Canadian asset manager Brookfield and Iguatemi are reaching an agreement on the sale of two shopping malls in the city of São Paulo, according to several people familiar with the matter.
The companies have just set the price for the majority stakes that Brookfield holds in the Pátio Paulista and Pátio Higienópolis shopping malls, with the aim of finalizing an agreement by the end of December, a deadline that could be slightly extended due to the end-of-year holidays, they said. two of the sources this week.
The sale of the two shopping centers, valued at close to R$2.5 billion, when completed, will mark Brookfield’s exit from the shopping mall sector in Brazil, the same sources said.
The Canadian asset manager decided to exit the shopping mall sector in Brazil as it considered that its investments in these commercial ventures were already mature. The company began investing in shopping centers in the country in the 1980s.
According to a person familiar with the situation, other groups have also shown interest in the malls.
Brookfield and Iguatemi, who have been holding exclusive talks about the deal, declined to comment.
READ MORE: More cosmetics and fewer anchor stores: the CEO of Allos shows what is trending in shopping malls
Brookfield, which manages around R$200 billion in assets in Brazil, remains active in several other sectors in the country, including renewable energy, infrastructure, private equity and real estate.
Financing for the transaction should be done by Iguatemi and BB Asset, through an investment fund focused on shopping centers, and possibly other funds specialized in real estate, according to the sources.
According to the agreement, Iguatemi will complete the due diligence process with the objective of signing the final contract with Brookfield by the end of 2024.
Initially, the transaction would only involve BB Asset and Iguatemi. However, the group decided to include other investors due to current unfavorable market conditions for real estate investment funds looking to raise new capital. Talks with these additional investors are ongoing, three of the sources said.
BB Asset declined to comment.
READ MORE: Shopping malls give up online sales and apps focus on the in-person experience
Earlier this year, BB Asset, through one of its funds, and Iguatemi also purchased a stake in Shopping Rio Sul, in Rio de Janeiro, from Brookfield.
Brookfield, with approximately $1 trillion in assets in more than 30 countries, has its origins in a public services company founded in 1899 in São Paulo, Brazil.
