Developer and Investor". This growth will be achieved by capitalizing on
innovative concepts; the key strengths of the Company, by pursuing
> Utilises a consistent policy of joint- Strategy its policy of joint-ventures and international di-
venturing; versification through new developments, refur-
> Maintains a clear and consistent growth Sonae Imobiliária is an international company bishments and acquisitions and by:
strategy based on international with a European base and it specialises in shop- > Being an active partner, controlling or
expansion. ping and leisure centres. Its strategy is based sharing control, in all its developments;
on two main approaches:
9
consolidated report and accounts 2002’sonaeimobiliária
> Maintaining its position as leader in the invest in the Southern European Partnership Strategy
development, investment and management markets;
of shopping centres in Portugal; > Being proactive in the search for and The Company has pursued a strategy of part-
> Concentrating its efforts in the markets taking advantage of the opportunities nerships with reputed national and international
where it already operates, namely, that occur in the rest of Europe; partners, with whom it has formed joint-ven-
Spain, Germany, Austria, Greece, Italy > Achieving a position of importance within tures to develop and hold property for the pur-
and Brazil; the sector in Brazil, with a self-imposed pose of sharing risk and return and of acquir-
> Actively seeking to become the leader of limit of exposure to this market of not ing know-how.
the sector in Europe by continuing to more than 20% of Group NAV.
Centres % Sonae Imobiliária Partners Countries
CascaiShopping, Cascais, Portugal 50% Pan European (25%) UK
Trans European II (25%) U.S.A
Multiplan (development) Brazil
GaiaShopping, Porto, Portugal 50% CNP Assurances (25%) France
Ecureuil Vie (25%)
ViaCatarina, Porto, Portugal 50% ING Real Estate Holland
Centro Colombo, Lisboa, Portugal 50% ING Real Estate Holland
NorteShopping, Porto, Portugal 50% TIAA- CREF U.S.A.
Centro Vasco da Gama, Lisboa, Portugal 100% ING Real Estate (development) Holland
Sintra Retail Park, Sintra, Portugal 50% Miller Developments U.K.
MadeiraShopping, Funchal, Madeira, Portugal 50% Estevão Neves Portugal
Arrábida Shopping, Porto, Portugal 50% CNP Assurances (25%) France
Ecureuil Vie (25%)
Plaza Mayor, Málaga, Spain 75% Castle Management UK
Parque Principado, Oviedo, Spain 25% Grupo LAR Grosvenor (25%) Spain
Whitehall Fund (50%) U.S.A.
Avenida M 40, Madrid, Spain 60% Grupo Eroski Spain
Aegean Park, Atenas, Greece 50% Grupo Charagionis Greece
Parque D. Pedro, SP, Brazil 97.5% Enplanta Engenharia Brazil
3DO, Dortmund, Germany 90% Westdeutsche Immobilien Bank Germany
Vienna Mitte, Viena, Austria 100% Bautrager Austria Immobilien (BAI) Austria
(only shares in the offices and hotel)
Boavista Shopping, SP Brazil 97.5% Enplanta Engenharia Brazil
Parque Atlântico, Ponta Delgada, Azores, Portugal 50% Nicolau Sousa Lima Portugal
Estação Viana, Viana do Castelo, Portugal 50% Painhas & Arieira Lda, Renet Lda, Portugal
Silva Martins & Duque S.A., Telcabo Lda.
Luz del Tajo, Toledo, Spain 65% Grupo Eroski Spain
Plaza Eboli, Pinto (Madrid), Spain 65% Grupo Eroski Spain
Dos Mares, S. Javier, Murcia, Spain 65% Grupo Eroski Spain
Alexander Platz, Berlim, Germany 100% DEGEWO (only shares in the offices) Germany
Coimbra Retail Park, Coimbra, Portugal 50% Miller Developments UK
Setúbal Retail Park, Setúbal, Portugal 50% Miller Developments UK
Malaga Factory Outlet, Málaga, Spain 75% Castle Management UK
Mediterranean Cosmos, Salónica, Greece 19.95% Grupo Charagionis Greece
Lamda Developments
Zubiarte, Bilbao, Spain 50% ING Developments Spain
10
sonaeimobiliária’ consolidated report and accounts 2002
Sonae Imobiliária also applies this policy of part- cific aspects of the Shopping and Leisure Centre is to acquire in this way the local skills needed
nerships to operating companies that cover spe- business, especially outside of Portugal. The aim for the successful development of its projects.
Businesses % Sonae Partners Countries
Retail Parks (Portugal and Spain) 50% Miller Developments UK
Car Parking (Portugal) 50% SABA - Aparcamientos, SA Spain
Development and Management of Shopping 50% Charagionis Group Greece
Centres (Greece) – Sonae Charagionis, SA
Development, Management and investment 50% Enplanta Engenharia, LTDA. Brazil
in Shopping Centres (Brazil) – Sonae Enplanta, SA
11
consolidated report and accounts 2002’sonaeimobiliária
Summary of Performance in 2002
Adoption of EPRA – The European Association of Public of the company’s investment portfolio as de-
International Accounting Quoted Real Estate Companies. From 2005 on- termined by independent valuers.
Standards (IAS) wards, all companies in the European Union will
be required by law to use it. Lastly, it is the stan- Indicators
In 2001, Sonae Imobiliária began to draw up its dard that gives the clearest and truest picture
consolidated accounts in accordance with In- of the company’s financial position and business. In 2002, Sonae Imobiliária Consolidated Net
ternational Accounting Standards (IAS). There In general, Sonae Imobiliária’s results are Profits was €144.4 million (€ 120.9 million in
were a number of reasons for this decision. made up of two main parts. The first of these 2001). This is an increase of 19.4% over 2001.
Firstly, the use of this standard makes it easier relates to the profits on its investments, The NAV of its investment properties increased by
to compare Sonae Imobiliária’s performance made up of income from the properties, 11.1% to € 1,037 million in 2002, compared with
with that of other companies in the market. Sec- which it owns, and, from time to time, of the € 934 million in 2001, or € 24.90/per share on
ondly, IAS is widely regarded as the standard proceeds of sale of such properties. The sec- 31/12/2001 compared with € 27.67/per share
system for the future and has been adopted by ond part relates to the variation in the value on 31/12/2002.
Performance Indicators 1997 1998 1999 2000 2001 2002
Real Estate NAV as at 31 Dec (€ million) 379 459 643 752 934 1,037
Real Estate NAV as at 31 Dec per share (€) 10.11 12.24 17.15 20.05 24.90 26.67
Share Price as at 31 Dec (€) 11.13 16.34 13,.09 12.55 16.00* Na
GLA owned in operating centres (000’s m2) 333 413 563 584 790 1.140
GLA under management (000’s m2) 550 625 893 959 1.128 1.517
Number of tenant contracts under management 1,747 2,050 3,162 3,450 3,949 5,089
Consolidated EBITDA – Portuguese GAAP (€ million) 12.0 12.3 54.1 63.4 Na Na
Consolidated EBITDA – IAS (€ million) 55.1 75.3 95.5
Consolidated Net Profit – Portuguese GAAP (€ million) 4.6 15.2 22.6 25.6 Na Na
Consolidated Net Profit – IAS (€ million) 63.0 120.9 144.4
*Tender Offer price
Performance Indicators Growth (as % of previous year)
1998 1999 2000 2001 2002
Real Estate NAV as at 31 December 21% 40% 17% 24.1% 11.1%
Real Estate NAV as at 31 Dec per share 21% 40% 17% 24.1% 11.1%
Share Price as at 31 Dec 47% (20%) (4%) 27.5%* Na
GLA (m2) owned in operating centres 14% 36% 4% 35.3% 44.4%
GLA (m2) under management 14% 43% 7% 17.6% 34.,5%
Nr. of tenant contracts under management 17% 54% 9% 14.5% 28.9%
*Tender Offer price
12
sonaeimobiliária’ consolidated report and accounts 2002
Macro-economic
The Macro-Economic Background
Throughout 2002, the world economy showed prices had a significant effect on levels of stagnated, rising by only 0.2% in 2002, com-
few signs of recovery, evident in the varied consumption and investment, even though pared with a 2.4% increase in 2001. The
growth patterns in different sectors and coun- low long-term interest rates and the weaker stronger Euro exacerbated the situation. The
tries. In the first months of the year some indi- dollar lessened the impact. It was sympto- rate of growth declined in 4 out of 5 of the
cators were predicting that the economy would matic of this low rate of growth that the un- major EU economies. In Germany the GDP
strengthen, stimulated by repeated cuts in in- employment level rose by one percentage rose by 0.4% (compared with a 0.6% in-
terest rates. However, this did not come about. point to 5.8%. The likelihood of a strong re- crease in 2001), in France by 1.0% (as
Consumer and business confidence declined covery in the near future is slim, indicating a against 1.8% in 2001), in the United Kingdom
globally. This was reflected in disappointing need to stimulate demand. At the very be- it went up by 1.5% (as against last year’s
growth in world trade in 2002, a mere 2.6% in- ginning of this year, in January 2003, the 1.0%), in Italy by 0.3% (as against 1.8% in
crease, well below the average annual increase government announced an ambitious pro- 2001) and in Spain by 1.8% (as against 2.7%
during the 1990’s (7.9%). gramme of tax cuts, designed to stimulate in 2001). As a result of this, the E.U.’s un-
In this renewed climate of uncertainly, stock consumer spending and encourage invest- employment level, which has been steadily
market trading worldwide was depressed and ment. In Canada, there was a 3.3% increase declining since 1997, rose to 7.6% in 2002
confidence was further shaken by a series of in the rate of growth as against 1.5% in (as against 7.3% in 2001). The main objec-
scandals. It is going to take longer than ex- 2001, due mainly to a healthy level of in- tive of EU monetary policy was thus com-
pected for the world economy to make a strong vestment and consumer spending. promised. Inflation in the Euro area was 2.0%,
recovery. The build-up of hostilities in the Mid- The economy of Japan was also inconsis- despite the fact that the ECB cut the main in-
dle East made markets even more volatile and tent. Although growth predictions had been terest rate governing the Eurozone’s mone-
this also had a drastic effect on the economy, revised upwards, domestic demand still re- tary policy from 4.5% to 2.75%.
with oil prices rising to around 30 dollars per mains somewhat weak. The appreciation of Throughout the EU, reform is urgently needed
barrel. the yen - spurred by a surplus in the current if sustained growth is to occur. This applies par-
Nonetheless, real GDP rose by 2.3% in the balance of payments - will lessen the effect ticularly to the need for a more flexible labour
United States (0.3% in 2001) and by 0.9% in of recent good export performance, and the market and to the need for measures to coun-
the European Union (1.6% in 2001). Japan reg- longer it takes for the world economy to re- teract the slow, irreversible effect of the aging
istered further signs of recession, with GDP cover, the longer it will take Japan. Further- of the population. Furthermore, institutional and
falling 0.7% in 2001, following on a downturn more, the authorities are still in disagree- budgetary reforms are essential if the expan-
of 0.3% in 2000. This disparity between the ment with each other as to the best way of sion of the EU into central and eastern Europe
US/EU economies and that of Japan was due setting up a monetary policy capable of lift- is to prove successful.
more to "structural inconsistencies" brought ing the country out of the deflationary econ-
about by difficulties in regaining financial bal- omy that has persisted since 1995. In order Sonae Imobiliária’s
ance and to rigidity in the markets rather than to bring about this recovery, reform is "target" markets
to any more general factors. needed in both the banking system and in
Notwithstanding the slight increase in pro- taxation policies. The following section is a summary of the main
ductivity, the economy of the USA continued In the European Union, most countries ex- characteristics and trends which influence the
to show signs that were both positive and perienced further difficulties brought about as retail real estate market in each of the countries
negative. Even though productivity in- much by risky budgetary policies as by delays where Sonae Imobiliária operates: Portugal,
creased, consumer spending and confi- in structural reforms. Throughout the EU, ex- Spain, Greece, Italy, Germany, Austria and
dence declined. Declining stock market pectations remained low and export levels Brazil.
15
consolidated report and accounts 2002’sonaeimobiliária
Growth in Consumer Spending
Portugal annual
SHOPPING CENTRE TRENDS
% growth
Key Data
6,0
ECONOMIC OVERVIEW 5,0 Total GLA: 1,462,906 m2
4,0
> Domestic demand is likely to remain 3,0 GLA/1000 Population 145.1m2
weak for at least the first part of this 2,0 (EU: 176.2m2)
1,0
year, before a more convincing recovery 0,0 Pipeline 2003/4: 326,000m2
-1,0
emerges in 2004.
-2,0
> The domestic sector is likely to increase -3,0 > Rapid expansion in shopping centre
2001 2001 2001 2001 2002 2002 2002 2002
its contribution to the national economy T1 T2 T3 T2 T1 T4 T3 T4 space during the 1990s.
Consumer spending (annual%) Non-food retail sales (annual %)
over the next 12 months as sentiment > Although a relatively new phenomenon
Source: Consensus Economics Inc., Instituto Nacional de Estatística
levels & consumer activity pick up. in Portugal, shopping centres have
> The government remains committed to quickly become a key feature of the
reducing the public deficit, and the RETAIL PROPERTY MARKET OVERVIEW retail landscape.
structural reforms associated with this > Rents increased by 3.6% in the year to > As a result the majority of current stock
are likely to improve Portugal’s December, resulting in capital growth of is modern and well designed.
economic growth potential. just over 2%, with a slight softening of > As the opportunities for the
the average prime yield. development of large centres are
annual GDP Growth & Inflation > Demand is strong from both Portuguese scarce, developers are investing in
% growth
12 and international retailers and leasing smaller or specialist centres such as
10 prospects in the shopping centre sector leisure and retail parks.
8
are generally good.
6
Shopping Centre Pipeline
4
Shop Property Performance 200.000
2 annual 180.000
% growth Yield
0 160.000
80 13% 140.000
-2
12% 120.000
91 93 95 97 99 01 03 60 100.000
Growth Inflation 11% 80.000
Source: Consensus Economics Inc., Instituto Nacional de Estatística 40 10% 60.000
40.000
20 9%
20.000
8% 0
RETAIL MARKET TRENDS 0 95 95 97 98 99 00 01 02 03 04
7%
> Overall, the retail sector appears to have -20 6%
New Shopping Centre GLA Per Annum
91 92 93 94 95 96 97 98 99 01 02 Source: C&W H&B, European Research Group
reached a trough in the first half in
Yield Capital Growth Rental Growth
2002. Source: C&W H&B, European Research Group
> Towards the end of 2002 total retail INVESTMENT MARKET TRENDS
sales volumes contracted by 3.5% over > Yields in the retail sector in Portugal
the year to December. have fallen steadily over the last 10
> The general improvement in economic years, as the market has seen greater
fortunes will support a pick up in retail liquidity and maturity.
activity in 2004 > Consequently the yields are closer to the
European average.
> In December, the prime yield for a
shopping centre stood at 6.75%.
16
sonaeimobiliária’ consolidated report and accounts 2002
> Continued strong interest from Spain Growth in Consumer Spending
annual
international investors has also been a % growth
7,0
significant factor in helping to drive ECONOMIC OVERVIEW
6,0
down yields. > Despite a slowing economy Spain still 5,0
remains one of the best performing 4,0
Yield Retail Yield Data 3,0
economies in Europe with GDP growth of
12% 2,0
about 2.0% in 2002.
10% 1,0
> It is expected that Spain’s GDP growth
8% 0,0
will surpass its partners in the Euro zone 98 98 99 99 00 00 01 01 02 02
6% Q1 Q4 Q3 Q2 T1 T3 T1 T3 T1 T3
in both 2003 and 2004. Consumer spending (annual%) Total retail sales (annual %)
4%
Source: Consensus Economics Inc., Instituto Nacional de Estadística
> Internal demand will be encouraged by
2%
0%
the government’s fiscal and monetary
Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02
expansion policy in 2003. RETAIL PROPERTY MARKET OVERVIEW
Averge Shops Headline Shops Headline S. Centres
> The inflation rate is above the Euro zone > High street rents rose in the final quarter
Source: C&W H&B, European Research Group
average, partly as a result of indirect tax at an equivalent annual growth rate of
increases and structural adjustment to 28.5% - the highest growth rate in
MARKET OUTLOOK the Euro. Europe in 2002.
> Property values have held up well during > Rents in shopping centres remain
the current slowdown and, despite the annual GDP Growth & Inflation stable.
% growth
economic uncertainty, activity has 8 > Healthy demand has been seen across
continued among occupiers and 6 the country, but mainly in cities outside
investors. 4 the big two (Madrid and Barcelona).
> There is a healthy balance between 2 > There is now sufficient offer of shopping
supply and demand and this will sustain 0 centres in the big cities, in contrast with
-2
the market over the coming year. There some provincial towns which have yet to
-4
continues to be significant cross-border see significant shopping centre
91 93 95 97 99 01 03
retailer activity, with a number of Growth Inflation development.
Source: Consensus Economics Inc., Instituto Nacional de Estadística
operators actively seeking space in the
Shop Property Performance
major towns and cities. annual
% growth Yield
> Liquidity will improve over time in the RETAIL MARKET TRENDS
9%
investment market. > Spanish retail had a good 2002 despite 30 9%
20 8%
the wider economic slowdown.
Boom 10 8%
> According to the latest monthly national 7%
0
Recovery Slowing statistics, overall retail sales were up in 7%
-10
6%
December 2002 by 2.6%. -20 6%
Slump
> Despite some slowing down in the retail -30 5%
91 92 93 94 95 96 97 98 99 01 02
market towards the end of last year it
Yield Rental Growth Capital Growth
remains reasonably strong. Source: C&W H&B, European Research Group
17
consolidated report and accounts 2002’sonaeimobiliária
SHOPPING CENTRE TRENDS > Yields for established prime shopping Boom
Key Data centres with proven track records
Recovery Slowing
Total GLA: 7,716,490m2 hardened slightly in 2002 to 6.25%,
GLA/1000 Population: 192.5m2 indicating the still buoyant level of Slump
(EU: 176.2m2) interest in the sector.
Pipeline 2003/4: 983,170m2 > The market remains active, with
numerous domestic and international Italy
> Although shopping centres have been investors seeking development and
part of the retail scene since the start of investment opportunities. ECONOMIC OVERVIEW
the 1970s, substantial growth only > Given the strong competition for the > Economic activity slowed considerably in
began from the late 1980s onwards. limited supply of good quality investment 2002 and indications of recovery are
> The number of shopping centres product, forward sales have become likely to emerge only very gradually over
increased dramatically in the 1990s, more common. the next 12-18 months.
fuelled by international and domestic > Activity is expected to improve towards
chains and the interest of foreign Yield Retail Yield Data the end of 2003 as the government
9%
investment. 8%
implements cuts in income tax rates and
> There is a significant volume of 7% increases investment incentives.
6%
development in the pipeline focusing on 5%
> The consumer sector is likely to be
4%
smaller cities. further supported by renewed growth in
3%
> There are lots of potential locations but 2% employment over the year, together with
1%
many are proving difficult to advance relatively higher real wages.
0%
due to tight planning. Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02
Averge Shops Headline Shops Headline S. Centres
annual GDP Growth & Inflation
Source: C&W H&B, European Research Group % growth
Shopping Centre Pipeline 8
900.000
6
800.000
700.000 MARKET OUTLOOK 4
600.000
> Slower growth is expected in 2003, in
500.000 2
400.000 large part on the basis that the pace of
300.000 0
200.000 growth seen over the last couple of
100.000 -2
years is unsustainable. 91 93 95 97 99 01 03
0
95 95 97 98 99 00 01 02 03 04 > However, despite the more gloomy Growth Inflation
New Shopping Centre GLA Per Annum Source: Consensus Economics Inc., Istat
wider economic picture, activity in the
Source: C&W H&B, European Research Group
market place is continuing.
> Given that it is unlikely that there will be RETAIL MARKET TRENDS
INVESTMENT MARKET TRENDS any relaxation in planning restrictions on > Official retail sales figures have been flat
> High street retail yields have been large-scale retail development, the supply for some time and have been declining
relatively stable for the last 18 months, of new large shopping centres should in real terms.
with prime and average prime yields remain limited. > The gap between large and small
standing at 5.75% and 6.09% > So it is expected that the values of good operators continues to widen, with the
respectively. quality existing schemes will remain well latter losing market share.
supported.
18
sonaeimobiliária’ consolidated report and accounts 2002
> The latest figures available (for > The retail property market remains INVESTMENT MARKET TRENDS
November 2002) show that sales growth relatively healthy - despite weaker > Prime high street yields remained
by value amounted to 1.8%. consumer expenditure - and continues to unchanged in December and have
> Large non-food retailers recorded see a good level of activity. hovered around 5.95% for the last four
growth of 3.2% in sales. > The principal high streets and shopping years.
> Further growth is expected next year in centres in major cities are priority > Shopping centre yields have fallen
non-food sales as consumers spend targets for expanding and speciality steadily over the last 5 years to narrow
more on non-essential items. retailers. the gap with high street yields.
> The prime yield for a regional shopping
Growth in Consumer Spending
annual SHOPPING CENTRE TRENDS centre stood at 6% in December.
% growth
7,0
Key Data
Yield Retail Yield Data
6,0 Total GLA: 6,111,200 m2
10%
5,0 GLA/1000 Population: 105.9m2
4,0 8%
(EU: 176.2m2)
3,0
Pipeline 2003/4: 650,000 6%
2,0
1,0 4%
0,0 > The development of modern shopping 2%
97 97 98 98 99 99 00 00 01 01 02 02
T1 T3 T1 T3 T1 T3 T1 T3 T1 T3 T1 T3 centres began in earnest in the mid- 0%
Consumer spending (annual%) Non-food retail sales (annual %) Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02
1980s, peaking in the first half of the
Source: Consensus Economics Inc., Istat
Averge Shops Headline Shops Headline S. Centres
1990s.
Fonte: C&W H&B, Eupean Research Group
> Development slowed in the latter part of
RETAIL PROPERTY MARKET OVERVIEW the 1990s due to the two-year
moratorium on large-scale retail MARKET OUTLOOK
> Rental growth has slowed with no schemes. > The wider economic picture is subdued
upward movement in the fourth quarter. > Italy has very few dominant schemes as is the retail sector generally.
However, the final outcome for 2002 is compared to the rest of Western > However, whilst the level of rental growth
a solid performance from retail property, Europe, with no centre larger than is expected to see a further deceleration
with an overall rental increase of 9%. 70,000m2 and only 12 schemes of in the next few months, the market is still
more than 40,000m2. some way off a serious correction as has
Shop Property Performance
been seen in a number of other major
annual
% growth Yield Shopping Centre Pipeline markets. The demand-supply imbalance
40 8.0%
600.000
30
should ensure that rental values are well
7.5%
500.000
20 supported.
7.0%
400.000
10
6.5%
0 300.000 Boom
6.0%
-10 200.000
-20 5.5% Recovery Slowing
100.000
-30 5.0%
91 92 93 94 95 96 97 98 99 01 02 0
95 95 97 98 99 00 01 02 03 04 Slump
Yield Rental Growth Capital Growth
New Shopping Centre GLA Per Annum
Source: C&W H&B, European Research Group
Source: C&W H&B, European Research Group
> Moreover, activity will continue as Italy is
still viewed as having considerable long-
19
consolidated report and accounts 2002’sonaeimobiliária
term growth potential by occupiers and > The market is becoming increasingly > The market is still enjoying a period of
investors. international, with a number of operators expansion and modernisation.
> The level of investor interest in Italian trying to gain market share, through > Retail development is focused on Athens
retail property is expected to maintain acquisitions or organic growth and Thessalonica and there are a
yields at current low levels. number of projects scheduled for the
Growth in Consumer Spending next 2-3 years.
annual
Greece % growth
25.0
SHOPPING CENTRE TRENDS
20.0
ECONOMIC OVERVIEW Key Data
15.0
> Economic performance slowed last year 10.0 Total GLA: 105,659m2
but has been excellent over the last few 5.0 GLA/1,000 Population: 9.9m2
years. 0 (EU: 176.2m2)
-5.0
> Consumer spending is robust and the Pipeline 2003/4: 384,520m2
-10.0
strength of retail and investment activity 95 95 96 97 98 98 99 00 01 01 02
T1 Q4 Q3 Q2 T1 Q4 Q3 Q2 T1 Q4 Q3
is likely to be boosted by construction Total retail sales (annual %) Consumer spending (annual%)
> Greece has the lowest per capita
activity in the run up to the Olympic Source: Economist Intelligence Unit, General Secretariat of National provision of shopping centre floorspace
Statistical Service of Greece
Games. in the EU and second lowest to Romania
> Greece has this year taken over the in Europe.
rotating presidency of the EU from RETAIL PROPERTY MARKET OVERVIEW > Although out-of-town shopping is growing
Denmark. in popularity only a few centres have
> Rents have stabilised following the falls been established in the metropolitan
annual % GDP Growth & Inflation seen in the first half of last year. But areas of Salonica and Athens.
growth
25 December values were 7.2% down on a > It was widely expected that the staging
20 year earlier. of the Olympic games in 2004 would
15 > Over the longer term, however, the provide a catalyst to retail development
10
sector’s performance has been one of in the country. This has so far failed to
5
the strongest in Europe, with rents materialise with many projects delayed
0
showing average annual growth of 8.1% and developers frustrated by
-5
91 93 95 97 99 01 03 over the last ten years – reflecting the bureaucratic procedure.
Growth Inflation increasing maturity of the Greek market
Source: Economist Intelligence Unit, General Secretariat Of National
as modern retail space has emerged. Shopping Centre Pipeline
Statistical Service Of Greece
200,000
180,000
Shop Property Performance
annual
160,000
% growth Yield 140,000
RETAIL MARKET TRENDS 120,000
50 11.0%
100,000
> The latest official statistics show overall 40
10.0% 80,000
retail sales growth by value at 8.3% in 30 60,000
9.0% 40,000
20
the year to November 2002. 20,000
10 8.0% 0
> International retailer interest remains 95 95 97 98 99 00 01 02 03 04
0
strong in Athens’ main high street areas, -10
7.0% New Shopping Center GLA Per Annum
Source: C&W H&B, European Research Group
with demand coming from a small -20 6.0%
91 92 93 94 95 96 97 98 99 01 02
number of major players in the market.
Yield Rental Growth Capital Growth
Source: C&W H&B, European Research Group
20
sonaeimobiliária’ consolidated report and accounts 2002
INVESTMENT MARKET TRENDS downward pressure as an institutional RETAIL MARKET TRENDS
> Prime high street yields are 7%, with market begins to emerge. > The economic downturn continues to
yields for prime regional shopping dent consumer confidence and increase
Boom
centres standing at 8%. pressure on the retail market. However,
> Yields have been flat for around 2 years, Recovery Slowing
certain retailers have managed to
although the trend over the last 5-10 perform well despite the wider economic
years has been steadily downward, Slump gloom.
spurred in particular by Greece’s > Sales are down in most sectors with the
admission to EMU. exception of price aggressive retailers.
> Interest in the investment market is Germany > International retailer interest in Germany
rising but is being held back by lack of has seen a notable increase but is more
product and uncertainty as to which ECONOMIC OVERVIEW likely to materialise over the medium
projects will actually come to fruition. > Signs of a recovery in German activity term with most taking a conservative
> The market is currently developer-led remain elusive although export stance at present.
and looks set to remain so for the time performance has improved somewhat, > Official sales figures provide a negative
being. business investment remains weak, picture overall, with a 3.3% fall in
reflective of increased global volumes in November. The clothing
Retail Yield Data uncertainty. sector is showing some more positive
Yield %
12 > The labour market remains a concern, signs, although competition is fierce.
10 with the number of people out of work
8 reaching record highs. Growth in Consumer Spending
annual
6 % growth
> The outlook is for continued weakness in 6.0
4 the near term, with domestic activity 4.0
2
hindered by restrictive fiscal policy, and 2.0
0
lack of confidence. 0.0
Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02
Averge Shops Headline Shops Headline S. Centres -2.0
Source: C&W H&B, European Research Group annual GDP Growth & Inflation -4.0
% growth
6.0 -6.0
5.0 98 98 99 99 00 00 01 01 02 02
MARKET OUTLOOK T1 T3 T1 T3 T1 T3 T1 T3 T1 T3
4.0
> Further good growth is anticipated in the 3.0 Consumer spending (annual%) Germany Retail Sales, clothing (%)
2.0 Total retail sales ( %)
medium to long term, although the
1.0 Source: Consensus Economics Inc., Federal Statistical Office Germany
current economic uncertainty is likely to 0
mean no significant changes to values in -1.0
-2.0
the short term. 91 93 95 97 99 01 03
RETAIL PROPERTY MARKET OVERVIEW
> The demand from international investors Growth Inflation > Average prime high street rental growth
Fonte: Consensus Economics Inc., Federal Statistical Office Germany
for modern shopping centres should amounted to 1.2% in 2002 – a very
remain strong, notably in the run-up to sharp slowdown in the pace of growth
the Olympic Games. which peaked in the second half of
> Over the longer term, yields are 2001.
expected to come under further > Shopping centre rents remained fairly
stable in 2002.
21
consolidated report and accounts 2002’sonaeimobiliária
> The increased demand for property is and schemes in train stations – (the Retail Yield Data
yield %
being driven by international chains who latter popular with retailers as they 7
recognise that current market conditions circumvent the strict opening hours). 6
may allow them to rent prime locations 5
Shopping Centre Pipeline 4
at good rents.
1,200,000 3
> There is a strong polarisation in demand
2
1,000,000
between prime and secondary pitches, 1
800,000
with the latter suffering a much sharper 0
600,000 Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02
fall-off in demand.
400,000 Averge Shops Headline Shops Headline S. Centres
Fonte: C&W H&B, European Research Group
200,000
Shop Property Performance
annual
0
% growth Yield (%)
95 95 97 98 99 00 01 02 03 04
20 6.0
New Shopping Centre GLA Per Annum
15 MARKET OUTLOOK
Source: C&W H&B, European Research Group
10 5.5
> Reduced consumer confidence and poor
5
0 5.0 retail trading conditions are filtering
-5 INVESTMENT MARKET TRENDS through to retail property.
-10 4.5
-15
> During the last year, investment has > The strong rental growth seen in 2001
-20 4.0 focused on the western parts of and early 2002 has stalled for the time
91 92 93 94 95 96 97 98 99 00 01 02
Germany and has been dominated by being, although prime values in the
Yield Rental Growth
Capital Growth domestic players. major cities should be underpinned by
Source: C&W H&B, European Research Group
> While international investors have shown the shortage of good quality supply.
greater interest over the past two years > Whilst the extension of trading hours
SHOPPING CENTRE TRENDS they often find pricing to be prohibitively should provide a boost to the market,
Key Data expensive and can be frustrated by the changes to taxation and higher social
Total GLA: 9,992,635m2 lack of suitable investment product. security charges may yet add to the
GLA/1,000 Population: 120.0m2 > Retail has benefited from investors pressure on consumer spending.
(EU: 176.2m2) rebalancing their portfolios at the > Yields will be supported by continuing
Pipeline 2003/4: 1,020,200m2 expense of their office holdings, low interest rates and stock market
although it is now slowing. instability but there is some risk if rental
> Shopping centre provision is relatively > High street retail yields have been levels remain weak and yields may
low in Germany compared to other among the lowest in Europe for some soften in due course.
Western European countries, time, with prime stock attracting levels
Boom
representing just 10% of retail of 4.75% in the large cities.
floorspace. > Shopping centre yields are also relatively Recovery Slowing
> Shopping centre growth peaked in the low, with regional schemes attracting
Slump
years following reunification principally prime yields of 5.75% (although the
focused on Eastern Germany. This limited level of investment trading
growth has slowed in recent years. activity makes it difficult to be too
> New supply is now showing a modest precise about yield levels).
increase with developers focusing on in-
town developments and redevelopments
22
sonaeimobiliária’ consolidated report and accounts 2002
Austria Growth in Consumer Spending SHOPPING CENTRE TRENDS
annual
% growth Key Data
15.0
ECONOMIC OVERVIEW 10.0 Total GLA: 1,790,020 m2
> The economic downturn has contributed 5.0 GLA/1,000 Population: 219.1m2
0.0
to a marked rise in unemployment, while (EU: 176.2m2)
-5.0
business and consumer confidence has Pipeline 2003/4: 173,300m2
-10.0
been undermined by the uncertainty -15.0
surrounding the timing of EU recovery. -20.0 > Although limited in variety Austria has
00 00 00 00 01 01 01 01 02 02 02 02
> More recently, confidence levels have T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 one of the largest per capita provisions
been subject to pressure from the crisis Consumer spending Footwear & Leather retail sales (annual %) of shopping centre space in Europe.
(annual%)
Clothing retail sales (annual %)
in the Middle East, with risks to the
Source: Consensus Economics Inc., Statistik Austria,
inflation outlook from the impact on oil. Economist Intelligence Unit Shopping Centre Pipeline
yield %
> The Government is restricted from 1,200,000
increasing public spending until 2003 to RETAIL PROPERTY MARKET OVERVIEW 1,000,000
boost the domestic sector, and as such > With the exception of Salzburg, last year 800,000
a convincing revival in domestic demand saw little movement in high street rents 600,000
400,000
is unlikely to materialise until next year. and the current market is very stable.
200,000
Capital values slipped by just under 1%
GDP Growth & Inflation 0
annual
% growth
during 2002. 95 96 97 98 99 00 01 02 03 04
5 > Shopping centre rents have also been New Shopping Centre GLA Per Annum
Source: C&W H&B, European Research Group
4 fairly stable.
3
> The general picture however is one of a
slowdown in demand. > Historically, planning regulations have
2
been tight; nevertheless shopping
1 Shop Property Performance
annual
centres have grown in popularity with
0 % growth Yield (%)
91 93 95 97 99 01 03 8
consumers and retailers alike.
40
Growth Inflation
30
> Planning laws were relaxed in 2000 and
Source: Consensus Economics Inc., Statistik Austria 7
20 further liberalisation is expected,
10 6 resulting in an increase in the amount of
RETAIL MARKET TRENDS 0 new space coming on-stream.
4
> The overall retail market remains -10
somewhat subdued, with falling retail -20 4 INVESTMENT MARKET TRENDS
91 92 93 94 95 96 97 98 99 00 01 02
sales. > Prime retail yields in Vienna remain in the
Yield Rental Growth
> Performance in clothing sales (-0.6%) Capital Growth 5.0-6.0% bracket.
was less negative. Source: C&W H&B, European Research Group
> Out-of-town shopping centre yields are in
> Economic prospects in Germany may the 7-8% range, but with the possibility
influence near term performance in the of achieving sub-7% for the very best
Austrian retail market due to trade links schemes.
between the countries and also as a > Whilst there is increasing foreign
result of the high proportion of German interest, competition is less fierce than
retailers present in the Austrian market. in other countries due to reduced
23
consolidated report and accounts 2002’sonaeimobiliária
supply, low yields and weaknesses in in Argentina. As such, inflows of foreign Growth in Consumer Spending
annual
rents in recent years. direct investment will be subdued. % growth
6.0
> However, exports should continue to do
4.0
Retail Yield Data well, owing to gains in competitiveness,
yield % 2.0
7 diversion from the domestic to foreign 0.0
6
markets and a recovery in external -2.0
5
demand. -4.0
4
3
> Some recovery in domestic demand is -6.0
01 01 01 01 02 02 02 02
2 expected in 2004 due to the T1 T2 T3 T4 T1 T2 T3 T4
1 implementation of various public anti- Consumer spending Retail sales clothing & footwear
0 Total retail sales %
Dec 97 Dec 98 Dec 99 Dec 00 Dec 01 Dec 02
poverty policies.
Source: Economist Intelligence Unit, Instituto Brasileiro
de Geografia e Estatístics
Average Shops Headline Shops Headline S. Centres
Source: C&W H&B, European Research Group annual GDP Growth & Inflation
% growth
20 RETAIL PROPERTY MARKET OVERVIEW
MARKET OUTLOOK 15 > Overall rental growth in the year to
> Stability is the main feature of the 10
December 2002 was minimal. However,
current market and values are expected the market is clearly polarised, with some
5
to remain unchanged in the short term. of the best schemes registering growth.
0
> Longer term, however, Austria is likely to > In recent years, rents have been under
-5
see an increasing number of international 91 93 95 97 99 01 03 pressure as a result of wider economic
operators entering the market. Growth Inflation problems, with considerable volatility
Source: Economist Intelligence Unit, Instituto Brasileiro
> This will place upward pressure on rental de Geografia e Estatística resulting from sharp fluctuations in the
levels, especially if the retail exchange rate.
development pipeline remains at its RETAIL MARKET TRENDS > However, purpose-built schemes are
current low level. > Consumer spending growth has been increasingly popular with consumers and
subdued over the last 12-18 months. have been helped by the expansion of
Boom > Some improvements in the retail market the food and leisure sectors.
Recovery Slowing
have been seen towards the end of last > As a result, rents in well-located schemes
year, with 0.2% (year-on-year) growth in with a strong tenant mix have seen growth.
Slump total retail sales seen in Q3, while sales
volumes of clothing and footwear Shop Property Performance
annual %
expanded by 2.0%. rental growth
80
Brazil > The improvement in the large-scale food
60
sector later in the year was due largely
40
ECONOMIC OVERVIEW to the discounts obtained from suppliers
20
> The weakness in the economy is likely to and passed on to consumers through
0
continue over the next 12-18 months, sales promotions. -20
despite the new Government’s policy -40
1997 1998 1999 2000 2001 2002
commitments.
Average High Street Rents
> Sentiment generally remains low, Average Shopping Centre Rents
Source: C&W H&B, European Research Group
especially in light of the economic crisis
24
sonaeimobiliária’ consolidated report and accounts 2002
analysis of the business
Shopping and leisure centres
At present Sonae Imobiliária owns 12 shopping Madrid, Luz del Tajo in Toledo, Plaza Eboli in que D. Pedro in Campinas, São Paulo opened
centres, 2 shopping galleries and one retail Pinto, Madrid, Dos Mares in S. Javier, Murcia, in March 2002, and the company has holdings
park in operation in Portugal. The company is Malaga Outlet in Malaga and Zubiarte in Bilbao). in five other shopping centres in operation, of
the market leader in the country’s shopping cen- Sonae Imobiliária is also developing another 7 which four are in the state of S. Paulo and one
tre industry, with a market share of 51% in new projects elsewhere in Europe: 3DO in Dort- is in Brazilia.
terms of GLA under management mund, Germany, Alexander Platz in Berlin, Ger- Sonae Imobiliária owns or co-owns about
In Portugal, the company is also marketing and many, Vienna Mitte in Vienna, Austria, Aegean 1,140,532 m2 of GLA in operation in Portugal,
developing 2 more shopping centres and 2 new Park in Athens, Greece, Mediterranean Cosmos Spain and Brazil and manages 1,516,821 m2
retail parks and is extending an existing shop- in Thessalonica, Greece, Brescia Centre in of GLA in these markets.
ping centre. Brescia, Italy and Pavia Centre in Pavia, Italy. Sonae Imobiliária is also actively involved in 114
In Spain, Sonae Imobiliária owns six shopping In Brazil, Sonae Imobiliária is developing one properties, of which 83 are in Portugal, 16 in
centres already in operation and it is develop- new shopping and leisure centre in São Paulo Spain, 3 in Greece, 2 in Italy, 2 in Germany, 1
ing 6 new shopping centres (Avenida M40 in and is extending another shopping centre. Par- in Austria and 7 in Brazil.
27
consolidated report and accounts 2002’sonaeimobiliária
Shopping and leisure centre development
The main events > A joint venture was set up between Berlin, Germany for the development of
of 2002 Sonae Imobiliária (65%) and the Eroski a shopping and leisure centre.
Group (35%) to develop three shopping
> Construction started at Parque Atlântico and leisure centres in Spain: Performance
in Ponta Delgada, Azores, Portugal. This - Luz del Tajo, Toledo, with a GLA of
joint development of Sonae Imobiliária 41,400 m2. The opening of this Sonae Imobiliária is developing two more shop-
(50%) and the Nicolau de Sousa Lima centre is scheduled for Autumn 2004; ping centres, two new retail parks and the ex-
Group (50%) is scheduled to open in - Plaza Éboli in Pinto (near Madrid) with pansion of an existing shopping centre in Por-
Autumn 2003; a GLA of 30,000 m2. This centre is tugal.
> On 18th April 2002, Plaza Mayor in scheduled to open in Autumn 2004;. In Spain, there are 6 new Centres under de-
Malaga, Spain opened as planned. This - Dos Mares in S. Javier, Murcia, with a velopment (Avenida M40 in Madrid, Luz del Tajo
development, which has a total GLA GLA of 24,000 m 2, scheduled to in Toledo, Plaza Éboli in Pinto – Madrid -, Dos
(Gross Lettable Area) of 33,000 m2 was open in Spring 2004; Mares in S. Javier, Zubiarte in Bilbao and
Sonae Imobiliária’s first complete project > Building began at Estação Viana, in Viana Malaga Factory Outlet in Malaga).
in this country; do Castelo, Portugal. Sonae Imobiliária In the rest of Europe, Sonae Imobiliária has
> The International Council of Shopping and a group of local investors are seven new projects under development: 3DO
Centres (ICSC) awarded carrying out the development on a 50-50 in Dortmund and Alexanderplatz in Berlin, Ger-
MadeiraShopping first Prize in the "New basis. The centre is scheduled to open many, Vienna Mitte in Vienna, Austria, Aegean
Medium-Sized Shopping Centre" in November 2003; Park in Athens and Mediterranean Cosmos in
category, while both AlgarveShopping > It has been announced that Parque Thessalonica, Greece and the Brescia Centre
and Parque Principado (a development in Atlântico shopping and leisure centre in in Brescia and the Pavia Centre in Pavia, Italy.
Oviedo, Spain of which Sonae Imobiliária Ponta Delgada, Azores, Portugal, will The estimated total gross development cost of
owns 25%) received "Honourable open in October 2003; these Shopping Centres is around €1,700.4
Mentions" in the ICSC "Large Shopping > Approval has been given, conditional on million.
Centre" category; obtaining a licence, for investing in the The tables below give a more detailed picture
> The sales launch and presentation to the Pavia Shopping and Leisure Centre in of each of these projects being developed in
public of the Avenida M40 shopping and Pavia, Italy; the various markets in which Sonae Imobiliária
leisure centre, in Madrid, Spain, took place. > Building has begun at Coimbra Retail operates.
This centre will open in March 2004; Park, in Eiras, Coimbra, Portugal. This
> A joint venture was set up between project is being developed jointly by Portugal
Sonae Charagionis (39.9%) and Lamda Sonae Imobiliária (50%) and Miller
Development (60.1%) to develop a Developments (50%). The centre is In Portugal, Sonae Imobiliária is currently de-
shopping and leisure centre in scheduled to open in October 2003; veloping and marketing two shopping cen-
Thessalonica, Greece, with a GLA of > The company has bought WIB’s holding in tres and two new projects and is extending
47,000 m 2; Sonae West Shopping, AG (Dusseldorf, CascaiShopping. The total investment in all
> A 50-50 joint venture was set up with Germany) and Sonae Imobiliária now these projects amounts to around €146.8
ING to develop the Zubiarte shopping owns 95% of the company; million.
and leisure centre in Bilbao, Spain, with > The company has signed a promissory The two Shopping Centres, Parque Atlântico
a GLA of 21,700 m 2; contract to buy a site in Alexander Platz, (Ponta Delgada, Azores, Portugal) and Estação
28
sonaeimobiliária’ consolidated report and accounts 2002
Viana (Viana do Castelo, Portugal) are both be- this type in Portugal. We hope that that these now under construction. €25.4 million is being
ing developed in partnership with local com- developments will be just as successful as Sin- invested in extending its GLA by 7,000 m2. The
panies. Construction started in 2002 and the tra Retail Park. Building began at Coimbra Re- building work and the marketing campaign are
centres are scheduled to open in the Autumn tail Park in late 2002 and the project is sched- proceeding faster than expected and the new
of 2003. uled to open in Autumn 2003. The architectural area of the Centre should open in October of
The marketing campaigns for these centres plans for Setúbal Retail Park, in Setúbal, have this year.
have been highly successful and the centres been approved and the project is still awaiting Sonae Imobiliária will of course manage all of
should open almost fully let. a building licence. Hopefully this will soon be these projects.
Coimbra Retail Park and Setúbal Retail Park are granted so that building can begin during 2003.
the company’s second and third investments of The second extension of CascaiShopping is
Spain
Portugal Parque Estação Extension Coimbra Setúbal
Atlântico Viana CascaiShopping Retail Park Retail Park
Location Ponta Delgada, Azores Viana do Castelo Cascais, Coimbra Setúbal
Opening Date Autumn 2003 Autumn 2003 Autumn 2004 Autumn 2003 Autumn 2004
Catchment Area 116,000 inhab 134,000 inhab 1,000,000 inhab 175,000 inhab. 154,000 inhab.
GBA (m2) 37,000 33,000 10,000 13,000 20,000
GLA (m2) 22,000 18,000 7,000 12,800 20,000
Nr. of Parking places 1,120 600 610 500 800
Anchor Stores 7 7 2 1 3
Shop Units 75 85 36 10 10
Restaurants 16 16 1 4
% GLA leased 67% 55% 65% 55% 15%
Gross Investment (€) 39.5 million 46.3 million 25.4 million 13.5 million 22.1 million
Developers Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária
Miller Developments Miller Developments
Owners Sonae Imobiliária (50%) Sonae Imobiliária (50%) Sonae Imobiliária (50%) Sonae Imobiliária (50%) Sonae Imobiliária (50%)
Grupo Nicolau Group of Local PanEuropean (25%) Miller Group (50%) Miller Group (50%)
Sousa Lima (50%) Investors (50%) TransEuropean (25%)
In Spain, Plaza Mayor, in Malaga, opened as been signed for 55% of its GLA. The centre will restaurants, a 10-screen cinema and parking
planned on 18th April. The opening event was feature a 15,000 m2 Eroski hypermarket, a 12- for about 1,000 cars.
a huge success. Sonae Imobiliária’s first com- screen Yelmo Cineplex cinema, a Forum In October, also in partnership with the Eroski
plete project in Spain, the centre has 33,000 sports shop, and the Zara Group’s complete Group (65%/35%), building began at the Dos
m2 of GLA, and represents an investment of range of brand names. Mares shopping and leisure centre in S.
€ 46.9 million. In July 2002, Sonae Imobiliária announced that Javier, in the Murcia area. This project repre-
The construction and marketing of the Avenida it was going to develop a new shopping and sents an investment of about € 35 million. It
M40 shopping and leisure centre, in Madrid, leisure centre, Plaza Éboli, in Pinto, in the will have 24,000 m2 of GLA with 77 shops, in-
are proceeding at a brisk pace. This joint ven- Madrid area. This is another joint venture with cluding an Eroski hypermarket, 15 restau-
ture between Sonae Imobiliária and the Eroski the Eroski Group (65%/35%). About € 45 mil- rants, an 8-screen cinema and parking for
Group (60/40) is scheduled to open next lion will be invested in the centre, which will about 1,200 cars. It is scheduled to open in
spring. Avenida M40 will have 147 shops and have 30,000 m2 of GLA with 80 shops. The Spring 2004.
a number of anchors. Contracts have already Centre will have an Eroski hypermarket, 13
29
consolidated report and accounts 2002’sonaeimobiliária
The company is continuing to develop Luz del As has already been mentioned, the company construction. With a GLA of around 21,700 m2
Tao, in Toledo. This is another joint investment has formed a 50/50 joint venture with ING, and and 77 shops, it is scheduled to open in the
with the Eroski Group (65%/35%). The esti- Sonae Imobiliária and ING Developments are second quarter of 2004.
mated investment in the centre is € 77 million developing the Zubiarte shopping and leisure
and it will have 41,000 m2 of GLA. centre, in Bilbao. The centre is already under
Spain Avenida M40 Luz del Tajo Plaza Éboli Dos Mares Zubiarte Málaga
Factory Outlet
Location Madrid, Spain Toledo, Spain Pinto, Spain S. Javier, Spain Bilbau, Spain Malaga, Spain
Opening Date Spring 2004 Autumn 2004 Autumn 2004 Spring 2004 Autumn 2004 Spring 2005
Catchment Area 1,009,000 inhab 247,000 inhab 156,000 inhab 137,000 inhab 1,500,000 inhab 882,000 inhab
GBA (m2) 65,000 55,000 39,000 31,000 35,000 17,000
GLA (m2) 47,600 41,400 30,000 24,000 21,700 16,700
Nr. of Parking places 2,400 2,000 1,000 1,200 1,000 970
Anchor Stores 8 8 7 9 8 3
Shop Units 111 77 60 53 55 50
Restaurants 28 14 13 15 14
% GLA leased 55% 8% Not started Not started 20% Not started
Gross Investment (€) 110.7 million 77.1 million 45.0 million 35.2 million 75.0 million 30.7 million
Developers Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária
Group Eroski Group Eroski Group Eroski Group Eroski ING Castle City
Owners Sonae Imobiliária (60%) Sonae Imobiliária (65%) Sonae Imobiliária (65%) Sonae Imobiliária (65%) Sonae Imobiliária (50%) Sonae Imobiliária (75%)
Grupo Eroski (40%) Grupo Eroski (35%) Grupo Eroski (35%) Grupo Eroski (35%) ING (50%) Castle City (25%)
Germany and Austria 55,000 m2 and an estimated development cost and represents an investment of around
of € 250 million. € 265.5 million.
Through its subsidiary for the German and Aus- In December, Sonae Imobiliária signed a con- In Austria the Vienna Mitte shopping and leisure
trian markets, SonaeWest Shopping, AG, with, tract for the purchase of a site on the Alexan- centre is being developed in Vienna. The devel-
headquarters in Dusseldorf, Sonae Imobiliária derplatz, in the city of Berlin,on which to de- opment cost of this centre, which will have around
has continued to develop 3DO in Dortmund, velop a shopping and leisure centre. This 25,000 m2 of GLA, is € 170 million The building
Germany. The project has a GLA of around new development will have 53,200 m2 of GLA licence for the project was granted in 2002.
Germany & Austria 3 DODortmund Alexander Platz Vienna Mitte
Location Dortmund, Germany Berlin, Germany Viena, Austria
Opening Date Spring 2006 Spring 2006 Autumn 2006
Catchment Area 3,400,000 inhab 2,000,000 inhab 2,000,000 inhab
GBA (m2) 86,000 79,000 40,500
GLA (m2) 55,000 53,200 24,600
Nr. of Parking places 2,100 1,600 750
Anchor Stores 8 14 6
Shop Units 180 190 125
Restaurants 25 20 23
Cont. >>
30
sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
Germany & Austria 3 DODortmund Alexander Platz Vienna Mitte
% GLA leased Not started Not started Not started
Gross Investment (€) 250.0 million 265.5 million 170.,0 million
Developers Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária
Sonae West Shopping, AG Sonae West Shopping, AG Sonae West Shopping, AG
Owners Sonae Imobiliária (90%) Sonae Imobiliária Sonae Imobiliária
WestDeutsche Immobilien Bank (10%)
Greece and Italy ment with the LAMDA Development Group to shopping and leisure centre has a development
develop Mediterranean Cosmos, a shopping cost of about € 109 million.
In Greece during 2002, through Sonae Chara- and leisure centre in the city of Thessalonica, In November, Sonae Imobiliária agreed to in-
gionis, SA –Sonae Imobiliária’s subsidiary for in Northern Greece. This centre, of which vest in the Pavia Centre, a shopping and leisure
the Greek market, with headquarters in Athens Sonae Charagionis owns 39.9%, will have centre in Pavia, Italy. The agreement is condi-
– the Company continued to focus on obtain- 47,000 m2 of GLA and represents an invest- tional on the necessary licences being ob-
ing the licences required for the development ment of € 104 million. tained. This new centre represents an invest-
of Aegean Park, a shopping centre in the In Italy, through Sonae Imobiliária Italy, srl, ef- ment of € 129 million and it will have 47,500
Greater Athens area. forts are being made to conclude the licensing m2 of GLA.
During the first week of July, through Sonae process so that work can begin in 2003 on the
Charagionis, Sonae Imobiliária signed an agree- Brescia Centre, in Brescia, Italy. This 29,000 m2
Italy & Greece Brescia Centre Pavia Centre Aegean Park Mediterranean Cosmos
Location Brescia, Italy Pavia, Italy Athens, Greece Salónica, Greece
Opening Date Autumn 2005 Autumn 2005 Autumn 2005 Autumn 2004
Catchment Area 582,000 inhab 530,000 inhab 1,104,000 inhab 210,000 inhab
GBA (m2) 40,000 65,000 83,000 74,000
GLA (m2) 29,000 47,500 60,000 47,000
Nr. of Parking places 2,500 2,700 2,300 2,800
Anchor Stores 7 11 13 11
Shop Units 105 106 295 175
Restaurants 15 18 25 21
% GLA leased Not started Not started Not started Not started
Gross Investment (€) 109.2 million 129.2 million 152.0 million 104.0 million
Developers Sonae Imobiliária Italy, srl Sonae Imobiliária Italy, srl Sonae Charagionis, SA Sonae Charagionis, SA
Lamda Developments
Owners Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária (50%) Sonae Charagionis (39,9%)
Charagionis Group (50%) Lamda Devolopments (60,1%)
31
consolidated report and accounts 2002’sonaeimobiliária
The geographical distribution of the company’s –, the second results from the value created actual increase in value generated during the
investments is as follows: during the development process and is development phase. The Company, therefore,
recorded as Indirect Profit. recognised under the heading "Realized Prop-
Geographical breackdown
of Development Investments The income arises from project management erty Profit" (IAS 40) 10% of the increase in value
fees (services rendered) debited to projects un- relating to the centres opened during the year,
der development in the various countries. This in this case Plaza Mayor.
applies in every market except in Brazil, where In relation to non-realised gains on revaluation,
10% 14% 22%
Austria Italy Spain this income is included as part of the Brazil busi- the business has recognised the income from
29% 2% 8% 15%
Germany Brazil Portugal Greece ness unit. The growth versus 2001 results from future capital gains in the value of centres in
an increased number of projects under devel- course of development, which will only mate-
Financial Performance opment in 2002, as mentioned above. rialise at the time when the centres open. At
of the Development Operating costs rose by 8.9%, a substantial in- that time, the centres will be transferred to the
of Shopping and Leisure crease over 2001. The Company has a strong shopping centre investment business. These
Centres commitment to future expansion and conse- non-realised gains on revaluation are excluded
quently reinforce the management team during from the global consolidated accounts, since
This business contributed € 1.845 million to the the year. they represent transactions between busi-
Company’s consolidated profits, as against € The Total Indirect Profit is higher than last year nesses of the same Group.
511 thousand in 2001. This Net Profit has two by 19.5%. The Company has already ex- The Deferred taxes arise from the Realized
components, first, the one that results from the pressed its belief that the development busi- Property Profit and from the Non-Realised Prop-
normal activity of development – Direct Profit ness should be remunerated in relation to the erty Profit.
Sonae Imobiliária Development
(000’s Euro)
Profit & Loss Account Actual 2002 Actual 2001 var.(%)
Project Development Services Rendered 8.796 6.827 28,8%
Operating Costs 11.498 10.559 8,9%
General Supplies and Services 6.386 7.098 -10,0%
Personnel Costs 5.027 3.460 45,3%
Other Costs 86 2 -
Gross Operating Results (2.703) (3.732) -27,6%
Depreciation 94 41 128,5%
Operating Results (2.797) (3.773) -25,9%
Financial Income 690 92 646,5%
Financial Costs 624 163 281,9%
Financial Results 66 (71) -192,6%
Current Results (2.731) (3.844) -29,0%
Corporate Taxes (901) (1.266) -28,8%
Direct Profits (1.830) (2.578) -29,0%
Realized Property Profit (IAS 40) 1.947 4.610 -57,8%
Non - Realized Property Profit (IAS 40) 3.563 0 --
Total Indirect Income 5.510 4.610 19,5%
Deferred Tax 1.836 1.521 20,6%
Indirect Profit 3.675 3.089 19,0%
Net Profit 1.845 511 261,2%
32
sonaeimobiliária’ consolidated report and accounts 2002
Investment in Shopping and Leisure
Centres
Main Events in 2002 > The company has sold Quinta do Investimentos, the Investment Fund
Lambert, where Sonae Imobiliária has its Management Company of the Banco
> In 2002, construction proceeded of Lisbon headquarters, to AF Comercial Português Group;
Phase 2B of the extension of
CascaiShopping The extension will add Information on Centres and Galleries Owned
around 7,000 m2 of GLA to the centre
31.12.2002
and about 34 new shops. Total Centre Location Opening Units Occupancy GLA (M2) Total
investment will be around € 25 million;
> The remodelling of the shopping gallery CascaiShopping Cascais 91+94+99+00 170 99% 64,894
CoimbraShopping Coimbra 1993 69 97% 26,482
opposite the hypermarket at Gaiashopping
GuimarãesShopping Guimarães 1995 92 100% 24,875
was completed. New toilets and a MaxMat
GaiaShopping Gaia 1989+95 163 97% 57,186
shop were built and Worten moved to
ViaCatarina Oporto 1996 100 96% 11,611
larger premises. The space it occupied Centro Colombo Lisbon 1997 426 100% 119,769
previously was taken over by Sportzone; MaiaShopping Maia 1997 110 100% 28,940
> On 18th April 2002, the Plaza Mayor NorteShopping Oporto 1998 289 99% 72,024
shopping and leisure centre opened in Centro Vasco da Gama Lisbon 1999 166 100% 47,649
Sintra Retail Park Sintra 2000 16 100% 17,317
Malaga, Spain. The centre has about
MadeiraShopping Funchal 2001 112 92% 26,516
33,000m2 of GLA;
AlgarveShopping Guia 2001 133 96% 42,404
> In December 2002, an agreement was
Arrábida Shopping Gaia 1996 176 97% 56,457
signed relating to the acquisition of FILO’s Total Shopping C’s in Portugal 2,022 98% 596,124
shopping centre business and a joint ClérigoShopping Oporto 1991 25 16% 1,423
venture with ING for this purpose, under Edifício Grandella Lisbon 1998 5 80% 5,806
Total Galleries in Portugal 30 27% 7,229
the terms of which Sonae Imobiliária has
Total Portugal 2,052 97% 603,353
the same holding in the development
P.Primcipado Oviedo 2001 126 95% 75,542
business as ING and 100% of the
Plaza Mayor Málaga 2002 111 90% 33,034
shopping centre management business. Gran Casa Zaragoça 1997 177 97% 78,943
As a result of this purchase, the company La Farga Barcelona 1996 128 73% 18,584
now co-owns four shopping centres in Max Center Bilbau 1994 186 82% 59,613
operation: Gran Casa in Zaragoza, Max Valle Real Santander 1994 104 91% 47,738
Total Shopping C’s in Spain 832 88% 313,454
Center in Bilbao, Valle Real in Santander
Shopping Penha São Paulo 1992 203 69% 18,106
and La Farga in Barcelona. Jointly with
Shopping Franca São Paulo 1993 108 81% 18,361
ING, Sonae Imobiliária is also developing
Shopping Metrópole São Paulo 1980 164 95% 25,289
a shopping centre in Zubiarte, Bilbao; Pátio Brasil Brasília, DF 1997 198 90% 30,942
> At the beginning of 2003, an agreement Tivoli Shopping São Paulo 1998 160 88% 21,389
should be finalised for the purchase of Parque D. Pedro São Paulo 2002 368 86% 109,638
Total Shopping C’s in Brazil 1,201 85% 223,725
Castle Management’s 25% holding in the
TOTAL 4,085 92% 1,140,532
Plaza Mayor shopping and leisure centre
in Malaga, Spain;
33
consolidated report and accounts 2002’sonaeimobiliária
> During 2002, the re-financing took place Geographical Distribution Portugal:
of GLA owned Shopping and
of ViaCatarina (€ 39 million), GalleriesRental and
CascaiShopping (€ 123 million including Million Euro Other Income
160.0
144
the extension project) and Centro Vasco 140.0
124
120.0
da Gama (€ 111 million). 27% 53% 20%
102
Spain Portugal Brazil 100.0
87
80.0
62
Performance 60.0
40.0 32
Overall, 2002 was a highly successful year.
20.0
Sonae Imobiliária owns or co-owns 1,140,532 The Shopping Centres and Galleries owned or 0.0
97 98 99 00 01 02
m2 of GLA in operation in Portugal, Spain and co-owned by the company in Portugal, Spain
Brazil, an increase of 44% compared to the pre- and Brazil generated rents and other income
vious year. amounting to € 223.9 million, an increase of In Portugal, rents and other income generated
The percentage of GLA in centres in operation 58.7% over the previous year. On a "like-for-like" by shopping centres and galleries owned or co-
owned (or co-owned) by the company in each basis, the increase was 12.2%, an excellent re- owned by Sonae Imobiliária amounted to
of these countries is as follows: sult bearing in mind that during the year the € 143.8 million an increase of 16.1% over
Brazilian Real was devalued by 43.8% against 2001. This portfolio was 97% occupied at the
the Euro. At the end of 2002, the occupancy end of 2002.
rate of this portfolio was 92%.
Portugal Gross Rental Income Gross Fixed Gross Variable Variable
Rental Income Rental Income over fixed
(000’s Euro) 2002 2001 02/01% 2002 2001 02/01% 2002 2001 02/01% 2002 2001
var. var. var.
CascaiShopping 14,619 13,809 5.9% 14,188 13,547 4.7% 431 262 64.5% 3.0% 1.9%
CoimbraShopping 2,783 2,679 3.9% 2,258 2,163 4.4% 525 516 1.7% 23.3% 23.9%
GuimarãesShopping 2,922 2,641 10.6% 2,698 2,452 10.0% 224 189 18.5% 8.3% 7.7%
GaiaShopping 9,132 8,341 9.5% 8,785 8,004 9.8% 347 337 3.0% 3.9% 4.2%
ViaCatarina 4,933 4,678 5.5% 4,853 4,588 5.8% 80 90 -11.1% 1.6% 2.0%
Centro Colombo 37,487 36,650 2.3% 32,952 31,756 3.8% 4,535 4,894 -7.3% 13.8% 15.4%
MaiaShopping 4,073 3,879 5.0% 3,522 3,354 5.0% 551 525 5.0% 15.6% 15.7%
NorteShopping 21,490 19,551 9.9% 18,045 16,460 9.6% 3,445 3,091 11.5% 19.1% 18.8%
Centro Vasco da Gama 13,404 12,260 9.3% 11,765 10,370 13.5% 1,639 1,890 -13.3% 13.9% 18.2%
Sintra Retail Park 2,474 2,382 3.9% 2,469 2,377 3.9% 5 5 0.0% 0.2% 0.2%
MadeiraShopping 6,109 4,262 43.3% 5,634 3,891 44.8% 475 371 28.0% 8.4% 9.5%
AlgarveShopping 6,500 3,851 68.8% 5,905 3,450 71.2% 595 401 48.4% 10.1% 11.6%
Arrábida Shopping 9,040 8,618 4.9% 8,797 8,422 4.5% 243 196 24.0% 2.8% 2.3%
Total 134,966 123,601 9.2% 121,871 110,834 10.0% 13,095 12,767 2.6% 10.7% 11.5%
Analysis of the fixed and variable rents gener- CoimbraShopping, Centro Colombo, Ma- In December, Sonae Imobiliária sold Quinta do
ated only by the portfolio of shopping centres iaShopping, NorteShopping, Centro Vasco da Lambert, where the company has its Lisbon
in Portugal shows revenue amounting to €135 Gama and AlgarveShopping were all particularly headquarters, to AF Investimentos, the Invest-
million, an increase of 9.2% over 2001. successful, generating turnover rents amount- ment Fund Management Company of the
Turnover rents amounted to 10.7% of the fixed ing to over 10% of the fixed rental income of Banco Comercial Português Group.
rents. these centres.
34
sonaeimobiliária’ consolidated report and accounts 2002
The portfolio of shopping centres in Spain ei- the opening of Plaza Mayor and the fact that
ther owned or co-owned by Sonae Imobiliária Parque Principado has now been in operation
generated fixed and variable rents of €36 mil- for a full year. At the end of 2002, the occu-
lion. Major factors contributing to this total were pancy rate was 88%.
Spain Gross Rental Income Gross Fixed Gross Variable Variable
Rental Income Rental Income over fixed
(000’s Euro) 2002 2001 02/01% 2002 2001 02/01% 2002 2001 02/01% 2002 2001
var. var. var.
Parque Principado 9,158 5,299 72.8% 9,129 5,286 72.7% 29 13 123.1% 0.3% 0.2%
Plaza Mayor 3,169 0 n.a. 3,036 0 n.a. 133 0 n.a. 4.4% n.a.
Gran Casa 8,548 8,068 5.9% 8,410 7,999 5.1% 138 69 100.0% 1.6% 0.9%
La Farga 3,372 3,276 2.9% 3,297 3,223 2.3% 75 53 41.5% 2.3% 1.6%
Max Center 6,855 6,073 12.9% 6,684 5,921 12.9% 171 152 12.5% 2.6% 2.6%
Valle Real 4,450 4,102 8.5% 4,207 3,953 6.4% 243 149 63.1% 5.8% n.a.
Total 35,552 26,818 32.6% 34,763 26,382 31.8% 789 436 81.0% 2.3% 1.7%
On 18th April the Plaza Mayor shopping and Ranking Shop Tenants % weight
(Weight on rents) Name Brand on rents
leisure centre opened in Malaga, Spain, and in
December, Sonae Imobiliária agreed to buy 1 GRUPO INDITEX Zara; Pull & Bear; 8.33%
Bershka; Kiddy’s Class;
25% of Castle Management’s holding in its Massimo Dutti;
Stradivaríus; Oysho
SPV, the special purpose vehicle which owns
2 SONAE DISTRIBUIÇÃO Modelo Bounjour; 4.46%
Plaza Mayor. Vobis; Sport Zone;
Worten; Auto Center;
In September, Sonae Imobiliária, became the
Max Office
owner, jointly with ING Real Estate Bishop 3 GRUPO IBERSOL Pizza Hut; Pans & 3.52%
Company; KFC;
B.V., of the shopping centres acquired from
Pasta Café; Iber;
FILO. As a result of this purchase, the com- Ó Kilo; Burguer King;
Quiosque Buondi
pany now owns 50% of the Gran Casa Centre
4 GRUPO Cortefiel; Douglas; 3.46%
in Zaragoza, the Max Center in Bilbao and CONFESPANHA Women Secret; Milano;
Springfield
Valle Real in Santander as well as 25% of La
5 WARNER LUSOMUNDO Warner Lusomundo 2.84%
Farga in Barcelona.
6 GRUPO MACONDE Macmoda; Tribo 2.57%
Finally, a note concerning the relative weight- 7 GRUPO BCP BCP; BII; Bonança; 1.53%
ing in terms of rental income of the various Banco 7; Nova Rede;
BPSM
groups who are clients/shop tenants. 8 GRUPO Perfumes e Cª 1.48%
In fixed rental terms, Sonae Imobiliária’s BARREIROS FARIA
9 MANGONOR Mango 1.24%
largest tenant is the INDITEX Group, which gen-
10 GRUPO VISTA ALEGRE Casa Alegre; 1.17%
erates about 8.3% of the total fixed rental in- E ATLANTIS Vista Alegre; Atlantis
come. Sonae Distribuição, including all its
brand names, represents only 4.5% of the to-
tal rental income. Sonae Turismo’s contribu-
tion is negligible.
35
consolidated report and accounts 2002’sonaeimobiliária
Open Market Valuation Open Market Value The changes in the open market value of the
of Operating Shopping
Centres and Galleries main Shopping Centres owned (or co-owned) by
The open market value of the shopping centres million of Euro Sonae Imobiliária between 2001 and 2002 are
3,000
and galleries in operation in Portugal, Spain and shown in the following table:
2,500
Brazil as at 31 December 2002, was € 2,560.9 1.944
2.561
2,000
million. The part that belonged to Sonae Imo- 1.480 1.471
1,500 1.359
biliária was valued at € 1,471.2 million. This rep- 1,000
959
854
1.064
760
653 534
resents an increase in 2002 of € 407 million just 500 375
in its share of the shopping centres and galleries 0
‘12/97 ‘12/98 ‘12/99 ‘12/00 ‘12/01 ‘12/02
in operation. This increase came about through
Total Value Sonae Share
the company’s own investment and through the
growth in rents and other types of income.
Shopping Centres and Galleries owned or co-owned and in operation
At 31/12 and in 000’s € Open Market Value attributable to Sonae
2002 2001 % 2000 % 1999 %
Portugal
CascaiShopping 97,359 93,404 4.2% 84,122 11.0% 75,892 10.8%
CoimbraShopping 31,475 29,265 7.6% 27,988 4.6% 26,870 4.2%
GuimarãeShopping 33,231 31,326 6.1% 28,107 11.5% 26,526 6.0%
GaiaShopping 58,207 56,242 3.5% 92,572 21.5% 89,290 3.7%
(50% held in 2001)
ViaCatarina 33,026 31,212 8.8% 28,556 9.3% 28,571 –0.1%
Centro Colombo 278,574 250,249 11.3% 240,770 3.9% 225,282 6.9%
MaiaShopping 49,245 41,965 17.3% 39,206 7.0% 37,081 5.7%
NorteShopping 134,462 118,172 13.8% 112,035 5.5% 101,391 10.5%
Centro Vasco da Gama 204,098 185,903 9.8% 166,798 11.5% 129,603 28.7%
Sintra Retail Park 14,713 14,300 2.9% 13,343 7.2% - n.a.
MadeiraShopping 32,460 26,573 22.2% - n.a. - n.a.
AlgarveShopping 81,927 77,566 5.6% - n.a. - n.a.
Arrábida Shopping 59,049 57,090 3.4% - n.a. - n.a.
( 50% adquired in 2001)
Others 5,666 8,728 -35.1% 9,462 -7.8% 9,118 3.8%
Total Portugal 1,113,490 1,021,994 9.0% 842,958 21.2% 749,623 12.5%
Spain
Parque Principado 31,625 32,750 -3.4% - n.a. - n.a.
Plaza Mayor 61,875 - n.a. - n.a. - n.a.
Gran Casa 63,250 - n.a. - n.a. - n.a.
Max Center 61,000 - n.a. - n.a. - n.a.
Valle Real 33,000 - n.a. - n.a. - n.a.
La Farga 11,352 - n.a. - n.a. - n.a.
Total Spain 262,102 32,750 700.1% - n.a. - n.a.
Total Shopping and Gallleries in op. 1,375,592 1,054,744 30.4 % 842,958 21.2% 749,623 12.5%
36
sonaeimobiliária’ consolidated report and accounts 2002
This increase in the open market value of as- Risk Management vestment monitoring procedures and staff au-
sets attributable to Sonae Imobiliária is due dits. Various audits relating to the company’s
mainly to the purchase of four Shopping Cen- In its Shopping Centres, Sonae Imobiliária has computer systems were also carried out.
tres in Spain, the opening of Plaza Mayor in set up a number of activities and plans of ac- These included audits of security and back-up
Malaga in Spain and to the opening of Parque tion in the area of Risk Management. During procedures connected with the management
Dom Pedro in Campinas in Brazil. The in- 2002, various audits took place of a techno- and invoicing of contracts in Portugal, while in
crease was much less than it would have been logical and operational nature. These included Brazil, there were audits of the efficiency, se-
had the Brazilian Real not been devalued. On audits of the fire alarm system, the burglar curity and availability of the computer systems
a "like-for-like" basis, the increase was 8.6%. alarm and CCTV systems, and technical audits and of the processing centre which handle the
This figure shows that dynamic management of the tenants’ shops, particularly of the hygiene Company’s operations in that country.
of the company’s assets produced genuine standards and sanitation in the shops in the
growth. food courts. These audits revealed that some Financial Performance
The percentage of the total Open Market Value operating procedures were in need of im- of Investment in Shopping
of shopping centres and galleries in operation provement and that there is also a need for and Leisure Centres
which are owned (or co-owned) by Sonae Imo- some re-building in particular areas. The emer-
biliária in each country is as follows: gency procedures in the Shopping Centres This business contributed €108.2 million to the
were also audited. Fire drills and bomb-scare company’s Consolidated Profits, compared to
Geographical breakdown of and evacuation drills were held. In some cases € 116.1 million in 2001, a decrease of 6.8%.
OMV of Shopping Centres
in operation the civil protection services, the security serv- The income of this business has two main ele-
ices and the fire-fighting service were present. ments. The first relates to the direct income from
In addition to these audits, technical, environ- operations during the year and corresponds to
mental, legal and security audits took place in the Total Income from shopping centres. This
76% 6% 18%
Portugal Brazil Spain all the Shopping Centres. amounted to € 107.9 million compared to
All assets owned by Sonae Imobiliária in Por- € 98.7 million in 2001, an increase of 9.3%.
The Re-financing of tugal and Spain are insured against acts of ter- This figure is lower than it would have been since
Shopping and Leisure rorism. one type of income generated in 2001 did not
Centres in Operation arise in the same way in 2002. We refer to the
Internal Auditing payment of key money (net of letting costs),
During 2002 three shopping centres in Portu- which, according to IAS regulations, must be ac-
gal were re-financed through long-term, mort- In conducting its internal audits Sonae Imobil- counted for only when the shopping centre
gage-backed, project finance type loans. This iária has been using the shared services of the opens. In 2001, this was the case of
is a means of financing the expansion of the Sonae Group. Specialist staffs carried out this Madeirashopping and Algarveshopping, where
company, particularly outside Portugal. work, reporting directly to the Board of Direc- key money reached the amount of € 5.6 million.
The Shopping Centres that were re-financed in tors of Sonae Imobiliária. During 2002, com- In the first half of 2002 only Plaza Mayor
this way were ViaCatarina (€ 39.2million), Cas- pliance audits were conducted on the main opened. However, in the Spanish Shopping
caiShopping (€ 122.9 million including the ex- units in Portugal, Germany and Greece and at Centres market the concept of key money
tension currently underway) and Vasco da the beginning of the year, on the implementa- barely exists. This meant that only the letting
Gama (€ 111.0 million). tion of the Euro. Further audits were conducted costs of this investment were taken into ac-
These transactions raised Sonae Imobiliária’s in Portugal and Brazil of a number of proce- count (€ 931 thousand).
long-term level of debt by € 238 million. dures critical to the business. These included If this unfavourable factor were to be left out,
audits of shop tenant contract management, in- the increase in Shopping Centre Operating In-
37
consolidated report and accounts 2002’sonaeimobiliária
come would have been 18.6%. This growth is Sonae Imobiliária Assets
000’s Euro
due to the increase in business after the open- Profit & Loss Account Actual 2002 Actual 2001 var.(%)
ing of Plaza Mayor and to the fact that Algar-
Fixed Rental Income 84,555 70,458 20.0%
veshopping, Madeirashopping and Parque Prin-
Turnover Rental Income 8,581 8,264 3.8%
cipado were all in operation for the whole year.
Key-Money Income 9,098 16,149 – 43.7%
The second main element of the income of this Other Income 5,714 3,859 48.1%
business is Gains on Revaluation of the com- Total Shopping Centre Operating Income 107,948 98,730 9.3%
pany’s properties. This amounted to € 108.9 Property Management Services 5,673 4,922 15.3%
Common Charges for Vacant Units 805 434 85.6%
million, of which € 21.4 million derives from the
Letting & Marketing Costs 2,171 6,448 – 66.3%
increase in value of Plaza Mayor, which opened Property Taxes 3,013 3,254 – 7.4%
during the year, and the remaining amount is Capital Expenditure 6,030 3,696 63.2%
from gains in value of the other properties. Other Costs 10,624 4,374 142.9%
Total Shopping Centre Operating Costs 28,316 23,127 22.4%
There was an increase during the year in Net
Shopping Net Operating Margin 79,632 75,603 5.3%
Financial Expenses. This was due to the in-
Parking Income 7,101 6,424 10.5%
crease in investments, to the re-financing of Parking Costs 3,284 3,150 4.3%
certain properties and to the fact that the in- Parking Net Operating Margin 3,817 3,274 16.6%
terest charges on the financing for the devel- Co-generation Income 2,432 2,044 19.0%
Co-generation Costs 1,699 1,575 7.9%
opment of the centres which opened during the
Co-generation Net Operating Margin 733 469 56.3%
year ceased to be capitalised once the centres
Total Shopping Centre Operating Margin 84,182 79,346 6.1%
opened. Office Income 1,154 1,198 – 3.7%
The Extraordinary Profits and Losses relate to Office Costs 59 40 46.8%
the capital gain on the sale of a business in- Offices Net Operating Margin 1,094 1,158 – 5.5%
Asset Management Fees 1,288 499 157.9
cluded within the sale of Prædium (€ 1.4 mil-
Total Income from Services Rendered 1,288 499 157.9
lion), and to previous year adjustments in re-
General Supplies and Services 7,582 7,559 0.3%
spect of estimates for local property taxes and Personnel Costs 363 322 12.6%
notary fees. Total Overheads 7,945 7,882 0.8%
Corporation Tax was € 14.9 million. This is cal- Gross Operating Results 78,619 73,121 7.5%
Depreciation 242 639 – 62.2%
culated in relation to individual businesses or
Provisions 111 89 25.2%
tax groups, in accordance with Portuguese Tax Operating Results 78,266 72,393 8.1%
and Accounting Regulations. Deferred Tax re- Financial Income 10,781 7,998 34.8%
lates to tax on adjustments made to comply Financial Costs 34,060 24,790 37.4%
Financial Results (23,279) (16,792) 38.6%
with IAS regulations.
Current Results 54,987 55,601 – 1.1%
Other Non-Recurring Income 3,714 1,716 116.4%
Other Non-Recurring Costs 494 2,477 – 80.0%
Results Before Corporate Taxes 58,207 54,840 6.1%
Corporate Taxes 14,939 11,464 30.3%
Direct Profits 43,267 43,376 – 0.3%
Realized Property Profit 0 13,631 – 100.0%
Non-realized Property Profit (IAS 40) 108,958 96,987 12.3%
Total Indirect Income from Investments 108,958 110,618 – 1.5%
Deferred Tax 44,050 37,896 16.2%
Indirect Profit 64,908 72,722 – 10.7%
Net Profit 108,176 116.098 – 6.8%
38
sonaeimobiliária’ consolidated report and accounts 2002
The Management and Letting of Shopping and Leisure
Centres (Property Management)
Main Events of 2002 Portugal (22.5% of the total), 247 in in Oviedo (Asturias, Spain), which will join
Spain (35.6%) and 290 in Brazil (41.2%); our portfolio of centres under
> The company took over the > Contracts were renewed and shops re- management in April 2003.
management of Arrábida Shopping in let in ViaCatarina and Arrábida Shopping
Portugal (bought 28/12/2001), of (where most of the existing contracts Portfolio Under
Parque D. Pedro in Brazil (in March) and expired in 2002). The results of this Management
of a number of centres in Spain; were extremely positive, both in terms
> Plaza Mayor (in Malaga), which opened of the quality of brands and of the Sonae Imobiliária’s consolidated business of
in April; agreed rents; managing, marketing and letting shopping
> Gran Casa (in Zaragoza), La Farga (in > The back office and management staff of centres continued to expand. The company’s
Hospitalet), Max Centre (in Bilbao) and the FILO Shopping Centres were integrated business grew in all three of the countries
Valle Real (in Santander), all four of into CCC in the last quarter of 2002; where it operates, Portugal, Spain and Brazil.
which were bought in September; > The company began to train the future
> La Morea (in Pamplona), which opened in management staff of Parque Principado,
October;
> At the end of 2002, the GLA under Shopping Centres: Contracts and GLA (m2) under management
management in the company’s Centres GLA m2 number of contracts
portfolio in Portugal, Spain and Brazil
CascaiShopping 64,894 187
amounted to a total of 1,516,831 m2,
CoimbraShopping 26,482 93
an increase of 34.5% over 2001, with
GuimarãeShopping 24,875 98
a corresponding increase in the
GaiaShopping 57,186 179
number of contracts under ViaCatarina 11,611 120
management from 3,949 to 5,089 Centro Colombo 119,769 502
(+28,9%); MaiaShopping 28,940 120
NorteShopping 72,024 333
> During 2002, the number of visits to
Centro Vasco da Gama 47,649 227
centres in the company’s portfolio under
Sintra Retail Park 17,317 16
management in Portugal, Spain and
MadeiraShopping 26,516 143
Brazil was 377,000 million, an increase AlgarveShopping 42,404 177
of 6.5% relative to 2001; Arrábida Shopping 56,457 195
> During 2002, sales (excluding those Total Shopping Centres in Portugal 596,124 2,390
made in shops of which the occupiers ClérigoShopping 1,423 3
Galeria Lambert 1,995 16
are the owners) amounted to about
Grandella 5,806 3
€ 2,495 million in the company’s
Total Galleries in Portugal 9,224 22
portfolio under management in Portugal,
Third Party Galleries under Management 259,246 647
Spain and Brazil. This is an increase of Total under management in Portugal 864,594 3,059
about 11.5% over the previous year; Plaza Mayor 33,034 103
> Contracts were signed for 693 shops Gran Casa 78,943 175
La Farga 18.584 93
during 2002, of which 156 were in
Cont. >>
39
consolidated report and accounts 2002’sonaeimobiliária
Cont. >>
Shopping Centres: Contracts and GLA (m2) under management
Centres GLA m2 number of contracts
Max Center 59,613 148
Valle Real 47,738 93
Urbil 35,675 69
La Morea 19,195 72
Total Shopping Centres in Spain 292,782 753
Third Party Galleries under Management 135,720 162
Total under management in Spain 428,502 915
Penha 18,106 166
Franca 18,361 89
Metrópole 25,289 156
Pátio Brasil 30,942 194
Tivoli 21,389 148
Parque D. Pedro 109,638 362
Total Shopping Centres in Brazil 223,725 1,115
Total under management 1,516.821 5,089
As at 31/12/2002, Sonae Imobiliária had un- In Spain, Sonae Imobiliária expanded its port- We will begin by analysing the 2002 per-
der management 1,516,821 m2 of GLA (an in- folio under management from seven to fourteen formance of Sonae Imobiliária’s 12 shopping
crease of 34.4% over 31/12/2001). Of this to- shopping centres and galleries. The company centres and the retail park in Portugal. De-
tal, 57% was in Portugal, 28% in Spain, and the now manages a total of 915 contracts and spite the weak economy, the centres contin-
remaining 15% in Brazil. This GLA relates to 428,502 m2 of GLA. Sonae Imobiliária co-owns ued to perform well. The total number of vis-
5,089 contracts with retailers (over 28.9% five of these centres, and the other two shop- its remained more or less the same (-0.1%),
more than in the previous year). ping centres and seven galleries are owned by while total sales rose by 7.7% compared to
In Portugal, at the end of 2002, Sonae Imobil- other companies the previous year.
iária had under management 3,059 contracts In Brazil, Unishopping, a company wholly On a "like-for-like" basis, excluding the centres,
for shops and storage space, representing a owned by Sonae Enplanta, currently manages which opened in 2002, and the months of
total GLA of 864,594 m2. six Shopping Centres. Sonae Imobiliária is co- 2002 during which the centres were not open
owner of these, either directly or through in 2001, there was a slight decline in the num-
Portugal:
No of contracts Sonae-Enplanta. The company has a total of ber of visits in Portugal (-2.1%), while sales
GLA & GLA under No. of 1,115 contracts and 223,725 m2 of GLA un- rose by 5.5%.
(000’s) m2 management contracts
under manag. under manag.
der management. At CascaiShopping the number of visits re-
1,000 3,500
3,000 mained stable, despite building works for the
800
2,500 Performance of Centres current extension. There were about 10.5 mil-
600 2,000
under Management lion visits (3.4% fewer than in 2001). Total sales
400 1,500
increased by 1.5% compared with 2001. The
1,000
200 In this section, we will deal only with the Shop- average effort rate at the centre (Rents plus
500
0 0 ping Centres in Portugal and Spain. Centres Common Service Charges as a percentage of
‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02
under management in Brazil will be dealt with Shop Sales) was 12.5% in 2002.
GLA (1.000 m2 ) under Management
No of Contracts under Management in a separate section on Brazil.
40
sonaeimobiliária’ consolidated report and accounts 2002
Centre Visits Sales MaiaShopping also completed its fifth year in
02/01 02/01
[visits 000’s; 000’s Euro] 2002 2001
% Var.
2002 2001
% Var. operation, performing well with 8.6 million vis-
itors (-1,6%), while sales rose 11.2% as several
CascaiShopping 10,460 10,824 -3.4% 159,165 156,765 1.5%
new brands opened and the tenant-mix im-
CoimbraShopping 7,533 7,466 0.9% 45,343 43,875 3.3%
proved. The average effort rate during the year
GuimarãeShopping 8,967 8,442 6.2% 41,726 37,070 12.6%
GaiaShopping 10,721 10,670 0.5% 95,596 86,335 10.7% was 10.4%.
Viacatarina 9,585 9,371 2.3% 41,611 38,097 9.2% NorteShopping opened in October 1998 and
Centro Colombo 31,458 34,088 -7.7% 450,145 448,423 0.4% has completed its fourth year with an excellent
MaiaShopping 8,582 8,718 -1.6% 51,028 45,895 11.2% performance record. The centre has had 21.7
NorteShopping 21,652 21,558 0.4% 307,272 275,322 11.6%
million visitors (+0,4%) and a double-digit in-
Centro Vasco da Gama 21,000 21,466 -2.2% 174,126 171,672 1.4%
crease in sales (+11,6%). The average effort
Sintra Retail Park n.d. n.d. - 24,270 20,756 16.9%
MadeiraShopping 5,899 4,562 29.3% 79,384 57,508 38.0%
rate was low (8.9%), suggesting that rents
AlgarveShopping 7,526 6,192 21.5% 80,985 53,916 50.2% could rise in the medium term.
Arrábida Shopping 12,179 12,438 -2.1% 80,931 79,786 1.4% Centro Vasco da Gama, which opened in
Total 155,562 155,795 -0.1% 1,631,582 1,515,420 7.7% April 1999, performed reasonably well, with 21
Total (Like-for-like) 02/01 152,148 155,386 -2.1% 1,595,507 1,512,419 5.5%
million visits (-2,2%) and a 1.4% increase in to-
tal sales, despite intense competition in its
catchment area with the opening of "El Corte
At CoimbraShopping, five years after its ex- most of 2001, the disruption caused by public Inglés" and Fórum Almada. The average effort
tension, both traffic and sales increased by works in downtown Porto had a considerable rate was 10.4%.
0.9% and 3.3% respectively. In terms of sales, effect on the centre, and this was an excellent Sintra Retail Park opened in November 2000
the performance was excellent, reaching € 600 recovery. The average effort rate was 15.4%. and its performance has shown steady
per m2 per month, the best record in the Sonae This is likely to decrease in future, once new progress. At the end of 2002 sales rose by a
Imobiliária portfolio. The average effort rate at brands are introduced with better sales per m2. healthy 16.9%. There is no record of levels of
the centre was 7.7%, which is very low. At Centro Colombo, in its fifth year of opera- traffic. The average effort rate reached 11.4%
In GuimarãeShopping traffic continued to tion there were 31.5 million visitors. Even in 2002.
grow (+6.2%) together with sales (+12.6%). In though the number of visits declined by 7.7% MadeiraShopping opened at the end of
2001, a large number of contracts with retail- compared to 2001, Colombo is still one of the March 2001. It had almost 6 million visits in
ers expired and new brands moved in, im- most popular shopping centres in the world. In 2002 and total sales were € 79 million. In the
proving the tenant-mix. The average effort rate November 2001 the department store "El Corte months during which performance can be com-
was 11.4%. Inglés" opened in Lisbon, with over 40,000 m2 pared to the previous year, the number of vis-
In GaiaShopping visits reached 10.7 million of GLA. In September 2002 Fórum Almada itors and total sales increased by 1.0% and
(+0,5%), while total sales rose 10.7% due to opened in the Greater Lisbon area, with over 11.6% respectively. The average effort rate
the improvement in the tenant-mix during the 70,000 m2 of GLA. The presence of these new was 9.8%.
second quarter of 2002. This performance was competitors needs to be taken into account. AlgarveShopping opened in April 2001. It had
achieved even though the shops in the Gallery Sales at Centro Colombo rose by 0.4% in over 7.5 million visits in 2002 and total sales
opposite the Hypermarket had to close tem- 2002, reaching a monthly average of over reached € 81 (excluding the hypermarket). In
porarily for renovation works. The average ef- € 469 per m2 (excluding the Hypermarket and the months which can be compared with the
fort rate was 11.3%. C&A), a very good performance for a centre of previous year, although the number of visits fell
At Viacatarina there were 9.6 million visits this size. The average effort rate at Colombo by 6.5%, total sales rose by 18.0%. The aver-
(+2.3%), while sales went up by 9.2%. During was 10% in 2002. age effort rate was 10.4%.
41
consolidated report and accounts 2002’sonaeimobiliária
Arrábida Shopping, acquired at the end of De- In Spain, the company bought four Shopping Taking only the centres which are co-owned by
cember 2001, had over 12 million visits in Centres previously owned by FILO and the Sonae Imobiliária and La Morea (Pamplona), the
2002 (-2.1%) and total sales (excluding the hy- number of centres in Sonae Imobiliária’s growth over 2001 was 14.8% and 22% in vis-
permarket) were € 81 million, a 1.4% increase Spanish portfolio under management rose its and sales respectively
over the previous year. October saw the be- from seven to fourteen. Overall, the per- On a "like-for-like" basis, comparing only those
ginning of major improvements in the tenant-mix formance of these centres was good. In months during which the centres were open
as old contracts expired and new ones were 2002 the number of visitors increased by in the previous year, the number of visitors
signed. It is probable that this change will gen- 14.5% and total sales rose by 19.2% com- and total sales rose by 2.5% and 9.5% re-
erate higher sales in 2003. In 2002 the centre’s pared to 2001. spectively.
average effort rate was 13.4%.
Centre Visits Sales
02/01 02/01
[visits 000’s;sales 000’s Euro] 2002 2001 % Var. 2002 2001
% Var.
Plaza Mayor (Opened in April 2002) 5,120 - n.d. 22,701 - n.d.
Gran Casa 16,305 16,414 –0.7% 110,554 96,766 14.2%
La Farga 6,410 6,688 –4.2% 39,140 39,676 –1.4%
Max Center 8,039 7,486 7.4% 88,451 81,040 9.1%
Valle Real 6,934 6,708 3.4% 58,131 53,040 9.6%
La Morea (Opened in October 2002) n.d. - n.d. 11,029 - n.d.
Total 42,808 37,296 14.8% 330,006 270,522 22.0%
Total (Like-for-like) 02/01 37,688 37,296 1.1% 296,276 270,522 9.5%
Plaza Mayor is primarily a leisure centre. It ance was excellent. There were 16.3 million vis- sult, the level of traffic rose by 7.4% and sales
opened in April 2002, and has had a major im- its (-0,7%) and total sales were € 91 million, an by 9.1%, an excellent performance. Average ef-
pact on the Malaga area. In its first eight and a increase of 14.2% over 2001. Average effort fort rate was 11.2%.
half months in operation, it has had 5.1 million rate in 2002 was 10.4%. Valle Real, in Santander, continued to im-
visitors, with shop tenants recording sales of At La Farga, in Hospitalet (near Barcelona), prove its performance as in previous years,
€ 23 million. These figures are within the fore- the level of traffic and sales fell by 4% and with levels of traffic and sales increasing by
casts. In 2002 the average effort rate was 16% 0.4% respectively due mainly to increased 34% and 9.6% respectively. Average effort
because several shops opened late and had to competition, with new shopping centres rate was 9.5%.
start paying rent and expenses for the common opening in La Farga’s catchment area. There Lastly, La Morea, in Pamplona, which is owned
parts before generating any sales. This figure are to be major changes in the tenant-mix of by a third party but is managed by Sonae Imo-
should be much lower in 2003. the upper floors of the centre to make it biliária through CCC. The centre opened in Oc-
In September Sonae Imobiliária bought four cen- more competitive and more attractive to the tober and has proved extremely popular in the
tres previously owned by FILO (Gran Casa, La local clientele. Average effort rate was city. There are no figures for the level of traf-
Farga, Max Center and Valle Real). Although the around 10%. fic, as the footfall system has not yet been in-
company only began managing these centres in The Max Center, in Bilbao, was extended in stalled. Sales are good, with average monthly
September 2002, we present above their per- 2002. A new area has been built, bringing to- figures of around € 340 per m2. Average effort
formance figures for the whole of 2002: gether the centre’s leisure facilities (cinemas, rate was 9.3% during the first two and a half
Gran Casa is the largest shopping centre in bowling, food and drink), and a number of new months in operation.
Zaragoza. As in previous years, its perform- fashion brands have been introduced. As a re-
42
sonaeimobiliária’ consolidated report and accounts 2002
Rent Collection In 2002 in Spain, 160 contracts were signed New Businesses and
Performance with shops in new developments at Plaza Mayor New Technology (NTBD)
(in Malaga), La Morea (in Pamplona), Zubiarte
One of the most important aspects of shopping (Bilbao), the enlarged Max Center and Avenida During 2002, the NTBD (New Technologies
centre management is the collection of rent, M-40 (under construction near Madrid). Business Department) launched a number of
service charges and key money. In Portugal, a total of 10 new contracts were projects that add value to the company’s ac-
Rent collection performance in 2002 was ex- signed with the first shop tenants of Parque tivities by taking advantage of new technology.
cellent in Portugal and Spain, with the rent col- Atlântico (Ponta Delgada, Azores) and Coimbra The SonaeShopping brand was created at the
lection level (the ratio between rents collected Retail Park. end of 2001 and brings together a number of
and amounts invoiced over the 12-month pe- projects involving communications, customer
riod) reaching an overall figure of 99.8%. 250 loyalty, and new services to shop tenants. The
233
200 following schemes were launched in 2002:
170
% 160
150 146
> Portal SonaeShopping.Com – This is the
101
100.2 Internet infrastructure for on-line
100 99.8 100 87
advertising and communication between
99 50
10 the Sonae Imobiliária Shopping Centres
98
97.4 0
97 Portugal Spain Total and the public. This portal will give
96
New Projects Centres in Operation access to all the sites of Shopping
95 Centres under Sonae Imobiliária
Total Spain Portugal
Once shopping centres are operating, it is im- management, both in Portugal and
portant to continue to ensure that the quality of abroad. As at 31/12/2002, the portal
In Portugal, the rent collection level rose to over the tenant-mix remains high. In Portugal, a to- already included 26 shopping centre and
100% as some bad debts were settled. In tal of 146 contracts were signed for shops in gallery sites, 20 in Portugal, 1 in Spain
Spain, it was around 97.4% because some bad centres already in operation and 87 such con- and 5 in Brazil. Over the next few
debts remained. These should be settled dur- tracts were signed in Spain. The level of tenant months the roll-out to the websites of
ing the first half of 2003. turnover in shops in existing shopping centres other centres under management will
was 6.1%. take place and this will then expand
Letting of centres under Besides the contracts signed in operating further to include the websites of
management shopping centres, it should be noted that, dur- centres at the development stage,
ing 2002, 347 new contracts were re-negoti- serving as backup to other marketing
During 2002 the take-up of new tenancies in ated with tenants that had reached the end of activities. This portal has already had
Iberia (the number of contracts being signed) their respective contracts (280 in Portugal and more than 13,000 page-views and has
remained buoyant. Contracts were signed for 67 in Spain) but there was a mutual interest in links to Sonae Imobiliária’s corporate
a total of 403 shops, of which 170 were in new establishing new contracts. The results portal;
projects being developed and 233 in centres achieved with new contracts were very posi- > SonaeShopping Gift Cheque Project
already in operation. tive, namely in ViaCatarina, Arrábida Shopping – This is a customer loyalty programme
and Gran Casa. for individual shopping centres marketed
through their websites. Customers can
order cheques either on-line or at kiosks
in the shopping centres and can use
them to shop in those shopping centres.
43
consolidated report and accounts 2002’sonaeimobiliária
The project is now in operation in the The project should generate advertising It should be noted that halfway through 2002
company’s 12 shopping centres in revenue both from general advertisers the Market Research Department started to in-
Portugal, and the roll-out to the other and from tenants of the centres. It is due voice its services and that the New Technolo-
centres in Spain and Brazil will soon take to be launched in Spring 2003; gies Business Department (NTBD) also issued
place; some invoices for projects being launched.
> Portal SonaeShopping.Net – This is a Staff Both of these departments should show an in-
highly innovative B2B tool designed for crease in revenue in 2003.
the use of shop tenants in Sonae In Portugal the company continued to expand
Imobiliária shopping centres. It has its involvement in shopping centre manage- Financial Performamnce
already been launched in 74 shopping ment and lettings. As a result, the number of of property management
centres and galleries in Portugal staff members involved in the management and
(including the Continente and Modelo letting of Shopping Centres was 213 as at As the Brazilian operations make up their own con-
galleries), 1 centre in Spain and 2 31/12/2002, an increase of 3.9% compared solidated accounts, the following analysis of the
centres in Brazil. It is now expanding to to staff numbers of 205 at the end of 2001. company’s consolidated financial performance re-
include the rest of the company’s In Spain there was a bigger increase in staff num- lates only to the European operations. Property
portfolio under management in Spain bers, from 30 people as at 31/12/2001 (in- Management activities were clearly profitable in
and Brazil, with priority for centres co- cluding Back Office), to 75 people as at 2002, as can be seen from the table below, show-
owned by Sonae Imobiliária. The main 31/12/2002 (also including Back Office). This is ing the Consolidated Account for this business.
objectives of the portal are to increase an increase of 150% and is due to the expansion The Net profits rose from € 2.8 million in 2001
the efficiency of digital (Internet) of the company’s portfolio under management to € 3.5 million in 2002, an increase of 24%.
communication between the centres and with the purchase of 4 FILO Shopping Centres The Total Income increased by 13% overall be-
their tenants, eliminating paperwork and to the addition of La Morea to this portfolio. tween 2001 and 2002, as the company ex-
wherever possible, and to offer a range panded its operations. The main contributors
of services to tenants, (security, Property Management were the opening of Plaza Mayor (in 2002), the
cleaning, maintenance, and Letting Fees first full year of operation of centres opened in
telecommunications, insurance, 2001 and the management of 5 additional
temporary work etc.), through a group As Property Management is a service business, shopping centres in Spain (from September on-
of qualified service providers offering the fees related to it need to be analysed in wards) as a result of their acquisition.
preferential terms. The portal has had a some detail. The Overheads including Personnel Costs
good tenant take-up and is already in In Portugal and Spain the company expanded went up by 12% in 2002, increasing less than
use in over 1,500 shops. In 2002 there its operations and total fees related to Property income thanks to benefits resulting from the
were over 21,000 visits to the site and Management showed a marked overall in- size of the company’s portfolio, particularly in
almost 5,000 requests for services; crease in 2002 (+13% compared with 2001). relation to back-office expenses.
> SonaeShopping.TV – An agreement has If the different types of fees are analysed sep- As a result of this, Operating Results increased
been made with SIC (Portuguese TV arately, it can be seen that in 2002 overall man- by 6% between 2001 and 2002.
operator) to set up the company SIC agement fees increased considerably (+21%), The Financial Results are below last year be-
INDOOR, in which Sonae Imobiliária will due to the overall expansion of the company’s cause the interest rate of short-term invest-
have a 35% shareholding. The aim is to portfolio, while letting fees, which relate to a ments was lower than in 2001.
use video walls to create a flow of more cyclical activity, fell by 27%, because ac- The Results Before Corporate Taxes increased
entertainment and information for clients tivity in this area peaked in 2001 and is likely from € 5.1 million in 2001 to € 5.6 million in
in the food-courts of shopping centres. to do so again in 2003. 2002, an increase of 9%.
44
sonaeimobiliária’ consolidated report and accounts 2002
Sonae Imobiliária Property Management
(000’s Euro)
Profit & Loss Account Actual 2002 Actual 2001 var.(%)
Property Management Income 9,298 7,653 21%
Letting Services Income 2,046 2,819 -27%
Common Charges Management Income 4,643 2,934 58%
Other Income 560 1,295 -57%
Total Income from Management Services 16,548 14,701 13%
Common Charges Operating Differences 146 116 26%
General Supplies and Services 7,408 6,932 7%
Personnel Costs 4,021 3,357 23%
Overheads 11,429 10,188 12%
Gross Operating Results 5,265 4,629 14%
Depreciation 708 316 124%
Operating Results 4,556 4,313 6%
Financial Income 1,087 1,276 -15%
Financial Costs 155 163 -5%
Financial Results 932 1,113 -16%
Other Non-Recurring Income(Costs) 97 (314) -131%
Results Before Corporate Taxes 5,585 5,112 9%
Corporate Taxes 2,093 2,302 -9%
Net Profit 3,492 2,811 24%
Prospects for 2003 centre, which opened in April 2001. From 1 The Company will also be expanding its busi-
January 2003, we will no longer be manag- ness of marketing and letting shopping cen-
The prospects for 2003 are that Sonae Imo- ing either the Eroski shopping centres and tres. A large number of developments are un-
biliária will continue to expand its management, galleries or the Urbil shopping centre in San derway and are being marketed either by
marketing and letting activities in the shopping Sebastian, owned by the Lar-Grosvenor Sonae Imobiliária Property Management (as is
and leisure centre sectors. Group. the case for Parque Atlântico, Estação Viana
In relation to Shopping Centre Management in In April 2003, we will start to manage shopping and Coimbra Retail Park and the extension of
Portugal the company will continue to enlarge centres in Italy. We have already formed a part- CascaiShopping), or by CCC (who are re-
its portfolio. In 2003 Parque Atlântico, Estação nership with the Italian company Espansione sponsible for Avenida M-40, Luz del Tajo, Plaza
Viana, and Coimbra Retail Park will open and Commerciale and will be managing the Orio Eboli, Dos Mares and Zubiarte, which are be-
Sonae Imobiliária Property Management will Center in Bergamo. This Centre has around ing developed by Sonae Imobiliária, and also
also be responsible for the extension of Cas- 54,000 m2 of GLA and is owned by the German the projects at Elche, Fuengirola, Mijas and
caiShopping. fund CGI. Gandia, which are being developed by third
In Spain, although none of the projects cur- In 2003 we will also be setting up a manage- party companies).
rently under development are scheduled to ment company in Greece. The Mediterranean In Italy, Greece, Germany and Austria, we will
open before 2004, in April 2003 CCC will Cosmos project (in Thessalonica) is scheduled also begin the marketing and letting of the an-
begin managing Parque Principado, a shop- to open in 2004. Some staff have already been chor stores in centres under development, ei-
ping centre in Oviedo with over 70,000 m2 recruited and will be trained over the coming ther directly through our own teams or through
of GLA. Sonae Imobiliária owns 25% of this year. contracts with other companies.
45
consolidated report and accounts 2002’sonaeimobiliária
Shopping Centres Brazil
The main events > The Parque D. Pedro was awarded the The Development
of 2002 special prize for "Retail and Services" of Shopping Centres
for its contribution to the development
> The Parque D. Pedro, the largest of the regional economy promoted by Boavista Shopping is being developed in Santo
shopping and leisure centre in Latin the IBEF (The Brazilian Institute for Amaro, in São Paulo, and it is due to open in
America, opened in Campinas, in the Financial Managers) of the region of April 2004. About 60% of the GLA has already
state of São Paulo on 18th March. Campinas, and it also won the "Herbert been let. The estimated development cost is
> In September the Parque D. Pedro won de Souza Betinho" Diploma of Merit € 18 million.
the Master Imobiliário prize for 2002 in awarded by the Campinas Council, for In July 2002 the Board of the Company ap-
the retail category. The prize is awarded its work for the benefit of the proved the investment in the extension of Shop-
annually by Fiabci/Brazil (The community in respect of its Shopping ping Penha, in the city of São Paulo. The total
International Federation of Real Estate Courses Centre. development cost is estimated at € 11.6 mil-
Agents) and by Secovi (The São Paulo > The launch of Boavista Shopping, in São lion and the GLA of the Centre will be increased
Union of Real Estate Agencies and of Paulo in October; by about 12,300 m2.
Management Companies of Residential
and Commercial Property);
Brazil Shopping Penha Expansion Boavista Shopping
Location São Paulo, Brazil São Paulo, Brazil
Opening Date April 2004 April 2004
Catchment Area 653,000 inhab. 340,000 inhab
GBA (m2) 17,500 40,000
GLA (m2) 12,300 24,000
Nr. of Parking places 350 1,160
Anchor Stores 3 3
Shop Units 40 150
Restaurants - 13
% GLA leased 65% 60%
Gross Investment (€) € 11,6 million € 18 million
Developers Sonae Enplanta, SA Sonae Enplanta, SA
Owners Sonae Imobiliária Sonae Imobiliária (95%)
Sonae Enplanta, SA (5%)
Investiment in Shopping ping and leisure centre in Latin America. There was 6.6%. Converted into Euros this amounts
Centres are 360 shops and 108,000 m2 of GLA. to a fall of 11.9% compared with 2002. The oc-
The total rents generated by the shopping cen- cupancy rate of the portfolio at the end of 2002
Sonae Imobiliária opened the Parque D. Pedro tres owned or co-owned by Sonae Imobiliária in was 85%. It should be noted that the growth in
in Campinas, in the state of São Paulo on 19th Brazil grew by 55.8% in Reais. If we exclude the rents has been negatively affected by the sub-
March 2002. This Centre is the largest shop- opening of Parque D. Pedro the growth in Reais stantial devaluation of the Brazilian Real.
46
sonaeimobiliária’ consolidated report and accounts 2002
The open market value, as at 31st December Parque D. Pedro. It should be noted that once
2002, of the Brazilian shopping centres in op- again this growth was strongly affected by the
eration was € 95.6 million, a growth of € 86 devaluation of the Brazilian Real.
million resulting exclusively from the opening of
Portugal Gross Rental Income Gross Fixed Gross Variable Variable
Rental Income Income over fixed
(000’s Euro) 2002 2001 02/01% 2002 2001 02/01% 2002 2001 02/01% 2002 2001
var. var. var.
Penha 1,776 3,653 -51.4% 1,698 3,516 -51.7% 78 137 -43.1% 4.6% 3.9%
Franca 584 923 -36.7% 517 703 -26.5% 67 220 -69.5% 13.0% 31.3|%
Metrópole 3,062 5,053 -39.4% 2,828 4,638 -39.0% 234 415 -43.5% 8.3% 8.9%
Pátio Brasil 3,691 5,407 -31.7% 3,385 4,962 -31.8% 306 444 -31.1% 9.0% 9.0%
Tivoli 1,081 1,875 -42.3% 957 1,545 -38.1% 124 330 -62.4% 13.0% 21.4%
Parque D. Pedro 4,710 0 n.a. 4,341 0 n.a. 369 0 n.a. 8.5% n.a.
Total 14,904 16,910 -11.9% 13,726 15,364 -10.7% 1,178 1,546 -23.8% 8.6% 10.1%
At 31/12 and in 000’s € Open Market Value attributable to Sonae
2002 2001 % 2000 % 1999 %
Brazil
Shopping Penha 779 2,437 -61.4% 3,021 -19.3% 3,283 -8.0%
Shopping Franca 599 795 -24.7% 909 -12.5% 963 -5.6%
Shopping Metrópole 1,116 1,887 -40.9% 2,091 -9.8% 2,032 2.9%
Pátio Brasil 1,683 2,962 -43.2% 2,946 0.5% 2,482 18.7%
Tivoli Shopping 1,212 1,495 -18.9% 1,642 -9.0% 1,458 12.6%
Parque Dom Pedro 90,234 - n.a. - n.a. - n.a.
Total Brazil 95,622 9,576 898.6% 10,609 -9,7% 10,218 3.8%
Performance of Centres Centre Visits Sales
02/01 02/01
Under Management [visits 000’s; Sales 000’s Euro] 2002 2001
% Var
2002 2001
% Var
Parque Dom Pedro 12,395 - n.d. 96,026 - n.d.
Unishopping, a company wholly owned by
Penha 10,843 13,522 -19.8% 24,179 34,475 -29.9%
Sonae Enplanta, currently manages six cen-
Franca 3,981 5,766 -30.9% 17,015 21,760 -21.8%
tres, and Sonae Imobiliária is co-owner of all of Metrópole 8,630 8,908 -3.12% 54,849 56,102 -2.2%
them, either directly or through Sonae En- Pátio 10,997 7,495 46.7% 36,695 54,448 -32.6%
planta. In these centres there are 1,115 con- Tivoli 6,659 8,609 -22.6% 17,635 29,804 -40.8%,
tracts and 223,725 m2 of GLA. Total 53,507 44,299 20.8% 246,399 196,590 25.3%
Total (Like-for-like) 02/01 37,688 37,296 -7.2% 150,373 196,590 -23.5%
47
consolidated report and accounts 2002’sonaeimobiliária
Overall there were 53.5 million visitors to the- que D. Pedro was transferred from develop- The income from Property Development
ses shopping centres in 2002 (an increase of ment to investment when it opened to the pub- amounted to € 241 thousand, derived from de-
20.8% over 2001) which generated sales of lic in 2002. velopment services provided by Unishopping
more than 914.7 million Reais (€ 246.3 million) The Gross Operating Profit of Investment in Shop- and by Sonaeimo to projects under develop-
a growth of 121.57% (in Reais), compared to ping Centres was € 7.3 million, compared with ment.
the same period in 2001. On a like-for-like ba- € 848 thousand in 2001. This growth resulted The Financial Costs relate to local financing
sis the number of visitors fell by 7.2% and sales from the opening to the public of Parque D. Pe- charges and exchange differences on the loans
rose by 8.23%. dro in the middle of March. This Operating Profit made by the shareholders to Parque D. Pedro
also included a non-recurring element of € 2.3 (€ 7.6 million). The Financial Income results
Financial Performance million relating to key money (deducted from the from the capitalisation of interest on the de-
of the Shopping Centres letting costs) recognized in the accounts of Par- velopment of Parque D. Pedro, until its open-
Brazil Business que D. Pedro at the time of its opening. ing in March 2002.
In relation to Property Management, the income Other Non-Recurring Income/(Costs) of € 737
The total contribution of this business of the from Property Management Services amounted thousand resulted from the sale of the C&A
company to the Consolidated Profit was € 30.3 to € 1.6 million, derived from contracts for shop in Parque D. Pedro.
million. management services of the five shopping cen- Non-Realised Property Profits of € 47 million
This business includes both investment (Sonae tres in which Sonae Enplanta has a share and arose almost exclusively from the revaluation
Enplanta and Parque D. Pedro), management from the inclusion of the property management of Parque D. Pedro as at 31/12/2002. De-
(Unishopping), and development (Sonaeimo and of Parque D. Pedro in the management portfolio ferred tax is calculated based on this
Boavista Shopping) of shopping centres. Par- of Unishopping. amount.
48
sonaeimobiliária’ consolidated report and accounts 2002
Sonae Imobiliária Brazil
(000’s Euro)
Profit & Loss Account Actual 2002 Actual 2001
Fixed Rental Income 6.903 1.056
Turnover Rental Income 599 114
Key-Money Income 5.997 77
Other Income 310 58
Total Shopping Centre Operating Income 13.809 1.306
Property Management Services 174 54
Common Charges from Vacant Units 875 150
Letting & Marketing Costs 3.667 0
Income Tax 588 0
Centre Owner Contributions to Promotion Funds 444 52
Other Costs 741 237
Total Shopping Centre Operating Costs 6.491 492
Parking Income 104 134
Parking Costs 85 99
Parking Net Operating Margin 18 35
Centre Net Operating Margin 7.336 848
Income from Project Development Services 241 875
Income from Property Management Services 1.637 1.309
Total Income from Service Rendered 1.877 2.184
General Supplies and Sevices 1.005 1.033
Personnel Costs 1.327 1.249
Structure Costs 2.331 2.281
Gross Operating Results 6.882 751
Depreciation 80 89
Provisions 403 143
Operating Results 6.399 520
Financial Income 660 2.806
Financial Costs 343 3.178
FX Financial Results (7.606) 0
Financial Results (7.289) (372)
Current Results (890) 148
Other Non-Recurring Income 3.305 0
Other Non-Recurring Costs 2.568 0
Direct Results Before Corporate Taxes (154) 148
Corporative Taxes 757 207
Direct Profits (911) (59)
Non-realized Property Profit (IAS 40) 47.440 221
Total Indirect Income From Investments 47.440 221
Deferred Tax 16.198 (235)
Indirect Profit 31.242 456
Total Net Profit 30.330 397
49
consolidated report and accounts 2002’sonaeimobiliária
Environmental Management
Sonae Imobiliária Practice for Environment Site assessment" Proceeding with EMS
Reviewed and Improved methodology published by the American So- implementation in
its Environmental ciety forTesting Materials (ASTM, 2000) centres which are
Management System During the year Sonae Imobiliária did not make already open
any land purchase that had environmental prob-
In 2002 in compliance with Norm ISO 14001 lems. The implementation of EMS continued in the
Sonae Imobiliária reviewed the operational pro- Implementation of Procedures for Design and Shopping Centres in Portugal, and the imple-
cedures of its Environmental Management Sys- Development was started in 2002 in the ma- mentation and coordination of EMS was begun
tem (EMS) and defined procedures for the Real jority of projects in the course of development in centres where Sonae Imobiliária is the owner
Estate Development sector of its business. in the Iberian Peninsula (Parque Atlântico, Es- or co-owner, in Spain (Plaza Mayor) and in Brazil
These procedures, three in total, were struc- tação Viana, Luz del Tajo, Dos Mares, Plaza (Parque D. Pedro, Shopping Penha, Shopping
tured according to the logic of this develop- Eboli), and environmental audits of the proj- Franca, Shopping Metrópole, Pátio Brasil and
ment business. ects for water supply and drainage, manage- Tivoli Shopping). EMS monitoring went on as in
> New Business – defines how to evaluate ment of waste and acoustics, were also made previous years and in the second semester the
possible environmental issues relating to on centres being developed in Portugal. centres in Brazil were also included. Monitor-
land and properties to be purchased. In relation to the environmental requirements ing was focused especially on the areas of
> Design and Development – defines to be applied in the projects, it should be waste and energy, the environmental areas
environmental requirements for Sonae noted that Sonae Imobiliária chose to abandon which are most relevant in operational terms.
Imobiliária’s projects. Its main objective the BREEAM (Building Research Establishment
is to promote eco-efficiency by Environmental Assessment Scheme) method- Waste produced
by Shopping centres
implementing common requirements for ology and to create its own. This new "Envi-
in Portugal
Ton
all projects regardless of the country ronmental Standards for Retail Developments"
25000
where they are located. methodology is not only based on the re-
20000
> Environmental Management of Building quirements which the company has already
Works – defines environmental defined, but also takes into account interna- 15000
requirements during construction and tionally recognized requirements for the envi- 10000
establishes environmental management ronmental certification of buildings. In addi- 5000
rules for building works. tion, a search engine for the requirements
0
data base was developed which is available on 2001 2002
Recycled Total
The implementation of the Internet for project managers and de-
*These amounts include figures from
EMS was started in signers.
GuimarãeShopping, MaiaShopping,
projects under The implementation of Building Works Man-
NorteShopping, ViaCatarina, GaiaShopping,
development agement Procedures was started in Estação CoimbraShopping, Centro Colombo, Centro
Viana in 2002, thereby ensuring that the envi- Vasco da Gama, CascaiShopping,
In 2002, as a result the implementation of New ronmental impact resulting from the building AlgarveShopping, MadeiraShopping.
Business Procedures, an Environmental Due works was reduced and controlled.
Diligence – study of soil utilization and con- It is important to note that the method used in
tamination –, was done on all land purchased. quantifying waste was altered as a result of rec-
These studies follow the general "Standard ommendations made in the audit of waste man-
50
sonaeimobiliária’ consolidated report and accounts 2002
agement systems that took place in each cen- Energy consumption The amount of consumption by Sonae Imobil-
in Shopping centres
tre at the beginning of 2002. iária as shown in these figures will still be "re-
in Portugal*
Mwh
viewed" in accordance with endogenous factors
90000
Rates of Recycling (e.g. the presence of skylights, inefficient air
80000
of Waste in Shopping
70000 conditioning) and/or exogenous factors (e.g.
Centres in Portugal* 60000
50000 climate), which at the moment have a negative
0,195
40000 influence on these results. The work to define
0,190
30000
0,185 20000 the weightings of the "correction" to be made
0,180 10000
was also started in 2002 and will be finished
0,175 0
2001 2002 next year.
0,170
Energy consumption A pilot study was started in ViaCatarina in 2002
0,165
0,160 *These amounts include figures from to evaluate the energy efficiency of the devel-
2001 2002 GuimarãeShopping, MaiaShopping,
opment. This work, to be concluded in 2003,
Taxa de Valorização NorteShopping, ViaCatarina, GaiaShopping,
will enable real time consumption figures to be
*These amounts include figures from CoimbraShopping, Centro Colombo,
CascaiShopping, AlgarveShopping, obtained, thus enabling action to be taken im-
GuimarãeShopping, MaiaShopping,
NorteShopping, ViaCatarina, GaiaShopping,
MadeiraShopping. mediately in those areas where there are devi-
CoimbraShopping, Centro Colombo, Centro ations from the expected amounts, thereby
Vasco da Gama, CascaiShopping, In spite of this better performance, the levels avoiding waste of energy.
AlgarveShopping, MadeiraShopping. of energy consumed in the running of the Shop- In 2002, Centro Colombo joined the GreenLight
ping Centres led to a programme being started Programme – a voluntary Community Pro-
The rate of recycling of waste has been in- in 2002 of in-depth research in order to iden- gramme aimed at controlling CO2 emissions in
creasing, not only due to the awareness cam- tify energy efficiency levels, which could be- an economically viable way, for instance by
paigns directed at shopkeepers, making them come benchmarks for the Shopping Centre reusing already existing lighting installations.
constantly aware of the importance of correctly sector.
sorting waste, but also to a gradual improve- Energy consumption in
Actual Centro Colombo’s
ment in infrastructure which will support sepa- Benchmark Carparks
Kwh
rate waste collection, for instance in the Food 1.30
Negative Positive Difference
700
1.20
Courts. 600
1.10
1.00 500
0.90 400
The Management of
0.80 300
Energy in shopping 0.70 200
centres in Portugal has 0.60
100
0.50
ViaCatatarina
Centro Colombo
CoimbraShopping
Arrábida Shopping
GaiaShopping
MadeiraShopping
MaiaShopping
CascaisShopping
AlgarveShopping
NorteShopping
GuimarãesShopping
improved 0
Nov 01 Dec 01 Jan 02 Feb 02
The reduction in energy consumption in 2002 is
not only the result of measures taken on a man- Comparison between consumption benchmarks After joining the GreenLight Programme in No-
agerial level, such as new timetables/program- for shopping centres and actual consumption in vember 2001, the savings obtained became
ming of equipment working hours and lit areas, Sonae Imobiliária’s shopping centres in obvious (the December peak was due to oper-
Portugal (2001 data)
but is also due to specific energy rationalisation ating an additional floor of the car park during
programmes, such as the Greenlight Programme the pre-Christmas season).
in which the Centro Colombo participated.
51
consolidated report and accounts 2002’sonaeimobiliária
Because of these modifications to its lighting "Trip to TetraPak World" was promoted in the Water management audits were made in every
system, Centro Colombo saved around Centres in Portugal, endeavouring to create shopping centre in Portugal. The audit’s ob-
400.830 Kwh/year. awareness among visitors of the importance of jective was to analyse the way the systems
waste separation and of the recycling process were operating, to identify solutions for tech-
The results of EMS of TetraPak’s packaging. nical/operational problems/flaws resulting in
in the Shopping Centres Also waste separation was the theme of a cam- waste and consequently to define a plan to
paign in Shopping Centres in Brazil, like Tivol- monitor water consumption in order to detect
In order to assess the results of EMS, envi- iShopping, to make visitors aware of correct any problem, in real time, and to avoid exces-
ronmental audits were carried out in 2002 on environmental behaviour. sive and unnecessary waste of this resource.
all shopping centres in Portugal and Spain, and Surveys among visitors to Plaza Mayor- Spain The auditors’ recommendations were imple-
every recommendation was analysed, bud- and Parque D. Pedro – Brazil reveal once more mented in Centro Colombo and as a result a 35%
geted and included in the respective investment the importance visitors place on environmental reduction in consumption was achieved, which
plans and Environmental Action Plans for 2003. management in this type of development. meant a yearly saving of the order of € 127,847
(taking water at a cost of € 1.11/ m3)
Results of surveys among
Environmental visitors to Plaza Mayor
– Spain and Park D. Pedro Water consumption
awareness, an EMS
– Brazil in Centro Colombo
mainstay m3
100 %
90 % 350 000
80 % 300 000
In October 2002 the Board of Directors at-
70 %
60 % 250 000
tended a Workshop on "Sustainable Develop-
50 % 200 000
ment", during which various guidelines for 40 %
150 000
30 %
Sonae Imobiliária were identified aimed at Sus- 20 % 100 000
10 % 50 000
tainable Development. 0 %
Plaza Mayor Parque D. Pedro 0
As in previous years, various events to promote
(Spain) (Brazil) 2001 2002
Environmental Awareness among visitors were
Importance of the Centre’s environmental management
also held at Shopping Centres. The Campaign Consider that the Centre is Managing the environment
SPEL (Car Parks)
2002 Main Events 50 years, and a parking-meter zone, with worth and Shareholders’ loans)
140 spaces in the city of Leiria, for a amounted to € 12 million.
> SPEL opened an underground carpark period of 20 years. It is anticipated that > SPEL reached an agreement with the
(PRAÇA CARLOS ALBERTO, in Porto), two the carpark will open during 2004 and Porto Council relating to the concession
higher level carparks (Marisqueiras and that the parking-meter zone will start in for the expansion of the PRAÇA DE
Mercado, in Matosinhos), one surface April 2003. LISBOA, and it is expected that the
carpark (Estádio Universitário de Lisboa) > SPEL’S permanent funding was contract will be signed during the first
and a parking-meter zone in Portimão, increased by a total of € 6 million, quarter of 2003. The implications of this
making a total of 1,795 spaces. through the provision by its shareholders agreement are:
> Was awarded the contract to design, of additional loans which they - Extension of the concession period (by
build and manage an underground contributed in equal shares. At the end approximately a year and a half) to 31
carpark, with 309 spaces, for a period of of 2002 the permanent funding (Net December, 2022.
52
sonaeimobiliária’ consolidated report and accounts 2002
- The option of the Porto Council to can- Car Parking
cel, which was provided for in the ori-
ginal contract, can only be exercised af- In 2002 SPEL, a company held jointly by Sonae
ter 1 January, 2013. Imobiliária SGPS, SA and SABA Aparcamientos
- SPEL gives up the protection area – 300 SA, strengthened its position as leader in the
metres around the PRAÇA DE LISBOA Portuguese car park market. It finished the year
carpark – provided for in the original with 16,034 car parking spaces, either under
contract. concession or under management, distributed
as follows:
Contract
Contract Number
Location termination
Type spaces
date
Silo Auto Oporto, Portugal Concession 2012 840
Praça de Lisboa Oporto, Portugal Concession 2022 879
Cordoaria Oporto, Portugal Concession 2021 325
Praça do Infante Oporto, Portugal Concession 2021 318
Largo de Santa Cristina Viseu, Portugal Concession 2051 326
Hospital Velho Viseu, Portugal Concession 2009 60
Mercado 21 de Agosto Viseu, Portugal Concession 2009 100
Parking meters Viseu, Portugal Concession 2009 822
Swimming pools Matosinhos, Portugal Concession 2051 310
Parking meters Matosinhos, Portugal Concession 2011 357
Seafood restaurants Matosinhos, Portugal Concession 2051 515
Supermarkets Matosinhos, Portugal Concession 2011 169
Estádio Universitário Lisbon, Portugal Concession 2007 390
Parking meters Portimão, Portugal Concession 2021 250
Total under concession 5.661
ViaCatarina Oporto, Portugal Management 578
Centro Colombo Lisbon, Portugal Management 6.800
Vila Lambert Lisbon, Portugal Management 256
Centro Vasco da Gama Lisbon, Portugal Management 2.559
Marco Shopping Marco Canaveses, Management 180
Portugal
Total under management 10.373
Total in operation 16.034
The strategy of the company is to increase and Branco, Olhão, Póvoa de Varzim and Santarém) and it should carry on for the next three years.
consolidate its market share in the segment cor- – that did not reach the returns required by the In the next three years (2003/2005), the ex-
responding to downtown parking, as long as there company. pansion will involve the construction and sub-
is scope for value creation for the shareholders. The significant investments made in 2002 follow sequent operation of 1,299 car park spaces as
Many investment opportunities were analysed from the growth strategy defined for SPEL by its detailed below:
in 2002, in several cities in Portugal (Castelo two shareholders. Implementation started in 1999
53
consolidated report and accounts 2002’sonaeimobiliária
Contract Number Estimated
Location
type Spaces opening
Praça 1º de Maio Portimão, Portugal Long term concession 350 Dec. 2003
Avenida da Boavista Oporto, Portugal Long term concession 500 2005
Fonte Luminosa Leiria, Portugal Long term concession 309 2004
Parking meters Leiria, Portugal Long term concession 140 Apr. 2003
Total under construction 1,299
All these parks have been awarded to SPEL. SPEL – Car Parking Business
(000’s Euro)
The construction of Praça 1º de Maio car park
Profit & Loss Account Actual 2002 Actual 2001 Var.%
in Portimão is already underway and the other
car parks are in the negotiations phase. Income from Concessioned Parks 2,025 1,467 38.1%
In 2002 SPEL had a turnover of € 6.2 million, Income from Management Services 651 652 (0.2%)
an increase of 26.9 % over 2001. Other Operating Income 190 112 70.1%
Total Recurrent Operating Income 2,866 2,230 28.5%
SPEL – Turnover General Supplies and Services 974 646 50.7%
Euro Personnel Costs 413 374 10.4%
millions
7.0 Rental Costs for Concessions 359 173 107.1%
6.0 Other Costs 5 0 -
5.0 Total Operating Costs 1,751 1,194 46.7%
4.0 Gross operating results 1,115 1,037 7.6%
3.0 Depreciation 666 101 560.6%
2.0 Operating Results 450 935 (51.9%)
1.0 Financial Income 14 17 (16.0%)
0.0 Financial Costs 617 57 976.5%
1998 1999 2000 2001 2002
Financial Results (602) (40) 1393.0%
Other Non-Recurring Income (Costs) 10 0 -
Financial Performance Results Before Corporate Taxes (143) 895 (116.0%)
SPEL Corporate Taxes (100) 295 (133.9%)
Net Profit (43) 600 (107.2%)
The car parking business, through SPEL, made
a loss of € 43 thousand which was reflected in
the Company’s Consolidated Result. Last year
SPEL made a profit of € 600 thousand.
SPEL’s performance was below expecta-
tions. The lacking of a consistent parking pol-
icy in the city of Porto and insufficient polic-
ing generates illegal free surface parking and
traffic jams consequently de-motivating un-
derground car parking.
54
sonaeimobiliária’ consolidated report and accounts 2002
Residential Development
This business, as referred to elsewhere in this to 31/03/2002, reflecting only the results gen-
report, was sold to Sonae Capital. Its profit and erated until that date.
loss account is the same as the one made up
Prædium - Residential Development Business
(000’s Euro)
Profit & Loss Account Actual 2002 Actual 2001
Sales of Properties 5,517 46,775
Costs of Properties Sold 5,681 46,672
Sales Margin (164) 103
General Supplies and Services 2,534 15,624
Costs of Projects & Work Subcontracted 2,258 14,546
Others Costs 276 1,078
Personnel Costs 266 920
Others Costs 50 292
Total Operating Costs 2,850 16,836
Works Invested in Real Estate Stock 2,693 16,089
Rental Income from Properties 66 658
Total Operating Income 2,758 16,747
Gross Operating Results (256) 14
Depreciation 11 40
Operating Results (267) (27)
Financial Income 634 3,233
Financial Costs 485 2,001
Financial Results 149 1,232
Other Non-Recurring Costs (7) 51
Results Before Corporate Taxes (124) 1,257
Corporate Taxes (0) 421
Minority Interests (55) 368
Net Profit (70) 468
Corporate centre
Finally a pro-forma profit & loss account of the eral businesses in Portugal, except for SPEL. a consequence of the increased efforts of the
Corporate Centre is presented below, including This Corporate Centre is not, by itself, a profit Company to respond to the challenges posed
the parent company, a corporate services com- centre – these accounts are presented just to by the internationalisation.
pany and several instrumental companies. In allow for a full image of the consolidated ac- The positive contribution of this business to the
the corporate services company, further to counts of the Company to emerge. Consolidated Result is due to the booking of a
other departments, the Company has cen- In global terms, the Operating Costs grew 10% capital gain on the sale of the residential busi-
tralised the back office departments of the sev- versus the same period of the previous year as ness (Prædium).
55
consolidated report and accounts 2002’sonaeimobiliária
Corporate Centre
(000’s Euro)
Profit & Loss Account Actual 2002 Actual 2001 Var.%
Services Rendered 11,678 11,175 4.5%
Operating Costs 11,119 10,110 10.0%
General Supplies and Services 5,448 5,026 8.4%
Personnel Costs 5,577 4,878 14.3%
Other Costs 94 206 -54.5%
Gross Operating Results 559 1,065 -47.5%
Depreciation 559 639 -12.5%
Recurrent Operating Results 0 426 -100.0%
Operating Results 0 426 -100.0%
Financial Results 0 -
Other Non-Recurring Income (Costs) 3,049 (426) -
Results Before Corporate Taxes 3,049 0 -
Corporate Taxes 0 0 -
Net Profit 3,049 0 -
Open Market Value of the Sonae Imobiliária
Properties
The Company has published every year, since of the market´s current views about future in- Open Market Value
1997, the open market valuation of its prop- come and expenditure. The residual value, at of the Properties as at
erties as prepared by an independent entity, the end of 10 years, is calculated by applying 31 December 2002
Cushman & Wakefield Healey & Baker. As a market rate of return ("exit yield" or "cap rate")
usual, we are publishing as an annex, the full to the net income of the 11th year. This rate of Sonae Imobiliária, in accordance with its strat-
Valuation Report as of 31 December 2002. return and the discount rate are defined in ac- egy, is focussed on shopping and leisure cen-
cordance with the local and institutional in- tres – they represent practically all of the open
Methodology vestment market and the appropriateness of market value of the properties attributable to
the resulting market value is tested by analysis the Company.
The valuation is prepared in accordance with of the upfront rate of return.
Geographical Distribution
the Practice Statements of the RICS Appraisal For properties under development, the market
of OMV of the Real
and Valuation Manual published by The Royal value in the existing state is obtained by esti- Estate owned
by Sonae Imobiliária,
Institution of Chartered Surveyors (the “Red mating the market value of the property when
at 31/12/2002
Book”). completed and then deducting the investment
The methodology used to calculate the open still to occur (including a normal profit for the
market value of the properties in operation in- developer and financial charges).
7,1% 92,9%
volves preparing 10-year projections of income Brazil Europe
€117 million €1.524 million
and expenditure that are then discounted to the
valuation date at a market rate. The projections
are not predictions about the future but rather The Company´s real estate assets (properties
correspond to the best estimate of the valuer included in the independent Valuation Report
56
sonaeimobiliária’ consolidated report and accounts 2002
produced by Cushman & Wakefield Healey & corporate vehicle holding it. And, in fact, in sev- tugal and abroad – as per chart) reached
Baker attached to this Report) were valued as eral jurisdictions, capital gains arising from the € 1,037 billion versus € 934 million on 31 De-
at 31 December 2002 at € 2,837 billion sale of shares are tax-sheltered. cember 2001. The growth was € 103 million
(€ 2,348 billion in 2001). Of that amount, the For these reasons, the Company calculates and or 11.1%. The NAV per share of the properties
part attributable to Sonae Imobiliária was publishes a NAV that results from valuing all of attributable to the Company was € 27.67 ver-
€ 1,641 billion (€ 1,361 billion in 2001) – this its properties on an open-market basis and in- sus € 24.90 as at 31 December 2001.
represents a growth of € 279 million or 20.5% cludes no deduction for deferred taxes.
in relation to 2001. The calculation now presented is consistent NAV of total Real Estate
millions assets owned
with the NAV calculations published in previous Euros
1,200
NAV ("Net Asset years. It is hoped that a better perception of the
1,037
1,000 934
Value") of the value of the Company is obtained in this way.
800 752
Properties as at 31 643
600
December 2002 NAV of the properties as 456
379
400
at 31 December 2002
200
Assumptions in NAV
0
calculations As last year, the chart below compares the 31.12.97 31.12.98 31.12.99 31.12.00 31.12.01 31.12.02
open market value of the properties with their
Starting in 2001, the Company decided to respective historical cost (net of depreciation)
adopt International Accounting Standards (IAS) as at 31 December 2002. The difference be-
in the preparation of its consolidated accounts. tween both amounts gives an approximation of
The IAS lead to the open-market value of the in- the return generated by each property (ex-
vestment properties being reflected in the Com- cluding the effect of the property´s previous
pany´s Balance Sheet. We do not believe how- year’s results).
ever that the Net Asset Value resulting from Please note that the concept of "value created"
such a Balance Sheet truly reflects the value of is different from the concept of "valuation sur-
the Company and this basically for two rea- plus" shown in the accounts. Both correspond
sons. to the difference between market value and the
First, in accordance with IAS, the properties un- historical cost of the property. However, to cal-
der development or held for sale are not culate "value created" we have used a definition
booked at market value. In the case of Sonae of historical cost that is different from the one
Imobiliária, the shopping centres under devel- used to calculate "valuation surplus" in the ac-
opment are therefore booked at historical cost. counts.
The under-estimation of value in these proper- When calculating "value created", the historical
ties can be significant. cost of the property includes marketing and let-
Second and more importantly, in accordance ting costs (as addition to the investment) and
with IAS, deferred taxes are booked in con- key money received (as a deduction to the in-
nection with the latent capital gains arising from vestment). The accounts, however, treat these
investment properties. From the Company´s amounts, respectively, as cost and income of
point of view, this deduction for deferred taxes the year and not as part of the investment.
is arguable. In a property sale, the market prac- The NAV as at 31 December 2002, of the prop-
tice is not to sell the asset itself but to sell the erties attributable to Sonae Imobiliária (in Por-
57
consolidated report and accounts 2002’sonaeimobiliária
Sonae Imobiliária, NAV as at 31/12/2002
Assets Open Market Value Depreciation Historical
Cost
% Sonae Total Attributable Total % Sonae Total Value Total Value created
Imobiliária Sonae Imobiliária Imobiliária Created / Historical Cost
AlgarveShopping 100% 81,927 81,927 37,403 37,403 44,524 119.0%
Arrábida Shopping 50% 118,098 59,049 111,909 55,954 3,095 5.5%
CascaiShopping 50% 194,718 97,359 47,201 23,601 73,758 312.5%
Phase 2B 50% 34,344 17,172 8,295 4,148 13,024 314.0%
50% 229,062 114,531 55,496 27,748 86,783 312.8%
Centro Colombo 50% 557,148 278,574 310,178 155,089 123,485 79.6%
Centro Vasco da Gama 100% 204,098 204,098 49,674 49,674 154,424 310.9%
ClérigoShopping 100% 612 612 969 969 (357) (36.8%)
CoimbraShopping 100% 31,475 31,475 9,281 9,281 22,194 239.1%
GaiaShopping 50% 116,414 58,207 51,595 25,798 32,409 125.6%
Gare do Oriente 100% 817 817 201 201 616 306.7%
Gran Casa 50% 126,500 63,250 124,264 62,132 1,118 1.8%
Grandella 100% 4,237 4,237 1,619 1,619 2,618 161.7%
GuimarãeShopping 100% 33,231 33,231 12,794 12,794 20,437 159.7%
La Farga 25% 45,500 11,398 47,640 11,934 (536) (4.5%)
MadeiraShopping 50% 64,920 32,460 41,636 20,818 11,642 55.9%
MaiaShopping 100% 49,245 49,245 21,794 21,794 27,451 126.0%
Max Centre 50% 122,000 61,000 110,710 55,355 5,645 10.2%
NorteShopping 50% 268,924 134,462 103,998 51,999 82,463 158.6%
Parque Principado 25% 126,500 31,625 117,377 29,344 2,281 7.8%
Plaza Mayor 75% 82,500 61,875 51,254 38,441 23,434 61.0%
Sintra Retail Park 50% 29,426 14,713 14,544 7,272 7,441 102.3%
Valle Real 50% 66,000 33,000 60,461 30,231 2,769 9.2%
ViaCatarina 50% 66,052 33,026 38,664 19,332 13,694 70.8%
Total Investment 2,424,686 1,392,812 1,373,461 725,181 667,630 92.1%
Aegean Park 50% 35,272 17,636 34,810 17,405 231 1.3%
Alexander Platz 100% 6,295 6,295 3,143 3,143 3,152 100.3%
Arrábida (Expansão) 50% 412 206 0 0 206 -
Avenida M 40 60% 32,500 19,500 35,913 21,548 (2,048) (9.5%)
Brescia 100% 4,428 4,428 4,390 4,390 38 0.9%
Coimbra Retail Park 50% 3,004 1,502 4,094 2,047 (545) (26.6%)
Dos Mares 65% 16,251 10,563 5,662 3,680 6,883 187.0%
LoureShopping 100% 10,387 10,387 9,307 9,307 1,080 11.6%
Luz del Tajo 65% 9,635 6,263 5,092 3,310 2,953 89.2%
Parque Atlântico 50% 19,616 9,808 16,093 8,046 1,762 21.9%
Parque de Famalicão 100% 4,120 4,120 2,885 2,885 1,235 42.8%
Plaza Eboli 65% 9,182 5,968 9,164 5,957 11 0.2%
Torres Colombo 50% 25,380 12,690 17,624 8,812 3,878 44.0%
Viana Centro 50% 13,596 6,798 13,619 6,809 (11) (0.2%)
Zubiarte 50% 30,000 15,000 30,000 15,000 0 0.0%
Total Development 220,078 131,164 191,796 112,340 18,824 16.8%
Cont. >>
58
sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
Sonae Imobiliária, NAV as at 31/12/2002
Assets Open Market Value Depreciation Historical
Cost
% Sonae Total Attributable Total % Sonae Total Value Total Value created
Imobiliária Sonae Imobiliária Imobiliária Created / Historical Cost
Franca Shopping 15.72% 3,811 599 8,447 1,328 (729) (54.9%)
Metropole Shopping 5% 22,320 1,116 19,972 999 117 11.8%
Parque Dom Pedro 98% 91,634 90,234 57,667 56,786 33,448 58.9%
Pateo Brasil 5.21% 32,314 1,683 20,656 1,076 607 56.4%
Penha Shopping 7% 10,834 779 9,761 702 77 11.0%
Tivoli Shopping 12.5% 9,696 1,212 9,915 1,239 (27) (2.2%)
Expansão P.D.Pedro Shopping 98% 10,119 9,964 0 0 9,964 -
Expansão Penha Shopping 100% 3,367 3,367 2,249 2,249 1,118 49.7%
Boavista Shopping 98% 8,109 7,906 1,459 1,422 6,484 456.0%
Total Brazil 192,203 116,860 130,125 65,800 51,060 77.6%
TOTAL 2,836,967 1,640,836 1,695,382 903,321 737,515 81.6%
NAV - IAS 697,889
(+) Value Created - CascaiShopping (phase 2B) 13,024
(+) Value Created - Concessions 2,877
(+) Value Created - Development 18,824
(+) Value Created - Development Brazil 17,566
(+) Deferred Taxes Liabilities 298,815
Deferred Taxes Assets 17,033
(+) Swaps Revaluation 5,494
Net Asset Value 1,037,458
Net Asset Value per share in € 27.67
Financial Situation and Results
Financial Performance > Properties held as investments are re- > Deferred taxes are booked in relation to
valued annually on the basis of an those gains or losses;
Adoption of International independent open-market valuation > Given that the investment properties are
Accounting Standards (since 1997 Sonae Imobiliária has booked at open-market value every year,
published the independent open-market no charge for depreciation is booked;
The Company, as mentioned before, decided valuation of its properties); > Debt and financial derivatives are also
to use International Accounting Standards > The variations in the value of properties booked at open-market value.
(IAS) when preparing the consolidated ac- held as investments, or properties under
counts for 2001. The main differences be- development which are completed and
tween IAS and the Portuguese Accounting go into operation during the year, are
Standards previously used by the Company booked as gains or losses of that same
are as follows: year;
59
consolidated report and accounts 2002’sonaeimobiliária
Sonae Imobiliária structure to its several businesses; Shopping The organization of Sonae Imobiliária, with the
Organization Centre Development, Shopping Centre Invest- exception of Residential Development, which
ment, Shopping Centre Management, Shopping has been sold, still stands and can be illustrated
The restructuring that took place in December Centres Brazil, Car Parks and Residential De- as follows:
2000 was designed to adjust the Group’s legal velopment.
SONAE IMOBILIÁRIA SGPS
Sonae Imobiliária
Serviços Apoio a Empresas
SPEL, S.A.
Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária
Brasil BV Assets SGPS Developments SGPS Property Mgm. SGPS
Sonae Imobiliária Sonae Imobiliária Sonae Imobiliária
Asset Mgmt., S.A. Developments, S.A. Gestão, S.A.
(Property companies) Sonae Imobiliária CCC – Consultoria
BVs Desarollos, S.A. Centros Comerciales, S.A.
Sonae Imobiliária
Itália, S.R.L.
Sonae West
Shopping AG
Sonae Charagionis
Services, S.A.
Analysis of Consolidated In 2002, the Company altered the proce- As previously stated, Prædium – Sonae Imo-
Accounts dures to annul intra-group transactions be- biliária’s residential Development company –
tween Property Management Companies was sold in March 2002. If Prædium’s contri-
Profit and Loss Account 100% owned and Property Investment Com- bution to the Total Direct Income for both
panies consolidated under the proportional 2002 and 2001 were excluded then the
In consolidated terms, the total income of method. This alteration produced an equal growth of Total Direct Income in 2002 would
Sonae Imobiliária in 2002 amounted to € 237.2 amount reduction on the Total Direct Income be 25.3%. This increase was due to the inclu-
million (€ 227.1 million in 2001), which repre- and Total Direct Costs of the consolidated sion of AlgaveShopping, MadeiraShopping
sents a growth of 4% over the previous year. accounts. This adjustment was also made in (Portugal) and Parque Principado (Spain) dur-
This variation was mainly due to the increase 2001 (€ -81.5 million) for comparison pur- ing the full year, the inauguration of Plaza
in rents. poses. Mayor (Spain) and Parque D. Pedro (Brazil) and
60
sonaeimobiliária’ consolidated report and accounts 2002
(000’s Euro)
Consolidated Profit Actual Actual Var.%
and Loss Account 2002 2001
Total Direct Income from Investments 237,228 227,100 4%
General Supplies and Services 109,009 124,833 -13%
Personnel Costs 20,078 18,605 8%
Other Costs 12,605 9,909 27%
Total Direct Costs from Investments 141,691 153,347 -8%
EBITDA 95,537 73,753 30%
Depreciation 2,615 1,710 53%
Net Financial Costs 22,282 14,500 54%
FX Financial Results -7,606 0 n.a
Direct Profits 63,034 57,543 10%
Corporate Tax 16,655 14,560 14%
Direct Net Profits from Investments 46,379 42,983 8%
Total Indirect Income from Investments 166,934 116,533 43%
Indirect Income from valuation of investments(IAS 40) 166,934 101,804 64%
Indirect Income from gains on sales of investments 0 14,729 n.a
Deferred Taxes 63,846 39,008 64%
Indirect Net Profit from Investments 103,088 77,525 33%
Total Net Profit 149,466 120,508 24%
Minorities 5,074 -375 -1453%
Net Profit after Minorities 144,392 120,883 19%
to the organic rent growth of existing operat- EBITDA reached € 95.5 million (€ 73.8 million The Net Profit came to € 144.4 million com-
ing centres. in 2001) growing 30% as a consequence of the pared with € 120.9 million in 2001, a 19% in-
The results of the Company under IAS have two organic growth and the addition to the portfo- crease.
main components. The first, the Direct Profit lio of MadeiraShopping, AlgarveShopping (Por-
from Investments, was € 63 million (€ 57.5 mil- tugal), Parque Principado, Plaza Mayor (Spain) Balance Sheet
lion in 2001) – corresponding to the operating and Parque D. Pedro (Brazil).
profit which showed a significant growth over Net Financial Costs came to € 29.8 million The financial position of SONAE IMOBILIÁRIA re-
2001, both due to organic growth, and as a re- (€ 14.5 million in 2001), reflecting the ambi- mains sound. Debt (corresponding to Loans
sult of the centres that went into operation dur- tious international expansion plan of the Com- and Other Liabilities, Current and Non-Current
ing this period. pany and the unfavourable foreign exchange less Cash) increased during the year, from €
The second component corresponds to Indirect rate result coming from shareholders’ loans 459 million to € 697 million. At the same time,
Investment Profit (€ 166.9 million versus € 116.5 made to Brazilian companies. the Company’s asset base increased, resulting
million in 2001) and is divided between Gains on Corporation Tax due is € 16.7 million (14.6 mil- from investment and from the increase in val-
the Revaluation of Properties (€ 166.9 compared lion in 2001), representing a low tax rate since ues of the properties (with the corresponding
to. € 101.8 million in 2001) and the Gain on Sale it is computed on the basis of profits calculated increase in Net Worth). In consequence, Gear-
of Investments (€ 14.7 million in 2001). From in accordance with the Portuguese Accounting ing (measured as Indebtedness divided by To-
these amounts, deferred taxes of € 63.8 million System. tal Assets less Cash) grew only from 35% to
(€ 39.0 million in 2001) were deducted. 38%, which we consider a comfortable level.
61
consolidated report and accounts 2002’sonaeimobiliária
Consolidated Balance Sheet
(000´s Euro)
Actual 2002 Actual 2001 var.(%)
Investment Properties 1,498,889 1,162,172 29.0%
Properties Under Development 176,323 122,902 43.5%
Goodwill 19,424 1,170 1559.6%
Other Assets 159,134 157,711 0.9%
Cash 90,670 145,566 (37.7%)
Total Assets 1,944,440 1,589,521 22.3%
Net Worth 697,889 610,961 14.2%
Minorities 26,117 8,387 211.4%
Loans 787,437 542,986 45.0%
Other Liabilities 134,183 208,244 (35.6%)
Deferred Taxes 298,815 218,943 36.5%
Total Liabilities 1,220,434 970,173 25.8%
Net Worth, Minorities and total Liabilities 1,944,440 1,589,521 22.3%
Share Capital of Sonae Imobiliária, SGPS, S.A.
In 1999, in accordance with Artº 17º of Decree- (€ 75,788.60), the Share Capital of the Com-
Law 343/98, Sonae Imobiliária, SGPS, SA, re- pany has amounted to € 187,125,000 with
denominated its shares in Euros using the stan- each share having a nominal value of € 4.99.
dard method.
Therefore, since 1999, after the incorporation
of Free Reserves of PTE 15,194,250
Own Shares Held by Sonae Imobiliária, SGPS, S.A.
During 2002, the Company did not buy any of
its own shares, and it does not at present hold
any of its own shares.
Dividend Proposal From the Board of DIrectors
The Board of Directors of Sonae Imobiliária, dend of € 0.28 per share, amounting to the to-
SGPS, SA recommend to the General Meeting tal sum of € 10,500,000.
of the Company, the payment of a gross divi-
62
sonaeimobiliária’ consolidated report and accounts 2002
Organisation and People
The Board of Directors of Sonae Imobiliária re- while the executive members of the Board are Pedro Caupers
mained unchanged in 2002, both in terms of as follows: Director, responsible for all the
the number of members and their respective re- Company’s operations, including
sponsibilities. There are nine Directors on the Álvaro Portela Shopping Centre Management,
Board, of whom four are non-executive: President with direct responsibility Marketing and Letting;
for Institutional Relations, Fernando Guedes de Oliveira
Belmiro Mendes de Azevedo Environment and Corporate Director, responsible for Expansion,
Non-executive Chairman; Communication; Developments, Design and
Ângelo Ribeirinho Paupério João Pessoa Jorge Architecture of Shopping and Leisure
Non-executive Director Director, responsible for all the Centres.
Jeremy Henry Moore Newsum Company’s business in Brazil where
Non-executive Director he lives; At the end of the year, Sonae Imobiliária em-
Neil Leslie Jones José Edmundo Figueiredo ployed a staff of 607 people, of whom 401
Non-executive Director. Director, responsible for Finance, worked in Portugal, 81 in Spain, 16 in Germany,
Management Control, Asset 5 in Greece, 5 in Italy and 99 in Brazil. Out of
Management, Legal, Mergers and these, 558 work for the shopping centres busi-
Acquisitions and Back Office; ness and 49 for SPEL.
Prospects
Sonae Imobiliária will continue to be a Shopping it is already present, developing new projects, expects to participate whenever opportunities
and Leisure Centre specialist, which takes an but also renovating and expanding existing proj- arise that fit with its strategy.
integrated approach to its business. It will con- ects, always with the objective of delivering in- Therefore, it is still the objective of Sonae
tinue to have its base in the European market, novative and high quality products. Imobiliária to become one of the leading Eu-
where it will never have less than 80% of its The Company will be alert to the consolidation ropean companies in Shopping and Leisure
NAV. It will stay focused on the markets where of the sector in Europe, a process in which it Centres.
63
consolidated report and accounts 2002’sonaeimobiliária
Final Notes
The Board of Directors would like to thank all The Board of Directors
shopping centre tenants, official entities, fi-
nancial institutions and suppliers for all the trust Belmiro Mendes de Azevedo
and support they have shown throughout the Chairman (non-executive)
year.
We would also like to thank our official Auditor Ângelo Ribeirinho Paupério
for his co-operation. Director (non-executive)
Finally we would like to thank our staff for their
commitment during this year, which is clearly Jeremy Henry Moore Newsum
reflected in the results achieved. Director (non-executive)
Maia, 26th March 2003. Neil Leslie Jones
Director (non-executive)
Álvaro Carmona e Costa Portela
President
João Gonçalo Sassetti Pessoa Jorge
Director
José Edmundo Medina Barroso de Figueiredo
Director
Pedro José D’Hommée Caupers
Director
Fernando Maria Guedes Machado Antunes Oliveira
Director
64
sonaeimobiliária’ consolidated report and accounts 2002
notes to the directors report
as 31 december 2002
This annex contains a brief description of the 20th 2001 of the "Comissão do Mercado de annex to it and remissions are made to it when-
Corporate Governance practises of Sonae Imo- Valores Mobiliários". ever felt more appropriate to cover matters
biliária, SGPS, S.A. and was prepared to sat- This annex should be read in conjunction with there only.
isfy Regulamento n°7/2001 of December the consolidated management report since it is
Corporate Governance
Chapter I. Disclosure through a letter addressed to the President of the In accordance with the Company’s
Assembly containing the name and address of statutes, the Board of Directors, further to
1 Attribution of responsibilities to the the representative and the date of the Assembly. other obligations attributed by law, must
Directors, in the context of the decision- Public entities can appoint any person as their undertake the management of the busi-
making process – see page 63 of the representative through a document that will be ness and conduct the operations related to
Management Report. assessed, for validity, by the President of the its object and, for that, a wide range of
2 The Company does not have a dividend Assembly. powers are attributed to it, namely the fol-
policy; however a proposal was made in The Assembly will be chaired by a president, a lowing:
the Management Report. vice-President and a secretary. a) to represent the Company, in Court
3 There are no stock option or stock Chapter III. Company Statutes and outside it, to start and respond to
distribution plans. The Company’s object is to manage financial in- court proceedings, to accept and
4 The Company uses the Internet, vestments in other companies, as an indirect withdraw from court proceedings and
electronic mail and other technologies way to conduct economic activities. to go into arbitration. For these
for the disclosure of its financial The Company can acquire or dispose of invest- purposes, the Board can delegate its
performance, namely through its ment in companies, both national and foreign, powers in one of its members;
website: wvvw.sonaeimobiliaria.com. with an object equal to or different from the one b) to approve the Company’s plan and
included in article three, in companies regulated budget;
Chapter II. Voting by special regulations and in companies with un- c) to acquire, dispose of or encumber any
Rights and Shareholder limited liability, in accordance with the law. fixed or current assets, in accordance
Representation 1 The Company uses the internal audit with the law. Including shares, stakes,
and risk management services provided quotas or bonds;
Each group of one hundred shares corre- by its majority shareholder - Sonae d) to sell or acquire business
sponds to one vote and shareholders are enti- SGPS, S.A.. establishments, in accordance with the
tled to a number of votes corresponding to the 2 The Company is aware of the existence law;
integer that results from dividing their number of an agreement between its two e) to decide on any association between
of shares by one hundred. shareholders. the Company and other parties, as per
The General Assembly includes only the share- article five of the statues;
holders entitled to vote that hold shares and Chapter IV. Corporate f) to decide to issue bonds, take on loans
subscription and that demonstrate its owner- Bodies in the domestic or the international
ship, in accordance with the law, at least eight markets and to fulfil any obligations vis-
days before the meeting. 1 The Board of Directors of Sonae à-vis the lenders;
Shareholders can appoint as their representa- Imobiliária includes, at the present, nine g) to appoint any persons, individual or
tives for the meeting their spouse, a direct rela- members of which five are executive and collective, to be part of corporate
tive, a Company director or another shareholder, four are non-executive. bodies of other companies;
67
consolidated report and accounts 2002’sonaeimobiliária
h) to decide on any technical and financial f) an attorney if he signs the document or that meets at least once a year. The Commit-
support to companies where it holds documents pursuant to a decision tee includes Eng. Belmiro Mendes de Azevedo,
any shares, quotas or similar recorded in the Board minutes or if a Prof. José Manuel Neves Adelino and Jeremy
participation. director was given powers by the Henry Moore Newsum.
All the documents binding the Company, in- Board, as recorded in Board Minutes, The remuneration of the executive members of
cluding cheques, bills of exchange, promissory to appoint him for that. the Board of Directors in the year of 2002 was
notes, will only be valid if signed by: Also in accordance with the Company statutes, as follows:
a) two directors; the Board of Directors will meet, normally, once Fixed remuneration = € 1.019.664,35
b) a director and an attorney; per quarter and, further to that, every time the Variable remuneration = € 466.400,00
c) a director, if he is so appointed Chairman, the executive director or two other Non-executive members were not remuner-
pursuant to a decision recorded in the members ask for it, and all the decisions taken ated.
Board minutes; will be included in the respective minutes.
d) two attorneys; During 2002 the Board met eleven times.
e) an attorney, in accordance to point a) The remuneration of the members of corporate
of the previous article; bodies is set by a Remuneration Committee
68
sonaeimobiliária’ consolidated report and accounts 2002
69
consolidated report and accounts 2002’sonaeimobiliária
consolidated accounts
Sonae Imobiliária, SGPS, SA and Subsidiaries
Consolidated Balance Sheets as of 31 December 2002 and 2001 (Amounts stated in Euro)
Notes 2002 2001 restated 2001
(Note 2.2.)
Assets
NON CURRENT ASSETS:
Investment properties 7 1,498,889,202 1,061,571,619 1,061,571,619
Investment properties in progress 7 151,962,163 185,362,003 185,362,003
Property, plant and equipment 8 21,270,171 35,422,775 35,422,775
Intangible assets 9 20,907,394 2,654,094 2,654,094
Investments in associates and companies 5 1,607,618 1,233,377 1,233,377
excluded from consolidation
Deferred tax assets 21 17,032,523 3,296,653 3,296,653
Other non current assets 10 25,401,899 17,633,192 17,633,192
Total non current assets 1,737,070,970 1,307,173,713 1,307,173,713
CURRENT ASSETS:
Inventories 11 215,584 60,826,097 60,826,097
Trade receivables 12 13,555,360 14,994,536 14,994,536
Other receivables 13 84,448,004 39,277,672 39,277,672
Other current assets 14 18,480,695 16,439,278 21,682,854
Cash and cash equivalents 15 90,669,560 145,565,927 145,565,927
Total current assets 207,369,203 277,103,510 282,347,086
Total assets 1,944,440,173 1,584,277,223 1,589,520,799
Equity, Minority Interests and Liabilities
Equity
Share capital 16 187,125,000 187,125,000 187,125,000
Reserves (24,171,806) 25,591,269 25,591,269
Retained earnings 390,543,770 277,361,190 277,361,190
Consolidated net profit for the year 144,392,362 120,883,289 120,883,289
Total equity 697,889,326 610,960,748 610,960,748
MINORITY INTERESTS 17 26,116,597 8,386,568 8,386,568
PassivoPassivo
NON CURRENT LIABILITIES:
Long term debt 18 715,493,776 522,960,986 522,960,986
– net of current portion
Other loans 19 116,152 157,665 157,665
Other non current liabilities 20 10,407,490 19,867,606 19,867,606
Deferred tax liabilities 21 298,814,811 218,943,393 218,943,393
Total non current liabilities 1,024,832,229 761,929,650 761,929,650
CURRENT LIABILITIES:
Current portion of long term debt 18 69,584,507 44,250,462 44,250,462
Short term debt and other borrowings 19 2,242,134 17,871,707 17,871,707
Trade payables 23 38,741,200 40,162,237 40,162,237
Other payables 24 36,874,058 34,719,194 34,719,194
Other current liabilities 25 47,207,259 65,608,175 70,851,751
Provisions 26 952,863 388,482 388,482
Total current liabilities 195,602,021 203,000,257 208,243,833
Total equity, minority interests and liabilities 1,944,440,173 1,584,277,223 1,589,520,799
The accompanying notes form an integral part of these consolidated balance sheets.
The Board of Directors
71
consolidated report and accounts 2002’sonaeimobiliária
Sonae Imobiliária, SGPS, SA and Subsidiaries
Consolidated Statements of Profit and Loss by Nature
for the Years Ended 31 December 2002 and 2001 (Amounts stated in Euro)
Notes 2002 2001 restated 2001
(Note 2.2.)
Operating revenue:
Sales 27 5,516,596 46,775,171 46,775,171
Services rendered 27 210,588,859 170,519,100 236,804,579
Variation in fair value of the investment properties 28 176,558,814 101,818,038 101,818,038
Other operating revenue 29 21,122,649 24,520,051 39,727,946
Total operating revenue 413,786,918 343,632,360 425,125,734
Operating expenses:
Cost of inventories sold 11 (5,086,749) (46,296,595) (46,296,595)
External supplies and services (105,062,770) (78,536,697) (155,821,263)
Personnel expenses (20,078,008) (18,604,685) (18,604,685)
Depreciation and amortisation (1,783,008) (1,108,104) (1,108,104)
Provisions and impairment 26 (1,342,608) (602,097) (602,097)
Other operating expenses 30 (20,578,024) (9,908,664) (14,117,472)
Total operating expenses (153,931,167) (155,056,842) (236,550,216)
Net operating profit 259,855,751 188,575,518 188,575,518
Net financial expense 31 (29,887,846) (14,499,850) (14,499,850)
Profit before income tax 229,967,905 174,075,668 174,075,668
Income tax 22 (80,501,458) (53,567,482) (53,567,482)
Profit after income tax 149,466,447 120,508,186 120,508,186
Minority interests 17 (5,074,085) 375,103 375,103
Consolidated net profit for the year 144,392,362 120,883,289 120,883,289
The accompanying notes form an integral part of these consolidated statements of profit and loss.
The Board of Directors
72
sonaeimobiliária’ consolidated report and accounts 2002
73
consolidated report and accounts 2002’sonaeimobiliária
Sonae Imobiliária, SGPS, SA and Subsidiaries
Consolidated Statement of Changes in Equity
For the Yeares ended 31 December 2002 and 2001
Reserves
Notes Share Treasury Legal Translation Hedging
Capital Stock Reserves reserve reserve
Balance at 31 December 2000 187,125,000 (711,076) 3,423,300 (2,622,343) (946,300)
Appropriation of consolidation net profit for 2000:
Transfer to legal reserves - - 27,901,064 - -
Dividends distributed - - - - -
Sale of treasuty stock - 711,076 - - -
Currency translation differences - - - (780,394) -
Fair value of hedging instruments,
net or fax 18 - - - - (2,017,804)
Deferred tax in fair value
of hedgings instruments 21 - - - - 633,746
Consolidated net profit for 2001 - - - - -
Others - - - - -
Balance at 31 December 2001 187,125,000 - 31,324,364 (3,402,737) (2,330,358)
Appropriation of consolidation net profit for 2001:
Transfers to reserves - - 399,341 - -
Dividends distributed - - - - -
Currency translation differences - - - (48,811,607) -
Fair value of hedging instruments, net or fax 18 - - - - (2,016,136)
Deferred tax in fair value of hedgings instruments 21 - - - - 665,327
Consolidated net profit for 2002 - - - - -
Others - - - - -
Balance at 31 December 2002 187,125,000 - 31,723,705 (52,214,344) (3,681,167)
The accompanying notes form an integral part of these statements of changes in equity.
The Board of Directors
74
sonaeimobiliária’ consolidated report and accounts 2002
(Amounts stated in Euro)
Retained Net Total
earnings profit
286,784,931 25,642,871 498,696,383
(9,758,193) (18,142,871) -
9,877 (7,500,000) (7,490,123)
79,101 - 790,177
- - (780,394)
- - (2,017,804)
- - 633,746
- 120,883,289 120,883,289
245,474 - 245,474
277,361,190 120,883,289 610,960,748
112,896,472 (113,295,813) -
(2,162,524) (7,587,476) (9,750,000)
- - (48,811,607)
- - (2,016,136)
- - 665,327
- 144,392,362 144,392,362
2,448,632 - 2,448,632
390,543,770 144,392,362 697,889,326
75
consolidated report and accounts 2002’sonaeimobiliária
notes to the consolidated
financial statements
1. Introduction
SONAE IMOBILIÁRIA, S.G.P.S., S.A. ("the Com- company of a group of companies, as ex- malls, management of shopping malls and man-
pany" or "Sonae Imobiliária"), which has its head plained in Notes 3 and 4 ("the Group"). agement of parking lots.
office in Lugar do Espido, Via Norte, Apartado The Group’s operations consist of investment The Group operates in Portugal, Brazil, Spain,
1197, 4471-909 Maia – Portugal, is the parent in shopping malls, development of shopping Greece, Germany and Italy.
2. Principal accounting policies
The principal accounting policies adopted in Board ("IASB"), in force as of 31 December 2.2. Change
preparing the accompanying consolidated fi- 2002. in accounting
nancial statements are as follows: The Group adopted International Financial Re- criteria
porting Standards in the preparation of con-
2.1. Basis of preparation solidated financial statements as from 1 Janu- During the year ended 31 December 2002,
ary 2001 and, consequently, some of the gene- the Group corrected its accounting procedure
The accompanying consolidated financial rally accepted accounting principles in Portu- relating the elimination of balances and tran-
statements have been prepared on a going gal, as defined in the Official Plan of Accounts sactions between management companies
concern basis and under the historical cost (Plano Oficial de Contas - "POC"), were not ap- (usually held at 100%) and the corresponding
convention, except for investment properties plied, namely the historical cost convention re- investment companies included in the con-
and financial instruments which are stated at lating to investment properties and financial ins- solidation by the proportional method of con-
fair value (Notes 2.4 and 2.14), from the ac- truments, which are stated at their fair value. solidation, by starting eliminating them in to-
counting records of the companies included The effect of the adjustments as of 30 Decem- tal instead of its proportion as it was usually
in the consolidation (Notes 3 and 4) main- ber 2000, relating to changes in accounting prin- made until that date. The balance sheet cap-
tained in accordance with generally accepted ciples to IFRS, amounting to € 222,683,763, tions as of 31 December 2001 and the state-
accounting principles in Portugal adjusted, in was recorded in the equity captions "Retained ment of profit and loss captions for the year
the consolidation process, to International Fi- earning" (€ 223,565,176), "Hedging reserve" them ended affected by this correction were
nancial Reporting Standards ("IFRS"), issued (negative amount of € 946,300) and "Translation as follows:
by the International Accounting Standards reserve" (€ 64,887).
Balance sheet
Restated as of 31/12/2001 for comparative purposes Stated as of 31/12/2001
Other current assets (Note 14) 16,439,278 21,682,859
Other current liabilities (Note 25) (65,608,175) (70,851,751)
(49,168,897) (49,168,897)
Statement of profit and loss
Restated as of 31/12/2001 for comparative purposes Stated as of 31/12/2001
Services rendered (Note 27) 170,519,100 236,854,579
Other operating income (Note 29) 24,520,051 39,727,946
External supplies and services (78,536,697) (155,821,263)
Other operating expenses (Note 30) (9,908,664) (14,117,472)
106,593,790 106,593,790
77
consolidated report and accounts 2002’sonaeimobiliária
2.3. Consolidation during the year are included in the consol- between 20% and 50% in a company’s
principles idated financial statements as from the capital) are accounted for in accordance
date of their acquisition or up to the date with the equity method.
The consolidation methods adopted by the of their sale. Intercompany balances and Under this method investments are
Group are as follows: transactions, and dividends distributed increased or decreased annually by the
a) Investments in Group’s companies have been eliminated. amount corresponding to the Group’s
Investments in companies in which the The companies included in the consolidat- proportion of the net results of the
Group owns, directly or indirectly, more ed financial statements by the full consoli- associated companies and dividends
than 50% of the voting rights at dation method are listed in Note 3. received.
Shareholders’ General Meetings and is Investments in Group companies exclud- An assessment of investments in
able to govern the financial and operating ed from the consolidation (Note 5) are associates is performed when there is an
policies so as to benefit from its activities stated at cost. indication that the asset has been
(definition of control normally used by the b) Investments in jointly controlled impaired or the impairment losses
Group), are included in the consolidated companies recognised in prior years no longer exist.
financial statements by the full consolida- Investments in jointly controlled companies When the group’s share of losses
tion method. The equity and net profit are included in the accompanying exceeds the carrying amount of the
attributable to minority shareholders are consolidated financial statements in investment, the investment is reported
shown separately, in the caption Minority accordance with the proportional at nil value and recognition of losses is
interests, in the consolidated balance consolidation method as from the date the discontinued except to the extent of the
sheet and consolidated statement of prof- control is acquired. In accordance with this Group’s commitment.
it and loss, respectively. method the assets and liabilities, revenue Unrealised gains arising from
Minority interests include their proportion and costs of these companies are included transactions with associates are
of the fair values of identifiable assets in the accompanying consolidated financial eliminated to the extent of the group’s
and liabilities recognised upon acquisition statements on a line-by-line basis, in interest in the associate against the
of subsidiaries. proportion to the Group’s participation in investment in the associate. Unrealised
When losses applicable to the minority in the companies. losses are eliminated similarly but only
a consolidated subsidiary exceed the Intercompany balances and transactions, to the extent that there is no evidence of
minority interest in the equity of the sub- and dividends distributed have been impairment of the asset transferred.
sidiary, the excess, and any further loss- eliminated, in the proportion of the Group’s Investments in associated companies
es applicable to the minority, are charged participation. are listed in Note 5.
against the majority interest except to the Investments in joint ventures are classified
extent that the minority has a binding obli- as such based on the agreements that 2.4. Investment
gation to, and is able to, make good the regulate the joint control. Properties
losses. If the subsidiary subsequently The companies included in the
reports profits, the majority interest is accompanying consolidated financial Investment properties consist of invest-
allocated all such profits until the minori- statements in accordance with the ments in buildings and other constructions in
ty’s share of losses previously absorbed proportional method are listed in Note 4. shopping malls that are held to earn income
by the majority has been recovered. c) Investments in associated rentals or for capital gain, rather than for use
The purchase method of accounting has companies in the production or supply of goods or ser-
been used for businesses acquired. The Investments in associated companies vices or for administration purposes or for
results of companies acquired or sold (generally in the case of investments of sale in the ordinary course of business.
78
sonaeimobiliária’ consolidated report and accounts 2002
Investment properties are initially recorded at Years Depreciation of intangible assets (other than
cost and then adjusted to their fair value based Buildings and other constructions 50 goodwill, which is recorded as above mentioned)
on annual appraisals by an independent spe- Machinery and equipment 10 is recorded under the statement of profit and
cialised valuer (fair value model). Changes in fair Transport equipment 5 loss caption "Depreciation and amortisation".
values of investment properties are accounted Tools and utensils 4
for in the period in which they occur, under the Administrative equipment 10 2.7. Investments
statement of profit and loss captions "Variation Other property, plant and equipment 5
in fair value of investment properties". Investments are classified into the following ca-
Developed and constructed assets which qua- Current maintenance and repair costs are tegories:
lify as investment properties are recognised as charged to the statement of profit and loss of – Held to maturity
such when they start being used. the period in which they occur. Improvements – Trading
Up to the end of the construction or develop- of significant cost, which increase the use of – Available-for-sale
ment period of assets which will become in- the assets, are capitalised and depreciated
vestment properties, they are accounted for at over the remaining estimated useful lives of the Held to maturity investments are included in
cost under the caption Investment properties in corresponding assets. non-current assets unless they mature within
progress. At the end of the development and 12 months of the balance sheet date. Invest-
construction period, the difference between 2.6. Intangible assets ments held for trading are included in current
cost and the fair value at that date is accounted assets. Available-for-sale investments are clas-
for in the consolidated statement of profit and Intangible assets are stated at cost less accu- sified as current assets if management intends
loss caption "Variation in fair value of investment mulated amortisation and any accumulated to realise them within 12 months of the balance
properties". impairment losses. Intangible assets are only sheet date.
Expenses relating to investment properties in recognised if it is probable that future economic All purchases and sales of investments are
use, such as maintenance, repairs, insurance benefits attributable to the assets will flow to the recognised on the trade date.
and property taxes are recognised are recog- Group and the cost of the asset can be mea- Investments are initially measured at cost,
nised in the consolidated statement of profit sured reliably. which is the fair value of the consideration given
and loss for the period to which refer. ntangible assets as of 31 December 2002 for them, including transaction costs.
relate essentially to management rights of instal- Available-for-sale and trading investments are
lations, which are amortised on a straight-line subsequently carried at fair value without any
2.5. Property, plant basis over the estimated period of the manage- deduction for transaction costs which may be
and equipment ment right (periods ranging from 10 to 15 years) incurred on its sale by reference to their quoted
and goodwill arising on the concentration of busi- market price at the balance sheet date.
Property, plant and equipment is stated at cost ness combinations. Gains or losses on measurement to fair value
less accumulated depreciation and any accu- Differences between cost and the fair value of of available-for-sale investments are recog-
mulated impairment losses. group and associated companies as of the date nised directly in the fair value reserve in
Depreciation is provided on a straight-line ba- of their acquisition are recorded in the intangible shareholders equity, until the investment is
sis, as from the date the assets start being asset caption "Goodwill", these being amortised sold or otherwise disposed of, or until it is de-
used, over the estimated period of useful life during the expected period to recover the invest- termined to be impaired, at which time the cu-
of each group of assets. ment (Note 9). Depreciation and impairment mulative gain or loss previously recognised
The rates of depreciation used correspond losses of goodwill are recorded under the state- in equity is included in net profit or loss for
the following periods of useful life of the as- ment of profit and loss caption "Other operating the period.
sets: expenses". Changes in the fair values of trading invest-
79
consolidated report and accounts 2002’sonaeimobiliária
ments are included in the profit and loss shopping mall (key income). These contracts posits and other treasury applications which ma-
statement for the year. can be renewed or cancelled by any of the par- ture in less than three months that are subject
Held to maturity investments are carried at ties involved (the company or the tenant). If the to insignificant risk of change in value.
amortised cost using the effective interest rate cancellation is made by the tenant it must pay For purposes of the statement of cash flows,
method. a cancellation fee to the company established cash and cash equivalents also include bank
in the contract. overdrafts, which are included in the balance
2.8. Accounting for In accordance to the conditions of these con- sheet caption "Other loans".
leases tracts, they are classified as operating leases,
being the rents (fixed and variable rents) and 2.12. Loans
A lease is classified as (i) a finance lease if the the common charges recorded in the state-
risks and rewards incident to ownership lie with ment of profit and loss in the year to which they Loans are stated as liabilities at their nominal
the lessee and as (ii) as an operating lease if respect. The expenses as well the key income value. Costs incurred to obtain the loans are
the risks and rewards incident to ownership do and the cancellation fee related with the opera- amortised on a straight-line basis over their
not lie with the lessee. ting leases are recorded as expenses or in- term.
Classifying a lease as a finance or an ope- come in the statement of profit and loss to
rating lease depends upon the substance of which they respect. 2.13. Borrowing costs
transaction rather than the form of the con-
tract. 2.9. Inventories Borrowing costs are normally expensed as in-
curred. Borrowing costs relating directly to the
ACCOUNTING FOR LEASES WHERE Inventories, including work-in-progress, are va- acquisition, construction or production of fixed
A GROUP IS THE LESSEE lued at the lower of cost and net realisable assets are capitalised as part of the cost of the
The existing situations where the Group is the value. Net realisable value is the selling price in qualified asset. Borrowing costs are capitalised
lessee are operating leases (usually for cars) the ordinary course of business, less the costs from the time of preparation of the activities to
and as such the lease payments are recognised of completion, marketing and distribution. construct or develop the asset to the time the
as an expense on a straight-line basis over the The cost of inventories, which is computed on production or construction is completed.
lease term. a specific basis, includes value added tax when
this may not be recoverable and all direct and 2.14. Derivatives
ACCOUNTING FOR LEASES WHERE indirect production costs.
A GROUP IS THE LESSOR The Group uses derivatives in the management
The existing situations where the Group is the 2.10. Receivables of its financial risks, only to hedge such risks. De-
lessor relate to the contracts with the tenants rivatives are not used by the Group for trading
of the shopping malls. These contracts are Receivables are stated at their nominal value (speculation) purposes.
usually for a period of six years and establish less impairment losses (recorded under the cap- Cash flow hedges in the form of swaps are used
the payment by the tenant of a monthly fixed tion "Impairment losses in accounts receivable"), by the Group to hedge interest rate risks on
rent - invoiced in advance –, a variable rent, in- so that they reflect their net realisable values. loans obtained. The conditions established in the
voiced if the monthly sales of the tenant are hedging swaps are identical to those of the loans
higher than the limit established in the contract 2.11. Cash and cash in terms of the amount of the loans, maturity
and the payment of tenant’s share in the shop- equivalents dates of the interest and repayment schedules
ping mall operating expenses (common of the loans.
charges). The contract with the tenant also es- Cash and cash equivalents includes cash on The Group’s criteria for classifying a derivative
tablishes the payment of an entrance fee in the hand, cash at banks in demand and term de- instrument as a cash flow hedges include:
80
sonaeimobiliária’ consolidated report and accounts 2002
> the hedge transaction is expected to be sheet liability method, reflecting the net tax ef- current assets and non current liabilities, res-
highly effective in achieving offsetting fects of temporary differences bewteen the car- pectively.
changes in fair value or cash flows rying amounts of assets and liabilities for fi-
attributable to the hedged risk; nancial reporting purposes and the amounts 2.19. Balances and
> the effectiveness of the hedge can be used for income tax purposes. transactions
reliably measured; Deferred tax assets and liabilities are calculated expressed in
> there is adequate documentation of the and valued annually at the tax rates expected to foreign currencies
hedging relationships at the inception of be in force when the temporary differences revert.
the hedge; Deferred tax assets are recognised only when All assets and liabilities expressed in foreign
> the forecasted transaction that is subject it is probable that sufficient taxable profits will currencies were translated to Euro at the ex-
of the hedges is highly probable be available against which the deferred tax as- change rates prevailing as of the balance sheet
sets can be utilised. At each balance sheet dates.
Swaps used by the Group to hedge the expo- date a review is made of the deferred tax as- Exchange gains and losses arising due to dif-
sure to changes in the interest rate of its loans sets and they are reduced whenever their fu- ferences between the historical exchange
are initially accounted for as assets or liabili- ture use is no longer probable. rates and those prevailing at the date of col-
ties at ther fair value by corresponding entry lection, payment or the date of the balance
to the equity caption Hedging reserves, and 2.17. Revenue sheet, are recorded as profits or losses in the
then recognised in the statement of profit and recognition consolidated statement of profit and loss for
loss over the period of the swaps the year.
Revenue from the sale of goods is recognised in
2.15. Provisions the consolidated statement of profit and loss when 2.20. Translation of
the risks and rewards of ownership have been financial
Provisions are recognised when, and only when, transferred to the buyer and the amount of the pro- statements of
the Group has an obligation (legal or implicit) re- visions can be reasonably quantified. Sales are foreign entities
sulting from a past event and it is probable that recognised net of sales taxes and discounts.
an outflow of resources will be required to set- Revenue from services rendered, which corre- The entities that operate abroad and are fi-
tle the obligation, and a reliable estimate can be sponds essentially to fixed and variable rent nancially, economically and organisationally
made of the amount of the obligation. Provisions from stores (Note 2.8), common expenses re- autonomous are considered as foreign enti-
are reviewed and adjusted at the balance sheet covered from the tenants and revenue from ties.
to reflect the best estimate as of that date. operation of parking lots, is recognised in the The assets and liabilities of the foreign enti-
year to which it relates. ties are translated to Euro at the rates of ex-
2.16. Income tax Revenue relating to the right of entry to the change in force as of the balance sheet date,
stores (key money) is recognised in the state- and income and expenses in their statements
Income tax is computed based on the taxable ment of profit and loss caption "Other operating of profit and loss are translated to Euro at the
results of the companies included in the con- income", when invoiced to the tenants (Note 2.8). average rates for the year. The resulting
solidation and considers deferred taxes. translation differences are recorded in the
Current income tax is determined based on the 2.18. Balance sheet equity caption "Translation reserve".
taxable results of companies included in the classification The following exchange rates were used to
consolidation, in accordance with the tax rules translate the financial statements of the
in force where their head offices are located. Assets and liabilities due in more than one foreign Group and associated companies to
Deferred taxes are calculated using the balance year are classified in the balance sheet as non Euro:
81
consolidated report and accounts 2002’sonaeimobiliária
2002 2001 of resources embodying economic benefits is
01.12.31 average 01.12.31 average
remote
Brazilian Real 0.269370 0.378280 0.488660 0.480450 A contingent asset is not recognised in the
consolidated financial statements but dis-
closed when an inflow of economic benefits is
2.21. Impairment of if this is not possible, for the cash-generating probable.
Assets unit to which the asset belongs.
Reversal of impairment losses recognised in
Assets are assessed for impairment at each prior years is recorded when there is an indi- 2.23. Subsequent
balance sheet date and whenever events or cation that the impairment losses recognised Events
changes in circumstances indicate that the car- for the asset no longer exist or have de-
rying amount of an asset may not be recover- creased. The reversal is recorded in the state- Post-year-end events that provide additional
able. Whenever the carrying amount of an as- ment of profit and loss as operating result. information about conditions that exist at the ba-
set exceeds its recoverable amount, an im- However, the increased carrying amount of an lance sheet date (adjusting events), are reflected
pairment loss is recognised under the state- asset due to a reversal of an impairment loss in the consolidated financial statements. Post-
ment of profit and loss caption "Other is recognised to the extent it does not exceed -year-end events that are not adjusting events
operating expenses". The recoverable amount the carrying amount that would have been de- are disclosed in the notes when material.
is the higher of an asset’s net selling price and termined (net of amortisation or depreciation)
value in use. The net selling price is the amount had no impairment loss been recognised for 2.24. Segment
obtainable from the sale of an asset in an arm’s that asset in prior years. information
length transaction less the costs of disposal.
Value in use is the present value of estimated 2.22. Contingencies All business and geographic segments of the
future cash flows expected to arise from the Group are identified annually.
continuing use of an asset and from its dis- Contingent liabilities are not recognised in the Information regarding the business and geo-
posal at the end of its useful life. Recoverable consolidated financial statements. They are graphic segments identified is included in
amounts are estimated for individual assets or, disclosed unless the possibility of an outflow Note 35.
3. Group companies included in the consolidation
The companies included in the consolidation, share capital held by the Group as of 31 De-
their head offices, and the percentages of their cember 2002 and 2001, are as follows:
Name Head Office Perc. of share Capital Held
02.12.31 01.12.31
Mother Company
Sonae Imobiliária, SGPS, S. A. Maia - -
Subsidiaries
Corporative servives
Sonae Imobiliária III – Serviços de Apoio a Empresas, S.A. Maia 100% 100%
Imoprædium, B.V. Amsterdam (Netherlands) 100% 100%
Cont. >>
82
sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
Name Head Office Perc. of share Capital Held
02.12.31 01.12.31
Investment companies
AlgarveShopping – Empreendimentos Imobiliários, S.A. Lisbon 100% 100%
2) Amarras, SGPS, S.A. Maia 100% -
2) Ameia, SGPS, S.A. Maia 100% -
12) Ascendente, SGPS, S.A. Maia 100% 100%
Caisgere, SGPS, S. A. Maia 100% 100%
2) Castelo do Queijo, SGPS, S.A. Maia 100% -
2) Circe, SGPS, S.A. Maia 100% -
2) Conquista, SGPS, S.A. Maia 100% -
Datavénia – Gestão de Centros Comerciais, S.A. Maia 100% 100%
2) Elmo, SGPS, S.A. Maia 100% -
3) Espimaia – Sociedade Imobiliária, S.A. Maia - 100%
2) Esteiros, SGPS, S.A. Maia 100% -
GuimarãesShopping – Empreendimentos Imobiliários, S.A. Maia 100% 100%
6) Imocolombo, B.V. Amsterdam (Netherlands) 100% 100%
Imospain, B.V. Amsterdam (Netherlands) 100% 100%
Imospain V, B.V. Amsterdam (Netherlands) 100% 100%
1) Imospain VIII, B.V. Amsterdam (Netherlands) 100% 100%
Imovalue, B.V. Amsterdam (Netherlands) 100% 100%
MaiaShopping – Empreendimentos Imobiliários, S.A. Maia 100% 100%
2) Mosquete, SGPS, S.A. Maia 100% -
Omala – Imobiliária e Gestão, S.A. Oporto 100% 100%
Paracentro – Plan.Comerc.e Gestão de Centros Comerciais, S.A. Maia 100% 100%
Plaza Mayor Parque de Ocio, S.A Madrid (Spain) 75% 75%
Prediguarda – Sociedade Imobiliária, S.A. Maia 100% 100%
RPU, SGPS, S.A. Maia 100% 100%
Rule, SGPS, S.A. Maia 100% 100%
Sonae Imobiliária Asset Management, S.A. Maia 100% 100%
Sonae Imobiliária Assets, SGPS, S.A. Maia 100% 100%
Vasco da Gama - Promoção de Centros Comerciais, S.A. Lisbon 100% 100%
Vilalambert - Sociedade Imobiliária, S.A. Maia 100% 100%
Management companies
Colombogest – Gestão de Centros Comerciais, S.A. Lisbon 100% 100%
4) Consultoria de Centros Comerciales, S.A. Madrid (Spain) 100% 60%
NorteShopping – Gestão de Centro Comercial, S.A. Maia 100% 100%
Pridelease Investments Ltd Cascais 100% 100%
Sonae Imobiliária – Gestão, S.A. Lisbon 100% 100%
Sonae Imobiliária Property Management, SGPS, S. A. Maia 100% 100%
Vasco da Gama Dois Gest- Gestão de Centros Comerciais, S.A. Lisbon 100% 100%
ViaCatarina Gest – Gestão de Centros Comerciais, S.A. Maia 100% 100%
Residential Real Estate promotion companies
3) Centro Residencial da Maia – Urbanismo, S.A. Oporto - 56%
Cont. >>
83
consolidated report and accounts 2002’sonaeimobiliária
Cont. >>
Name Head Office Perc. of share Capital Held
02.12.31 01.12.31
3) Country Club da Maia – Imobiliária, S.A. Maia - 56%
3) Empreendimentos Imobiliários da Quinta da Azenha, S.A. Maia - 56%
3) Imoclub – Serviços Imobiliários, S.A. Matosinhos - 56%
3) Imohora – Imobiliária, S.A. Matosinhos - 56%
3) Imohotel – Empreendimentos Turísticos Imobiliários, S.A. Matosinhos - 56%
3) Imosedas – Imobiliária e Serviços, S.A. Matosinhos - 56%
3) Prædium – Desenvolvimento Imobiliário, S.A. Oporto - 56%
3) Prædium II – Imobiliária, S.A. Maia - 56%
3) Prædium III – Imobiliária, S.A. Maia - 56%
3) Prédios Privados Imobiliária, S.A. Matosinhos - 56%
3) Predisedas – Predial das Sedas, S.A. Matosinhos - 56%
3) Promosedas – Promoção Imobiliária S.A. Matosinhos - 56%
3) Torre São Gabriel – Imobiliária, S.A. Maia - 56%
3) Torre São Rafael – Imobiliária, S.A. Maia - 56%
3) Urbisedas – Imobiliária das Sedas, S.A. Matosinhos - 56%
Development companies
1) 5ª Coluna – Gestão e Promoção Empreend. Imobiliários, S.A. Maia 100% 100%
1) Alfange – Imobiliária e Gestão, S.A. Maia 100% 100%
7) Avenida M40, S.A. Madrid (Spain) 60% 60%
1) Centro Retail Park – Parques Comerciais, S.A. Maia 100% 100%
1) Ciclop – Gestão de Centros Comerciais, S.A. Maia 100% 100%
2) Comercial de San Javier Shopping, S.A. Madrid (Spain) 65% -
2) Comercial de Pinto Shopping, S.A. Madrid ( Spain) 65% -
Fimaia-Serviços na Área Económica e Gestão de Invest., S.A. Maia 100% 100%
1) Gal Park, S.A. Madrid ( Spain) 100% 100%
5) Grama – Grandes Armazéns, S.A. Lisbon 100% 50%
1) ImmoProject, Gmbh Dusseldorf (Germany) 100% 100%
2) Imoconstruction, B.V. Amsterdam (Netherlands) 100% -
2) Imocontrol, B.V. Amsterdam (Netherlands) 100% -
Imogermany, B.V. Amsterdam (Netherlands) 100% 100%
1) 8) Imodeveloment, B.V. Amsterdam (Netherlands) 100% 100%
2) Imoground, B.V. Amsterdam (Netherlands) 100% -
1) Imoitalie II, B.V. Amsterdam (Netherlands) 100% 100%
2) Imoretail, B.V. Amsterdam (Netherlands) 100% -
Imospain III, B.V. Amsterdam (Netherlands) 100% 100%
1) Imospain VII, B.V. Amsterdam (Netherlands) 100% 100%
1) Imospain IX, B.V. Amsterdam (Netherlands) 100% 100%
1) Imospain X, B.V. Amsterdam (Netherlands) 100% 100%
1) 9) Imospain XII, B.V. Amsterdam (Netherlands) 100% 100%
2) Imostructure, B.V. Amsterdam (Netherlands) 100% -
1) Inmo Development and Investment, S.A. Madrid (Spain) 100% 100%
LouresShopping – Empreendimentos Imobiliários, S.A. Maia 100% 100%
1) Nó Górdio, SGPS, S.A. Maia 100% 100%
Parque de Famalicão – Empreendimentos Imobiliários, S.A. Maia 100% 100%
Cont. >>
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sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
Name Head Office Perc. of share Capital Held
02.12.31 01.12.31
10) PA-Zehnte, Beteiligungsverwaltungs, GmbH Viena (Austria) 100% -
1) Procoginm, S.A. Madrid (Spain) 100% 100%
1) Proyecto Park, S.A. Madrid (Spain) 100% 100%
1) Proyecto Shopping 2001, S.A. Madrid (Spain) 65% 65%
1) Querubim – Gestão de Centros Comerciais, S.A Maia 100% 100%
Sonae Germany, GmbH Dusseldorf (Germany) 100% 100%
Sonae Imobiliária Development II, S.A. Maia 100% 100%
Sonae Imobiliária Development, SGPS, S.A. Maia 100% 100%
Sonae Imobiliária Desarrollo, S.L. Madrid (Spain) 100% 100%
1) Sonae Imobiliária Itália, Srl Sondrio (Italy) 100% 100%
1) Transalproject 2000, Srl Sondrio (Italy) 100% 100%
11) Sonae West Shopping AG Dusseldorf (Germany) 95% 75.1%
Brazil companies
Dom Pedro I, B.V. Amsterdam (Netherlands) 100% 100%
Dom Pedro II, B.V. Amsterdam (Netherlands) 100% 100%
1) Imobrasil I, B.V. Amsterdam (Netherlands) 100% 100%
1) Imobrasil II, B.V. Amsterdam (Netherlands) 100% 100%
Parque Dom Pedro Shopping, S.A. São Paulo (Brazil) 98.47% 97.52%
1) Parque Jóquei – Empreendimentos Comerciais, Lda São Paulo ( Brazil) 90% 90%
1) 13) Pátio Boavista Shopping, Lda. São Paulo ( Brazil) 99.91% 90%
Sonae Imobiliária Brasil, B.V. Amsterdam (Netherlands) 100% 100%
Sonaeimo, B.V. Amsterdam (Netherlands) 100% 100%
Sonaeimo – Empreendimentos Comerciais, S.A. São Paulo (Brazil) 100% 100%
1) Companies excluded from the consolidation in 2001 5) Company sold by SM – Empreendimentos Imobiliários, 10) Company acquired at 11 January 2002
due to their immateriality; S.A. to Imodevelopment BV 11) Acquisition of 20% of the share capital in December
2) Companies incorporated in 2002 6) Ex. – Imospain XI, BV 2002
3) Companies sold at 1 April 2002 7) Ex. - Fortuna del Piero, S.A. 12) Ex: - Ascendente – Imobiliária, Serviços de Gestão de
4) Acquisition of 40% of the share capital in November 8) Ex. – Imospain II, BV Activos, S.A.
2002 9) Ex. – Imofrance, BV 13) Ex: - Parque Alegre – Empreendimentos Comerciais,
Lda
These companies were included in the consoli-
dation by the full consolidation method, as
explained in Note 2.3.a).
4. Jointly controlled companies
The jointly controlled companies included in Group as of 31 December 2002 and 2001,
the consolidation, their head offices, and the are as follows:
percentages of their share capital held by the
85
consolidated report and accounts 2002’sonaeimobiliária
Name Head Office Perc. of share Capital Held
02.12.31 01.12.31
Parking lots
SPEL – Sociedade de Parques de Estacionamento, S.A. Maia 50% 50%
Investments companies
Capital Plus – Investimentos e Participações, S.A. Vila Nova de Gaia 50% 50%
Empreendimentos Imobiliários Colombo, S.A. Lisbon 50% 50%
Grupo Lar Parque Principado, S.L. Madrid (Spain) 25% 25%
4) Hospitalet Center S.L. Madrid (Spain) 25.05% -
4) Iberian Assets, S.A. Madrid (Spain) 50% -
Imo R – Companhia Imobiliária, S.A. Oporto 50% 50%
5) ING RPFI Porto Inv. – Gest. e Prom. Centros. Com.,SGPS, Lda. Lisbon 50% -
4) Inmolor, S.A Madrid (Spain) 25.05% -
Inparsa – Indústria e Participações, S.A. Maia 50% 50%
Lisedi – Urbanização e Edifícios, S.A. Maia 50% 50%
LL Porto Retail SGPS, S.A. Vila Nova de Gaia 50% 50%
MadeiraShopping – Sociedade de Centros Comerciais, S.A. Funchal (Madeira) 50% 50%
Omne – Sociedade Gestora de Participações Sociais, S.A. Cascais 50% 50%
Sintra Retail Park – Parques Comerciais, S.A. Maia 50% 50%
SM – Empreendimentos Imobiliários, S.A. Cascais 50% 50%
Teleporto – Empreendimentos Imobiliários, S.A. Maia 50% 50%
1) Torre Colombo Ocidente – Imobiliária, S.A. Lisbon 50% 50%
1) Torre Colombo Oriente – Imobiliária, S.A. Lisbon 50% 50%
ViaCatarina – Empreendimentos Imobiliários, S.A. Maia 50% 50%
Management companies
C.C.G. – Centros Comerciais de Gaia, S.A. Vila Nova de Gaia 50% 50%
Residential Real Estate promotion companies
3) Andar – Sociedade Imobiliária, S.A. Maia - 28%
Development companies
Aegean Park Constructions Real Estate and Development, S.A. Athens (Greece) 50% 50%
Centerstation – Imobiliária, S.A. Maia 50% 50%
6) Imogreece, B.V. Amsterdam (Netherlands) - 50%
Imogreece II, B.V. Amsterdam (Netherlands) 50% 50%
1) Imogreece III, B.V. Amsterdam (Netherlands) 50% 50%
2) Imogreece IV, B.V. Amsterdam (Netherlands) 50% -
1) Micaelense Shopping – Empreendimentos Imobiliários, S.A. Ponta Delgada (Azores) 50% 50%
Sóguia – Sociedade Imobiliária, S.A. Maia 50% 50%
Sonae Charagionis Services, S.A. Athens (Greece) 50% 50%
1) Victoria Park, S.A. Athens (Greece) 50% 50%
4) Zubiarte Inversiones Inmobiliarias, S.A. Barcelona (Spain) 50% -
Brazilian companies
Sonae Enplanta, S.A. São Paulo (Brazil) 50% 50%
Cont. >>
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sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
Name Head Office Perc. of share Capital Held
02.12.31 01.12.31
Unishopping Administradora, Ltda São Paulo (Brazil) 50% 50%
Unishopping Consultoria, Ltda São Paulo (Brazil) 50% 50%
1) Companies excluded from the consolidation in 2001 due to 4) Companies acquired in September 2002
their immateriality 5) Company acquired in February 2002
2) Companies incorporated in 2002 6) Company sold in July 2002
3) Company sold in April 2002
These companies were included in the con-
solidation by the proportional consolidation
method, as explained in Note 2.3.b).
5. Associated companies
The associated companies included in the con- lance as of 31 December 2002 and 2001, are
solidation, their head offices, percentages of as follows:
their share capital held by the Group and ba-
Name Head Office Perc.of share cap. held Amount
02.12.31 01.12.31 02.12.31 01.12.31
Associated companies
Sonaegest – Soc. Gestora de Fundos de Investimento, S.A. Maia 20% 20% 289,050 284,661
289,050 284,661
Associated companies excluded from the consolidation
1) Imogreece III, BV Amsterdam (Netherlands) 50% 50% - 9,096
1) Micaelense Shopping – Empreendimentos Imobiliários, S.A. Ponta Delgada (Azores) 50% 50% - 25,000
3) SM (Cayman) INS Cayman - 50% - 3,556
1) Torre Colombo Ocidente – Imobiliária, S.A. Lisbon 50% 50% - 25,000
1) Torre Colombo Oriente – Imobiliária, S.A. Lisbon 50% 50% - 25,000
- 87,652
Subsidiaries excluded from the consolidation
1) 5ª Coluna - Gestão e Promoção Empree. Imobiliários, S.A. Maia 100% 100% - 50,000
1) Alfange - Imobiliária e Gestão, S.A. Maia 100% 100% - 50,000
1) Centro Retail Park - Parques Comerciais, S.A. Maia 100% 100% - 50,000
1) Ciclop - Gestão de Centros Comerciais, S.A. Maia 100% 100% - 50,000
2) Gaiaproject - Empreendimentos Imobiliários, S.A. Maia - 56% - 50,000
1) Galp Park, S.A. Madrid (Spain) 100% 100% - 61,000
1) Imobrasil I, BV Amsterdam (Netherlands) 100% 100% - 18,500
1) Imobrasil II, BV Amsterdam (Netherlands) 100% 100% - 18,500
1) 6) Imodevelopment, B.V. Amsterdam (Netherlands) 100% 100% - 18,161
1) Imoitalie II BV Amsterdam (Netherlands) 100% 100% - 18,200
1) Imospain VII, B.V. Amsterdam (Netherlands) 100% 100% - 18,200
1) Imospain VIII, B.V. Amsterdam (Netherlands) 100% 100% - 18,200
1) Imospain IX, B.V. Amsterdam (Netherlands) 100% 100% - 18,200
Cont. >>
87
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Cont. >>
Name Head Office Perc.of share cap. held Amount
02.12.31 01.12.31 02.12.31 01.12.31
1) Imospain X B.V. Amsterdam (Netherlands) 100% 100% - 18,200
1) 5) Imospain XII, B.V. Amsterdam (Netherlands) 100% 100% - 18,200
1) Inmo Development & Investments, S.A. Madrid (Spain) 100% 100% - 61,000
1) Immo Project, Gmbh Dusseldorf (Germany) 100% 100% - 28,037
2) Martimope – Sociedade Imobiliária S.A. Maia - 56% - 50,000
4) Lamda Pyleas, S.A. Athens (Grecce) 39.9% - 1,271,569 -
1) Nó Górdio, SGPS, S.A. Maia 100% 100% - 50,000
8) Oriogest, Srl Sondrio (Italy) 100% - 2,000 -
1) 7) Pátio Boavista Shopping, Lda São Paulo (Brazil) 90% 90% - 4,959
1) Parque Jóquei – Empreendimentos Comerciais, Ltda São Paulo (Brazil) 90% 90% - 4,959
1) Procoginm, S.A. Madrid (Spain) 100% 100% - 61,000
1) Querubim – Gestão de Centros Comerciais, S.A. Maia 100% 100% - 50,000
4) Segest – Sonae Espansione Gestione, S.r.l. Sondrio (Italy) 100% - 7,500 -
8) SIC Indoor – Gestão de Suportes Publicitários, S.A. Lisbon 35% - 17,500 -
1) Sonae Imobiliária Itália, S.r.l. Sondrio (Italy) 100% 100% - 75,548
4) Sonae Imobiliária Itália – Prop. Management, Srl Sondrio (Italy) 100% - 19,999 -
1) Transalproject 2000, S.r.l. Sondrio (Italy) 100% 100% - 200
1,318,568 861,064
1,607,618 1,233,377
1) Companies excluded from the consolidation in 2001 due to their immateriality
to their immateriality 5) Ex. - Imofrance, B.V.
2)Companies sold in April 2002 6) Ex. - Imospain II, B.V.
3) Company liquidated in December 2002 7)Ex. - Parque Alegre – Empreendimentos Comerciais, Ltda
4) Companies excluded from the consolidation in 2002 due 8) Company incorporated in 2002
The associated companies were included in the their immateriality, both individually and in total,
consolidation by the equity method, as explained in relation to the financial position and results of
in Note 2.3.c). operations of the Group and are accounted for
The Group and jointly controlled companies ex- in the accompanying consolidated financial
cluded from the consolidation above mentioned statements at cost (Note 2.3.a)).
were excluded from the consolidation due to
6. Acquisition and sale of companies
The main acquisitions and sales of companies oc- Assets, S.A. ("Iberian Assets") and Zubiarte In- held by Iberian Assets at 50.1%. Zubiarte is a
curred during the years ended 31 December versiones Inmobiliarias, S.A. ("Zubiarte"), by development company and is actually the
2002 and 2001 were as follows: € 119,808,384. Iberian Assets is the owner owner of a shopping mall that is under con-
of 4 operative shopping malls located in Spain, struction and is expected to open to the public
Acquisition of subsidiaries two of them (Kareaga and Gran Casa) held di- in September 2004. These companies were in-
rectly and the other two (La Farga and Valle cluded in the consolidation by the proportional
In September 2002, the Group acquired 50% Real) held indirectly throught its subsidiaries method, as they are jointly controlled compa-
of the share capital of the companies Iberian Hospitalet Center, SL and Inmolor, S.A. both nies. A goodwill of € 18,147,759 (Note 9)
88
sonaeimobiliária’ consolidated report and accounts 2002
arose with the acquisition of these four com- nancial statements by the full consolidation as it is a jointly controlled company. As this ac-
panies. As this acquisition was reported to 30 method. quisition was reported to 31 December 2001,
September 2002, profits and losses of these In December 2001, the Group acquired 50% of profits and losses of this company ere not in-
companies for the fourth quarter of 2002 were the share capital of LL Porto Retail SGPS, S.A., cluded in the consolidated statement of profit
included in the consolidated statement of profit located in Vila Nova de Gaia, owner of the Ar- and loss for 2001.
and loss. rábida Shopping, through its investment in Cap-
In December 2002, the Group acquired the ital Plus – Investimentos e Participações, S.A., Sale of subsidiaries
remaining 40% of the share capital of Con- by € 12,415,934. This company and its sub-
sultoria de Centros Comerciales, S.A. sidiaries were included in the consolidation by In April 2002 the Group sold the investment
("CCC"), by € 1,227,434, resulting in a good- the proportional method, as they are jointly con- held in Prædium – Desenvolvimento Imobiliário,
will amounting to € 1,274,080 (Note 9). This trolled companies. As this acquisition was re- S.A. ("Prædium DI"), which through its sub-
subsidiary, held in 60% before this acquisi- ported to 31 December 2001, profits and sidiaries, operated in the Residential Real Es-
tion, was already included in the consolidated losses of these companies were not included tate promotion business. In this transaction,
financial statements by the full consolidation in the consolidated statement of profit and loss the Group sold both the investment held and the
method. for 2001. accounts receivable from this company
In December 2002, the Group acquired 19.9% In December 2001, the Group acquired 50% of amounting to € 33,364,509. With the sale of
of the share capital of Sonae West Shopping, share capital of Centerstation – Imobiliária, the investment by € 1,083,000 a gain of
AG by € 10,000, resulting in a goodwill S.A., located in Maia, which owns the project € 3,048,795 (Notes 22 and 29) was obtained.
amounting to € 153,996 (Note 9). This sub- to construct the Viana Centro shopping center, The group of companies that left the consoli-
sidiary, held in 75% before this acquisition, by € 1,389,601. This company was included dation perimeter, as a consequence of the sale
was already included in the consolidated fi- in the consolidation by the proportional method, of Prædium DI were as follows:
Name Head office % of share capital held as of 01.12.31
Centro Residencial da Maia – Urbanismo. S.A. Oporto 56%
Country Club da Maia – Imobiliária. S.A. Maia 56%
Empreendimentos Imob. da Quinta da Azenha. S.A. Maia 56%
Imoclub – Serviços Imobiliários. S.A. Matosinhos 56%
Imohora – Imobiliária. S.A. Matosinhos 56%
Imohotel – Empreendimentos Turísticos Imob. S.A. Matosinhos 56%
Imosedas – Imobiliária e Serviços. S.A. Matosinhos 56%
Prædium – Desenvolvimento Imobiliário. S.A. Oporto 56%
Prædium II – Imobiliária. S.A. Maia 56%
Prædium III – Imobiliária. S.A. Maia 56%
Prédios Privados Imobiliária. S.A. Matosinhos 56%
Predisedas – Predial das Sedas. S.A. Matosinhos 56%
Promosedas – Promoção Imobiliária S.A. Matosinhos 56%
Torre São Gabriel – Imobiliária. S.A. Maia 56%
Torre São Rafael – Imobiliária. S.A. Maia 56%
Urbisedas – Imobiliária das Sedas. S.A. Matosinhos 56%
In December 2001, the Group sold 50% of through its subsidiaries, owned at 100%, Tele- owns GaiaShopping, by € 16,183,873, re-
share capital of Inparsa – Indústria e Partici- porto – Empreendimentos Imobiliários, S.A. sulting a gain amounting to € 14,728,612
pações SGPS, S.A., located in Maia, which and Lisedi – Urbanização e Edifícios, S.A., (Note 29). These subsidiaries were included
89
consolidated report and accounts 2002’sonaeimobiliária
in the consolidation by the proportional Effect of the acquisitions
method, as they are jointly controlled com- and sales
panies. As this sale was reported to 31 De-
cember 2001, profits and losses of these The effect of the above mentioned acquisitions
companies were considered at 100% in the and sales in the accompanying consolidated fi-
consolidated statement of profit and loss for nancial statements as of 31 December 2002
2001. and 2001 was as follows:
31.12.2002 31.12.2001
Acquisitions Sales Acquisitions Sales
(Zubiarte and Iberian) (Prædium DI) (LL Porto Retail) (Teleporto e Lisedi)
Cash and cash equivalents (I) 4,265,218 573,581 4,326,668 13,508
Investment properties (Note 7) 195,000,000 - 58,460,375 56,242,000
Tangible fixed assets 1,571,789 2,213,144 15,833 6,183
Investments 12,651,849 - - -
Other non current assets 10,863,262 7,668,681 - -
Accounts receivable from Group companies 20,351,963 - - -
Inventories - 52,964,754 - -
Trade receivable from Group companies 927,675 1,892,236 216,745 416,141
Other current assets 18,176,915 9,994,791 990,443 1,020,117
Accounts payble (149,546,703) (78,817,535) (60,613,761) (56,242,688)
Identifiable assets and liabilities at acquisition date 114,261,967 (3,510,348) 3,396,303 1,455,261
Minorities (Note 17) (12,601,342) 1,544,553 - -
Deferred tax liabilities (Note 21) - - 11,300,103 -
Goodwill (Note 9) 18,147,759 - 389,601 -
Variation in the fair value of the acquired investment properties (Note 28) - - (1,280,472) -
Pofit/ (loss) on sales (Notes 22 and 29) - 3,048,795 - 14,728,612
Amount of purchase / sale (II) 119,808,384 1,083,000 13,805,535 16,183,873
Net cash flow (II-I) (115,543,166) 509,419 (9,478,867) 16,170,365
7. Investment properties
The movement in investment properties during
the years ended 31 December 2002 and 2001
was as follows:
2002 – Investment properties 2001 – Investment properties
in operation in progress total in operation in progress total
Opening balance 1,061,571,619 185,362,003 1,246,933,622 851,882,305 121,499,267 973,381,572
Increases - 73,555,470 73,555,470 5,434,160 166,509,155 171,943,315
Transfers - 12,307,874 12,307,874 - - -
Increases by transfer to investment
properties in progress:
Production cost 134,263,184 (134,263,184) - 103,740,094 (103,740,094) -
Cont. >>
90
sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
2002 – Investment properties 2001 – Investment properties
in operation in progress total in operation in progress total
Adjustment to fair value (Note 28) 78,864,107 - 78,864,107 42,430,641 - 42,430,641
Variation in fair value of the investment
properties between years:
Gains (Note 28) 95,063,639 - 95,063,639 58,106,925 - 58,106,925
Losses (Note 28) (1,125,000) - (1,125,000) (14,170) - (14,170)
Increases through concentration 180,000,000 15,000,000 195,000,000 57,366,700 1,093,675 58,460,375
of business activities (Note 6)
Sale of investment (8,456,840) - (8,456,840) (56,242,000) - (56,242,000)
properties
Currency translation differences (41,291,507) - (41,291,507) (1,133,036) - (1,133,036)
Closing balance 1,498,889,202 151,962,163 1,650,851,365 1,061,571,619 185,362,003 1,246,933,622
During the year ended 31 December 2002 the During 2002 the Group transferred the At 31 December 2002 and 2001 investment
Group sold the investment property Vilalambert Colombo towers investment from property, properties in operation corresponded to the fair
resulting in a gain of € 78,794, recorded un- plant and equipment to investment properties value of the Group’s proportion of the following
der operating income (Note 29). in progress (Note 8). shopping malls:
31.12.2002 31.12.2001
% held Yield Amount % held Yield Amount
Portugal
AlgarveShopping 100% 8.00% 81,927,000 100% 8.25% 77,566,000
Arrábida Shopping 50% 7.50% 59,048,500 50% 7.25% 57,366,700
CascaiShopping 50% 7.00% 97,359,000 50% 6.75% 93,404,000
Centro Colombo 50% 6.75% 278,573,500 50% 6.50% 248,525,049
Centro Vasco da Gama 100% 6.75% 204,098,000 100% 6.25% 185,903,000
CoimbraShopping 100% 8.00% 31,475,000 100% 7.75% 29,265,000
GaiaShopping 50% 7.50% 58,206,500 50% 7.25% 56,242,000
GuimarãeShopping 100% 8.00% 33,231,000 100% 7.75% 31,326,000
MadeiraShopping 50% 8.50% 32,460,000 50% 8.50% 26,573,000
MaiaShopping 100% 8.00% 49,245,000 100% 7.75% 41,965,000
NorteShopping 50% 7.00% 134,462,000 50% 6.75% 118,172,000
Sintra Retail Park 50% 8.25% 14,712,500 50% 8.25% 14,300,000
ViaCatarina 50% 7.75% 33,025,500 50% 7.50% 30,755,000
Vilalambert 100 N/A - 100% 8.75% 8,321,870
1,107,823,500 1,019,684,619
Brazil
Parque D. Pedro 98% 12.00% 91,634,476 98% N/A -
Sonae Enplanta 50% 5,388,226 50% 9,137,000
97,022,702 9,137,000
Spain
Gran Casa 50% 6.50% 63,250,000 N/A N/A -
Cont. >>
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consolidated report and accounts 2002’sonaeimobiliária
Cont. >>
31.12.2002 31.12.2001
% held Yield Amount % held Yield Amount
Kareaga 50% 6.85% 61,000,000 N/A N/A -
La Farga 25% 8.00% 22,750,000 N/A N/A -
Valle Real 25% 6.85% 33,000,000 N/A N/A -
Plaza Mayor 75% 7.50% 82,418,000 75% N/A -
Parque Principado 25% 7.00% 31,625,000 25% 32,750,000
294,043,000 32,750,000
1,498,889,202 1,061,571,619
The fair value of each investment property was lated using the market yields for the different In the valuation of investment properties some
determined by means of a valuation as of the types of income generated by the properties assumptions, that in accordance with the Red
balance sheet dates made by an independent (fixed rent, variable rent, co-generation and Book are considered to be special were in ad-
specialised entity. other income). The reasonableness of the mar- dition considered, namely that in the case of
The valuation of these investment properties ket values thus obtained was tested by means recently inaugurated shopping malls, in which
was made in accordance with the Practice of 10-year projections of the income generated the possible costs still to be incurred were not
Statements of the RICS Appraisal and Valuation by the property. considered, as the accompanying financial
Manual published by The Royal Institution of In the case of investment properties located in statements already include a provision for
Chartered Surveyors ("Red Book"), located in Brazil, the local practice was used. This in- them.
England. volves preparing 10-year projections and dis- Investment properties in progress at 31 De-
In the case of European assets, the market counting them to the valuation date at market cember 2002 and 2001 are made up as fol-
value of the investment properties was calcu- discount rates. lows:
31.12.2002 31.12.2001
Portugal
CascaiShopping expansion - second phase 4,147,588 315,693
Parque de Famalicão 2,885,116 -
Ponta Delgada 8,046,297 -
Coimbra Retail Park 2,024,348 -
Setúbal Retail Park 1,269,665 1,112,835
LoureShopping 9,307,059 8,351,534
Viana Centro 6,809,393 1,093,675
Colombo Towers 8,780,307 -
Germany
Vienna 2,186,767 -
Berlin Alexander Platz 3,143,160 -
Dortmund 2,673,845 -
Brazil
Sonaeimo 2,230,492 -
Pátio Boavista 1,451,085 -
Parque D. Pedro Shopping - 90,123,565
Cont. >>
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Cont. >>
02.12.31 01.12.31
Spain
Plaza Mayor - 41,717,881
Avenida M40 35,913,166 26,192,124
Malaga Outlet 4,380,805 -
Luz Del Tajo 5,091,891 -
Plaza Éboli 9,164,387 -
Dos Mares 5,661,908 -
Zubiarte 15,000,000 -
Greece
Aegean Park 17,405,000 16,454,696
Italy
Brescia 4,389,884 -
151,962,163 185,362,003
At 31 December 2002 and 2001 the following
investment properties had been given in gua-
rantee of bank loans:
Colombo Center Parque Principado
Vasco da Gama Center Plaza Mayor
NorteShopping Gran Casa
CascaiShopping Kareaga
GaiaShopping Valle Real
ViaCatarina La Farga
MaiaShopping
CoimbraShopping
GuimarãeShopping At 31 December 2002 and 2001 there were no
Sintra Retail Park material contractual obligations to purchase,
Arrábida Shopping construct or develop investment properties or for
AlgarveShopping repairs or maintenance, other than those refer-
MadeiraShopping red to above.
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consolidated report and accounts 2002’sonaeimobiliária
8. Property, plant and equipment
The movement in property, plant and equipment during the years ended 31 December 2002
and corresponding accumulated depreciation and 2001 was as follows:
2002
Land Buildings and Machinery Transport Administrative
and natural other and equipment equipment equipment
resources constructions
Assets:
Opening Balance 5,299,512 19,884,667 3,742,507 252,729 2,308,378
Increases - 1,050,805 331,707 15,404 611,451
Sales (870,780) (2,665,915) (565,497) (9,468) (154,460)
Transfers and disposals (2,758,124) (2,196,034) (687,469) (29,647) (675,334)
Currency translation differences - - (22,006) (56,827) (92,043)
Change in consolidation perímeter (1,670,608) 1,556,068 (54,262) 3,467 351,208
Closing Balance - 17,629,591 2,744,980 175,658 2,349,200
Accumulated depreciation and impairment losses:
Opening Balance - 1,214,901 1,431,587 80,415 925,810
Depreciation for the year - 725,791 328,070 28,102 224,757
Sales - (213,274) (226,121) (5,515) (81,868)
Transfers and disposals - (761,113) (449,086) (24,301) (310,625)
Currency translation differences - - (10,406) (10,848) (11,673)
Change in consolidation perímeter - 596,949 (7,882) 2,834 (36,185)
Closing Balance - 1,563,254 1,066,162 70,687 710,216
Net assets - 16,066,337 1,678,818 104,971 1,638,984
94
sonaeimobiliária’ consolidated report and accounts 2002
2002 2001
Tools and Other property, Property, plant total total
utensils plant and and equipment in
equipment progress
107,217 518,842 7,396,603 39,510,455 28,453,564
31,498 137,477 2,648,235 4,826,577 12,240,132
(9,968) (33,735) - (4,309,823) (107,274)
381 - (7,568,081) (13,914,308) (1,029,445)
- - (137) (171,013) (30,674)
178 141,717 (1,110,226) (782,458) (15,848)
129,306 764,301 1,366,394 25,159,430 39,510,455
62,314 372,653 - 4,087,680 4,032,083
24,244 52,731 - 1,383,695 1,003,311
(2,791) (27,013) - (556,582) (54,981)
- (344) - (1,545,469) (888,070)
- - - (32,927) (2,735)
178 (3,032) - 552,862 (1,928)
83,945 394,995 - 3,889,259 4,087,680
45,361 369,306 1,366,306 21,270,171 35,422,775
Sales in 2002 relate basically to the sale of the During 2002 the Group transferred the During 2002, the subsidiary SPEL – Sociedade
Vilalambert offices by € 3,964,366, resulting Colombo towers investment from property, de Parques de Estacionamento, S.A., capitalised
in a gain of € 294,194, recorded under oper- plant and equipment to investment properties under the caption Property, Plant and Equipment
ating income (Note 29). in progress (Note 7). financial costs amounting to € 115,277.
95
consolidated report and accounts 2002’sonaeimobiliária
9. Intangible assets
The movement in intangible assets and corres- years ended 31 December 2002 and 2001
ponding accumulated amortisation during the was as follows:
2002 2001
Goodwill Other rights Total Total
Assets :
Opening balance 7,585,624 2,981,912 10,567,536 12,298,729
Increases:
Acquisitions (Note 6) 19,575,835 9,719,263 29,295,098 389,601
Price adjustments 160,581 - 160,581 -
Sales and disposals (5,656,209) - (5,656,209) (2,120,794)
Closing balance 21,665,831 12,701,175 34,367,006 10,567,536
Accumulated depreciation and impairment losses:
Opening balance 6,415,215 1,498,227 7,913,442 9,283,866
Amortisation for the year 10,456,811 355,967 10,812,778 750,370
Sales and disposals (5,266,608) - (5,266,608) (2,120,794)
Closing balance 11,605,418 1,854,194 13,459,612 7,913,442
Net assets 10,060,413 10,846,981 20,907,394 2,654,094
Disposals of goodwill in 2002 relate basically Kareaga, La Farga and Valle Real) are actu- period plus an equal period for renewal),
to the write off of goodwill that was fully de- ally in operation. In this transaction the Group which is the expected period to recover the
preciated as of 31 December 2001. paid an amount of € 9,719,263, which was investment.
In September 2002, the Group acquired the capitalised as intangible assets and is being At 31 December 2002 and 2001 goodwill was
management right to operate five shopping depreciated over a period of twelve years made up as follows:
centers in Spain, four of which (Gran Casa, (corresponding to the established contract
02.12.31 01.12.31
Depreciation
and impaiment Accumulated
losses depreciation
year of Depreciation of the year and impair- Book Book
aquisition Amount rate (note 30) ment losses value value
Consultoria de Centros Comerciales, SL 1999 1,518,231 20% 303,646 1,214,584 303,647 607,292
Fimaia – Serv. Econ. e Gestão de Inv. S.A. 1999 365,973 20% 73,195 292,780 73,193 146,389
Consultoria de Centros Comerciales, SL 2000 45,211 20% 9,042 27,126 18,085 27,127
Centerstation – Imobiliária. S.A. 2001 - 389,601
Consultoria de Centros Comerciales, SL (Note 6) 2002 1,274,080 20% 254,816 254,816 1,019,264 -
Sonae West Shopping AG (Note 6) 2002 153,996 20% 30,799 30,799 123,197 -
Iberian Assets, S.A. (Note 6) Sep/02 6,916,776 20% 345,839 345,839 6,570,937 -
Hospitalet Center S.L., (Note 6) Sep/02 306,020 20% 15,301 15,301 290,719 -
Inmolor. S.A. (Note 6) Sep/02 1,748,812 20% 87,441 87,441 1,661,371 -
Zubiarte Inversiones Inmobiliarias. S.A. (Note 6) Sep/02 9,176,151 100% 9,176,151 9,176,151 -
Cont. >>
96
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Cont. >>
02.12.31 01.12.31
Depreciation
and impaiment Accumulated
losses depreciation
year of Depreciation of the year and impair- Book Book
aquisition Amount rate (note 30) ment losses value value
Price adjustment 2002 160,581 100% 160,581 160,581 - -
21,665,831 10,456,811 11,605,418 10,060,413 1,170,409
10. Other non current assets
At 31 December 2002 and 2001 other non cur-
rent assets were made up as follows::
02.12.31 01.12.31
Loans to group companies that were inclued in the
consolidation by the proportional method or exclued from consolidation:
Imo R – Sociedade Imobiliária. S.A. 14,877,278 14,877,278
Zubiarte 4,294,389 -
Lamda Pylea 259,350 -
Other 1,543,964 2,007,717
Advances on account of investments 1,761,880 748,197
Fun Entertainment International 1,237,921 -
Other non current assets 1,427,117 -
25,401,899 17,633,192
Loans to group companies included in the process when the shareholders’ contribu-
consolidation by the proportional method tions are not proportional to its ownership
are not eliminated during the consolidation percentage.
11. inventories
At 31 December 2002 and 2001 this caption
was made up as follows:
02.12.31 01.12.31
Work in progress 194,421 27,172,853
Merchandise 21,163 33,653,244
215,584 60,826,097
The decrease in inventories in 2002 is related its subsidiaries operated in the Residential Real products during the year ended 31 December
with the sale of the investment held in Prædium Estate promotion business. 2002 and 2001 was as follows:
DI mentioned in Notes 6 and 34, which through The movement in work in progress and finished
97
consolidated report and accounts 2002’sonaeimobiliária
02.12.31 01.12.31
Work in progress Finished goods Total Total
Opening balance 27,172,853 - 27,172,853 51,693,599
Amounts capitalised during the year 2,257,641 - 2,257,641 20,616,635
Sales - (5,086,749) (5,086,749) (45,137,381)
Transfers (24,149,324) - (24,149,324) -
Change in consolidation perimeter (5,086,749) 5,086,749 - -
Closing balance 194,421 - 194,421 27,172,853
12. trade receivables
At 31 December 2002 and 2001 trade recei-
vables were made up as follows:
02.12.31 01.12.31
Acounts receivable from customers:
Relating management of shopping malls 5,268,467 5,539,029
Relating to residential real estate - 2,240,348
Brazil 2,480,407 4,476,549
Spain 3,867,990 1,280,451
Other costumers 1,230,587 1,115,084
Notes receivable from customers 568,324 143,525
Doubtful accounts receivable 8,107,862 7,192,320
21,523,637 21,987,306
Accumulated impaiment losses on trade receivables (Note 26) (7,968,277) (6,992,770)
13,555,360 14,994,536
13. Other receivables
At 31 December 2002 and 2001 this caption
was made up as follows::
02.12.31 01.12.31
Municipal Council of Lisbon 7,776,954 7,776,954
State and other public entities 21,310,144 18,455,665
Soconstrução BV 32,807,843 -
Imoconti, S.A. 2,288,300 -
Accounts receivable from group companies that were included
in the consolidation by the proportional method 7,783,497 -
Estação Shopping 1,175,000 -
ING Soparfi 1,987,249 -
Municipal Council of Malaga 1,649,415 -
MBO La Farga 986,000 -
Cont. >>
98
sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
02.12.31 01.12.31
Advances to suppliers 840,485 873,386
Others 6,267,414 12,291,237
84,872,301 39,397,242
Accumulated impairment losses on other (424,297) (119,570)
receivables (Note 26)
84,448,004 39,277,672
The amount of € 7,776,954, due by the Mu- presented in December 2002, reclaiming the the invoices from third parties during the pe-
nicipal Council of Lisbon, relates to works de- totally of the improvements made by Colombo riod of construction of the shopping malls and
veloped by the subsidiary Empreendimentos on account of CML and corresponding interests the reimbursement of that VAT is asked to
Imobiliários Colombo, S.A. ("Colombo") in the and other expenses incurred by Colombo un- state entities only after the beginning of ope-
area surrounding the Colombo Center. These der the above mentioned protocols. The ration of the shopping malls.
works were developed on behalf of the Munici- Colombo’s Board of Directors believes that the The amount of € 32,807,843 receivable from
pal Council of Lisbon ("CML") in accordance with legal action will be favourable to the company Soconstrução, BV relates to the amount to re-
protocols signed between the technical services and consequently no provision to face losses ceive from the entity to which Prædium DI was
of CML and Colombo at the end of 2002. On the relating the account receivable was recorded. sold in 2002, including both the amount of the
other hand, the caption Other non current lia- The amount of € 21,310,144 receivable from sale and accounts receivable from that entity
bilities, at 31 December 2002, includes the state entities relates basically to Value Added that were also sold (Note 6). The Group expects
amount of € 3,242,373 (Note 24) relating to Tax ("VAT") receivable. In accordance to tax to collect this account receivable in 2003.
works developed by CML on behalf of Colombo legislation, the Group follows the procedure of
and licences. A legal action against CML was record under this caption the VAT included in
14. Other current assets
At 31 December 2002 and 2001 this caption
was made up as follows:
02.12.31 01.12.31 01.12.31
restated
(note 2.2)
Interest income receivable 1,374,286 181,679 181,679
Variable rents receivable 2,852,117 2,267,342 4,063,189
Recovery costs receivable 254,634 347,710 347,710
Deferred rents 766,473 766,516 4,214,245
Bank expenses 3,950,382 6,256,707 6,256,707
Management and administartion services receivable 2,788,501 1,900,917 1,900,917
Others 6,494,302 4,718,407 4,718,407
18,480,695 16,439,278 21,682,854
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consolidated report and accounts 2002’sonaeimobiliária
15. Cash and cash equivalents
At 31 December 2002 and 2001 cash and
cash equivalents was made up as follows:
02.12.31 01.12.31
Cash 157,557 228,593
Bank deposits payable on demand 67,045,755 26,136,656
Treasury applications 23,466,248 119,200,678
90,669,560 145,565,927
Bank overdrafts (Note 19) (938,697) (2,160,960)
89,730,863 143,404,967
At 31 December 2001, treasury applications in- to very short-term treasury operations with the
clude the amount of € 118,000,678, relating shareholder Sonae SGPS, S.A..
16. Share capital
At 31 December 2002 share capital was made The following entities own more than 20% of
up of 37,500,000 fully subscribed and paid up the share capital at 31 December 2002 and
ordinary shares of € 4.99 each. 2001:
Entity 2002 2001
Sonae Investments, BV 67.04% 67.04%
Grosvenor Investments, (Portugal), SA 32.96% 32.96%
17. Movement in minority interests
During the year ended 31 December 2002 the
movement in minority interests was as follows:
Balance as of Net Variation in Companies
01.12.31 profit translation exclued from
reserve consolidation
in 2001
Parque D. Pedro 1,754,872 446,008 (625,795) -
Plaza Mayor – Parque de Ócio, S.A. 891,468 4,480,539 - -
Prædium DI 1,031,201 - - -
Avenida M40, S.A. 4,830,100 - - -
Hospitalet Center, SL - 68,249 - -
Inmolor, S.A. - 127,624 - -
Comercial de Pinto Shopping, S.A. - - - 924,735
Other (121,073) (48,335) (240) 1,052,255
8,386,568 5,074,085 (626,035) 1,976,990
100
sonaeimobiliária’ consolidated report and accounts 2002
Acquisitions Sales Other Balance as of
(note 6) (note 6) 02.12.31
- - (339,132) 1,235,953
- - - 5,372,007
- (1,544,553) 513,352 -
- - - 4,830,100
5,709,395 - - 5,777,644
6,891,947 - - 7,019,571
- - - 924,735
- - 73,980 956,587
12,601,342 (1,544,553) 248,200 26,116,597
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consolidated report and accounts 2002’sonaeimobiliária
18. Bank loans
At 31 December 2002 and 2001 bank loans
obtained were made up as follows:
02.12.31
Used amount
Entidy limit short term medium and
long term
Debenture loans:
Sonae Imobiliária / 98 bonds 27,963,842 11,939,990
Sonae Imobiliária / 99 bonds - 50,000,000
SM / 92 bonds - -
27,963,842 61,939,990
Bank loans:
Sonae Imobiliária, SGPS, S.A. BPI - - -
Empreendimentos Imobiliários Colombo, S.A. Eurohypo (a), (b) 112,250,000 - 112,250,000
Imo R – Sociedade Imobiliária, S.A. BEI (a), (d) 17,608,363 2,177,876 12,047,827
BPI (a), (b) 3,673,033 454,296 2,513,127
Eurohypo, BPI (a), (b) 18,750,000 935,547 17,307,612
Citibank (a) 24,939,895 14,877,277 -
Caisgere, SGPS, S.A. CGD (c) 13,467,543 - 13,467,543
SM – Empreendimentos Imobiliários, S.A. CGD (a), (b), (e) - - -
CGD (a), (b), (e) - - -
Vasco da Gama – P. Centros Comerciais, S.A. BEI (d), (e) - - -
Banksyndicate (b), (e) - - -
ViaCatarina – Emp. Imobiliários, S.A. BPA (a), (b), (e) - - -
MadeiraShopping – Soc. Cent. Comerciais, S.A. BCP (a), (b) 14,253,148 1,839,116 11,954,254
Sintra Retail Park – Parques Comerciais, S.A. BPI (a), (b) 6,234,974 545,560 5,455,602
SPEL – Soc. P. Estacionamento, S.A. BPI (a) 1,683,445 374,098 1,122,294
SPEL – Soc. P. Estacionamento, S.A. BPI - - - 5,380,713
Sonae Enplanta, S.A. Unibanco (a) - 279,236 535,203
Sonae Enplanta, S.A. BNDES (a) - 109,998 9,167
Prædium – Des. Imobiliário, S.A. CGD (f) - - -
AlgarveShopping – Emp. Imobiliários, S.A. BCP, CGD (b) 33,668,858 - 33,668,858
Plaza Mayor – Parque de Ocio, S.A. Eurohypo (b) 35,459,714 - 34,257,719
Plaza Mayor – Parque de Ocio, S.A. BPI (b) 9,975,960 1,976,098 -
Rule, SGPS, S.A. Eurohypo (b) 64,843,727 - 64,843,727
Inparsa – Ind. e Participações, SGPS, S.A. Eurohypo (a), (b) 27,500,000 - 27,500,000
Capital Plus – Inv. e Participações, S.A. Eurohypo, BBVA (a), (b), (d) 27,750,000 1,375,000 24,000,000
Grupo Lar Principado, SL Eurohypo (a), (b) 24,040,483 - 24,040,483
ING RPFI Porto Investment, SGPS, S.A. Eurohypo (a), (b) 19,600,000 - 19,600,000
OMNE – SGPS, S.A. Eurohypo (a), (b) 61,428,000 - 50,000,000
Ascendente – SGPS, S.A. BBVA (b), (d) 111,000,000 2,830,500 108,169,500
Avenida M40, S.A. Commerzbank (b) 28,000,000 11,818,153 -
Hospitalet Center Eurohypo (a), (b) 12,774,037 751,265 10,517,712
102
sonaeimobiliária’ consolidated report and accounts 2002
01.12.31
used amount
limit short term medium and due date Reimbursement
long term plan
- 39,903,832 Jan/2005 Final
- 50,000,000 Dec/2006 Final
3,740,985 - 2002 Final
3,740,985 89,903,832
7,481,968 7,481,968 - Dec/2002 Final
112,250,000 - 112,250,000 Sep/2026 Annual
17,608,363 1,992,524 14,225,704 Jun/2009 Quaterly
3,673,033 415,633 2,967,424 Jun/2009 Quaterly
18,750,000 467,774 18,243,158 Jun/2011 Quaterly
24,939,895 - 14,877,276 Dec/2003 Final
13,467,543 - 13,467,543 Sep/2004 Final
9,975,958 820,639 820,639 Nov/2003 Half year
13,716,942 - 12,469,947 Dec/2009 Monthly
24,939,895 5,072,777 19,867,120 Jun/2010 Annual
- 10,756,617 - 2015 Final
- 8,671,370 - Jul/2002 Annual
12,220,548 - 11,635,610 May/2010 Quaterly
6,234,974 233,812 6,001,162 Aug/2010 Half year
5,611,476 - 5,231,497 Dec/2006 Half year
- - - in renegotiation in renegotiation
- - - Nov/2005 Quaterly
- 673,600 1,568,926 Jan/2004 Quaterly
9,975,958 - 9,975,958 Sep/2004 Final
33,668,858 - 19,087,779 Apr/2013 Quaterly
35,459,714 2,530,261 25,272,559 Oct/2017 Annual
- - - Aug/2003 Final
64,843,727 - 64,843,727 Jul/2026 Annual
27,500,000 - 27,500,000 Nov/2016 Annual
27,750,000 1,250,000 25,375,000 Mar/2017 Quaterly
24,040,483 - 24,040,483 Mar/2005 Half year
- - - Oct/2021 Annual
- - - 2028 Annual
- - - 2028 Annual
- - - 2003 Vários
- - - Apr/2013 Half year
Cont. >>
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Cont. >>
02.12.31
Used amount
Entidy limit short term medium and
long term
Inmolor Eurohypo (a), (b) 15,025,303 - 15,025,303
Iberian Assets Eurohypo (a), (b) 39,967,305 976,645 28,773,456
Iberian Assets Eurohypo (a), (b) 26,369,406 300,000 25,619,406
750,263,194 41,620,665 648,059,506
Total 69,584,507 709,999,496
Fair value of the financial hedging instruments - 5,494,280
69,584,507 715,493,776
(a) These amounts are considered at the control propotion (c) to guarantee the repayment of this loan, the Group (e) This loan wasrepaid before its term
held by the Group pledged the sharest of this subsidiary (f) Company sold in 2002
(b) To guarantee the repayment of these loans, the Group (d) The Group constitued bank guarantees of the repay-
pledged the real estate properties owned by these companies ment of this loan
Bank loans bear interests at market interest At 31 December 2002 loans classified as medi- At 31 December 2002 and 2001 the Group’s
rates and were all contracted in Euro, um and long term were repayable as follows: hedging financial instruments relate to inter-
except for the bank loans relating Sonae est rate swaps (cash flow hedges) and were
Enplanta, which were contracted in Brazilian 2004 29,676,326 as follows:
2005 29,323,013
Reais and translated to Euro using the
2006 71,267,537
exchange rate prevailing at balance sheet
2007 and following years 574,351,907
date (Note 2.20).
704,618,783
02.12.31 01.12.31
loan Fair value of the financial loan Fair value of the financial
hedging instrument hedging instrument
Sonae Imobiliária / 98 Bonds 39,903,832 286,254 39,903,832 380,520
Sonae Imobiliária / 99 Bonds 50,000,000 3,959,879 50,000,000 2,041,004
Sonae Imobiliária SGPS / BPI - - 7,481,968 142,502
Caisgere SGPS / CGD 13,467,543 493,000 13,467,543 321,618
Imo R / BEI 14,225,703 436,036 16,681,606 167,500
Imo R / BPI 2,967,423 53,154 3,479,716 42,500
Imo R / Eurohypo 18,243,159 265,957 18,750,000 382,500
5,494,280 3,478,144
These interest rate swaps are stated at financial hedging instruments was made and the variable interest rate negotiated
their fair value at the balance sheet date, as taking into consideration the actualisation with the bank entity that granted the loan.
of 31 December 2002, determined by the to the balance sheet date of the future The main hedging principles used by the
valuation made by the bank entities with cash-flows relating the difference between Group when negotiating these hedging finan-
which the interest swaps were contracted. the contracted interest rate with the bank cial instruments are as follows:
The computation of the fair value of these entity with which the swap was negotiated
104
sonaeimobiliária’ consolidated report and accounts 2002
01.12.31
used amount
limit short term medium and due date Reimbursement
long term plan
- - - Jan/2026 Half year
- - - Jun/2019 Half year
- - - Nov/2020 Half year
494,109,335 40,366,975 429,721,512
44,107,960 519,625,344
142,502 3,335,642
44,250,462 522,960,986
> Perfect matching between the cash- rate used in the in interest rate swap
flows paid and received: there is and in the loan are coincident;
coincidence between the dates of > In a scenario of increase or decrease in
interest payments of the loans obtained interest rates, the maximum amount of
and changed with the bank; interest charges is perfectly calculated.
> Perfect matching in the index interest
rate used: the reference index interest
19. Other loans
At 31 December 2002 and 2001 other loans
obtained were made up as follows:
02.12.31 01.12.31
Short term Medium and long term Short term Medium and long term
Bank loans:
Sonae Imobiliária, SGPS, S.A. 9,975,958 -
Imo R – Sociedade Imobiliária, S.A. 24,950 49,900 24,950 74,850
MaiaShopping – Empreendimentos Imobiliários, S.A. 16,563 66,252 33,128 82,815
SM – Empreendimentos Imobiliários, S.A. 869,507 - 298,292 -
MadeiraShopping – Soc. Cent. Comerciais, S.A. – - - 142,617 -
AlgarveShopping – Emp. Imobiliários, S.A. - - 270,766 -
Grupo Lar Principado, SL 392,417 - 4,965,036 -
1,303,437 116,152 15,710,747 157,665
Bank overdrafts (Note15) 938,697 - 2,160,960 -
2,242,134 116,152 17,871,707 157,665
105
consolidated report and accounts 2002’sonaeimobiliária
These loans bear interests at market interest
rates and were contracted in Euro
20. Other non current liabilities
At 31 December 2002 and 2001 other non cur-
rent liabilities were made up as follows:
02.12.31 01.12.31
Shareholdres:
Prædium – Desenvolvimento Imobiliário, S.A. - 15,010,347
Avenida M40, S.A 4,144,449 3,921,416
Others 893,885 136,767
Deposit of guarantees received 2,210,895 -
Other non current accounts payable 3,158,261 799,076
10,407,490 19,867,606
21. Deferred taxes
Deferred tax assets and liabilities at 31 the temporary differences that generate
December 2002 and 2001 in accordance to them, are made up as follows:
Deferred tax assets Deferred tax liabilities
02.12.31 01.12.31 02.12.31 01.12.31
Difference between fair value and historical - - 296,437,397 216,805,304
cost of tangible fixed assets
Wrote-off of intagible assets - - (3,118,747) (4,027,537)
Wrote-off deferred income relating key - - 5,496,161 6,165,626
income and expenses relating the opening of shopping centers
Fair value of hedging financial instruments 1,813,113 1,147,786 - -
Tax losses carried forward 15,219,410 2,148,867 - -
17,032,523 3,296,653 298,814,811 218,943,393
The movement in deferred tax assets and ended 31 December 2002 and 2001 was
liabilities (net balance) during the years as folow:
106
sonaeimobiliária’ consolidated report and accounts 2002
2002 2001
Opening balance 215,646,740 190,860,140
Effect in net result:
Difference between fair value and historical cost of 66,498,369 37,525,545
tangible fixed assets
Wrotte-off of movements in the year 908,793 778,138
in intangible assets
Wrotte-off of movements in the year in deferred assets relating (669,464) 1,013,704
to key income and expenses relating to the opening of shopping centers
Recognition of deferred income taxes relating to the fair - 11,300,103
value arising in business concentrations (Note 6)
Use / Increase of tax losses carried forward (2,891,555) 1,556,933
Effect of change in income tax rate from 35.2% to 33% (Note 22) - (13,166,537)
Other - -
Sub-total (Note 22) 63,846,143 39,007,886
Effect in equity:
Vauation of hedging financial instruments (665,327) (633,746)
Currency translation differences (7,064,362) -
Change in perimeter:
Sales of companies 2,087,169 (12,375,799)
Acquisition of companies:
Deferred income tax liabilities 18,173,214 -
Deferred income tax assets (11,358,899) -
Other 1,117,610 (1,211,741)
Closing balance 281,782,288 215,646,740
The deferred tax assets relating to tax loss-
es carried forward are made up as follows:
02.12.31 01.12.31
Tax consolidation of Prædium - 2,087,169
IMO R – Sociedade Imobiliária, S.A. - 61,698
Parque D. Pedro Shopping, S.A 3,647,977 -
Unishopping Administradora, Lda 2,208 -
Spel – Sociedade Parques Estacionamento,SA 210,328 -
Iberian Assets, S.A. 7,683,012 -
Zubiarte Inversiones Inmobiliarias, S.A. 3,675,885 -
15,219,410 2,148,867
At 31 December 2002 the Group reviewed recorded the deferred tax assets relating to bably be recovered in the future. The limit
the tax losses carried forward, and only the tax losses carried forward which will pro- expire date of the tax losses is as follows:
107
consolidated report and accounts 2002’sonaeimobiliária
Tax loss Limit expire date
Portugal:
Generated in 2001 637,358 2007
Spain:
Generated in 1996 22,467,974 2011
Generated in 1997 6,539,811 2012
Generated in 1998 4,052,256 2013
33,060,041
Brazil:
Generated in 2001 148,656 no limit date
Generated in 2001 10,587,181 no limit date
10,735,837
44,433,236
22. Income tax
Income tax for the years ended 31
December 2002 and 2001 is made up as
follows:
02.12.31 01.12.31
Current tax 16,655,315 14,559,596
Deferred tax (Note 21) 63,846,143 39,007,886
80,501,458 53,567,482
The numerical reconciliation between tax ex-
pense and the product of accounting profit mul-
tiplied by the applicable tax rate is as follows:
02.12.31 01.12.31
Profit before income tax 229,967,905 174,075,668
Gains related to the sale of companies (Note 6) (3,048,795) (14,728,612)
Depreciation of goodwill (Note 9) 10,456,811 -
Other permanent differences 3,134,847 (1,864,341)
Taxable profit 240,510,768 157,482,715
Effect of different income tax rates in other countries 3,433,044 -
243,943,812 157,482,715
Income tax rate in Portugal 33.0% 35.2%
80,501,458 61,274,635
Cont. >>
108
sonaeimobiliária’ consolidated report and accounts 2002
Cont. >>
02.12.31 01.12.31
Recognition of deferred income taxes relating the fair - 11,300,103
value arising in business concentrations (Note 6)
Effect of change in income tax rate from 35.2% - (13,166,537)
to 33% (Note 21)
80,501,458 53,567,482
23. Trade payables
At 31 December 2002 and 2001 trade
payables were made up as follows:
02.12.31 01.12.31
Suppliers 12,622,948 16,997,624
Suppliers of fixed assets 19,718,082 23,101,195
Others suppliers 64,181 63,418
32,405,211 40,162,237
24. Other payables
At 31 December 2002 and 2001 other
payables were made up as follows:
02.12.31 01.12.31
Advances from customers 1,525,223 10,413,229
State and other public entities 21,382,620 10,805,859
Shareholders 4,557,911 6,210,059
Municipal Council of Lisbon (Note 13) 3,242,373 3,242,373
ING Soparfi 1,986,344 -
Other payables 4,179,587 4,047,674
36,874,058 34,719,194
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consolidated report and accounts 2002’sonaeimobiliária
25. Outros passivos correntes
At 31 December 2002 and 2001 other current
liabilities were made up as follows:
02.12.31 01.12.31 01.12.31
restated
(Note 2.2.)
Accrud interested payable 4,613,787 4,668,405 4,668,405
Vacation pay and vacation bonus 4,848,739 4,583,690 4,583,690
Accrued Real Estate tax 10,740,841 12,226,881 12,226,881
Accrued services payables 4,581,308 2,906,540 2,906,540
Condominium margin 1,406,996 1,503,189 1,503,189
Recovery costs payable - 76,006 76,006
Accrued fixed assets payable 2,916,526 7,287,715 7,287,715
Antecipated invoiced key income - 11,943,625 11,943,625
Antecipated invoiced rental income 7,499,495 5,086,676 10,330,252
Others 10,599,567 15,325,448 15,325,448
47,207,259 65,608,175 70,851,751
26. Provisions and impaiment losses on accounts receivable
The movement in provisions and impairment ended 31 December 2002 and 2001 is made
losses on accounts receivable during the years up as follows:
Captions Balance as of Increase Decrease Changes in Translation Balance as of
00.12.31 Perimeter differences 01.12.31
Impaiment losses on accounts receivable:
Customers 6,888,111 602,457 (487,139) - (10,659) 6,992,770
Others debtors 119,570 - - - - 119,570
7,007,681 602,457 (487,139) - (10,659) 7,112,340
Provisions for risks and costs:
Other risks and costs 71,071 1,841 (2,940) 318,885 (375) 388,482
7,078,752 604,298 (490,079) 318,885 (11,034) 7,500,822
Captions Balance as of Increase Decrease Changes in Translation Balance as of
00.12.31 Perimeter differences 01.12.31
Impaiment losses on accounts receivable:
Customers (Note 12) 6,992,770 1,310,876 (676,450) 574,118 (233,037) 7,968,277
Others debtors (Note 13) 119,570 31,732 (6,548) 279,543 - 424,297
7,112,340 1,342,608 (682,998) 853,661 (233,037) 8,392,574
Provisions for risks and costs:
Other risks and costs 388,482 167,217 (22,024) 419,188 - 952,863
7,500,822 1,509,825 (705,022) 1,272,849 (233,037) 9,345,437
110
sonaeimobiliária’ consolidated report and accounts 2002
27. Sales and services rendered
Sales and services rendered for the years
ended 31 December 2002 and 2001 are made
up as follows:
02.12.31 01.12.31 01.12.31
restated
(Note 2.2.)
sales 5,516,596 46,775,171 46,775,171
Services rendered:
Fixed rents 101,563,999 82,097,833 110,157,336
Variable rents 10,167,281 9,013,946 13,424,732
Space rentals 3,826,897 3,329,081 4,347,485
Common charges 53,171,741 46,818,899 44,330,903
Parking lot income 9,229,582 8,024,504 6,423,840
Others 32,629,359 21,234,837 58,120,283
210,588,859 170,519,100 236,804,579
216,105,455 217,294,271 283,579,750
The decrease in sales in 2002 is related to the Sales occurred during 2001 relate basically to
sale of Prædium DI, which through its sub- the sale of the real estate residential buildings
sidiaries operated in the residential real estate Torre de S.Gabriel and Ouro Foz.
promotion business (Notes 6 and 34).
28. Variation in fair value of the investment properties
The variation in fair value of the investment prop-
erties in 2002 and 2001 is made up as follows:
02.12.31 01.12.31
Tranfers from “in progress” (Note 7) 78,864,107 42,430,641
Variation in fair value between years (Note 7):
Gains 95,063,639 58,106,925
Losses (1,125,000) -
Variation in fair value of the acquired investment
properties (Note 6) - 1,280,472
Adjustment to the estimated construction cost at the 3,756,068 -
date of the transfer to investment properties in operation
176,558,814 101,818,038
111
consolidated report and accounts 2002’sonaeimobiliária
29. Other operating revenue
Other operating revenue for the years ended
31 December 2002 and 2001 is made up as
follows:
02.12.31 01.12.31 01.12.31
restated
(Note 2.2.)
Key income 5,993,778 650,191 15,858,086
Gains obtained in the sale 3,048,795 14,728,612 14,728,612
of companies (Notes 6 and 34)
Gains obtained in the sale 372,988 - -
of properties (Notes 7 and 8)
Gains obtained in the sale of other assets 2,531,595 - -
Others 9,175,493 9,141,248 9,141,248
21,122,649 24,520,051 39,727,946
30. Other operating expenses
Other operating expenses for the years ended
31 December 2002 and 2001 are made up as
follows:
02.12.31 01.12.31 01.12.31
restated
(Note 2.2.)
Real estate tax 3,129,282 4,837,668 4,837,668
Amortisation and impairment losses 10,456,811 596,886 596,887
of goodwill (Note 9)
Indemnifies paid to tenants 1,071,917 - 3,367,148
Others 5,920,014 4,474,110 5,315,769
20,578,024 9,908,664 14,117,472
112
sonaeimobiliária’ consolidated report and accounts 2002
31. Net financial results
Net financial results are made up as follows:
02.12.31 01.12.31
Expenses:
Interest expense 34,269,769 23,211,270
Transfers from equity relating to hedging
financial instruments 667,912
Foreign currency exchange loss 7,798,134 2,711,044
Others 3,070,642 1,527,385
45,138,545 28,117,611
Net financial expenses (29,887,846) (14,499,850)
15,250,699 13,617,761
Income:
Interest 11,767,947 11,463,444
Gains on investments in
associated companies 4,385 21,426
Gain on marketable securities
and other treasury applications 2,408,981 380,000
Foreign currency exchange gain 84,088 1,550,303
Other financial income 985,298 202,588
15,250,699 13,617,761
32. Related parties
The Group just identified as related parties its
shareholders.
The transactions with these entities relates only
to loans granted or obtained and distribution of
dividends.
33. Compromises not reflect in the balance sheet
There are tax requirements for reinvestment in subsidiaries to comply with that tax require- ing to sales to Group companies recorded in
course relating the sale of investments in pre- ments for reinvestment, in accordance with individual accounts and wrote-off in the con-
vious years. In accordance to the policy current legislation, through the acquisition of solidation process) were not considered in the
adopted in preceding years, it is intention of other investments, fact by which gains ob- computation of the income tax for 2001 and
the Board of Directors of the Company and its tained in previous year (including those relat- 2002.
113
consolidated report and accounts 2002’sonaeimobiliária
34. Discontinuing activities
As of 1 April 2002 the Group discontinued the As this sale was considered as of 31 March amounted to € 5,962,617 and € 5,453,887,
real estate residential promotion business 2002, the consolidated statement of profit and respectively and the corresponding result be-
through the sale of Prædium DI and its sub- loss includes income and expenses of the first fore taxes amounted to € 508,730.
sidiaries. With this sale the Group obtained quarter of 2002 of this group of companies. In- The main assets and liabilities as of 31 De-
a gain of € 3,048,795 (Note 29). The effect come and expenses of this group of companies, cember 2001 and the main categories of in-
of this sale as of 1 April 2002 is detailed in included in the consolidated statement of profit come and expenses for the year then ended, of
Note 6. and loss for the year ended 31 December 2002 this business segment are detailed in Note 35.
35. Segment information
In 2002 and 2001 the following business seg- In 2002 and 2001 the following geographical The significant information relating to the busi-
ments were identified: segments were identified: ness and geographical segments at 31 De-
> Investment in Shopping Malls; > Europe cember 2002 and 2001 is presented in an ap-
> Management of Shopping Malls; > Brazil pendix.
> Residential Real Estate
The intra-segment transactions in 2002 and
The remaining Group activities and administra- 2001 were eliminated in the consolidation
tive services are classified as unallocated. process.
36. Note added for translation
The accompanying financial statements are with generally accepted accounting princi- counting principles in other countries. In the
a translation of financial statements origi- ples, some of which may not conform with event of discrepancies the Portuguese lan-
nally issued in Portuguese in accordance or be required by generally accepted ac- guage version prevails.
Information by Geographical Segments
Europe Brazil
02.12.31 01.12.31 01.12.31 02.12.31 01.12.31
restated
Segment revenue 349,442,572 341,112,454 422,605,828 64,344,346 2,519,906
Segment assets 1,836,105,684 1,479,137,004 1,480,932,851 108,334,489 108,587,948
114
sonaeimobiliária’ consolidated report and accounts 2002
(Amounts stated in Euro)
Total
02.12.31 01.12.31 01.12.31
restated
413,786,918 343,632,360 425,125,734
1,944,440,173 1,587,724,952 1,589,520,799
115
consolidated report and accounts 2002’sonaeimobiliária
Information by Business Segments
Investments in shopping malls Management of shopping malls
02.12.31 01.12.31 01.12.31 02.12.31 01.12.31 01.12.31
restated restated
Revenue:
Sales - - - - - -
Services rendered 34,304,158 15,112,873 15,112,873 169,365,838 146,742,167 213,027,646
Other operating income 190,311,040 105,388,298 120,596,193 3,344,162 2,700,377 2,700,377
224,615,198 120,501,171 135,709,066 172,710,000 149,442,544 215,728,023
Inter-segment revenue - - - - - -
Total revenue 224,615,198 120,501,171 135,709,066 172,710,000 149,442,544 215,728,023
Operating result of the segment 177,096,693 96,347,284 107,346,372 92,947,617 90,575,481 79,576,393
Unallocated expenses
Net interest
Other financial results
Income tax
Extraordinary items
Minority interests
Net consolidation profit for the year
Segment assets:
Investment properties 1,498,889,202 1,061,571,619 1,061,571,619 - - -
Other assets 137,969,455 1,351,445,097 1,351,445,097 27,693,066 19,160,427 20,956,274
Investment in associated companies 1,271,569 677,751 677,751 37,499 - -
Unallocated assets - - - - - -
1,638,130,226 2,413,694,467 2,413,694,467 27,730,565 19,160,427 20,956,274
Segment liabilities:
Segment liabilities 1,035,499,601 765,812,359 765,812,359 29,289,223 32,395,542 34,191,389
Unallocated liabilities - - - - - -
1,035,499,601 765,812,359 765,812,359 29,289,223 32,395,542 34,191,389
Cash flows:
Cash flows from (11,954,904) 10,836,959 10,836,959 88,447,191 78,337,427 78,337,427
operating activities
Cash flows from (146,375,616) (113,679,648) (113,679,648) (9,000,026) 1,390,514 1,390,514
investing activities
Cash flows from financing 105,930,517 207,239,338 207,239,338 (340,441) (62,104) (62,104)
activities
(52,400,003) 104,396,649 104,396,649 79,106,724 79,665,837 79,665,837
116
sonaeimobiliária’ consolidated report and accounts 2002
(Amounts stated in Euro)
Residential Real Estate Unallocated Total
02.12.31 01.12.31 02.12.31 01.12.31 02.12.31 01.12.31 01.12.31
restated
5,516,596 46,775,171 - - 5,516,596 46,775,171 46,775,171
406,413 1,840,911 6,512,450 6,823,149 210,588,859 170,519,100 236,804,579
39,608 275,722 3,986,654 17,973,692 197,681,463 126,338,089 141,545,984
5,962,617 48,891,804 10,499,104 24,796,841 413,786,918 343,632,360 425,125,734
- - - - - - -
5,962,617 48,891,804 10,499,104 24,796,841 413,786,918 343,632,360 425,125,734
(42,633) 134,733 (10,145,926) 1,518,020 259,855,751 188,575,518 188,575,518
-
- - -
(22,501,822) (11,747,826) (11,747,826)
(7,386,024) (2,752,024) (2,752,024)
(80,501,458) (53,567,482) (53,567,482)
(5,074,085) 375,103 375,103
144,392,362 120,883,289 120,883,289
- - 151,962,163 185,362,003 1,650,851,365 1,246,933,622 1,246,933,622
- 71,620,987 126,318,669 (1,102,668,558) 291,981,190 339,557,953 341,353,800
- 100,000 298,550 455,626 1,607,618 1,233,377 1,233,377
- - - - - - -
- 71,720,987 278,579,382 (916,850,929) 1,944,440,173 1,587,724,952 1,589,520,799
- 37,191,389 155,645,426 132,978,346 1,220,434,250 968,377,636 970,173,483
- - - - - - -
- 37,191,389 155,645,426 132,978,346 1,220,434,250 968,377,636 970,173,483
733,106 1,242,038 (4,365,111) (17,883,516) 72,860,282 72,532,908 72,532,908
(12,926,565) 1,183,736 (35,431,254) (8,579,226) (203,733,461) (119,684,624) (119,684,624)
5,796,731 (1,224,135) (36,494,280) (35,507,194) 74,892,527 170,445,905 170,445,905
(6,396,728) 1,201,639 (76,290,645) (61,969,936) (55,980,652) 123,294,189 123,294,189
117
consolidated report and accounts 2002’sonaeimobiliária
Sonae Imobiliária, SGPS, S.A. e Subsidiaries
Consolidated Statements of Cash Flows for the Years
Ended 31 December 2002 and 2001 (Amounts stated in Euro)
2002 2001 restated 2001
OPERATING ACTIVITIES:
Receipts from trade debtors 194,236,441 202,286,338 268,571,817
Payments to trade creditors 94,399,668 79,981,297 157,265,864
Payments to employees 22,920,108 19,338,358 19,338,358
Flows from operations 76,916,665 102,966,683 91,967,595
(Payments)/receipts of income tax 10,093,738 14,757,706 14,757,706
Other (payments)/receipts relating 6,037,355 (15,676,069) (4,676,981)
to operating activities
Flows from operating activities [1] 72,860,282 72,532,908 72,532,908
INVESTING ACTIVITIES:
Receipts relating to:
Investments 12,985,062 70,526,620 70,526,620
Tangible fixed assets 16,458,096 1,089,978 1,089,978
Interest income 10,488,480 11,861,721 11,861,721
Dividends 746,976 812,338 812,338
Other 584,107 41,262,721 450,114 84,740,771 450,114 84,740,771
Payments relating to:
Investments 140,515,045 17,181,298 17,181,298
Tangible fixed assets 96,917,649 188,745,331 188,745,331
Intangible fixed assets 9,719,263 - -
Loans granted (2,155,775) (2,646,259) (2,646,259)
Other - 244,996,182 1,145,025 204,425,395 1,145,025 204,425,395
Flows from investing activities [2] (203,733,461) (119,684,624) (119,684,624)
FINANCING ACTIVITIES:
Receipts relating to:
Loans obtained 121,230,570 201,407,780 201,407,780
Capital increase and share premiums - 128,793 128,793
Sale of treasury stock - 711,076 711,076
Other 35,351 121,265,921 79,752 202,327,401 79,752 202,327,401
Payments relating to:
Interest expenses 35,730,968 24,029,626 24,029,626
Dividends 9,750,000 7,490,123 7,490,123
Other 892,426 46,373,394 361,747 31,881,496 361,747 31,881,496
Flow from financing activities [3] 74,892,527 170,445,905 170,445,905
Variation in cash and cash equivalents [4]=[1]+[2]+[3] (55,980,652) 123,294,189 123,294,189
Effect of exchange differences 3,633,670 (2,495,019) (2,495,019)
Effects of changes in the perimeter:
Change in the consolidation method 2,322 915,627 915,627
Acquisition / sale of companies 5,937,894 5,940,216 208,073 1,123,700 208,073 1,123,700
Cash and cash equivalents at the beginning of the year 143,404,968 16,492,060 16,492,060
Cash and cash equivalents at the end of the year 89,730,862 143,404,968 143,404,968
The Board of Directors
118
sonaeimobiliária’ consolidated report and accounts 2002
119
consolidated report and accounts 2002’sonaeimobiliária
statutory auditors’ report
and audit report
Translation of a report originally issued in Portuguese
(Amounts stated in Euro)
Introduction Code; (iii) adopting adequate accounting of the companies included in the consoli-
policies and criteria and the maintenance dation have been appropriately examined;
1 In compliance with the applicable of appropriate internal control systems; assessing the adequacy of the accounting
legislation we hereby present our (iv) informing any significant facts that principles used and their uniform applica-
Statutory Auditors’ Report and Audit have influenced the operations, financial tion and disclosure, taking into consider-
Report on the consolidated financial position or results of operations of the ation the circumstances; the applicability
information contained in the companies included in the consolidation. of the going concern concept; the ade-
consolidated Management Report and quacy of the overall presentation of the
consolidated financial statements for the 3 Our responsibility is to examine the finan- consolidated financial statements; and as-
year ended 31 December 2002 of cial information contained in the docu- sessment that, in all material respects, the
Sonae Imobiliária, S.G.P.S., S.A. ("the ments of account referred to above, in- financial information is complete, true, up-
Company"), which comprise the cluding the verification that, in all material to-date and licit. Our examination also in-
consolidated Balance Sheet as of 31 respects, the information is complete, cluded verifying that the information in-
December 2002, that reflects total of true, up-to-date and licit, as required by the cluded in the consolidated Management
Euros 1,944,440,173 and shareholders’ Securities Market Code, and issuing a pro- Report is consistent with the other con-
equity of fessional and independent report based on solidated documents of account. We be-
Euros 697,889,326, including a net our work. lieve that our examination provides a rea-
profit of Euros 144,392,362, the sonable basis for expressing our opinion.
consolidated Statement of Profit and Scope
Loss by nature, the consolidated Opinion
Statement of Cash Flows and the 4 Our examination was performed in accor-
consolidated Statement of Changes in dance with the Technical Standards is- 5 In our opinion, the consolidated financial
Equity for the year then ended and the sued by the Portuguese Institute of Statu- statements referred to in paragraph 1
corresponding Notes. tory Auditors, which require that the ex- above, present fairly, in all material re-
amination be planned and performed with spects, the consolidated financial position
Responsibilities the objective of obtaining reasonable as- of Sonae Imobiliária, S.G.P.S., S.A. as of
surance about whether the consolidated fi- 31 December 2002 and the consolidated
2 The Company’s Board of Directors is re- nancial statements are free of material results of their operations and their con-
sponsible for: (i) the preparation of con- misstatement. Such an examination in- solidated cash flows for the year then
solidated financial statements that present cludes verifying, on a test basis, evidence ended, in conformity with the International
a true and fair view of the financial posi- supporting the amounts and disclosures in Financial Reporting Standards, issued by
tion of the companies included in the con- the financial statements and assessing the the International Accounting Standards
solidation, the consolidated result of their estimates, based on judgements and cri- Board, in force as of 31 December 2002
operations and their consolidated cash teria defined by the Company’s Board of and the information contained therein is,
flows; (ii) the preparation of historical fi- Directors, used in their preparation. Such in terms of the definitions included in the
nancial information in accordance with an examination also includes: verification technical standards and review recom-
generally accepted accounting principles of the consolidation procedures used and mendations referred to in paragraph 4
and that is complete, true, up-to-date and application of the equity method, as well above, complete, true, up-to-date and
licit, as required by the Securities Market as verifying that the financial statements licit.
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consolidated report and accounts 2002’sonaeimobiliária
Emphasis ing the elimination of balances and trans- this change, the Group restated for com-
actions with companies included in the parative purposes the financial data af-
6 As mentioned in Note 2.2 of the notes to consolidation by the proportional method, fected, contained in the financial state-
the consolidated financial statements, the starting eliminating them in total instead ments for the year ended 31 December
Group changed in 2002 its criteria relat- of its proportion. As a consequence of 2002.
Oporto, 26 March 2003
Magalhães, Neves e Associados - SROC
Represented by:
Jorge Manuel Araújo de Beja Neves
122
sonaeimobiliária’ consolidated report and accounts 2002
report and opinion of the
statutory board of auditors
consolidated accounts
Translation of a report originally issued in Portuguese
To the Shareholders of Sonae Imobiliária, S.G.P.S., S.A.
In compliance with the applicable legislation and In performing our work, we examined the con- tors’ Report and Audit Report, prepared by the
our mandate we hereby submit our Report and solidated balance sheet as of 31 December Statutory Auditor, president of this Board, with
Opinion which covers our work and the docu- 2002, the consolidated statement of profit and which we agree.
ments of presentation of the consolidated an- loss by nature, the consolidated statement of Considering the above, in our opinion, and al-
nual accounts of Sonae Imobiliária, S.G.P.S., cash flows and the statement of changes in eq- though the matter described in paragraph 6 of
S.A. ("Sonae Imobiliária") and Subsidiaries uity for the year then ended and the related the statutory Auditors’ Report and Audit Re-
("Group") for the year ended 31 December notes, which were prepared based on the ac- port,the consolidated financial statements re-
2002, which are the responsibility of the Sonae counting records of the companies included in ferred to above and the consolidated Directors’
Imobiliária’s Board of Directors. the consolidation, maintained in accordance Report, as well the proposal therein, are in ac-
We accompanied the operations of Sonae Imo- with generally accepted accounting principles cordance with accounting, legal and statutory
biliária and that of its principal participated in Portugal, adjusted, in the consolidation requirements and so can be approved by the
companies, the writing up of their accounting process, to the International Financial Report- Shareholders’ General Meeting.
records and their compliance with statutory and ing Standards ("IFRS") issued by the Interna- We wish to thank the Board of Directors of
legal requirements, having obtained, from the tional Accounting Standards Board ("IASB") in Sonae Imobiliária and the personnel of the com-
Board of Directors and personnel of Sonae Imo- force as of 31 December 2002. We also panies of the Group for the assistance provided
biliária and from the Statutory Bodies and per- analysed the consolidated Directors’ Report to us.
sonnel of its principal participated companies, prepared by the Board of Directors. In addition,
all the information and explanations required. we analysed the consolidated Statutory Audi- Oporto, 26 March 2003
Magalhães, Neves e Associados, SROC
Represented by:
Jorge Manuel Araújo de Beja Neves
President
Teresa Alexandra Martins Tavares
Member
Benoit François Pierre Prat-Stanford
Member
125
consolidated report and accounts 2002’sonaeimobiliária
Real Estate
Assets Valuation
The Directors,
Sonae Imobiliária S.G.P.S. S.A.
Lugar do Espido, Via Norte,
4471 Maia Codex,
Portugal
Lisbon, 28th February 2003
Dear Sirs,
Property Valuation as at 31st December 2002
Sonae Imobiliária S.G.P.S., S.A. ("The Company")
In accordance with your instructions, we have 48) also comply with the Code regard to the nature of the property and
pleasure in reporting to you as follows: of Practice of the ABNT (Brazilian the state of the market) for the proper
Association for Technical Standards) marketing of the interest, for the
1. Scope of Instructions code number-NBR-5676/90. The agreement of the price and terms and
valuation has been prepared by Valuers for the completion of the sale;
1.1 We have considered those properties as who conform to the requirements as set c) that the state of the market, level of
set out in Appendix 1 which we out in the RICS Appraisal and Valuation values and other circumstances were,
understand are held by the Company or Manual, acting in the capacity of on any earlier assumed date of
its subsidiaries. external valuers. exchange of contracts, the same as on
1.2 We are instructed to prepare this the date of valuation;
valuation for a management review of 2. Basis of Valuation d) that no account is taken of any
the Company’s property values at the additional bid by a prospective
end of 2002. It should be noted that 2.1 As instructed and in accordance with purchaser with a special interest; and
Cushman & Wakefield Healey & Baker the requirements of the RICS Appraisal e) that both parties to the transaction had
have in the past undertaken detailed and Valuation Manual, the valuation of acted knowledgeably, prudently and
valuations of some of the properties. the properties has been prepared on the without compulsion."
This valuation has been prepared on the following basis: 2.2 With respect to those properties in the
basis of information relating to the Course of Development as set out in
properties received from the Company. Open Market Value Appendix 1, it should be noted that the
1.3 The valuation of all the properties has valuation has been prepared on the
been prepared in accordance with the This is defined as "An opinion of the best price basis of the Open Market Value of the
Practice Statements contained in the at which the sale of an interest in property land and buildings in their existing state
RICS Appraisal and Valuation Manual would have been completed unconditionally for at the date of valuation. In assessing the
published by The Royal Institution of cash consideration on the date of valuation, as- Open Market Value of the properties in
Chartered Surveyors ("The Red Book"), suming: the Course of Development we have
subject to our comments in Section 3.0 a) a willing seller; therefore assumed that the existing
below. The valuations of the properties b) that, prior to the date of valuation, there contractual arrangements of the
in Brazil (property nºs 23 - 28 and 46 - had been a reasonable period (having ongoing construction continue
127
consolidated report and accounts 2002’sonaeimobiliária
uninterrupted and would be assignable 3.3 Concerning Centro Vasco da Gama understand that the Local Authority has
to a third party. The valuation of such (Property nº 5), we have been informed so far withheld consent. We have made
properties has also been prepared on that the property does not possess a the Special Assumption that the
the basis of the details of the cost of valid Licença de Utilização (Final Construction Licence is forthcoming on
works incurred to the date of valuation Utilisation Licence). This document is a reasonable timescale and without any
and the estimated costs to complete as issued by the Local Authority upon financial penalty.
supplied by the Company, as well as practical completion and licensing of the 3.6 Concerning Aegean Park (Property
having regard to any contracted lettings property. It should be noted that under n° 42), we understand that there
or sales and the current project Portuguese Law, a property is effectively remains an outstanding purchase
timetable. In addition, allowance has unsaleable as a property asset without payment of € 5,800,000. It should be
been made for financing outstanding the Licença de Utilização. noted that our valuation does not take
development costs until completion of We have made the Special Assumption account of this outstanding payment.
the project and for an assumed profit that this property is in possession of the Furthermore, we have assumed that
given the risk to be taken by a Licença de Utilização. We have made a planning permission for construction
purchaser of the development in its capital deduction from the Open Market of a shopping centre is forthcoming.
existing state. Value for the cost likely to be incurred in 3.7 It should be noted that the valuation
2.3 The values reported relate to the entire securing the issue of the relevant licence. prepared subject to this Special
property in each instance and no This cost has been supplied to us by the Assumptions may differ materially from
adjustment is made to reflect a shared Company. We have been informed by the the Open Market Value and as such it is
ownership. It should be noted that in a Company’s legal advisers that the imperative that the values expressed
number of cases, the Company does Licença de Utilização is not required to within this valuation certificate, when
not own 100% of the property and it is effect the sale of the shares of a real published or disclosed to any third
possible that a part stake in any of the estate asset-owning company, the party, are supported by the full
properties may not realise a value which ownership structure of the asset. explanatory notes setting out all the
is strictly pro-rata to the value of the 3.4 Concerning Parque Principado (Property assumptions utilised. Such publication
entire property. n° 17), we understand that there or disclosure will not be permitted
remains an outstanding purchase unless, where relevant, it incorporates
3. Special Assumptions payment, which will be calculated on the the Special Assumptions referred to
performance of turnover rent to the end herein.
3.1 In the preparation of this valuation the of December 2002. The amount will be
Company has specifically instructed payable before or on 30th April 2003. It 4. Tenure and Tenancies
Cushman & Wakefield Healey & Baker should be noted that our valuation is of
to make a number of Special 100% ownership of the property and we 4.1 We have not had access to the Title
Assumptions. Contrary to the have not made allowance for this Deeds of the properties and our
requirements of the Red Book, the outstanding payment. valuation has been based on various
Company has instructed us not to 3.5 Concerning Torre Ociente and Torre reports on title and information which
prepare an additional valuation of the Oriente (Property nºs 39 & 40), we are the Company’s Portuguese legal
properties on the basis of Open Market aware that the Company awaits the advisers, Carlos Osório de Castro,
Value without the Special Assumptions reissue of the Contruction Licence, Eduardo Verde Pinho e J.J. Vieira Peres
described below. The Special which is legally required before – Sociedade de Advogados, have
Assumptions are as follows: construction may commence. We supplied to us as to tenure and
128
sonaeimobiliária’ consolidated report and accounts 2002
statutory notices. It should be noted, d) vacant possession can be given of all supplied by the Company together with
however, that we have received reports accommodation which is unlet, or any verbal enquiries and any informal
on title only in relation to selected occupied either by the Company or by information received from the Local
properties. Where we have not been its employees on service occupancies. Planning Authority.
supplied with such reports we have 4.4 It should be noted that the utilisation 5.2 In the absence of information to the
relied upon information supplied by the contracts for the shopping centres do contrary our valuation is on the basis
Company. For those properties not provide for the full recovery of all that the properties are not affected by
previously valued by us no additional repairing and insuring costs incurred in any proposals for road widening or
legal information has been supplied by the operation of the property from the compulsory purchase.
the legal adviser for the purposes of tenants. Accordingly due provision has 5.3 Our valuation is on the basis that each
this revaluation as at 31st December been made within our valuation for such property has been erected either prior
2002. For those properties not non-recoverable costs. to planning control or in accordance
previously valued we have been 4.5 It should be noted that the properties with a valid planning permission and is
instructed to rely on such new that are held as investments in Brazil being occupied and utilised without any
information as has been supplied by the (Property nºs 23 - 28) are leased on a breach of the same.
Company. variety of lease terms to multiple 5.4 With respect to those properties in the
4.2 With respect to properties currently let, tenants. In particular the lease terms Course of Development, our valuation is
we have had access to sample vary in relation to the non-recoverable on the basis that each property is being
utilisation contracts and have reviewed out-goings and we have therefore constructed in accordance with both a
those utilisation contracts pertaining to estimated the operational costs of each valid planning permission and a valid
the anchor tenants. property based on the information building permission for construction.
4.3 Unless disclosed to us to the contrary and provided in relation to their track 5.5 With respect to the properties Held for
recorded within this Valuation Certificate, record. Development, our valuation is on the
our valuation is on the basis that: 4.6 The interest held in properties held as basis that each property will be
a) each property possesses a good and investments in Brazil (Property nºs 23 - constructed in accordance with both a
marketable title, free from any unusually 28) is in the form of shares in a valid planning permission and a valid
onerous restrictions, covenants or other "Proindiviso Condominio". This form of building permission for construction.
encumbrances; condominium is the standard form of
b) in respect of leasehold properties where ownership of shopping centres in Brazil 6. Structure
we have not reviewed the lease there and signifies that the condominium
are no unreasonable or unusual clauses owners jointly own the freehold of the 6.1 We have neither carried out a structural
which would affect value and no unusual whole property. The interests in the survey of any property, nor tested any
restrictions or conditions governing the ownership may be traded, but the services or other plant or machinery. We
assignment or disposal of the interest; property itself remains indivisible, no are therefore unable to give any opinion
c) in respect of utilisation contracts and shareholder having any individual claim on the condition of the structure and
leases subject to impending or on any part. services. However, our valuation takes
outstanding rent reviews and into account any information supplied to
renewals, we have assumed that all 5. Town Planning us and any defects noted during our
notices have been served validly and inspection. Otherwise, our valuation is
within the appropriate time limits; 5.1 We have not made formal searches, but on the basis that there are no latent
and have generally relied on information defects, wants of repair or other matters
129
consolidated report and accounts 2002’sonaeimobiliária
which would materially affect our on the basis that all buildings have been 8.2 With respect to the following properties:
valuation. constructed having appropriate regard Centro Colombo (Property nº4),
6.2 We have not inspected those parts of to existing ground conditions. In respect MaiaShopping (Property nº13) and
any property which are covered, of the properties with development NorteShopping (Property nº14) we have
unexposed or inaccessible and our potential, our valuation is on the basis assessed and included within the value
valuation is on the basis that they are in that there are no adverse ground reported income producing co-
good repair and condition. conditions which would affect building generation plant.
6.3 We have not investigated the presence costs and where you have supplied us 8.3 Process related plant/machinery and
or absence of High Alumina Cement, with a building cost estimate, we have tenants’ fixtures/trade fittings have been
Calcium Chloride, Asbestos and other relied on it being based on full excluded from our valuation.
deleterious materials. In the absence of information regarding existing ground
information to the contrary, our conditions. 9. Inspections
valuation is on the basis that no 7.2 We have not carried out any
hazardous or suspect materials and investigations or tests, nor been 9.1 We have inspected the properties
techniques have been used in the supplied with any information from you internally and externally from ground
construction of any property. You may or from any relevant expert that level during the final semester of 2002.
wish to arrange for investigations to be determines the presence or otherwise of 9.2 As agreed, in analysing the prevailing
carried out to verify this. pollution or contaminative substances in rental levels and in assessing our views
6.4 For those properties in the Course of any property or any other land (including on the Open Market Value for the
Development or Held for Development we any ground water). Accordingly, our completed shopping centres, we have
have assumed that all buildings will be valuation has been prepared on the substantially relied upon the floor areas
constructed with good workmanship, basis that there are no such matters that supplied to us by the Company.
using good materials and that, upon would materially affect our valuation. However, we have taken check
completion, a structural survey would not Should this basis be unacceptable to you measurements of a representative
reveal any defects to any part of the or should you wish to verify that this sample of lettable units and those
property. Our valuation is made on the basis is correct, you should have figures compare with those supplied to
assumption that the buildings will be appropriate investigations made and us to a range of approximately +/- 3%.
constructed using materials which will refer the results to us so that we can The presumption is therefore that it is
meet the current requirements of review our valuation. reasonable to assume that the
occupiers and investors in the remaining figures supplied to us by the
marketplace. This comment is made from 8. Plant and Machinery Company are equally accurate but we
a commercial perspective rather than a are unable to warrant to this effect.
technical one and therefore does not take 8.1 In respect of the freehold properties, usual In accordance with local practice the
into account the adequacy of engineering landlord’s fixtures such as lifts, escalators floor areas are calculated on the basis
and structural design matters. and air conditioning have been treated as of the lettable retail area of the unit,
an integral part of the building and are including all external walls and to the
7. Site and included within the asset valued. In the centre line of any party walls. Toilets
Contamination case of the leasehold properties, unless used exclusively by an occupier are also
advised to the contrary, these items have included. We would specifically highlight
7.1 We have not investigated ground been treated as belonging to the landlord that this is not in accordance with the
conditions/stability and our valuation is upon reversion of the lease. Code of Measuring Practice prepared by
130
sonaeimobiliária’ consolidated report and accounts 2002
The Royal Institution of Chartered 10.3 Our valuation has been prepared on 10.9 Where grants have been received, no
Surveyors but that it does follow the basis of the local currency relevant allowance has been made in our
established market practice in the to the country in which the properties valuation for any requirement to repay
respective countries. Both the areas are situated, namely the Euro (€) and the grant in the event of a sale of any
and any reference to the age of Brazilian Real (R$). property.
buildings in this valuation are 10.4 We have converted the values of the 10.10Our valuation does not make allowance
approximate. properties in Brazil to Euros, using the either for the cost of transferring sale
9.3 With respect to the properties in the exchange rate provided by the Banco proceeds outside of the respective
Course of Development we have de Portugal as at 31st December country or for any restrictions
assumed the existing project areas as 2002 of R$ 3.71236 to € 1.00. All on doing so.
supplied by the Company and values that have been converted are 10.11 Our valuation is subject to a number of
originating from the appropriate rounded to the nearest whole digit. We Special Assumptions, referred in
planning permissions and current have made no allowance for any Paragraph 3 herein.
development plans. With respect to benefits or burdens that may flow from
those properties Held for Development exchange rate fluctuations. 11. Valuation
we have assumed the site areas 10.5 No allowances have been made for
supplied by the Company. any expenses of realisation or any 11.1 Subject to the foregoing, and based on
taxation liability arising from a sale or values current as at 31st December
10. General Principles development of any property. 2002 we are of the opinion that the
10.6 No account has been taken of any Open Market Value of the freehold and
10.1Our valuation is based on the leases granted between subsidiaries of leasehold interests in the properties as
information which either the Company the Company, and no allowance has set out in Appendix 1 is the total sum
has supplied to us or which we have been made for the existence of a of € 2,836,931,560 (Two thousand,
obtained from our enquiries. We have mortgage, or similar financial eight hundred and thirty-six million, nine
relied on this being correct and encumbrance on or over any property. hundred and thirty-one thousand, five
complete and on there being no 10.7 Our valuation is exclusive of IVA (VAT) hundred and sixty euros).
undisclosed matters which would affect or any other taxes of a similar nature. 11.2 We set out the value ascribed to each
our valuation. 10.8 A purchaser of the properties is likely property in Euros in Appendix 1, and
10.2 In respect of tenants' covenants, whilst to obtain further advice or verification the individual property schedules in
we have taken into account information relating to certain matters referred to Appendix 2. It should be noted that our
of which we are aware, we have not above before proceeding with a total valuation comprises the
received a formal report on the purchase. You should therefore note aggregate of the Open Market Value
financial status of the tenants. We have the conditions on which this valuation attributable to each individual property.
had regard to any information supplied has been prepared. The valuation of We have not valued the portfolio as a
by the Company’s property the properties has been undertaken by whole in the context of a sale as a
management division regarding the Mr. Eric van Leuven FRICS and Mr. single lot.
current status of the relevant income Martin Trodden MRICS of Cushman &
for each property. Our valuation is on Wakefield Healey & Baker along with
the basis that this is correct. You may respective local valuers within the
wish to obtain further information to Cushman & Wakefield network where
verify this. appropriate.
131
consolidated report and accounts 2002’sonaeimobiliária
The contents of this Valuation Certificate are in- other party in respect of the whole or any part for this. Such permission is not intended to ex-
tended to be confidential to the addressees. of its contents. We note that this report will be tend our liability.
Consequently, and in accordance with current reproduced in its entirerty in the Company´s an-
practice, no responsibility is accepted to any nual report and we hereby give our permission Yours faithfully,
CUSHMAN & WAKEFIELD HEALEY & BAKER
132
sonaeimobiliária’ consolidated report and accounts 2002
Appendix 1
Sonae Imobiliária, SGPS, SA – Valuation as at 31st December 2002
Properties held net 10 Yr 10 Yr Freehold
A as investments initial Discount Cap (OMV) (€) *- Compounded Monthly
1 - Held Leasehold
YIELD rate* rate 2 - Held by Surface Right Agreement
Portugal
1. AlgarveShopping 7.60% 10.50% 8.00% 81,927,000
2. Arrábida Shopping 7.27% 10.00% 7.50% 118,097,000
3. CascaiShopping 6.71% 9.75% 7.00% 194,718,000
4. Centro Colombo 6.86% 9.50% 6.75% 571,017,000
5. Centro Vasco da Gama 6.75% 9.50% 6.75% 204,098,000
6. ClérigoShopping1 N/a N/a N/a 612,000
7. CoimbraShopping 8.42% 10.50% 8.00% 31,475,000
8. GaiaShopping 7.79% 10.00% 7.50% 116,413,000
9. Gare do Oriente1 N/a N/a N/a 817,000
10. GuimarãeShopping 8.09% 10.50% 8.00% 33,231,000
11. Grandella1 N/a N/a N/a 4,237,000
12. MadeiraShopping 8.09% 10.75% 8.50% 64,920,000
13. MaiaShopping 7.45% 10.50% 8.00% 49,245,000
14. NorteShopping 6.88% 9.50% 7.00% 268,924,000
15. Sintra Retail Park 7.72% 10.75% 8.25% 29,425,000
16. ViaCatarina Shopping 7.70% 10.25% 7.75% 66,051,000
Spain
17. Parque Principado 6.91% 10.00% 6.75% 126,500,000
18. Plaza Mayor, Málaga 7.51% 11.25% 7.50% 82,500,000
19. CC La Farga, 7.93% 11.00% 8.00% 45,500,000
Hospitalet, Barcelona2
20. CC Kareaga, Max 6.91% 9.75% 6.85% 122,000,000
Centre & Ocio, Bilbao
21. CC Valle Real, Santander 7.04% 9.75% 6.85% 66,000,000
22. CC Gran Casa, Zaragoza 6.75% 9.50% 6.50% 126,500,000
Brazil
23. Parque D. Pedro 14.00% 12.00% 91,634,701
24. Pátio Brasil 13.00% 11.00% 32,299,939
25. Franca Shopping 15.00% 13.00% 3,812,938
26. Metrópole Shopping 13.00% 11.00% 22,311,414
27. Penha Shopping 16.00% 13.00% 10,832,732
28. Tivoli Shopping 14.50% 12.00% 9,692,756
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consolidated report and accounts 2002’sonaeimobiliária
Sonae Imobiliária, SGPS, SA – Valuation as at 31st December 2002
B Properties in the Course of Development freehold (€)
Portugal
29. CascaiShopping – Expansion Phase 2B 34,343,000
30. Coimbra Retail Park 3,003,000
31. Estação Viana 13,596,000
32. Parque Atlântico 19,615,000
Spain
33. Avenida M40, Leganes 32,500,000
34. C.C. Dos Mares 16,250,000
35. Zubiarte 30,000,000
C Properties Held for Development freehold (€)
Portugal
36. Arrábida Shopping – Expansion 411,000
37. LoureShopping 10,387,000
38. Parque Famalicão 4,120,000
39. Torre Oriente 5,755,000
40. Torre Ocidente 5,755,000
Germany
41. Alexander Platz 6,295,000
Grecce
42. Aegean Park 35,271,000
Italy
43. Brescia 4,428,000
Spain
44. C.C. Luz del Tajo 9,636,000
45. Plaza Eboli 9,181,000
Brazil
46. Boavista 8,108,589
47. Parque D. Pedro – Expansion 10,118,361
48. Penha Shopping – Expansion 3,367,130
134
sonaeimobiliária’ consolidated report and accounts 2002
Appendix 2
Sonae Imobiliária, SGPS, SA – property valuation
as at 31st december 2002
Individual Property Schedules
Properties Held as Investments – Portugal
Ref. Property Description
1. AlgarveShopping Two-storey shopping centre with open malls, features a total GLA of 42,351.56 m2. A hypermarket unit of
Guia 15,488 m2 has been sold to owner occupier Continente. (NB. The aforementioned unit is excluded from this
Algarve valuation.) The cinema (2,717 m2) is operated by Socorama-Castello Lopes and the centre has also 9,589.85 m2
Portugal of anchor units, including Worten (1,605.08 m2), Sportzone (715.18 m2), Zara (2,024.94 m2), amongst others.
In addition, there are 93 unit shops providing 10,695.10 m2 GLA and 30 restaurant and catering units providing
3,861.61 m2 GLA. There is an additional 964.09 m2 of storage area. The centre will also have a Fnac unit of
2,070 m2, due to open in mid/late 2003.
AlgarveShopping opened in April 2001.
2. Arrábida Shopping A three-storey shopping centre with two basement car parking levels, providing 56,368.12 m2 GLA and 3,456 car
Vila Nova de Gaia spaces. Within the centre, the hypermarket unit of 23,500 m2 has been sold to owner occupier Auchan and a
Portugal restaurant unit of 976 m2 has been sold to owner occupier Flunch. (NB. Both the aforementioned units are excluded
from the valuation.) The remaining shopping centre totals 31,892 m2 GLA, of which 7,500 m2 is occupied by an
AMC cinema, and 24,392 m2 consists of 170 retail and catering units, including the following anchors: Fabio Lucci
(1,537.25 m2), Giaco Sports (1,530.75 m2), Tribo (696.46 m2), Bershka (436.05 m2), Stradivarius (350.90 m2),
MacModa (773 m2) and Worten (1,345 m2) amongst others. 268.70 m2 of storage area is also let to occupiers.
Arrábida Shopping opened in October 1996. It was acquired by the Company on 28th December 2001.
3. CascaiShopping Three-storey shopping centre arranged around a two-storey mall, totalling 64,883.15 m2 GLA with 4,040 car
Alcabideche parking spaces. Within the centre 38,999.53 m2 has been sold to owner occupiers: Continente (22,000 m2),
Cascais Worten (2,000 m2), Conforama (7,253 m2), Toys ‘R’ Us (3,160 m2), C&A (3,732.84 m2), McDonald’s (514.22
Portugal m2), BPA (158.93 m2) and CGD (180.54 m2). (NB: The aforementioned units are excluded from the valuation of
this property). The remaining shopping centre area totals 25,883.62 m2 GLA, of which 2,915 m2 is occupied by
anchor Warner-Lusomundo (seven screen cinema) and 22,969 m2 consists of 153 catering and retail mall units,
including the following anchors: Fnac (2,655 m2), Cortefiel (927.13 m2), Zara (2,392.79 m2), Sportzone
(2,459.77 m2), amongst others.
CascaiShopping opened in May 1991. Two phases of a three phase expansion and redevelopment have been
completed. The final phase (2B) is currently in the course of development and is due to be completed in
November 2003. Expansion Phase 2B is presented separately herein (Property n°. 29).
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sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
contract renewal fee) (€)
Freehold. Anchor units let on utilization contracts of 10 to 15 years 6,231,430 81,927,000
from 2001. Cinemas let on 15-year utilization contract from
The property is owned by 2001.
AlgarveShopping.
Unit shops let on 6-year utilization contracts expiring 2007.
(100% held by Sonae Imobiliária).
Freehold. Anchor units let on utilization contracts of varying lengths 8,588,417 118,097,000
expiring between 2003 and 2021. The cinema is held on a
The property is owned by Capital Plus. utilization contract expiring 2021.
(50% held by Sonae Imobiliária). Unit shops let on 6-year utilization contracts expiring
generally 2008.
Freehold. Anchor stores let on utilization contracts expiring May 2006.
14,068,034 194,718,000
The property is owned by Unit shops let on 6-year utilization contracts generally
SM – Empreendimentos Imobiliários. expiring May 2003.
(50% held by Sonae Imobiliária). We note that 89 of the existing 158 contracts will expire in
May 2003. We have been informed by the Company that 43
new contracts have been signed, 10 are under negotiation, 1
have yet to be contacted, 20 have been agreed but not yet
signed, 6 are not to be renewed, 9 are to relocate (6 agreed
and 3 under negotiation).The Company does not expect any
vacancy.
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consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Portugal
Ref. Property Description
4. Centro Colombo Centro Colombo is a three-storey shopping centre with a total of 119,539.40 m2 of GLA and 6,850 car parking
Lisbon spaces in three basement levels. A 29,489 m2 hypermarket unit is sold to Continente and a 3,814 m2 anchor
Portugal unit to C&A. (NB. The aforementioned units are excluded from our valuation.)
The remaining accommodation provides anchor units for the following: AKI (2,640.40 m2), Toys ’R’ Us (3,295
m2), Worten (2,829.80 m2), Sport Zone (2,349.80 m2), San Luis (1,830 m2), Cortefiel (1,213.60 m2), Zara
(1,797.66 m2 and 1,367.40 m2), Fnac (3,755.40 m2), Habitat (1,881.14 m2), Vobis (913.90 m2), Tribo
(1,080.40 m2), MacModa (1,225.30 m2), amongst others. There is also an Autocentre (983.75 m2), a health club
(2,480.20 m2), 12,308.60 m2 of commercial leisure and a 10-screen Warner-Lusomundo cinema (5,200 m2).
The unit shops number some 410 and total 37,212.21 m2, which includes 60 restaurant and catering units
providing 7,358.32 m2. In addition to the above, Centro Colombo has a co-generation plant producing electricity
that is sold to the condominium and to EDP. We understand there is potential for a Golf Driving Range on the
roof of the centre, the project for which extends to 3,668.70 m2. We are not aware of current plans to develop
out this project but it should be noted that this area is included in the total GLA of the centre shown above. There
is also 2,894 m2 of storage area.
We include the bases of Torre Oriente and Torre Ocidente, office towers to be constructed above the centre.
The bases were constructed with the shopping centre and include ground and first floors, both with mezzanine
levels. The ground floor extends to 1,171.50 m2 GLA and the first floor extends to 1,761 m2 and 1,758 m2
respectively including mezzanine. The ground floors are let to retail banks and the first floors are currently in
shell condition and unlet. These office areas form integral parts of the Colombo development but are shown
separately here for presentation purposes.
Centro Colombo opened in September 1997.
5. Centro Vasco da Gama Shopping centre arranged over 4 levels, totalling 47,625.43 m2 GLA with 2,559 car parking spaces. Within the
Parque das Nações centre there is an 11,411 m2 hypermarket area owned by Continente, a 2,658.40 m2 anchor unit owned by C&A
Lisbon and a 4,412 m2 anchor unit owned by Worten. (NB. The aforementioned units are excluded from the valuation of
Portugal this property.) The cinemas (3,832 m2) are operated by Warner-Lusomundo. Anchor units total 5,265.16 m2 and
include Sportzone (1,535.43 m2), Zara (2,054.40 m2), Vobis (711.15 m2), amongst others. Furthermore, the
centre provides 124 mall units totalling 14,782.77 m2, plus 34 restaurant and catering units totalling
5,264.10 m2. The centre provides an additional 1,306.85 m2 of storage area.
Centro Vasco da Gama opened in April 1999.
138
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
contract renewal fee) (€)
Freehold. Anchor stores let on 10 to 20-year utilization contracts Shopping Centre Shopping Centre
expiring between September 2006 and September 2016. 37,124,432 557,147,000
The property is owned by
Empreendimentos Imobiliários Colombo. Unit shops let on 6-year utilization contracts generally Torre Oriente Offices Torre Oriente Offices
expiring September 2003. We note that 289 contracts expire 410,902 7,053,000
(50% held by Sonae Imobiliária). in September 2003. We understand that, at present, 137
new contracts have been signed, 39 are under negotiation, Torre Ocidente Offices Torre Ocidente Offices
18 have yet to be contacted, 73 have been agreed but not 344,276 6,817,000
yet signed and 22 will not be renewed.
Total Total
Torre Oriente is let to Banco Comercial Portugues on a lease 37,879,610 571,017,000
contract expiring in 2012.
There is 1,761 m2 vacant at 1st floor level.
Torre Ocidente is let to a number of major Portuguese banks
generally expiring 2007 to 2012.
There is 408 m2 vacant at ground level and 1,758 m2 vacant
at 1st floor.
Freehold. Unit shops are let on 6 or 10-year utilisation contracts 13,783,875 204,098,000
generally expiring in either 2005 or 2009.
The property is owned by Vasco da
Gama (100% held by Sonae Imobiliária). Anchor stores are let on 6 to 15 year utilisation contracts
expiring between 2005 and 2014.
The Warner Lusomundo cinema and McDonald’s restaurant
are let on a 20-year utilisation agreement expiring in 2019.
139
consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Portugal
Ref. Property Description
6. Clérigo Shopping Single storey open-air retail area of 1,423 m2 GLA situated above two storey public car park. The retail is
Porto currently part let to 8 tenants, but 965 m2 remains vacant. The centre was refurbished and remarketed in
Portugal 1997/8.
ClérigoShopping originally opened in 1992.
7. CoimbraShopping Two-storey shopping centre totalling 26,482.79 m2 GLA with 1,111 car parking spaces. Within the centre, a
Coimbra 20,000 m2 hypermarket has been sold to owner occupier Continente. (NB. The aforementioned unit is excluded
Portugal from the valuation of this property.) The remaining shopping centre totals 6,482.79 m2 of which 759.60 m2 is
occupied by a Macmoda anchor store and 911.78 m2 by a Worten anchor store. Besides the two anchors, there
are 66 catering and retail units arranged around a two-storey mall, which account for 4,811.41 m2 GLA. The
centre also has an additional 572 m2 of storage space.
CoimbraShopping opened in September 1993.
8. GaiaShopping GaiaShopping totals 56,823.62 GLA with 3,126 car parking spaces and consists of two phases constructed at
Vila Nova da Gaia different times. The first, originally known as Galeria Comercial de Gaia opened in 1989 and includes 1,900 car
Portugal parking spaces and totals 32,507.73 m2 GLA. An area of 20,403.83 m2 has been sold to owner occupier
Continente as a hypermarket and a site in the main car parking area has been sold to Toys ‘R’ Us for a 4,579 m2
retail warehouse. (NB: The aforementioned units are excluded from the valuation of this property.) Phase 1
includes an anchor unit of 1,916.42 m2 which is part held by another Sonae Group Company. It is occupied by
Max Mat (DIY). We have been informed that the Company intends to purchase the remaining part of this unit. The
unit is included in our valuation and we have allowed a capital deduction from the Open Market Value for the
proposed purchase price. There is a further stand alone unit of 768.62 m2 occupied by Autocenter. In front of
the hypermarket is a single storey shopping mall consisting of some 43 units providing a lettable area of
4,839.86 m2, including a 1,226.25 m2 anchor store occupied by Worten. There is also an upper link mall that
provides direct access into the adjoining second phase. The second phase provides an additional two storey
shopping centre totalling 24,315.89 m2 GLA with a further 1,226 basement and roof car parking spaces. Within
the centre, a two storey anchor unit of 3,378.30 m2 has been sold to owner occupier C&A. (NB: The
aforementioned unit is excluded from the valuation of this property.) The remaining GLA totals 20,937.59 m2 and
it occupied by Zara (1,983.08 m2), Cortefiel (930.50 m2), Macmoda (956.50 m2), Tribo (879.10 m2), Sephora
(568 m2), Warner-Lusomundo nine screen cinema (3,290 m2) and 12,330.41 m2 consists of 109 retail and
catering units. An additional 476.50 m2 of storage space is let to occupiers.
The second phase of GaiaShopping opened in October 1995. The property is being refurbished in 2002 and
2003.
140
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
contract renewal fee) (€)
Leasehold. Unit shops let on license agreements generally expiring in 41,724 612,000
2012.
Prediguarda (100% held by Sonae
Imobiliária) has the benefit of a 20-year
concession expiring 2012.
Freehold. Anchor stores are let on 6-year utilization contracts expiring 2,652,783 31,475,000
in 2005.
The property is owned by Omala.
Unit shops are let on 6-year utilization contracts generally
(100% held by Sonae Imobiliária). expiring September 2005.
Freehold. Anchor stores let on 5 to 20-year utilization contracts expiring 9,084,779 116,413,000
between October 2005 and October 2015.
The property is owned by two
companies. Unit shops let on 6-year utilization contracts generally
The first phase is owned by Lisedi. expiring October 2007.
The second phase is owned by Teleporto.
(Both 50% held by Sonae Imobilária).
141
consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Portugal
Ref. Property Description
9. Gare do Oriente 3,758 m2 GLA of convenience retail and restaurant facilities within the Gare do Oriente railway station adjoining
Parque das Nações the Centro Vasco da Gama shopping centre.
Lisbon
Portugal Gare do Oriente opened in 1998.
10. GuimarãeShopping Two-storey shopping centre totalling 24,875.47 m2 GLA with 1,750 car parking spaces. Within the centre, a
Guimarães 16,143 m2 hypermarket area has been sold to owner occupier Continente and an anchor unit of 1,448 m2 has
Portugal been sold to owner occupier Worten. (NB. The aforementioned units are excluded from the valuation of this
property.) The remaining shopping centre area totals 7,284.47 m2 GLA, of which 1,504 m2 is occupied by
MacModa (753 m2) and Tribo (751 m2) anchor stores and 5,780.47 m2 consists of 88 catering and retail units
arranged around a two-storey mall. There are also seven additional retail units, totalling 359 m2, located within
the adjoining bus station. 77 m2 of storage space is let to occupiers.
GuimarãeShopping opened in February 1995.
11. Grandella 5 retail units situated within the Grandella building in the Chiado area of Lisbon with a total GLA of 5,668 m2.
Lisboa Occupiers include H&M (to open April 2003), Barreiros Faria (855 m2) and Stradivarius (210 m2).
Portugal
The property was originally developed in 1996.
12. MadeiraShopping Shopping centre with a total GLA of 26,582.77 m2, located on the island of Madeira, 10 minutes from the centre of
Funchal Funchal. The cinema (2,867.10 m2) is operated by Socorama-Castello Lopes and bowling (1,176.82 m2) by
Madeira Microlândia. The centre also has 11,018.47 m2 of anchor units, including Zara (1,677.27 m2), Modelo supermarket
Portugal (4,211.72 m2), Maxmat (2,280 m2), amongst others. In addition, there are 76 unit shops, providing 8,366.37 m2
GLA, and 25 restaurant and catering units providing 3,154.01 m2 GLA. The centre also provides 825.28 m2 of
storage area.
MadeiraShopping opened in March 2001.
142
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
contract renewal fee) (€)
Leasehold. Unit shops let on 6 year license agreements generally 96,353 817,000
The Gare do Oriente retail and restaurant expiring in May 2004.
facilities are held by Paracentro (100%
held by Sonae Imobiliária), on a lease
from G.I.L. at a rent of 50% of the rents
received up to € 78,241 and 85% of
rents receivable over € 78,241 with a
minimum rent payable of € 680,202.84
per annum.
Freehold. Anchor stores let on 15-year utilization contracts expiring 2,691,252 33,231,000
February 2010.
The property is owned by
GuimarãeShopping. Unit shops let on 6-year utilization contracts generally
expiring February 2007.
(100% held by Sonae Imobiliária).
Leasehold. Utilisation agreements for an initial term of six years, 508,421 4,237,000
generally expiring in 2005.
Head Lease held by Datavenia, (100%
owned by Sonae Imobiliária). A fifteen
year lease of the former Printemps
department store that commenced on
19th August 1996. Upon termination of
the original lease, the leaseholder has the
option to renew it for successive one-
year terms. The minimum rent payable to
the freeholder, MGAM, is € 884,564 per
annum.
Freehold. Anchor units let on utilization contracts of 6 to 15 years from
2001. Cinemas let on 10-year utilization contract from 2001.
The property is owned by 5,257,072 64,920,000
MadeiraShopping. Unit stores let on 6-year utilization contracts expiring 2007.
(50% held by Sonae Imobiliária).
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consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Portugal
Ref. Property Description
13. MaiaShopping Two-storey shopping centre totalling 30,917.25 m2 GLA with 2,300 car parking spaces. Within the centre there
Ermesinde is a 14,790 m2 hypermarket owned by Continente (NB. The aforementioned unit is excluded from the valuation of
Maia this property). The centre provides a 3,143.10 m2 11 screen Warner-Lusomundo cinema, three anchor units
Portugal leased to Worten (2,147 m2), Sportzone (759.65 m2) and Autocenter (1,037.20 m2) and approximately 105 unit
shops, restaurant food court and kiosks totalling 9,040.30 m2. In addition to the above, MaiaShopping has a co-
generation plant producing electricity that is sold to the condominium and to EDP. 103.66 m2 of storage space
is let to occupiers.
MaiaShopping opened in November 1997.
14. NorteShopping Two-storey regional shopping centre, totalling 71,903.24 m2 GLA with 5,000 car parking spaces, adjoining an
Matosinhos existing Continente hypermarket and two office buildings. The centre provides a 4,360 m2 8 screen Warner-
Porto Lusomundo multiplex cinema, Funcenter (1,780.10 m2) and anchor units totalling 20,746.61 m2, including Toys ‘R’
Portugal Us (3,280 m2), Fnac (2,480 m2), Zara (2,157 m2), Modelo-Bonjour supermarket (2,029 m2), Habitat (1,480.40 m2),
Macmoda (957.20 m2), amongst others. The centre also provides 204 unit shops (21,847.85 m2) and 37
restaurants (4,283.68 m2). An additional 1,270.65 m2 of storage is let to occupiers.
The centre adjoins a Continente Hypermarket and various support retail units totalling 18,885 m2. These units and the
Hypermarket are in separate ownership and excluded from the valuation.
In addition to the above NorteShopping has a co-generation plant producing electricity that is sold to the condominium
and to EDP.
NorteShopping opened in October 1998.
15. Sintra Retail Park Sintra Retail Park, the first retail park to be opened in Portugal, consists of 12 retail units totalling 17,598.30 m2
Sintra GLA, ranging from 1,000 m2 to 4,000 m2, 5 restaurants (1,238.30 m2), including a ‘drive-thru’ restaurant
Portugal (611.30 m2), and 650 car parking spaces. The centre is anchored by Mestre Maco DIY (3,931 m2) and Radio
Popular (Electricals) (2,597 m2).
Sintra Retail Park opened in November 2000.
16. ViaCatarina Shopping Four-storey shopping centre, totalling 11,612 m2 GLA with 578 car parking spaces, situated within six upper
Rua de Santa Catarina levels to the rear of the scheme. The shopping centre area features the following anchor stores: Modelo-
Porto Champion supermarket (886 m2), Zara (1,889 m2), Mango (628 m2), Sportzone (550 m2) and Worten (761 m2).
Portugal There are a further 65 mall units totalling 4,589 m2 GLA and 26 restaurant and catering units providing a further
2,309 m2 GLA. An additional 199 m2 of storage area is let to occupiers.
ViaCatarina Shopping opened in September 1996.
144
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
contract renewal fee) (€)
Freehold. Cinema let on 20 year utilization contract expiring 3,560,174 49,245,000
November 2017.
The property is owned by MaiaShopping.
Medium size anchor and unit shops generally let on 6-year
(100% held by Sonae Imobiliária). utilization contracts expiring November 2003.
We have been informed by the Company, that 70 contacts
will expire in November 2003 and although no new contracts
have yet been signed, 37 are under negotiation, 11 have to
be contacted, 12 have been agreed but not yet signed and
10 are not to be renewed.
Freehold. Anchor stores let on 10-15 year utilization contracts expiring 18,162,950 268,924,000
in October 2008 and October 2013.
The property is held by IMO-R.
Unit shops let on 6-year utilization contracts generally
(50% held by Sonae Imobiliária). expiring in October 2004.
Freehold. Retail units are let on 10 to 15 year utilisation contracts 2,273,426 29,425,000
expiring in 2010 onwards. Restaurants are let on six-year
The property is owned by Sintra Retail utilisation contracts expiring in 2006.
Park.
(50% held by Sonae Imobiliária).
Freehold. Anchor stores let on 15-year utilization contracts expiring 5,086,626 66,051,000
September 2011.
The property is owned by ViaCatarina.
Unit shops let on 6-year utilization contracts generally
(50% held by Sonae Imobiliária). expiring 2008.
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consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Spain
Ref. Property Description
17. Parque Principado A regional shopping centre with 76,842 m2 GLA The centre includes a 20,970 m2 Eroski supermarket, which has
Oviedo been sold and is excluded from the valuation.
Spain The centre is mainly arranged on one level but the leisure element is arranged on two levels with the restaurant
and catering units and Family Entertainment Centre (FEC) situated below the main cinema area. Anchors include a
Warner multiplex cinema (8,057 m2), Planet Bowling (3,358 m2), C&A (2,476 m2), Cortefiel (1,222 m2), Zara
(1,927 m2), FNAC (2,696 m2), Forum Sport (4,016 m2), Media Market (4,814 m2), NorAuto (1,039 m2) and Los
Telares (1,073 m2). There are 5,000 car spaces located to the front of the scheme at surface level.
Parque Principado opened in April 2001.
18. Plaza Mayor A leisure and entertainment centre, opened in April 2002, totalling 33,327 m2 GLA with 2,200 car-parking
Málaga spaces. The scheme is of an open-air design and the facades of the different units are used to replicate a typical
Spain Andalucian village. The scheme is divided up into four distinct areas; Plaza Brava, which consists mainly of bars
and is anchored by Big Fun Bowling (3,563 m2) and the soon to be opened Pacha nightclub (1,140 m2), Calle de
la Redonda/Plaza del Azahar, which consists of more traditional restaurants, Calle del Zoco, which consists
mainly of retail units and which is anchored by a Solinca Gymnasium (4,271 m2) and A Nike Factory (1,015 m2)
and finally Plaza Mayor, which consists of mainly fast food restaurants and is anchored by a Yelmo 20 screen
multiplex cinema (7,811 m2) with 4,783 seats, FEC (3,563 m2), Solinca Health Club (4,271 m2). In addition there
are 51 restaurants and 26 unit shops. A large retail unit is also proposed which is prelet to Nike, taking
occupation in May 2003.
Plaza Mayor opened on 19 April 2002
19. CC La Farga A neighbourhood shopping centre located in the area of L’Hospitalet, on the outskirts of Barcelona. The centre
Barcelona has a total GLA of 18,564 m2, comprising 128 units. There are no owner occupied units in this centre.
Spain
The centre is arranged on four levels, with the main leisure element on the fourth floor. Anchors include a Max
Centre multiplex cinema (2,043 m2), Caprabo Supermarket (2,664 m2), Intersport (976 m2), Los Telares (647
m2) and Burger King (282 m2). There are 1,148 paid car parking spaces.
La Farga opened in 1996.
146
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
Transfer fee)
Freehold. Anchor stores are generally let on utilisation contracts 8,745,189 126,500,000
agreements of between 10 and 20 years.
The property is owned by WXI Grupo Lar
Parque Principado. Unit stores are generally let on 5 year utilisation contracts.
(25% held by Sonae Imobiliária).
Freehold. Anchor stores let on utilization contracts of between 12 and 6,191,388 82,500,000
25 years.
The property is held by Plaza Mayor
– Parque de Ocio S.A. Unit shops let on utilization contracts of 6 years.
(75% held by Sonae Imobiliária).
Surface Right. The scheme is currently 89% let. 3,410,258 45,500,000
Agreement for 75 years, expiring
in 2067. Anchor stores are generally let on utilization contracts of
between 10 and 20 years, generally expiring 2016 and
The property is owned by Hospitalet 2021.
Center SL.
(25% held by Sonae Imobiliária). Unit stores are generally let on 5-year utilization contracts,
expiring at various dates.
147
consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Spain
Ref. Property Description
20. CC Karegaga Max Center & Ocio A shopping and leisure centre located in the area of Barakaldo, on the edge of the city of Bilbao. The centre has
Bilbao a total GLA of 59,370 m2. The Eroski hypermarket (18,561 m2), Bowling Sur (2,848 m2) and four mall units (816
Spain m2) have been sold to respective owner occupiers and are excluded from this valuation. The remaining GLA is
37,145 m2.
The main centre is arranged on two levels but the leisure element is situated in a separate building and is
arranged on three levels. Both buildings are joined via a bridge link at first floor level. Anchors in both schemes
include a multiscreen cinema (6,272 m2), H&M (2,353 m2), Decathlon (2,910 m2), Zara (1,944 m2), Cortefiel
(818 m2) and McDonald’s (385 m2). There is a combined total of 4,150 car spaces located at basement level
and to the front of the main scheme at surface level.
Max Center opened in 1994 without the leisure extension, Max Ocio opened in July 2002.
21. CC Valle Real A shopping centre located in the city of Santander with a total GLA of 47,739 m2. Of this, an Eroski
Santander hypermarket (15,948 m2), Leroy Merlin (6,256 m2) and three mall units (349 m2) have been sold to respective
Spain owner occupiers and are not included in this valuation. The ownership, subject of this valuation, therefore totals
25,186 m2.
The centre is arranged on two levels, with 2,500 car parking spaces. Anchors include an 8-screen Cines Valle
Real cinema (2,538 m2), Forum Sport (2,740 m2), Zara (1,892 m2), Gables (1,721 m2), Los Telares (1,018 m2),
Mango (930 m2) and Cortefiel (700 m2).
Valle Real opened in 1994 with an extension to the ground floor opening in 1999.
22. CC Gran Casa A regional shopping centre located in the city of Zaragoza. The centre has a total GLA of 79,441 m2, of which
Zaragoza the El Corte Ingles department store (36,000 m2) and Warner Lusomundo cinema (3,445 m2) have been sold to
Spain the respective occupiers and are not included in this valuation. The remaining centre has a total GLA of 39,996
m2, which is included in this valuation.
The centre is arranged on three levels above ground with a further three levels of basement car parking (2,500
spaces). Anchors include a Planet Bowling (1,947 m2), Media Markt (4,456 m2), Miro (1,110 m2), Cortefiel
(1,000 m2) Zara (1,279 m2), Mango (629 m2), H&M (2,727 m2) and Decathlon (2,971 m2). The property has
electricity producing co-generation plant.
CC Gran Casa opened in 1997
148
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
Transfer fee)
Freehold. The scheme is currently 96.85% let. 8,350,107 122,000,000
The property is owned by Cecomax SA. Anchor stores are generally let on utilization contracts of
(50% held by Sonae Imobiliária). between 10 and 20 years.
Unit stores are generally let on 5-year utilization contracts.
Freehold. The scheme is currently 97.8% let. 4,501,008 66,000,000
The property is owned by Inmolor SA. Anchor stores are generally let on utilization contracts of
(50% held by Sonae Imobiliária). between 10 and 20 years.
Unit stores are generally let on 5-year utilization contracts.
Freehold. The scheme is currently 98.4% let. 8,355,270 126,500,000
The property is owned by Isonax SA. Anchor stores are generally let on utilization contracts of
(50% held by Sonae Imobiliária). between 10 and 20 years.
Unit stores are generally let on 5-year utilization contracts.
149
consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Brazil
Ref. Property Description
23. Parque D. Pedro Shopping Phase I Shopping centre situated in the city of Campinas, São Paulo, Brazil. The shopping is situated on a site of
Campinas 476,490 m2 with a total constructed area of 178,697 m2 and a GLA of 113,186 m2, constructed in the first
São Paulo phase, mainly distributed on the ground floor. Restaurants, cinemas, leisure and theatre are placed on the lower
Brazil ground floor. Two anchor units totalling 5,855 m2 have been sold to owner occupier C&A. Parque D. Pedro
consists of 12 anchor stores (4 department stores), which include a hypermarket, a multiplex cinema with 15
screens, a health club and a theatre. There are a further 20 semi-anchor stores, 13 restaurants, 296
specialty/junior stores, 32 fast food units and 8,300 car parking spaces.
24. Pátio Brasil Shopping Center Shopping centre situated in the heart of the commercial centre of the city, adjacent to the hotel district. It is
Brasília situated on a site with 8,000 m2 and with a total GLA of 34,339 m2 on four levels plus three parking levels. The
Brazil expansion on the 3rd level was completed and opened in March 2001. An anchor unit of 2,990 m2 has been
sold to owner occupier C&A. (NB. The aforementioned unit is not included in the valuation.)
The centre comprises a further 4 anchor units, 198 mall unit shops, 1 bank, 28 restaurants, a 6 screen cinema,
26 kiosks, a children’s play area, bowling alley and fitness centre. There is underground car parking on three
levels for 1,800 cars.
The centre originally opened in October 1997.
25. Franca Shopping Center Shopping centre situated in the Municipality of Franca in the north eastern sector of the State of São Paulo, the
Franca shopping centre lies close to the town centre and fronts a dual-carriageway linking into the main regional
São Paulo highways.
Brazil
The Property is situated on a site of 70,000 m2 and with a total GLA of 17,992 m2 on one level. The trading units
comprise: 2 anchor stores, 83 mall unit shops, 10 restaurants, a 3 screen cinema, 9 kiosks, a childrens´ play
area, bingo hall and bowling alley. There is open car parking around the perimeter of the Centre for 1,100 cars.
This centre opened in October 1993.
26. Shopping Metrópole Shopping centre situated in the central region of São Bernardo do Campo fronting a large square which serves
São Bernardo do Campo as the intersection of major avenues and numerous bus routes. The Property is situated on a site of 88,342 m2
São Paulo and has a total GLA of 24,827 m2 over two levels.
Brazil
The trading units are on a single ground floor level and comprise: 2 anchor stores, 128 unit shops, 26
restaurants, one bank agency a 3-screen cinema, 7 kiosks and a childrens´ play area. There is car parking on
ground level for 1,200 cars.
This centre originally opened in May 1980 as a much smaller mall but after considerable expansion and
upgrading reopened on April 1997 in its present form.
150
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
Transfer fee)
Freehold. Mall units generally let on utilization contracts for terms of 5 R$ 37,662,419 R$ 340,181,000
years from 2002 and anchor stores generally let on utilization or or
Sonae Imobiliária owns directly 95.04% contracts for terms of ten years from 2002. € 10,145,142 € 91,634,701
and Sonae Enplanta owns the remaining
4.96%.
"Condominium Proindiviso". Anchor stores Grupo Otoch and Lojas Riachuelo are let on 6 R$ 25,465,713 R$ 119,909,000
and 10 year leases respectively. or or
The property is owned by Condominium € 6,859,710 € 32,299,939
Pátio Brasil Shopping Center. Unit shops are let on 3 or 5-year leases.
10.42% of the condominium is held by
Sonae Enplanta (50% of which is held by
Sonae Imobiliária).
"Condominium Proindiviso". Anchor stores Sé Supermercados and Magazine Luiza are let R$ 2,816,992 R$ 14,155,000
on 10 year leases. or or
The property is owned by Condominium € 758,814 € 3,812,938
Shopping Center Franca. Unit shops are let on 3 or 5-year leases except for
McDonald’s which has a 20 year lease.
31.40% of the condominium is held by
Sonae Enplanta (50% of which is held by
Sonae Imobiliária).
"Condominium Proindiviso". Anchor stores Lojas Americanas and Lojas Renner (JC Penny) R$ 21,351,009 R$ 82,828,000
are let on 10 year leases as are the Blockbuster and the or or
The property is owned by Condominium McDonald’s units. € 5,751,330 € 22,311,414
Shopping Center Metrópole.
Unit shops are let on 3 or 5-year leases.
10% of the condominium is held by
Sonae Enplanta, (50% of which is held by
Sonae Imobiliária).
151
consolidated report and accounts 2002’sonaeimobiliária
Properties Held as Investments – Brazil
Ref. Property Description
27. Shopping Penha Shopping centre located immediately adjacent to the traditional shopping streets of the Penha suburban centre
São Paulo situated in the east of São Paulo. Access to the centre is facilitated by some major highways close-by as well as
Brazil the proximity of the Penha Metro Station.
The Property is situated on a site of 19,194 m2 and with a GLA of 17,157 m2 on two levels. The trading units
comprise: 1 anchor, 185 unit shops, 16 restaurants, a 3 screen cinema and 19 kiosks. There is underground
car parking on three levels for 1,200 cars.
This centre originally opened in October 1992.
28. Tivoli Shopping Shopping centre situated some 130 km to the north of the city of São Paulo, fronting onto the Santa Bárbara
Santa Bárbara do Oeste Avenue linking the towns of Santa Bárbara and Americana. The centre has a total GLA of 20,370 m2 on one level.
São Paulo
Brazil The trading units comprise: 2 anchor stores, 120 unit shops, one bank agency, 17 restaurants, a 3 screen
cinema, 16 kiosks, a childrens’ play area and bingo hall. There is open car parking around the perimeter of the
Centre for 1,578 cars. The McDonald’s restaurant is a free-standing unit.
This centre opened in November 1998.
Properties in the Course of Development – Portugal
Ref. Property Description Tenure
29. CascaiShopping Expansion to the existing CascaiShopping (Property N° 3) consisting of a front extension of the Freehold
Expansion Phase 2B existing shopping centre at first floor level, providing 5,072.83 m2 of unit shops and two anchor
Cascais units of 1,311.50 m2 and 852.91 m2 respectively. In total the Expansion scheme is considered to The property is owned
Portugal be 7,237.24 m2, however GLA amounting to 438.88 m2 will be lost from the existing centre. by SM Empreendimentos
Therefore the net addition of Phase 2B is 6,798.91 m2. Our valuation includes only this latter area. Imobiliários.
In addition, the Expansion will increase the car parking capacity to a total of 4,269 spaces.
(50% held by Sonae
Imobiliária).
152
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Terms of Existing Tenancies Net Operating Income (€/year) Open Market
(excluding key money and Value (€)
Transfer fee)
"Condominium Proindiviso". Anchor store Lojas Americanas is let on a 10-year lease and R$ -501,742 R$ 40,214,000
the McDonald’s unit on a 20-year lease. or or
The property is owned by Condominium € -135,154 € 10,832,732
Shopping Center Penha. Other unit shops are let on 3 or 5-year leases.
14.10% of the condominium is held by
Sonae Enplanta (50% of which is held by
Sonae Imobiliária).
"Condominium Proindiviso". Anchor stores Sé Supermercados and Magazine Luiza are let R$ 9,589,819 R$ 35,983,000
on a 10 year leases and the McDonald’s unit on a 20 year or or
The property is owned by Condominium lease. € 2,583,214 € 9,692,756
Tivoli Shopping Center.
Other unit shops are let on 3 or 5-year leases.
25% of the condominium is held by
Sonae Enplanta (50% of which is held by
Sonae Imobiliária).
Sales / Open Market Estimated Estimated Costs Estimated Annual Net Open Market Value
Tenancies Value in Completion and of Completing Operating Income When Completed and
Arranged Existing Occupation Dates Development When Completed and Let (€)
State (€) (€) Let (€)
An anchor tenancy has been agreed 34,343,000 It is foreseen that the 11,930,604 3,393,219 49,793,000
with H&M (1,311.50m2). development will be (Costs offset by Key
Approximately 60% of GLA is completed by Money)
currently committed in Heads of November 2003.
Terms. The Expansion is expected to
be fully let on completion.
153
consolidated report and accounts 2002’sonaeimobiliária
Properties in the Course of Development – Portugal
Ref. Property Description Tenure
30. Coimbra Retail Park Coimbra Retail Park is currently under construction and located 5 km from Coimbra city centre. Freehold.
Coimbra The main access route is the IC2 road. The Retail Park will consist of 11 retail units totalling
Portugal 12,800 m2 GLA, ranging from 450 m2 to more than 3,000 m2 including the anchor Mestre Maco, The property is owned
San Luis and Multiópticas. Coimbra Retail Park will have 560 parking spaces. by Sóguia – Sociedade
Imobiliária, S.A.
Coimbra Retail Park is being constructed next to an exisiting retail location, which includes Modelo
supermarket, Worten, Modalfa and AutoCenter. These units do not form part of this valuation. (50% held by Sonae
Imobiliária).
31. Estação Viana Shopping A shopping centre currently under construction in Viana do Castelo. Estação Viana Shopping is well Freehold.
Viana do Castelo located in the city centre, taking advantage of good pedestrian flow, next to the railway and bus
Portugal station. The property is owned
The Centre will be arranged on three levels above ground which will provide 18,605 m2 GLA. by CenterStation –
Anchors will include a Castelo Lopes Cinema (1,595 m2), Worten (910 m2), Zara (1,469 m2) and Imobiliária, S.A.
Sportzone (594 m2). It will also provide 1,720 m2 for restaurant units, 8,739 m2 for unit shops and
a bowling alley (1,124 m2). (50% held by Sonae
The centre will have 600 paying car parking spaces. Imobiliária).
32. Parque Atlântico A shopping centre currently under construction located in Ponta Delgada in the Azores archipelago. Freehold.
Ponta Delgada The centre will have a GLA of 16,571 m2 including a Castello Lopes cinema multiplex (1,151 m2),
Azores Zara (1,490 m2), Sportzone (650 m2), Worten/Vobis (668 m2), amongst other anchors and 8,639 The property is owned
Portugal m2 of mall units, 1,519 m2 of restaurant units as well as 1,791 m2 for a DIY unit. The centre will by Micaelense Shopping
have 1,100 parking spaces. – Empreendimentos
Comerciais.
(50% held by Sonae
Imobiliária).
Properties in the Course of Development – Spain
Ref. Property Description Tenure
33. Avenida M40 This scheme is to be located in Leganés, one of Madrid’s southern suburban areas, adjacent to the Freehold.
Barrio de la Fortuna M-40 motorway and a 10 minute drive from Madrid city centre. The scheme, which is currently
Leganés under construction, will extend to approximately 49,800m2 of GLA and will comprise an Eroski The property is held by
Madrid Hypermarket (15,000m2), a Yelmo multiplex cinema (4,248 m2), a FEC (1,750m2), H&M (1,943 Avenida M-40, S.A.
Spain m2), Zara (1,700) plus another 169 retail/leisure units totaling 25,143 m2. The centre will be
distributed over three floors and will have approximately 2,500 parking spaces. (60% held by Sonae
Imobiliária).
154
sonaeimobiliária’ consolidated report and accounts 2002
Sales / Open Market Estimated Estimated Costs Estimated Annual Net Open Market Value
Tenancies Value in Completion and of Completing Operating Income When Completed and
Arranged Existing Occupation Dates Development When Completed and Let (€)
State (€) (€) Let (€)
Tenancies have been agreed with 3,003,000 It is foreseen that the 12,131,034 1,342,889 16,832,000
Mestre Maco (3,000 m2) and San development will be
Luís (1,350 m2) as anchors. A further completed by
2,250 m2 is let to national retailers September/
and 6,200 m2 remains unlet. October 2003.
Anchor tenancies have been signed. 13,596,000 It is foreseen that the 32,517,975 3,543,639 49,962,000
Letting of mall units is well advanced development will be (Costs offset by Key
and only very limited vacancy is completed by October Money)
expected upon opening. 2003.
Anchor tenancies have been signed. 19,615,000 It is foreseen that the 21,793,755 3,601,068 43,945,000
Letting of mall units is well advanced development will be (Costs offset by Key
and only very limited vacancy is completed by October Money)
expected upon opening. 2003.
Sales / Open Market Estimated Estimated Costs Estimated Annual Net Open Market Value
Tenancies Value in Completion and of Completing Operating Income When Completed and
Arranged Existing Occupation Dates Development When Completed and Let (€)
State (€) (€) Let (€)
Anchor tenancies have been agreed 32,500,000 Late 2003. 46,844,035 7,386,248 102,000,000
and the centre is currently 75%
commited in terms of GLA, assuming
Heads of Terms agreed.
155
consolidated report and accounts 2002’sonaeimobiliária
Properties in the Course of Development – Spain
Ref. Property Description Tenure
34. C.C. dos Mares A shopping centre, currently under construction, of 23,520m2 GLA located within the Municipality Freehold.
Murcia of San Javier in Murcia. The centre will comprise a Hypermarket of 8,970 m2 (which will be in
Spain separate ownership and is therefore excluded from this valuation), a Cinema (2,560 m2), a FEC
(595 m2) plus another 76 retail/leisure units. The centre will be distributed over two floors and will
have approximately 1,170 parking spaces.
The centre is located between the towns of San Javier and San Pedro del Pinatar and is a 10-
minute drive from San Javier airport.
35. Zubiarte A shopping centre, currently under construction that will extend to approximately 22,000 m2 of Freehold.
Bilbao GLA and will comprise a supermarket of 1,005 m2, a Multiplex Cinema of 4,450 m2 plus another
Spain 65 retail/leisure units. The centre will be distributed over five floors, with the top one dedicated in The property is owned
it’s entirety to the Cinema Multiplex, and a basement parking area. by Zubiarte Inversiones
Inmobiliárias S.A.
An urban site located within the city of Bilbao (next to the Guggenheim Museum).
(50% held by Sonae
Imobiliária).
Properties Held for Development – Portugal
Ref. Property Description
36. Arrábida Shopping An expansion to the current Arrábida Shopping (Property N° 2). It will be constructed at second floor level over
Expansion an existing flat roof and consist of 6,090 m2 GLA, destined for a Lifestyle anchor (2,200 m2), Entertainment
Vila Nova de Gaia anchor (1,795 m2), Café/Bars/Restaurants (1,066 m2), Restaurants/Terrace (760 m2), Counter service (60 m2),
Portugal Kiosks (89 m2) and a Creche (120 m2). A further amount of 1,254 m2 of mall circulation space is included within
the constructable area of the project.
We have been informed that the Expansion possesses a building licence but that a construction licence remains
outstanding.
37. LoureShopping This development site located in Loures (part of the Metropolitan Area of Lisbon) will comprise a GLA of 36,721
Loures m2, including a hypermarket with a sales area of 9,581 m2 – (owner occupied and therefore not included in this
Portugal valuation), 3,416 m2 dedicated to cinemas, and a 1,057 m2 leisure area, in addition to 9,530 m2 for various unit
shops.
38. Parque Famalicão Two plots of agricultural land totalling approximately 212,638 m2 situated on the South East of the A3/A7
Famalicão motorway junction. It does not currently benefit from planning permission but has development potential given
Portugal the strategic location.
156
sonaeimobiliária’ consolidated report and accounts 2002
Sales / Open Market Estimated Estimated Costs Estimated Annual Net Open Market Value
Tenancies Value in Completion and of Completing Operating Income When Completed and
Arranged Existing Occupation Dates Development When Completed and Let (€)
State (€) (€) Let (€)
Marketing has yet to commence. 16,250,000 Late 2004. 11,883,000 2,757,709 36,000,000
Anchor tenancies are currently in 30,000,000 It is foreseen that the 41,553,910 6,841,659 95,000,000
advanced negotiations and marketing development will be
of the mall units will commence once completed by May
anchors are signed. 2004.
Tenure Open Market Value (€)
Freehold. 411,000
The property is owned by Capital Plus.
(50% held by Sonae Imobiliária).
Freehold. 10,387,000
The property is owned by LoureShopping
– Empreendimentos Imobiliários S.A.
(100% held by Sonae Imobiliária)
Freehold. 4,120,000
The property is owned by Parque de
Famalicão, S.A.
(100% held by Sonae Imobiliária).
157
consolidated report and accounts 2002’sonaeimobiliária
Properties Held for Development – Portugal
Ref. Property Description
39. Torre Oriente We understand that it is the Company´s intention to construct two office towers over the Centro Colombo
Centro Colombo shopping centre. The foundations, ground and first floors have already been constructed (excluded from this part
Lisbon of the valuation). However, the Company awaits the necessary Construction Licence to continue with the upper
Portugal floors of the towers.
The Torre Oriente project consists of a total of 14 floors (an additional 12 floors above existing ground and first)
which will extend to a total of 23,978 m2 of GLA offices (2,933 m2 already constructed).
40. Torre Ocidente We understand that it is the Company´s intention to construct two office towers over the Centro Colombo
Centro Colombo shopping centre. The foundations, ground and first floors have already been constructed (excluded from this part
Lisbon, of the valuation). However, the Company awaits the necessary Construction Licence to continue with the upper
Portugal floors of the towers.
The Torre Ocidente project consists of a total of 14 floors (an additional 12 floors above existing ground and
first) which will extend to a total of 23,975 m2 of GLA offices (2,930 m2 already constructed).
Properties Held for Development – Germany
Ref. Property Description
41. First Alexander Platz First Alexander Platz is a development site situated in the heart of the city and is the largest development area
Berlin for retailing in all of Berlin comprising 53,176 m2 of GLA. The area currently includes the Kaufhof department
Germany store (30,000 m2) and Saturn Media Markt.. The centre will be divided into three levels above ground and into
two levels below ground destined for car parking offering 1,600 car parking spaces.
Properties Held for Development – Greece
Ref. Property Description
42. Aegean Park A development site located in Athens, Greece and situated in the Muncipality of Pireaus close to the Port of
Athens Piraeus, which is linked to Omonia, Central Athens by Piraeus Street. It consists of two plots of 33,000 m2 and
Greece 12,000 m2 divided by a minor road. The smaller of the two sites consists of rough scrub-land and the larger a
mixture of industrial and warehouse properties in various states of repair and occupation. Part of the large site is
currently being let to the Athens Water Authority on an annual tenancy that can be terminated at any time.
There are outline plans to join the two sites and develop a shopping centre featuring a total of 60,590 m2 GLA to
include retail, restaurant and leisure units.
158
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Open Market Value (€)
Freehold. 5,755,000
The property is owned by
Empreendimentos Imobiliários Colombo,
S.A..
(50% held by Sonae Imobiliária).
Freehold. 5,755,000
The property is owned by
Empreendimentos Imobiliários Colombo,
S.A..
(50% held by Sonae Imobiliária).
Tenure Open Market Value (€)
Freehold. 6,295,000
The property is owned by Sonae Project
Berlin GmbH.
(100% held by Sonae Imobiliária).
Tenure Open Market Value (€)
Freehold. 35,271,000
The property is owned by
Aegean Park, S.A..
(50% held by Sonae Imobiliária).
We have been informed that there is an
outstanding purchase payment of
€ 5,800,000. Our valuation figure provided
here does not take account of this and
shows the value of the site with full
ownership.
159
consolidated report and accounts 2002’sonaeimobiliária
Properties Held for Development – Italy
Ref. Property Description
43. Brescia Retail & Entertainment Centre, Located on the former site of the old Lucchini plants with a total site area of over 600,000 m2, this
Brescia redevelopment project lays on two plots of land, separated by a public road and linked by a bridge.
Italy The project comprises a retail and leisure complex with a total GLA of 28,825 m2 and will include a supermarket
with a total area of 4,000 m2 and a cinema of 4,100 m2.
The site is stategically placed on the edge of Brescia´s ring-road that circles the downtown area of the city.
Properties Held for Development – Spain
Ref. Property Description
44. C.C. Luz del Tajo A shopping centre project located on the outskirts of Toledo. It will comprise a total GLA of 41,245 m2, which
Toledo includes a 13,200 m2 Eroski hypermarket, multiplex cinema, food court and Inditex Group brands. The centre will
Spain have 2,000 car spaces at ground level.
45. Plaza Eboli The town of Pinto is located 20 km south of Madrid, along the N-IV motorway (Autovia de Andalucia). This is a
Pinto retail and leisure centre project destined for the local market. The project will comprise a total GLA of 28,875
Spain m2, which includes a 11,390 m2 Eroski hypermarket, cinemas (2,400 m2). The scheme will have parking for
1,000 cars.
Properties Held for Development – Brazil
Ref. Property Description
46. Boavista Shopping A site located in the suburb of Santo Amaro in the city of São Paulo, held for the development of a regional
Santo Amaro shopping centre with a total GLA of 23,700 m2. This GLA will include a Sonda hypermarket (9,900 m2), 4 anchor
São Paulo stores, 1 semi-anchor, 22 restaurant and catering units and 167 mall units. The centre will consist of three levels
Brazil above ground and 1,350 car parking spaces located in the basement and on the roof.
160
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Open Market Value (€)
Freehold. 4,428,000
The Property is owned by Transalproject
2000, S.R.L.
(100% held by Sonae Imobiliária).
Tenure Open Market Value (€)
Freehold 9,636,000
The property is owned by Proyecto
Shopping 2001, S.A.
(50% held by Sonae Imobiliária).
Freehold 9,079,000
The property is owned by Comercial
Pinto Shopping, S.A.
(65% held by Sonae Imobiliária).
Tenure Open Market Value (R$); (€)
Freehold. R$ 30,102,000
or
€ 8,108,589
161
consolidated report and accounts 2002’sonaeimobiliária
Properties held for Development – Brazil
Ref. Property Description
47. Parque D. Pedro – Expansion An additional 16,194 m2 to be constructed in the second phase of the Parque Dom Pedro shopping centre
Campinas, located at Campinas, São Paulo. Construction of this Expansion has not yet begun.
São Paulo
Brazil
48. Penha Shopping An additional 15,709 m2 GLA to be constructed in Penha Shopping, located immediately adjacent to the
Expansion Penha, traditional shopping streets of the Penha suburban centre situated in the east of São Paulo.
São Paulo
Brazil
162
sonaeimobiliária’ consolidated report and accounts 2002
Tenure Open Market Value (R$); (€)
Freehold. R$ 37,563,000
or
Sonae Imobiliária owns directly 95.04% and € 10,118,361
Sonae Enplanta owns the remaining 4.96%.
The property is owned by Condominium R$ 12,500,000
Penha Shopping Center. or
€ 3,367,130
163
consolidated report and accounts 2002’sonaeimobiliária
PORTUGAL
[PORTO]
LUGAR DO ESPIDO, VIA NORTE
4470 MAIA
PHONE: +351 22 948 75 22
FAX: +351 22 940 46 98
[LISBOA]
RUA AMÍLCAR CABRAL, 23
1750-018 LISBOA
PHONE: +351 21 751 5000
FAX: +351 21 758 5528
SPAIN
[MADRID]
C/ CONDE DE ARANDA, 24, 3º
28001 MADRID
PHONE: +34 91 575 8986
FAX: +34 91 575 7903
[BILBAO]
IBAÑEZ DE BILBAO, 28, 7º MÓDULO C
48009 BILBAO
PHONE : +34 94 435 6070
FAX: +34 94 424 3707
ITALY
CORSO MIGENTA, 85
20123 MILANO
PHONE: +39 02 4391 2517
FAX: +39 02 4391 2531
GREECE
10, KAPSALI STR.,
HERODOTOU STR., N. DOUKA STR.
KOLONAKI
10674 ATHENS
PHONE: +30 210 72 79 907
FAX: +30 210 72 79 927
GERMANY
KANZLERSTRASSE 4
40472 DÜSSELDORF
PHONE: +49 211 4361 6201
FAX: +49 211 4361 6202
BRAZIL
RUA GOMES DE CARVALHO, 1327, 3º, CONJ. 32
VILA OLÍMPIA, SÃO PAULO - SP
CEP: 04547-005
PHONE: +55 11 3371 3666
FAX: +55 11 3845 4522
> www.sonaeimobiliaria.com
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