CONFIDENTIAL OFFERING MEMORANDUM

U.S.$175,000,000

BR MALLS INTERNATIONAL FINANCE LIMITED(an exempted company incorporated under the laws of the Cayman Islands)

9.750% PERPETUAL NOTESUnconditionally Guaranteed byBR Malls Participações S.A., ECISA Engenharia Comércio e Indústria S.A., ECISAParticipações S.A. and Graúna Holding Participações S.A.

BR Malls International Finance Limited, or BR Malls International Finance, an exempted company incorporatedunder the laws of the Cayman Islands, is a newly-formed entity incorporated for the purpose of offeringUS$175,000,000 aggregate principal amount of its 9.750% guaranteed perpetual notes, or the notes. The notes willinitially be sold to investors at a price equal to 100% of the principal amount thereof, plus accrued interest, if any,from November 8, 2007. Interest on the notes will accrue at a rate of 9.750% per year. BR Malls InternationalFinance will pay interest on the notes quarterly in arrears on February 8, May 8, August 8 and November 8 of eachyear, commencing on February 8, 2008.

The notes will be perpetual notes with no fixed final maturity date and will be repaid only in the event that BRMalls International Finance redeems or repurchases the notes or upon acceleration due to an event of default, asdescribed in this offering memorandum.

BR Malls International Finance may, at its option, redeem the notes, in whole or in part, at 100% of their principalamount plus accrued interest and certain additional amounts, if any, on any interest payment date on or afterNovember 8, 2012 or at any time upon the occurrence of specified events relating to the applicable tax law, asdescribed in this offering memorandum. Upon the occurrence of changes of control, BR Malls International Financemust offer to repurchase the notes.

The notes will be unconditionally and irrevocably, jointly and severally, guaranteed by BR Malls Participações S.A.and its subsidiaries ECISA Engenharia Comércio e Indústria S.A., ECISA Participações S.A. and Graúna HoldingParticipações S.A., collectively, the guarantors.

The notes will be senior unsecured obligations of BR Malls International Finance, ranking equal in right of paymentwith all of its other existing and future senior unsecured debt. The guarantees of the notes will rank pari passu withall unsecured and unsubordinated obligations of each of the guarantors.

For a more detailed description of the notes, see “Description of the Notes” beginning on page 152.

We are not registering the notes under the Securities act of 1933, as amended, or the Securities Act, or under any U.S.state securities laws. We are offering the notes only to qualified institutional buyers in accordance with Rule 144Aunder the Securities Act and to persons outside the United States in compliance with Regulation S of the SecuritiesAct. Prospective purchasers that are qualified institutional buyers are hereby notified that the seller of the notes maybe relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The notesare not transferable except in accordance with the restrictions described under “Transfer Restrictions.”

There is currently no public market for the notes. Application has been made to list the notes on the Official List ofthe Luxembourg Stock Exchange and admit the notes for trading on the Euro MTF market of the LuxembourgStock Exchange (Euro MTF). The notes are expected to be eligible for trading in the PORTALSM Market of theNational Association of Securities Dealers Inc.

Investing in the notes involves risks. See “Risk Factors” beginning on page 21

PRICE 100% PLUS ACCRUED INTEREST, IF ANY

We expect that the notes will be ready for delivery in book-entry form through The Depository Trust Company, orDTC, and its direct and indirect participants, including Clearstream Banking S.A. Luxembourg, or Clearstream, andEuroclear Bank S.A./N.V., as operator of the Euroclear Bank.system, or Euroclear, on or about November 8, 2007.

Joint Book-Running Managers

Citi UBS Investment BankThe date of this offering memorandum is November 5, 2007.

TABLE OF CONTENTS

Page

Forward-Looking Statements ..................... x

Presentation of Financial and OtherInformation ............................................ xi

Summary.................................................... 1

The Offering .............................................. 12

Summary Financial Information ................. 17

Risk Factors ............................................... 21

Exchange Rates .......................................... 32

Use of Proceeds .......................................... 34

Capitalization............................................. 35

Selected Financial Information ................... 36

Unaudited Condensed Consolidated ProForma Financial Information .................. 39

Management’s Discussion and Analysis ofFinancial Condition and Results ofOperations.............................................. 43

Page

Industry and Regulatory Overview............. 72

Business...................................................... 87

Management .............................................. 140

Principal Shareholders ................................ 148

Related Party Transactions......................... 151

Description of the Notes............................. 152

Form of the Notes ...................................... 174

Taxation .................................................... 178

Plan of Distribution.................................... 184

Transfer Restrictions .................................. 187

Enforcement of Judgments ......................... 190

Legal Matters ............................................. 191

Independent Auditors ................................. 192

Index to Financial Statements ..................... F-1

In this offering memorandum, references to:

➤ “we,” “our,” “us,” the “Company” and “BR Malls” are to BR Malls Participações S.A., a corporation(sociedade anônima) duly organized and incorporated under the laws of the Federative Republic ofBrazil, or Brazil, and its consolidated subsidiaries, including the Issuer, except when the contextindicates otherwise;

➤ “Issuer” or “BR Malls International Finance” are to BR Malls International Finance Limited, afinancing company organized under the laws of the Cayman Islands;

➤ “guarantors” are to BR Malls and its subsidiaries, ECISA Engenharia S.A., ECISA Participações S.A.and Graúna Holding Participações S.A.;

➤ “Amazonas Shopping” are to Amazonas Shopping Center, located in Manaus, Amazonas;

➤ “anchor stores” are to large, well-known stores in our shopping malls that serve as the primaryattraction to the consumers in each shopping mall, and are intended to ensure a constant flow ofconsumers in all areas of our shopping malls;

➤ “Araguaia Shopping” are to Araguaia Shopping, located in Goiânia, Goiás;

➤ “ASCR” are to ASCR—Administradora Shopping Center Recife Ltda., our indirect subsidiary thatmanages Shopping Recife;

➤ “Big Shopping” are to Big Shopping, located in Contagem, Minas Gerais;

➤ “Campo Grande Parking” are to Campo Grande Parking Ltda., our indirect subsidiary that providesparking services at Shopping Campo Grande;

➤ “Center Shopping Rio” are to Center Shopping Rio, located in Rio de Janeiro, Rio de Janeiro;

➤ “Città Office” are to Città Office, located in Rio de Janeiro, Rio de Janeiro;

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➤ “Christaltur” are to Christaltur Empreendimentos e Participações Ltda., our indirect subsidiary thatholds our ownership interest in Shopping Villa-Lobos;

➤ “Crystal Plaza” are to Crystal Plaza, located in Curitiba, Paraná;

➤ “DACOM” are to DACOM Desenvolvimento and DACOM Gestão, our subsidiaries that provide,among others, leasing and merchandising services for shopping malls;

➤ “DACOM Desenvolvimento” are to DACOM Desenvolvimento e Avaliação Comercial de ShoppingCenters Ltda., our subsidiary that provides, among others, leasing and merchandising services forshopping malls;

➤ “DACOM Gestão” are to DACOM Gestão Comercial Ltda., our subsidiary that provides, amongothers, leasing and merchandising services for shopping malls;

➤ “DEICO” are to Deico Desenvolvimento Imobiliário Ltda., our indirect subsidiary that is responsiblefor the management, leasing and planning of shopping malls;

➤ “Dyl” are to Dyl Empreendimentos e Participações S.A., one of our shareholders;

➤ “ECISA” are to ECISA Engenharia and ECISA Participações;

➤ “ECISA Engenharia” are to ECISA Engenharia Comércio e Indústria S.A., our subsidiary that holdsdirect and indirect ownership interests in our shopping malls;

➤ “ECISA Participações” are to ECISA Participações S.A., our subsidiary that holds direct and indirectownership interests in our shopping malls;

➤ “EGEC” are to Empresa Gerenciadora de Enpreendimentos Comerciais S.A., our subsidiary thatprovides, among others, management, consulting and marketing services for shopping, commercial andbusiness centers;

➤ “EGEC PAR II” are to EGEC PAR II Participações Ltda., our indirect subsidiary that holds ownershipinterest in GS Shopping Center S.A.;

➤ “EMCE” are to EMCE—Empresa Cogendura de Energia Ltda., our indirect subsidiary that rentsequipment for electricity production for NorteShopping;

➤ “EPI” are to Empresa Patrimonial Industrial IV S.A., our indirect subsidiary that holds our ownershipinterest in Shopping Center Iguatemi Belém, Amazonas Shopping and Shopping Center IguatemiMaceió;

➤ “Equity International” are to Equity International Management, LLC and its subsidiaries andaffiliates;

➤ “Esplanada Shopping” are to Esplanada Shopping, located in Sorocaba, São Paulo;

➤ “Eximia” are to Eximia Participações e Empreendimentos Ltda., our indirect subsidiary that holds ourownership interest in Big Shopping and Minas Shopping;

➤ “Goiânia Shopping” are to Goiânia Shopping, located in Goiânia, Goiás;

➤ “GS” are to GS Shopping Center S.A., our indirect subsidiary that holds our ownership interest inGoiânia Shopping;

➤ “GP Investments” are to GP Investments Ltd. and its subsidiaries;

➤ “Graúna” are to Graúna Holding Participações S.A., our indirect subsidiary that holds our ownershipinterest in Shopping Tamboré;

➤ “Gross commercial area” or “GCA” are to the sum of all commercial areas of shopping malls, whichincludes the gross leasable area and other commercial areas owned by third parties;

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➤ “Gross leasable area” or “GLA” are to the sum of all areas in shopping malls that are available forlease, except for kiosks. We calculate our own gross leasable area by subtracting from grosscommercial area the areas in shopping malls owned by third parties;

➤ “I-Fashion” are to I-Fashion, located in Niterói, Rio de Janeiro;

➤ “Iguatemi Campina Grande” are to Iguatemi Campina Grande, located in Campina Grande,Pernambuco;

➤ “In Mont Group” are to In Mont Group, a group of companies that was acquired by us on July 16,2007. We hold through In Mount Group our ownership interest in Fashion Mall, Niterói Plaza, IlhaPlaza and other companies that provide services to such shopping malls;

➤ “Liberty Mall” are to Liberty Mall, located in Brasília, Distrito Federal;

➤ “Minas Shopping” are to Minas Shopping, located in Belo Horizonte, Minas Gerais;

➤ “Natal Shopping” are to Natal Shopping, located in Natal, Rio Grande do Norte;

➤ “Nattca” are to Nattca Participações S.A., our indirect subsidiary that holds our ownership interest inShopping Estação;

➤ “NorteShopping” are to NorteShopping, located in Rio de Janeiro, Rio de Janeiro;

➤ “Pantanal Shopping” are to Pantanal Shopping, located in Cuiabá, Mato Grosso;

➤ “Ras Shopping Centers” are to Ras Shopping Centers Ltda., our indirect subsidiary that holds ourownership interest in Esplanada Shopping;

➤ “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil;

➤ “Recife Parking” are to Recife Parking Ltda., our indirect subsidiary that provides parking services atShopping Recife;

➤ “São Gonçalo Shopping” are to São Gonçalo Shopping, located in São Goncalo, Rio de Janeiro;

➤ “SDR” are to SDR—Empreendimentos Imobiliárias S.A., our indirect subsidiary that holds ourownership interest in Shopping Del Rey;

➤ “Shopping ABC” are to Shopping ABC, located in the city of Santo André, São Paulo;

➤ “Shopping Butantã” are to Shopping Butantã, located in São Paulo, São Paulo;

➤ “Shopping Campo Grande” are to Shopping Campo Grande, located in Campo Grande, Mato Grossodo Sul;

➤ “Shopping Center Mooca Empreendimentos Imobiliários” are to Shopping Center MoocaEmpreendimentos Imobiliários S.A., our indirect subsidiary that holds our ownership interest inShopping Mooca;

➤ “Shopping Città América” are to Shopping Città América, located in Rio de Janeiro, Rio de Janeiro;

➤ “Shopping Crystal Plaza” are to Shopping Crystal Plaza, located in Curitiba, Paraná;

➤ “Shopping Curitiba” are to Shopping Curitiba, located in Curitiba, Paraná;

➤ “Shopping Del Rey” are to Shopping Del Rey, located in Belo Horizonte, Minas Gerais;

➤ “Shopping Estação” are to Shopping Estação, located in Curitiba, Paraná;

➤ “Shopping Iguatemi Belém” are to Shopping Iguatemi Belém, located in Belém, Pará;

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➤ “Shopping Iguatemi Campina Grande” are to Shopping Iguatemi Campina Grande, located inCampina Grande, Paraíba;

➤ “Shopping Iguatemi Caxias do Sul” are to Shopping Iguatemi Caxias do Sul, located in Caxias do Sul,Rio Grande do Sul;

➤ “Shopping Iguatemi Maceió” are to Shopping Iguatemi Maceió, located in Maceió, Alagoas;

➤ “Shopping Independência” are to Shopping Independência, located in Juiz de Fora, Minas Gerais;

➤ “Shopping Itaipu Multicenter” are to Shopping Itaipu Multicenter, located in Niterói, Rio de Janeiro;

➤ “Shopping Jundiaí” are to Shopping Jundiaí, located in Jundiaí, São Paulo;

➤ “Shopping Center Mooca” are to Shopping Center Mooca, located in São Paulo, São Paulo;

➤ “Shopping Mueller” are to Shopping Center Mueller, located in Joinville, Santa Catarina;

➤ “Shopping Piracicaba” are to Shopping Piracicaba, located in Piracicaba, São Paulo;

➤ “Shopping Center Raposo Tavares” are to Shopping Center Raposo Tavares, located in Cotia, SãoPaulo;

➤ “Shopping Recife” are to Shopping Recife, located in Recife, Pernambuco;

➤ “Shopping Tamboré” are to Shopping Tamboré, located in Tamboré, São Paulo;

➤ “Shopping Villa Lobos” are to Shopping Villa Lobos, located in São Paulo, São Paulo;

➤ “Shopping Vitória” are to Shopping Vitória, located in Vitória, Espírito Santo;

➤ “SISA” are to Sociedade Independência Imóveis S.A., our indirect subsidiary that organizes,implements and manages real estate and commercial developments, particularly in shopping malls;

➤ “SPE Chance” are to SPE Chance Participações S.A., our subsidiary that holds our ownership interestin Rio Plaza Shopping, Niterói Plaza Shopping, São Conrado Fashion Mall and Shopping Ilha Plaza;

➤ “SPE Indianápolis” are to SPE Indianápolis Participações S.A., our subsidiary that holds ourownership interest in Shopping Pantanal;

➤ “SPE Mônaco” are to SPE Mônaco Participações S.A., our subsidiary that holds our ownershipinterest in Natal Shopping;

➤ “SPE Monza” are to SPE Monza Participações S.A., our subsidiary that holds our ownership interestin Shopping Center Mooca;

➤ “SPE Xangai” are to SPE Xangai Participações S.A., our subsidiary that holds our ownership interestin Shopping Raposo Tavares;

➤ “TopShopping” are to Top Shopping, located in Nova Iguaçú, Rio de Janeiro;

➤ “U.S. dollars,” “dollars,” “dollar” or “US$” are to U.S. dollars, the official currency of the UnitedStates;

➤ “Villa Lobos Parking” are to Villa Lobos Parking Ltda., our indirect subsidiary that provides parkingservices at Shopping Villa Lobos; and

➤ “West Shopping Rio” are to West Shopping Rio, located in Rio de Janeiro, Rio de Janeiro.

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This offering memorandum is not an offer to sell the notes and we are not soliciting an offer to buy thenotes in any jurisdiction in which the offer or sale is prohibited. Neither the delivery of this offeringmemorandum nor any sale made under the terms described herein shall imply that the information hereinis correct as of any date after the date hereof.

NONE OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATEOR FOREIGN SECURITIES COMMISSION OR OTHER REGULATORY AGENCY HASAPPROVED OR DISAPPROVED OF THE NOTES OFFERED HEREBY OR DETERMINED IF THISOFFERING MEMORANDUM IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THECONTRARY IS A CRIMINAL OFFENSE.

This offering is being made in reliance upon exemptions from registration under the Securities Act for anoffer and sale of securities which does not involve a public offering. The notes will be initially purchasedby UBS Securities LLC and Citigroup Global Markets Limited (collectively, the “initial purchasers”) inaccordance with such exemptions. If you purchase any of the notes, you will be deemed to make certainacknowledgments, representations and agreements set forth herein under the caption “TransferRestrictions.” You may be required to bear the financial risks of this investment for an indefinite periodof time.

We prepared this offering memorandum solely for use in connection with this offering. In accepting thisoffering memorandum, you have agreed that this offering memorandum is highly confidential and thatyou will hold the information contained or referred to herein in confidence. We and the initial purchasersreserve the right to reject any offer to purchase any of the notes for any reason, or to sell less than theprincipal amount of the notes that any prospective purchaser has subscribed. This offering memorandumis personal to each offeree and is not an offer to any other person or to the public generally to subscribefor the notes. You represent that you are basing your investment decision solely on this offeringmemorandum and your own examination of us and the terms of this offering. You cannot distribute thisoffering memorandum or the information contained in it to any person other than your professionaladvisor without our prior written consent. You cannot make any photocopies of this offeringmemorandum or any documents delivered in connection with it. If you do not purchase any of the notesor if this offering is terminated, you agree to return this offering memorandum and all documentsdelivered in connection with this offering to Citigroup Global Markets Limited, Citigroup Centre,Canada Square, London E145LB and to UBS Securities LLC, 677 Washington Blvd., Stamford,Connecticut 06901, Attention: Debt Yield Capital Markets.

By receiving this offering memorandum and by purchasing the notes, you acknowledge that (1) you havehad the opportunity to ask us for and to review, and you have received and reviewed, all additionalinformation considered by you to be necessary to verify the accuracy of or to supplement the informationpresented in this offering memorandum, (2) you have not relied on the initial purchasers or any personaffiliated with any initial purchaser in connection with investigating the accuracy of such information oryour investment decision and (3) no person has been authorized to give information or to make anyrepresentation concerning us or the notes other than as contained in this offering memorandum andinformation given by our duly authorized officers and employees in connection with your examination ofus and the terms of this offering. You cannot rely on any such other information or representation.

The initial purchasers make no representation or warranty, express or implied, concerning the accuracyor completeness of the information in this offering memorandum, and nothing contained in this offeringmemorandum is, or shall be relied upon as, a promise or representation, from an initial purchaserwhether as to the past or the future.

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We cannot give you any assurance and you should not assume that the information contained in thisoffering memorandum is accurate or complete after the date appearing on the cover page of this offeringmemorandum. Our business, financial condition, results of operations, cash flows and prospects mayhave changed since that date.

The contents of this offering memorandum do not constitute legal, business or tax advice and neither wenor the initial purchasers are making any representation to any purchaser of the notes and guaranteesregarding the legality of an investment by such purchaser under any legal investment or similar laws orregulations. You should consult your own legal, business and tax advisors as to legal, business or taxadvice related to a purchase of the notes.

Notwithstanding anything herein to the contrary, investors may disclose to any person, withoutlimitation of any kind, the US federal or state income tax treatment and tax structure of the offering andall materials of any kind (including opinions or other tax analyses) that are provided to the investorsrelating to such tax treatment and tax structure. However, any information relating to the US federalincome tax treatment or tax structure shall remain confidential (and the foregoing sentence shall notapply) to the extent reasonably necessary to enable any person to comply with applicable securities laws.For this purpose, “tax structure” means any facts relevant to the US federal or state income taxtreatment of the offering but does not include information relating to the identity of the issuer of thesecurities, the issuer of any assets underlying the securities, or any of their respective affiliates that areoffering the securities.

The notes are expected to be eligible for trading in The PORTALSM Market. Notes sold in reliance onRule 144A under the Securities Act will initially be represented by one or more global certificates, andnotes sold to persons other than U.S. persons in reliance on Regulation S under the Securities Act willinitially be represented by a separate single global certificate, in each case in fully registered form withoutcoupons, and each such global certificate will be registered in the name of a nominee of The DepositoryTrust Company, New York, New York, as depositary. See “Form of Notes.”

You must comply with all applicable laws and regulations (including obtaining required consents,approvals or permissions) in force in any jurisdiction in which you purchase, offer or sell the notes.Neither we nor the initial purchasers have any responsibility for any purchase, offer or sale of the notesby you.

If you have any questions relating to this offering memorandum or this offering, or if you reasonablyrequire additional information in connection with your investment in the notes and guarantees, directyour questions to the initial purchasers or us.

In connection with this offering, the initial purchasers participating in this offering may engage intransactions that stabilize, maintain or otherwise affect the price of the notes. Specifically, the initialpurchasers may over-allot in connection with this offering, may bid for and purchase notes in the openmarket and may impose penalty bids. For a description of these activities, see “Plan of distribution.”

NOTICE TO RESIDENTS OF BRAZIL

The notes have not been, and will not be, registered with the Comissão de Valores Mobiliários, or theCVM, the Brazilian securities commission. Any public offering or distribution, as defined under Brazilianlaws and regulations, of the notes in Brazil is not permitted without such prior registration. Documentsrelating to the offering of the notes, including this offering memorandum, as well as information

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contained herein, may not be provided or distributed to the public in Brazil, as the offering of the notes isnot a public offering of securities in Brazil, nor may they be used in connection with any offer forsubscription or sale of the notes to the public in Brazil. Each of the initial purchasers has agreed not tooffer or sell the notes in Brazil, except in circumstances that do not constitute a public offering ordistribution of securities under applicable Brazilian laws and regulations or pursuant to an expressexemption of registration with the CVM, pursuant to Brazilian law and regulations.

NOTICE TO MEMBERS OF THE PUBLIC OF THE CAYMAN ISLANDS

SECTION 194 OF THE COMPANIES LAW (2007 REVISION) OF THE CAYMAN ISLANDSPROVIDES THAT AN EXEMPTED COMPANY (SUCH AS BR MALLS FINANCE) THAT IS NOTLISTED ON THE CAYMAN ISLANDS STOCK EXCHANGE IS PROHIBITED FROM MAKING ANYINVITATION TO THE PUBLIC IN THE CAYMAN ISLANDS TO SUBSCRIBE FOR ANY OF ITSNOTES. EACH PURCHASER OF THE NOTES AGREES THAT NO INVITATION MAY BE MADETO THE PUBLIC IN THE CAYMAN ISLANDS TO SUBSCRIBE FOR THE NOTES.

NOTICE TO INVESTORS WITHIN THE PHILIPPINES

As stated above, exempt transactions under the Securities Regulation Code include the sale to anynumber of “qualified buyers”. In this regard, a notice of exemption under SEC form 10-1 must be filedwith the SEC within ten days after the sale of the securities. Moreover, the following statement (in boldface, prominent type) is required to be disclosed to the offerees:

THE SECURITIES BEING OFFERED OR SOLD HAVE NOT BEEN REGISTERED WITH THESECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES REGULATION CODE.ANY FUTURE OFFER OR SALE THEREOF IS SUBJECT TO REGISTRATION REQUIREMENTSUNDER THE CODE UNLESS SUCH OFFER OR SALE QUALIFIES AS AN EXEMPTTRANSACTION.

“qualified buyers” are: (i) banks, (ii) registered investment houses, (iii) insurance companies, (iv) pensionfunds or retirement plans maintained by the Government of the Philippines or any political subdivisionthereof, or managed by a bank or a trust entity licensed by the Bangko Sentral ng Pilipinas,(v) investment companies, and (vi) such other persons as the SEC may determine as qualified buyers, onthe basis of such factors as financial sophistication, net worth, knowledge, and experience in financialand business matters, or amount of assets under management.

NOTICE TO INVESTORS IN SINGAPORE

Any offer of debt securities to prospective investors in Singapore (whether the issuer is a Singaporeresident issuer or a foreign issuer) must be made in accordance with the prospectus requirements of theSecurities and Futures Act, Chapter 289 of Singapore Statutes.

In general, a prospectus is required to be lodged with, and registered by, Monetary Authority ofSingapore, or MAS, prior to any offer of debt securities in Singapore, although certain categories ofprospective investors may be offered debt securities without the issuer having to register a prospectus.

SALES TO PROFESSIONAL INVESTORS WITHIN HONG KONG

The law relating to this area changed on December 3, 2004 when new legislation, the Companies(Amendment) Ordinance (“CAO”), came into effect. The following constitutes the selling restrictionapplicable to the sale of notes to “professionals” within Hong Kong since that date.

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Each initial purchaser has represented and agreed that:

(a) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, anynotes other than (i) to persons whose ordinary business is to buy or sell shares or debentures(whether as principal or agent); or (ii) to “professional investors” as defined in the Securities andFutures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (iii) inother circumstances which do not result in the document being a “prospectus” as defined in theCompanies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the publicwithin the meaning of that Ordinance; and

(b) it has not issued or had in its possession for the purposes of issue, and will not issue or have in itspossession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement,invitation or document relating to the notes, which is directed at, or the contents of which are likelyto be accessed or read by, the public of Hong Kong (except if permitted to do so under the securitieslaws of Hong Kong) other than with respect to notes which are or are intended to be disposed ofonly to persons outside Hong Kong or only to “professional investors” as defined in the Securitiesand Futures Ordinance and any rules made under that Ordinance.

NOTICE TO RESIDENTS OF EUROPEAN ECONOMIC AREA

In relation to each Member State of the European Economic Area which has implemented the ProspectusDirective (each, a “Relevant Member State”), each initial purchaser has represented and agreed that witheffect from and including the date on which the Prospectus Directive is implemented in that MemberState (the “Relevant Implementation Date”) it has not made and will not make an offer of notes to thepublic in that Relevant Member State, except that it may, with effect from and including the RelevantImplementation Date, make an offer of notes to the public in that Relevant Member State:

(a) in (or in Germany, where the offer starts within) the period beginning on the date of publication of aprospectus in relation to those notes which has been approved by the competent authority in thatRelevant Member State or, where appropriate, approved in another Relevant Member State andnotified to the competent authority in that Relevant Member State, all in accordance with theProspectus Directive and ending on the date which is 12 months after the date of such publication;

(b) at any time to legal entities which are authorised or regulated to operate in the financial markets or,if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(c) at any time to any legal entity which has two or more of (I) an average of at least 250 employeesduring the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annualnet turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

(d) at any time in any other circumstances which do not require the publication by the Issuer of aprospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of notes to the public” in relation to anynotes in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the notes to be offered so as to enable an investor todecide to purchase or subscribe the notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State and the expression “ProspectusDirective” means Directive 2003/71/EC and includes any relevant implementing measure in eachRelevant Member State.

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United Kingdom

Each initial purchaser has represented and agreed that:

(a) in relation to notes which have a maturity of one year or more and which arc to be admitted to theOfficial List, during the period up to but excluding the date on which Directive 2003/71/EC/theProspectus Directive is implemented in the United Kingdom (the “Implementation Date”), it has notoffered or sold and will not offer or sell any notes to persons in the United Kingdom prior toadmission of such notes to listing in accordance with Part VI of the Financial Services and MarketsAct 2000 (the “FSMA”) except to persons whose ordinary activities involve them in acquiring,holding, managing or disposing of investments (as principal or agent) for the purposes of theirbusinesses or otherwise in circumstances which have not resulted and will not result in an offer tothe public in the United Kingdom within the meaning of the Public Offers of Securities Regulations1995 (as amended) or the FSMA;

(b) in relation to notes which have a maturity of one year or more and which are not to be admitted tothe Official List, during the period up to but excluding the Implementation Date, it has not offeredor sold and will not offer or sell any such notes to persons in the United Kingdom except to personswhose ordinary activities involve them in acquiring, holding, managing or disposing of investments(as principal or agent) for the purposes of their businesses or otherwise in circumstances which havenot resulted and will not result in an offer to the public in the United Kingdom within the meaningof the Public Offers of Securities Regulations 1995 (as amended);

(c) in relation to any notes which have a maturity of less than one year, (i) it is a person whose ordinaryactivities involve it in acquiring, holding, managing or disposing of investments (as principal oragent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell anynotes other than to persons whose ordinary activities involve them in acquiring, holding, managingor disposing of investments (as principal or as agent) for the purposes of their businesses or who it isreasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) forthe purposes of their businesses where the issue of the notes would otherwise constitute acontravention of Section 19 of the FSMA by the Issuer;

(d) it has only communicated or caused to be communicated and will only communicate or cause to becommunicated an invitation or inducement to engage in investment activity (within the meaning ofSection 21 of the FSMA) received by it in connection with the issue or sale of any notes incircumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantors;and

(e) it has complied and will comply with all applicable provisions of the FSMA with respect to anythingdone by it in relation to any notes in, from or otherwise involving the United Kingdom.

NOTICE TO NEW HAMPSHIRE RESIDENTS

Neither the fact that a registration statement or an application for a license has been filed under RSA421-B with the State of New Hampshire nor the fact that a security is effectively registered or a person islicensed in the State of New Hampshire implies that any document filed under RSA 421-B is true,complete and not misleading. Neither any such fact nor the fact than an exemption or exception isavailable for a security or a transaction means that the Secretary of State of the State of New Hampshirehas passed in any way upon the merits or qualifications of, or recommended or given approval to, anyperson, security or transaction. It is unlawful to make, or cause to be made, to any prospectivepurchaser, customer or client any representation inconsistent with the provisions of this paragraph.

ix

Forward-looking statementsThis offering memorandum contains estimates and forward-looking statements, principally in “RiskFactors,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”and “Business.” Some of the matters discussed concerning our business, financial condition, results ofoperations, cash flow and prospects include estimates and forward-looking statements within themeaning of the Securities Act and the Securities Exchange Act of 1934, as amended, or the Exchange Act.Our estimates and forward-looking statements are based primarily on our current expectations andestimates of future events and trends, which affect or may affect our businesses, financial condition,results of operations, cash flow and prospects. Although we believe that these estimates and forward-looking statements are based on reasonable assumptions, they are subject to several risks anduncertainties and are made in light of information currently available to us.

Our estimates and forward-looking statements may be influenced by the following factors:

➤ general economic, political, and business conditions in Brazil and the regions in which we operate;

➤ fluctuations in inflation and prevailing interest rates in Brazil;

➤ changes in the retail, shopping mall and real estate markets in Brazil;

➤ our ability to successfully implement our business strategy, including our ability to (i) acquireadditional interests in the shopping malls in which we currently participate; (ii) acquire interests inshopping malls owned by third parties; (iii) identify properties suitable for the development of newshopping malls; and (iv) enter into new contracts for the provision of shopping mall managementservices and of the leasing of shopping mall stores and common spaces;

➤ our ability to successfully manage our business in the future;

➤ our ability to obtain additional financing on reasonable terms and conditions;

➤ changes in the level of retail sales in Brazil;

➤ introduction of new laws and/or regulations or of amendments to current laws and/or regulationsapplicable to the shopping mall, real estate and retail markets in Brazil, including those related to theenvironment or urban planning;

➤ governmental intervention resulting in changes to applicable taxes or the regulatory environment inBrazil;

➤ competition in the Brazilian shopping mall market in Brazil and in the regions in which we operate;

➤ force majeure events; and

➤ the other risk factors discussed under “Risk Factors.”

The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” andsimilar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and we undertake no obligation to updateor to review any estimate and/or forward-looking statement because of new information, future events orother factors. Estimates and forward-looking statements involve risks and uncertainties and are notguarantees of future performance. Our future results may differ materially from those expressed in theseestimates and forward-looking statements. In light of the risks and uncertainties described above, theestimates and forward-looking statements discussed in this offering memorandum might not occur andour future results and our performance may differ materially from those expressed in these forward-looking statements. Because of these uncertainties, you should not make any investment decision basedon these estimates and forward-looking statements.

x

Presentation of financial and other informationFINANCIAL STATEMENTS

We maintain our books and records in reais, and we prepare our financial statements in accordance withaccounting principles generally accepted in Brazil, or Brazilian GAAP, which are based on:

➤ Brazilian Law No. 6,404/76, as amended by Brazilian Law No. 9,457/97, Brazilian LawNo. 10,303/01, which are referred to hereinafter as the Brazilian Corporate Law and rules andregulations enacted by the CVM; and

➤ the accounting standards issued by the Brazilian Institute of Independent Accountants (Instituto dosAuditores Independentes do Brasil), or the IBRACON, and the Brazilian Federal Accounting Council(Conselho Federal de Contabilidade), or the CFC.

Brazilian GAAP differs in certain significant respects from accounting principles generally accepted in theUnited States, or U.S. GAAP and from International Financial Reporting Standards, or IFRS. There aresignificant differences between U.S. GAAP and IFRS and Brazilian GAAP. The financial statementscontained in this offering memorandum differ from those that would be prepared under U.S. GAAP orIFRS. We have made no attempt to identify or quantify the impact of those differences. No reconciliationto U.S. GAAP or IFRS of any of the financial statements presented in this offering memorandum hasbeen prepared for the purposes of this offering memorandum or for any other purposes. There can be noassurance that any such reconciliation would not identify material quantitative differences as well asdisclosures and presentation differences between our financial statements as prepared in accordance withBrazilian GAAP and the financial statements as prepared under U.S. GAAP or IFRS.

This offering memorandum includes audited combined consolidated financial information and pro formacombined consolidated financial information that should be read in conjunction with, and qualified inentirety by, our financial statements, the notes thereto and the report of our independent auditors, aswell as the sections “Summary Financial Information”, “Selected Financial Information”, “UnauditedCondensed Consolidated Pro Forma Financial Information” and “Management’s Discussion andAnalysis of Financial Condition and Results of Operations.”

The following information is included in this offering memorandum:

Combined consolidated financial statements.

This offering memorandum includes our (i) combined consolidated financial statements as of and for theyears ended December 31, 2004, 2005 and 2006, which have been audited by PricewaterhouseCoopersAuditores Independentes in accordance with auditing standards applicable in Brazil, as stated in theirreport included elsewhere in this offering memorandum, and (ii) unaudited consolidated interim financialinformation as of June 30, 2007 and for the six-month periods ended June 30, 2006 (combined) and2007. Our combined consolidated financial statements as of and for the years ended December 31, 2004,2005 and 2006 included in this offering memorandum reflect our operations as if we had existed andhad held the following ownership interests since January 1, 2004:

➤ 100% of ECISA;

➤ 99.8% of SDR and EMCE;

➤ 60.2% of Campo Grande Parking;

➤ 32.5% of ASCR and of Recife Parking; and

➤ 26.9% of Villa Lobos Parking.

xi

Presentation of financial and other information

For more information on the criteria used to create our combined consolidated financial statements, seenote 1(c) to our combined consolidated financial statements as of and for the year ended December 31,2004, 2005 and 2006 included elsewhere in this offering memorandum and “Management’s Discussionand Analysis of Financial Conditions and Results of Operations.” Until October 10, 2006, we did nothave any operations. The purpose of our combined consolidated financial statements is to present theoperations of our current corporate structure as of December 31, 2006 on a historical basis, except withrespect to EGEC and DACOM whose results are included in our combined consolidated financialstatements as of October 10, 2006 (the date of their acquisition).

Unaudited condensed consolidated pro forma financial information.

Our unaudited condensed consolidated pro forma financial information as of and for the six monthsended June 30, 2007 includes adjustments made to our unaudited consolidated financial statements forsuch period in order to give effect to the EPI acquisition that occurred on April 12, 2007, the Graúnaacquisition that occurred on July 8, 2007, the In Mont acquisitions that occurred on July 16, 2007, andthe related issuance of non-convertible debentures and incurrence of bank financing as if they hadoccurred as of January 1, 2007 (for purposes of preparing our pro forma income statement) and June 30,2007 (for purposes of preparing our pro forma balance sheet and except for EPI, which was acquiredprior to such date and, accordingly, was already reflected in our consolidated balance sheet as ofJune 30, 2007). The pro forma adjustments and the criteria and assumptions adopted in the preparationof our pro forma financial information as of and for the six months ended June 30, 2007 are describedbelow in “Unaudited Condensed Consolidated Pro Forma Financial Information.”

MARKET SHARE

Certain industry, demographic, market and competitive data, including market forecasts, usedthroughout this offering memorandum were obtained from internal surveys, market research, publiclyavailable information and industry publications. We have made these statements on the basis ofinformation from third party sources that we believe are reliable, such as the Brazilian Association ofShopping Malls (Associação Brasileira de Shopping Centers), or ABRASCE, the Brazilian Association ofResearch Entities (Associação Brasileira de Empresas de Pesquisa), or ABEP, CB Richard Ellis, or CBRE,Cushman & Wakefield Semco Consultoria Imobiliária Ltda., or Cushman & Wakefield, the BrazilianInstitute of Public Opinion and Statistics (Instituto Brasileiro de Opinião Pública e Estatística) or IBOPE,the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), orIBGE, and the Brazilian Central Bank (Banco Central do Brasil), or the Central Bank, among others.Industry and government publications, including those referenced here, generally state that theinformation presented therein has been obtained from sources believed to be reliable, but that theaccuracy and completeness of such information is not guaranteed. Although we and the initial purchasershave no reason to believe that any of this information or these reports are inaccurate in any materialrespect, this information has not been independently verified. We and the initial purchasers do not makeany representation as to the accuracy of such information.

INFORMATION ON OUR SHOPPING MALLS

When we discuss our shopping malls, we use terms used in our industry, such as GLA and GCA. GLA isan indicator of the rent generation capacity of a shopping mall and its subsidiaries. GCA is used toindicate the size of the property and of the commercial area offered to shopping mall customers. Inaddition, all references to our ownership interests in shopping malls include ownership interests that havealready formally been transferred to us and ownership interests that are in the process of beingtransferred to us, including 35.0% of Top Shopping, 100.0% of Shopping Tamboré and 0.06% of

xii

Presentation of financial and other information

Amazonas Shopping. Moreover, except as otherwise indicated, the description of our shopping malls,including their annual average number of visitors, is based on information and estimates prepared inaccordance with internal and management controls of our shopping malls.

ROUNDING

Some percentages and certain figures included in this offering memorandum have been subject torounding adjustments. Accordingly, figures shown as totals in certain tables herein may not be anarithmetic aggregation of the figures that precede them.

Solely for the convenience of the reader, certain amounts included in “Summary Financial Information,”“Capitalization,” “Selected Financial Information” and elsewhere in this offering memorandum havebeen converted from reais into U.S. dollars using the exchange rate as reported by the Central Bank as ofJune 30, 2007 of R$1.9262 per US$1.00 or as of the indicated dates (subject to rounding adjustments).These conversions should not be considered representations that any such amounts have been, couldhave been or could be converted into U.S. dollars at that or at any other exchange rate as of that or anyother date. The real/dollar exchange rate may fluctuate, and the exchange rate as of June 30, 2006, orany other date, may not be indicative of future exchange rates. See “Exchange Rates” for informationregarding exchange rates for the Brazilian real since January 1, 2001.

xiii

SummaryThis summary highlights selected information about us and the notes we are offering. It does not containall of the information that may be important to you. Before deciding to invest in the notes, you shouldread this entire offering memorandum carefully for a more complete understanding of our business andthis offering, including our combined consolidated financial statements and the related notes and thesections “Presentation of Financial and Other Information”, “Summary Financial Information”, “RiskFactors”, “Selected Financial Information”, “Unaudited Condensed Consolidated Pro Forma FinancialInformation” and “Management’s Discussion and Analysis of Financial Condition and Results ofOperations” included elsewhere in this offering memorandum.

OVERVIEW

We are the leading company in the shopping mall sector in Brazil. We are the largest owner of shoppingmalls in terms of total gross leasable area, gross leasable area owned and number of shopping malls andthe largest provider of management and consulting services for shopping, commercial and businesscenters as well as leasing and merchandising services for stores and common spaces in shopping malls interms of gross commercial area, according to data provided by ABRASCE.

We currently hold ownership interests in 28 shopping malls, including one which is under constructionand one in which our interest is held through convertible debentures. On the date of this offeringmemorandum, the shopping malls that we own accounted for 975.2 thousand square meters in grosscommercial area and 826.9 thousand square meters in gross leasable area, with approximately fivethousand stores and total sales of R$6.9 billion in 2006. On average, we hold a 44.5% stake in theshopping malls we own, equal to 368.3 thousand square meters in gross leasable area. Our averageownership interest in each of the 28 shopping malls in our portfolio reflects the weighted average of ourownership interests in the individual shopping malls.

On the date of this offering memorandum, we provide management, leasing, marketing and consultingservices to 29 shopping and commercial centers, including management services for 17 of the 28shopping malls in which we hold ownership interests and marketing services for 20 of the 28 shoppingmalls in which we hold ownership interests. On the date of this offering memorandum, these mallsincluded 878.6 thousand square meters in gross commercial area with five thousand stores. We alsoprovide marketing services to the supermarket chains Pão de Açúcar and Sendas.

We are the only company in our sector with a presence throughout all of the regions of Brazil, holdingownership interests in shopping malls in each of the five regions of the country. In addition, our portfoliois strategically diversified according to our target customers’ income classes, covering consumers in allsuch classes.

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Pantanal Shopping (MT): 10% Araguaia Shopping (GO): 50% Shopping Campo Grande (MS): 65.1% Goiânia Shopping (GO): 49.6%

Shopping Center Recife (PE): 31.1% Natal Shopping (RN): 45% Shopping Center Iguatemi Maceió (AL): 34.2%

NorteShopping (RJ): 74.1% Shopping ABC (SP): 0.7% Shopping Piracicaba (SP): 11.5% Big Shopping (MG): 13.0% Minas Shopping (MG): 1.0% TopShopping (RJ): 35% Shopping Del Rey (MG): 65% Independência Shopping (MG): 8% Shopping Villa-Lobos (SP): 39.7% Shopping Tamboré (SP): 100% Niterói Plaza (RJ): 100% Fashion Mall (RJ): 92.4% Ilha Plaza (RJ): 100% Rio Plaza (RJ): 100% Esplanada Shopping (SP): 2.4%

Amazonas Shopping (AM): 17.2% Shopping Iguatemi Belém (PA): 12.2%

Shopping Center Iguatemi Caxias (RS): 45.5% Shopping Estação (PR): 100% Shopping Curitiba (PR): 35%Shopping Mueller Joinville (SC): 10%

The following table contains certain key information regarding the shopping malls in which we holdownership interests:

As of the date of this offering memorandum(except if otherwise indicated)

Shopping Center State

OurInterests

(%)GCA

(m2)(1)GLA

(m2)(1)

Number ofStores

(in units)(2) Visitors(3)Total Sales

(R$)(4)

(amounts in thousands except if otherwise indicated)Shopping Recife(5) ............................ PE 31.1 78.4 61.2 410 24,000 206,656NorteShopping .................................. RJ 74.1 98.4 77.8 334 28,800 195,353Niterói Plaza(6) ................................. RJ 100.0 34.2 31.9 236 21,360 106,461Shopping Villa Lobos ........................ SP 39.7 27.4 27.4 216 8,400 79,946Shopping ABC(7) .............................. SP 0.7 48.7 46.5 236 11,000 78,173Minas Shopping(6) ............................ MG 1.0 32.3 28.6 184 11,500 69,399Amazonas Shopping(8)(9) ................. AM 17.2 44.6 38.5 206 15,600 92,219Shopping Center Iguatemi Belém(8)... PA 12.2 34.8 18.4 187 16,200 51,116Shopping Campo Grande .................. MS 65.1 57.4 28.2 165 9,000 51,909Fashion Mall(6)................................. RJ 92.4 14.1 14.1 144 3,600 32,672Shopping Curitiba(9) ......................... PR 35.0 28.3 24.0 154 11,200 38,780Shopping Del Rey.............................. MG 65.0 59.3 37.4 176 14,400 62,152Pantanal Shopping(10) ...................... MT 10.0 43.3 43.3 202 9,000 43,462Shopping Tamboré(9)........................ SP 100.0 32.1 32.1 160 12,000 50,578TopShopping(11) .............................. RJ 35.0 18.1 18.1 133 9,600 47,659Shopping Center Iguatemi

Maceió(8)(9).................................. AL 34.2 33.9 24.2 158 9,600 57,576Shopping Center Piracicaba(8)(9) ...... SP 11.5 27.8 27.8 145 7,200 37,491Shopping Estação(10)(12).................. PR 100.0 54.6 54.6 153 5,400 38,212Shopping Iguatemi Caxias do Sul ...... RS 45.5 27.6 15.1 94 10,800 27,919Goiânia Shopping(17)........................ GO 49.6 19.3 16.9 119 7,300 32,340Natal Shopping(9) ............................. RN 45.0 17.1 17.1 133 7,200 21,734Ilha Plaza(6) ...................................... RJ 100.0 20.3 20.3 142 7,200 32,248Big Shopping(6)................................. MG 13.0 17.6 17.6 85 12,000 34,553Araguaia Shopping(10)(13) ............... GO 50.0 18.5 18.5 100 15,600 21,928Rio Plaza(6)....................................... RJ 100.0 6.6 6.6 44 2,300 16,248Shopping Independência(14).............. MG 8.0 25.4 25.4 164 — —Esplanada Shopping(15) .................... SP 2.4 28.0 28.0 164 10.8 50,578Shopping Mueller Joinville(16) .......... SC 10.0 27.0 27.0 134 7,320 42,540

Total .......................................... 975.2 826.9 4,818 308,380 1,619.9

(footnotes on following page)

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(1) One square meter is equal to 10.76 square feet.(2) Includes stores within the gross leasable area we own and stores within the gross leasable area

owned by third parties.(3) For the year ended December 31, 2006.(4) Total sales for the three months ended March 31, 2007.(5) ASCR, a company in which we have a 32.5% ownership interest, manages this shopping mall.(6) Ownership interest acquired in July 2007. In relation to Fashion Mall, an additional ownership

interest of 10.0% was acquired in October 2007. In relation to Ilha Plaza, an additional ownershipinterest of 17.5% was acquired in September 2007.

(7) Ownership interest acquired in April 2007.(8) Ownership interest acquired through EPI in April 2007. In addition, the additional ownership

interest we acquired in Amazonas Shopping in May 2007 is currently in the process of beingregistered pursuant to Brazilian law.

(9) Ownership interest acquired in May 2007. In addition, the ownership interest acquired in ShoppingTamboré in May 2007 is currently in the process of being registered pursuant to Brazilian law.

(10) Ownership interest acquired in March 2007.(11) Subject to a purchase and sale agreement for a 35% ownership interest that will be effective within

120 days from June 22, 2007.(12) Ownership interest acquired in February 2007. Includes the Estação Convention Center, an anchor

store with 25 thousand square meters of gross leasable area.(13) Ownership interest consists of convertible debentures with profit sharing rights through which we

have, among others, the right to receive 50% of the shopping mall’s net income and to appoint theshopping mall’s management.

(14) Not yet in operation, scheduled to open in March 2008.(15) Ownership interest acquired in August 2007.(16) Ownership interest acquired in October 2007.(17) Ownership interest acquired between January and October 2007.

Our gross revenue from rent and services, or gross revenue, is derived from the following activities:(i) our ownership of shopping malls, through leasing stores and other merchandising spaces, parking lotfees and up-front transfer fees from store leasors, or key money, which represented 85.0% of our grossrevenue for the six months ended June 30, 2007; (ii) management, leasing, consulting and merchandisingservices for stores and common spaces in shopping malls, which represented 15.0% of our gross revenuefor the six months ended June 30, 2007.

Since October 2006, we have acquired the following interests in 21 new shopping malls, increasing ourown gross leasable area by approximately 244 thousand square meters by means of total investments ofR$1.5 billion: (i) on October 2, 2006, 30.0% of Shopping Del Rey (an increase in our ownershipinterest); (ii) on January 2, 2007, 38.7% of Goiânia Shopping; (iii) on February 5, 2007, 100.0% ofShopping Estação; (iv) on March 1, 2007, 10.0% of Pantanal Shopping; (v) on March 1, 2007,convertible debentures with participation in the profits of the company responsible for the developmentof Araguaia Shopping, which give us, among other rights, the right to receive 50% of the net income ofAraguaia Shopping and the right to appoint its officers and directors; (vi) on April 11, 2007, 0.7% ofShopping ABC; (vii) on April 11, 2007, 6.9% of Goiânia Shopping (an increase in our ownershipinterest); (viii) on April 13, 2007, 8.5% of Shopping Center Piracicaba, 12.2% of Shopping CenterIguatemi Belém, 11.1% of Amazonas Shopping and 16.6% of Shopping Iguatemi Maceió by means ofthe acquisition of the total capital stock of EPI; (ix) on May 2, 2007, 17.6% of Shopping IguatemiMaceió (an increase in our ownership interest); (x) on May 14, 2007, 6.1% of Amazonas Shopping (anincrease in our ownership interest); (xi) on May 18, 2007, 100.0% of Shopping Tamboré; (xii) onMay 21, 2007, 3.0% of Shopping Center Piracicaba (an increase in our ownership interest); (xiii) onMay 22, 2007, 35.9% of Natal Shopping; (xiv) on May 23, 2007, 20.0% of Shopping Curitiba; (xv) on

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June 22, 2007, 35.0% of Top Shopping; (xvi) on June 28, 2007, 15.0% of Shopping Curitiba (anincrease in our ownership interest); (xvii) on June 29, 2007, 9.1% of Natal Shopping (an increase in ourownership interest); (xviii) on July 3, 2007, 1% of Minas Shopping; (xix) on July 3, 2007, 13.0% of BigShopping; (xx) on July 16, 2007, 100.0% of Niterói Plaza Shopping; (xxi) on July 16, 2007, 82.4% ofFashion Mall; (xxii) on July 16, 2007, 82.5% of Ilha Plaza; (xxiii) on July 16, 2007, 100.0% of RioPlaza; (xxiv) on August 3, 2007, 2.4% of Esplanada Shopping; (xxv) on August 9, 2007, 12.9% ofShopping Villa-Lobos (an increase in our ownership interest); (xxvi) on September 27, 2007, 17.5% ofIlha Plaza (an increase in our ownership interest); (xxvii) on October 4, 2007, 10.0% of Fashion Mall(an increase in our ownership interest), (xxviii) on October 19, 2007, 10.0% of Shopping MuellerJoinville by means of the acquisition of the total capital stock of KGM37 Empreendimentos Ltda; and(xxix) on October 22, 2007, 4.0% of Goiânia Shopping (an increase in our ownership interest). Inaddition, on March 13, 2007, we acquired a 99.9% ownership interest in DEICO, which is responsiblefor the management, leasing and/or planning of 13 shopping malls.

We believe we have a strong financial position with growth in net revenue, EBITDA and net income since2004. The following table presents certain consolidated financial and operational information, including,where indicated, on a pro-forma basis, for the indicated periods.

As of and for the Year EndedDecember 31,

2004 2005 2006

Audited

(amounts in millions of R$,except as otherwise indicated)

Net revenue from rent and services................................................ 65,684 73,413 85,951EBITDA(1) .................................................................................... 33,998 41,878 53,751EBITDA margin(2) ........................................................................ 51.8% 57.0% 62.5%Net income (loss)........................................................................... 12,941 21,324 30,348Net margin(3)................................................................................ 19.7% 29.0% 35.3%Shopping centers GLA (in thousand square meters)(4)(5).............. 203.2 208.6 235.8Shopping centers (our ownership interest) GLA (in thousand

square meters)(5)(6)................................................................... 85.3 86.9 101.4As of and for the Six Months Ended

June 30,

2006 2007 2007

UnauditedPro-forma

Unaudited(7)

(amounts in thousands of R$,except as otherwise indicated)

Net revenue from rent and services................................................ 37,234 72,246 120,785Adjusted EBITDA(8) ..................................................................... 24,100 49,894 90,541Adjusted EBITDA margin(9) ......................................................... 64.7% 69.1% 75.0%Net income (loss) adjusted(10) ...................................................... 13,328 18,832 (48,413)Shopping centers GLA (in thousand square meters)(5)(6).............. 235.8 641.7 799.8Shopping centers (our ownership interest) GLA (in thousand

square meters)(6)(7)................................................................... 90.2 283.0 364.9

(1) EBITDA consists of operating income plus depreciation and amortization plus net financial results.EBITDA is not a financial performance measure calculated in accordance with Brazilian GAAP orU.S. GAAP, must not be considered as an alternative to net income, as an indicator of operatingperformance, or as an alternative to operating cash flows as an indicator of liquidity. EBITDA is notcalculated using a standard methodology and may not be comparable to the definition of EBITDAor similarly titled measures used by other companies. We believe that EBITDA allows a betterunderstanding not only of our financial performance but also of our ability to comply with ourobligations and obtain funds for our capital requirements. However, EBITDA presents limitations

(footnotes continued on following page)

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that impair its use as a measurement of our profits since it does not consider certain costs arisingfrom our business that might significantly impact our results of operations and liquidity, such asfinancial expenses, taxes and depreciation. See “Summary Financial Information.”

(2) Represents EBITDA divided by net revenue from rent and services.(3) Net income as a percentage of net revenue from rent and services.(4) Represents total gross leasable area of all shopping malls in which we hold an ownership interest

and does not reflect our ownership interest in each development.(5) One square meter is equal to 10.76 square feet.(6) Reflects our proportional interest in the total gross leasable area of all shopping malls in which we

hold an ownership interest.(7) For more information regarding our pro forma income statement, see “Unaudited Condensed

Consolidated Pro Forma Financial Information.”(8) Adjusted EBITDA consists of EBITDA, as adjusted for (i) non-recurring expenses related to our

initial public offering of common shares completed in May 2007, and (ii) non-recurring costs relatedto our corporate reorganization (see “—Recent Events” and “Principal Shareholders”). LikeEBITDA, Adjusted EBITDA is not a financial performance measure calculated in accordance withBrazilian GAAP or U.S. GAAP, and should not be considered as an alternative to net income, as anindicator of operating performance, or as an alternative to operating cash flows as an indicator ofliquidity. Adjusted EBITDA is not calculated using a standard methodology and may not becomparable to the definition of Adjusted EBITDA or similarly titled measures used by othercompanies.

(9) Represents adjusted EBITDA divided by net revenues from rent and services.(10) Consists of net income (loss), as adjusted for (i) non-recurring expenses related to our initial public

offering of common shares completed in May 2007, and (ii) non-recurring costs related to ourcorporate reorganization (see “—Recent Events”, “Selected Financial Information” and “PrincipalShareholders”).

COMPETITIVE STRENGTHS

We believe that our strengths are:

Strategically diversified portfolio of shopping malls. Our portfolio of shopping malls is strategicallydiversified with respect to both geographic location and target customer income segment. We own thelargest shopping mall in the Northeast region in terms of gross leasable area (Shopping Recife) as well asthe largest shopping mall targeted to the upper-middle income class (NorteShopping) of Brazil. The grossleasable area of the shopping malls that we own is distributed among several diverse regions of thecountry as follows: 52% in the Southeast, 13% in the Midwest, 13% in the Northeast, 15% in the Southand 7% in the North. Our portfolio includes shopping malls ranging from those targeting the low tomiddle income classes, such as Araguaia Shopping, to the upper-income class, such as Shopping Villa-Lobos and Fashion Mall. We believe our nationwide presence and our experience operating shoppingmalls that we target to different income classes (i) allows us to benefit from the economic growth of eachregion and income class, (ii) minimizes the impact of fluctuations in regional economies and sectors and(iii) provides us with a key competitive advantage for the implementation of our growth andconsolidation strategy.

Professional management and strong shareholder base. We have a team of professionals widelyrecognized in the market with significant experience in the shopping mall, real estate and financialsectors, as well as in management of businesses. Our compensation policy seeks to align the interests ofthese professionals with those of our shareholders through variable compensation and a stock optionplan that rewards strong performance and the attainment of specified goals. Our principal shareholdersbring together (i) ECISA, which has more than 50 years of experience in the construction and shopping

5

mall sectors, (ii) GP Investments’ experience in many successful private equity ventures, includinginvestments in Gafisa S.A., Equatorial Energia S.A., Lupatech S.A., ALL—América Latina Logística doBrasil, S.A. and Submarino S.A. and (iii) Equity International, led by Samuel Zell, one of the largestglobal real estate investors, with investments in emerging market companies such as Gafisa S.A., aninvestment held with GP Investments since 2005, and Desarrolladora Homex S.A.

Unique capacity for consolidation in the shopping mall industry. We believe the Brazilian shoppingmall industry presents unique growth opportunities for us. The combination of growth in retail sales andthe decrease in interest rates together with the fragmentation in the Brazilian shopping-center marketcreates a strong opportunity for both the development of new shopping mall projects and for theacquisition of ownership interests in existing shopping malls. We believe that we have competitiveadvantages to implement our growth strategy, such as (i) the successful experience of our managementteam and our principal shareholders in mergers and acquisitions; (ii) a willingness to invest in bothminority and majority interests, regardless of whether we are able to immediately manage the targetshopping mall; and (iii) privileged access to opportunities generated by the extensive network of ourshareholders’ contacts and the customer base of our subsidiaries EGEC, DACOM and DEICO. SinceOctober 2006, we have acquired ownership interests in 21 new shopping malls, adding approximately244 thousand square meters of gross leasable area to our portfolio.

Recognized, successful and growing services business. Our management, consulting and marketingservices for shopping malls and commercial and business centers represented approximately 15.0% ofour gross revenue from rent and services for the six months ended June 30, 2007. During the last nineyears, we believe we have developed a solid reputation for our services, resulting in us routinely securingnew clients while maintaining our existing client base, including those shopping malls in which we do nothold ownership interests. We also believe that our close relationships with owners of the shopping,commercial and business centers that we manage, together with our understanding of their operations,provides us with a significant competitive advantage for the implementation of our growth andconsolidation strategy. We provide these services to 29 shopping malls and commercial centers, includingsupermarket chains. We also believe that our services business has the potential to continue to grow asthe Brazilian shopping-center sector becomes increasingly professionalized.

Potential for growth with high margins and strong cash generation. From January 1, 2004 toDecember 31, 2006, we have demonstrated relatively high and consistent growth in our net revenue fromrent and services, with compound annual growth of 20.4% from 2004 to 2006, an increase of 94.0%from the six month period ended June 30, 2006 to the same period in 2007, and what we believe to behigh margins (EBITDA margins of 51.8% in 2004, 57.0% in 2005 and 62.5% in 2006 and an adjustedEBITDA margin of 69.1% for the six month period ended June 30, 2007), resulting in strong cash flowgeneration.

Strong relationships with retailers. We believe that the extensive base of our shopping and commercialcenters and business clients distinguishes us in the sectors in which we operate. Through the provision ofour services, we have established close relationships with a large number of retailers in Brazil, including:Lojas Americanas, Ponto Frio, Marisa, Casa & Vídeo, Leader Magazine, C&A, Riachuelo,Pernambucanas, Renner, Carrefour, Casas Bahia, Hiper Bompreço, and Pão de Açúcar. In addition, webelieve that our capacity for identifying anchor stores more suitable for new shopping mall projects, fromthe conceptual phase of such projects through when we turn spaces over to stores for operation,strengthens our relationships with retailers. We believe that attracting the best anchor stores is animportant factor in the success of a shopping mall, particularly during the start of its operations, whenintense marketing campaigns help position it in its region.

6

STRATEGY

We believe that the implementation of our principal commercial, financial and investment strategies willresult in improvements in the development of our operations, maximizing profitability for ourshareholders and generating advantages over our competitors. Our main strategies are:

Focus on the creation of value through acquisitions of ownership interests in shopping malls. We planto focus our efforts on implementing our strategy of growth through acquisitions. We have amanagement division exclusively dedicated to the prospecting, analysis and execution of shopping mallacquisitions, focusing on (i) increasing our ownership interests in the shopping malls that are already partof our ownership portfolio; (ii) acquiring ownership interests in shopping malls that we manage butwhich are not in our portfolio; (iii) acquiring ownership interests in other shopping malls that we do notmanage; and (iv) acquisitions of other companies, like us, in the shopping mall industry. Our growthstrategy focuses on generating value for our shareholders through acquisitions that provide adequatereturns, independent of the location, income segment of target customers, minimum percent ofownership interest and immediate control of the management of the shopping mall. We expect to use ourexpertise in managing shopping malls to improve the operations of those shopping malls that we acquire,further adding value to our investments.

Expand existing shopping malls and develop new shopping malls. We plan to take advantage ofopportunities to expand the shopping malls in which we hold ownership interests in order to (i) obtaineconomies of scale where certain fixed costs are not significantly affected by such expansions, and(ii) maximize our revenue from growth in such shopping malls. For example, we recently expanded ourNorteShopping shopping mall by 33 thousand square meters, making it one of the largest in the state ofRio de Janeiro in terms of gross leasable area, and we intend to begin the expansion of GoiâniaShopping, Amazonas Shopping, Shopping Tamboré, Shopping Iguatemi Caxias do Sul, Shopping CenterIguatemi Belém, Top Shopping, Minas Shopping, Niterói Plaza, Shopping Estação, Shopping IguatemiMaceió and Big Shopping by the end of 2008 (see “Business—Projects Under Development—ExpansionsScheduled to Occur in 2007 and 2008”). We also believe that the market for new shopping malls inBrazil presents significant potential for growth. We have already approved the general terms andconditions that will govern the development, construction and joint operation of two additionalshopping malls: one with 25 thousand square meters of planned gross leasable area in Granja Viana, aneighborhood in the municipality of Cotia, within the metropolitan area of São Paulo, and another with38 thousand square meters of planned gross leasable area (which can be expanded to a total 76 thousandsquare meters of gross leasable area) in the Mooca neighborhood in the city of São Paulo. Both shoppingmalls are scheduled to open in June 2009.

Expand our services business. We believe that our management, consulting and marketing services willbenefit from the accelerated growth of the shopping mall industry in Brazil. We expect increasedprofessionalism in the management of real estate properties will improve the demand for such services.We intend to continue to grow our services business by providing services to shopping malls we intend todevelop, shopping malls in which we hold ownership interests but for which we do not yet provideservices and shopping malls held by third parties that we believe would be in our interest to have in ourportfolio.

Implement standards of excellence throughout our operations. Using the same strategy adopted by ourshareholders for the companies in which they invest, we plan to implement standards of excellence in ouroperations, finances and personnel, by adopting leading practices such as zero-base budgeting, variablecompensation focused on the attainment of pre-defined goals and systematic monitoring of key

7

performance indicators. We will focus particular attention on the recruitment and retention of ouremployees, seeking to align their interests with those of our shareholders, including through the use ofstock options.

CORPORATE STRUCTURE

The chart on the following page shows our current shareholders, as well as our current shareholdingsand ownership interests in shopping malls:

8

31.0%

26.90%S.C.

Vila Lobos

S.C.Iguat. Caxias do

Sul

S.C.Independência

S.C.Campo Grande

S.C.Estação

S.C.Pantanal

S.C.Araguaia

ASCR EMCERecife

ParkingCampo Grande

ParkingSISA

S.CNorte Shopping

EGEC PAR II

GS Shopping

S.CGoiânia

NATTCA

CUIABÁ

SPEINDIANÁPOLIS

EGEC S.A.DACOM G DACOM D DEICOEPI S/A

S.C.ABC

S.C.Natal

S.C.Recife

S.C.Amazonas

S.C.Belém

S.C.Maceió

S.C.Piracicaba

S.C.Curitiba

Richard Paul Matheson

Dyl Empr. Ltda.

H. MathesonDrummond

Equity Intl.L. MathesonDrummond A. Wadih Arbex Carlos Medeiros NOVO MERCADOGP INVESTMENTS

Vila LobosParking

ECISAENGENHARIA (3)

SPEMONACO

ECISAPARTICIPAÇÕES (3)

S.C.Tamboré

Top Shopping

EXÍMIA

Minas Shopping

BigShopping

SPEMONZA

Graúna (3)

SDR SPE CHANCE

Rio Plaza

Ilha Plaza

Niterói Plaza

Fashion Mall

Recife Locadora CHRISTAL

S.C.Del Rey

0.68%

100%

100%

74.10%

100%

92.36%

12.20%

11.50%

17.20%

33.90%

45.50%

35%

12.82%

30%

100%75.83%100%90%

35%

13%

0.98%65.20%

50%

35%

12.72%

100%

78.65%.99.99%65.45%100%

0,01%

26.85%32.4561% 60.22% 32.46% 99.80%100%32.46%100% %001%001%8 100% 100% 100% 100% 100% 100% 100%

100%100%50%

19.10% 19.10% 13.75% 13.75% %93.1%93.1 0.99% 0.11% 30.43%

RAS

50%

Esplanada S.C.

4.85%

49.99%

SPE Mooca

60%

In Mont Group (1)

SPE XANGAI

100%

KGM37

S.C. MUELLER

10%

100%

Br Malls International Finance Ltd. (2)100%

(1) Reflects the corporate reorganization that we are currently implementing with respect to SPE Chance and its controlled subsidiaries and shopping centers. SPE Chanceacquired 100% of In Mont Group on July 16, 2007.

(2) Issuer of the notes.(3) Guarantor of the notes.

9

RECENT EVENTS

In November 2006, GP Investments and Equity International acquired an indirect ownership interest inECISA through us. In December 2006, ECISA became our wholly-owned subsidiary and ECISA’s formershareholders became our direct shareholders. Our other shareholders include Richard Paul Matheson, afounding shareholder of ECISA, who has significant experience in the shopping mall sector, and Adayl deBarros Stewart, the widow of Donald Stewart, another founder of ECISA. See “Principal Shareholders”.

In May 2007, we completed our initial public offering of 43,807,911 common shares, including commonshares in the form of Global Depositary Shares. Since the completion of our initial public offering, ourcommon shares have traded on the Novo Mercado segment of the BOVESPA.

Also in the first six months of 2007: we acquired (i) 6.9% of Goiânia Shopping, resulting in our holdinga total interest of 45.6%; (ii) 0.7% of Shopping ABC; (iii) 100% of the shares issued by EPI, which hasthe following ownership interests: (a) 8.5% of Shopping Piracicaba, (b) 12.2% of Shopping IguatemiBelém, (c) 11.1% of Amazonas Shopping and (d) 16.6% of Shopping Iguatemi Maceió; (iv) 17.6% ofShopping Iguatemi Maceió, resulting in our holding a total interest of 34.2%; (v) 100% of the anchorstore Âncora D’ in Amazonas Shopping, formerly owned by Redevco, resulting in our holding a total17.2% of Amazonas Shopping; (vi) 100% of Shopping Tamboré as well as other related assets; (vii) 3%of Shopping Piracicaba, resulting in our holding a total interest of 11.5%; (viii) 45% of Natal Shopping;(ix) 35% of Shopping Curitiba; (x) 35% of Top Shopping.

On July 23, 2007, we issued non-convertible unsecured debentures guaranteed by our subsidiaries ECISAParticipações, ECISA Engenharia and Graúna, with an aggregate principal amount of R$320.0 million.The transaction was consummated in the Brazilian capital markets. See “Management’s Discussion andAnalysis of Financial Condition and Results of Operations—Subsequent Events.”

On August 1, 2007, we incurred R$550 million of indebtedness with Banco Itaú BBA S.A., or Itaú BBA,Banco UBS Pactual S.A., or UBS Pactual and Banco Citibank S.A., or Citibank, or the Bridge Loans.Under the terms of the Bridge Loans, upon the occurrence of a public offering, such as this offering, weare required to prepay the Bridge Loans. On October 4, 2007, Itaú BBA, UBS Pactual and Citibankagreed to waive this prepayment covenant provided we obtain a R$470.0 million line of credit with ItaúBBA and such line of credit is totally disbursed and used to prepay the Bridge Loans within 90 days fromthe completion of the offering. If we do not satisfy these conditions, part of the proceeds from the follow-on equity offering (as described below) may be used to prepay the Bridge Loans. See “Management’sDiscussion and Analysis of Financial Conditions and Results of Operations—Subsequent Events.”

In addition, in the second semester of 2007, we acquired (i) 1% of Minas Shopping; (ii) 13% of BigShopping; (iii) 100% of Niterói Plaza; (iv) 92.4% of Fashion Mall; (v) 100% of Ilha Plaza; (vi) 100% ofRio Plaza; (vii) 2.4% of Esplanada Shopping; (viii) 12.9% of Shopping Villa Lobos, resulting in ourholding a total ownership interest of 39.7%; (ix) 10.0% of Shopping Mueller Joinville; and (x) 4.0% ofGoiânia Shopping, resulting in our holding a total ownership interest of 49.6%.

On September 26, 2007, two of the conditions for the development of a shopping mall in the city ofBauru, in the state of São Paulo were met (the land leading to the property where we intend to developthe shopping mall was expropriated and all licenses and authorization for the redesignation of the landwhere the shopping mall will be located into a urban area were obtained).

10

In September 2007, we began a corporate reorganization that will result in the merger of DACOMDesenvolvimento, DACOM Gestão and DEICO into EGEC. We believe that this corporatereorganization will be completed in October 2007.

On October 23, 2007, we completed a follow-on equity offering of our common shares in which weissued a total of 24,000,000 common shares without par value, assuming the over allotment for thatoffering is not exercised, including common shares in the form of GDSs, in Brazil and abroad andreceived approximately R$577.5 million in net proceeds.

On October 23, we announced a partnership with Cyrela Chile Empreendimentos Imobiliários Ltda., orCyrela, and Guararapes Confecções S.A., or Guararapes, to expand NorteShopping. The project, whichhas already been approved by the local authorities, includes the development of a commercial tower withapproximately 360 units by Cyrela. The expansion is expected to increase NorteShopping’s GCA by6,464 square meters and BR Mall’s owned GLA by 2,199 square meters.

For further information on our corporate structure see “Principal Shareholders.”

Our headquarters are located at Praia de Botafogo 501, Torre Corcovado, suite 702 (part), CEP22250-040 in Rio de Janeiro, Rio de Janeiro, Brazil and our investor relations department can becontacted at (55) 21-2546-0100, at (55) 21-2546-0101 or at ri@brmalls.com.br

BR Malls International Finance

BR Malls International Finance, the issuer of the notes, is a newly formed exempted companyincorporated with limited liability in the Cayman Islands and a wholly-owned subsidiary of BR Malls.The purpose of BR Malls International Finance is to engage in transactions related to the offering of thenotes as well as other financing transactions involving BR Malls or its subsidiaries. Prior to the issuanceof the notes, BR Malls International Finance will not have engaged in any business activity. BR MallsInternational Finance was incorporated with unrestricted purposes. The principal executive offices of BRMalls International Finance are located at Praia de Botafogo 501, Torre Corcovado, suite 702 (part),CEP 22250-040 in Rio de Janeiro, Rio de Janeiro, Brazil. No financial statements have been prepared forBR Malls International Finance as of the date of this offering memorandum and no financial statementsare expected to be prepared for BR Malls International Finance in the future.

11

THE OFFERING

This summary highlights information presented in greater detail elsewhere in this offering memorandum.This summary is not complete and does not contain all the information you should consider beforeinvesting in the notes. You should carefully read this entire offering memorandum before investing in thenotes, including “Risk Factors” and our financial statements.

Issuer...................................................................... BR Malls International Finance.

Guarantors ............................................................. BR Malls and its subsidiaries ECISA EngenhariaComércio e Indústria S.A., ECISA ParticipaçõesS.A. and Graúna Holding Participações S.A.

Notes offered.......................................................... US$175,000,000 aggregate principal amount of9.750% perpetual notes.

Guarantees ............................................................. The guarantors will irrevocably andunconditionally, jointly and severally, guaranteethe full and punctual payment of principal,interest, additional amounts and all other amountsthat may become due and payable in respect of thenotes.

Issue price............................................................... 100% of the principal amount.

Maturity date ......................................................... The notes are perpetual notes with no fixed finalmaturity date and no sinking fund provisions.

Interest payment dates ............................................ February 8, May 8, August 8 and November 8,commencing on February 8, 2008.

Interest ................................................................... The notes will bear interest from November 8,2007 at the annual rate of 9.750%, payablequarterly in arrears on each interest payment date.

Ranking.................................................................. The notes will be senior unsecured obligations ofBR Malls International Finance ranking:

➤ equal in right of payment to other existing andfuture senior unsecured debt of BR MallsInternational Finance;

➤ senior in right of payment to BR MallsInternational Finance’s subordinated debt; and

➤ effectively subordinated to debt and otherliabilities (including subordinated debt andtrade payables) of BR Malls InternationalFinance’s subsidiaries and to secured debt of BRMalls International Finance to the extent ofsuch security.

Prior to the issuance of the notes, BR MallsInternational Finance had no debt outstanding.

12

As of June 30, 2007, BR Malls and its subsidiarieshad approximately R$170.1 million of total debt.Approximately R$156.3 million of this totalamount was structurally senior to the notes beingsold in this offering, and are secured debt of BRMalls’ subsidiaries.

The guarantees will be senior unsecuredobligations of each of the guarantors ranking:

➤ equal in right of payment to other existing andfuture senior unsecured debt of that guarantor;

➤ senior in right of payment to any subordinateddebt of that guarantor; and

➤ effectively subordinated to debt and otherliabilities (including subordinated debt andtrade payables) of that guarantor’s subsidiariesand to secured debt of that guarantor and itssubsidiaries to the extent of such security.

Optional redemption .............................................. BR Malls International Finance may, at its option,redeem the notes, in whole or in part, on anyinterest payment date on or after November 8,2012, at 100% of the principal amount plusaccrued interest and additional amounts, subject toa minimum amount of the notes remainingoutstanding if a redemption is made in part. See“Description of the Notes—Redemption—Optional Redemption.”

Tax redemption ...................................................... BR Malls International Finance may redeem thenotes, in whole but not in part, at 100% of theirprincipal amount plus accrued interest andadditional amounts, if any, upon the occurrence ofspecified events relating to the applicable tax law.See “Description of the Notes—Redemption—TaxRedemption.”

Mandatory Repurchase Offer ................................. Upon the occurrence of certain events constitutinga change of control, as described and subject to thecertain conditions discussed in this offeringmemorandum, BR Malls International Financemay be required to purchase all or a portion thenotes. See “Description of the Notes—Redemption—Repurchase upon change ofcontrol.”

Additional amounts ................................................ All payments in respect of the notes or theguarantees, as applicable, will be made withoutwithholding or deduction for any Cayman Islands,

13

Brazilian or other applicable jurisdiction’s taxes orother governmental charges unless suchwithholding or deduction is required by law. In theevent we are required to withhold or deductamounts for any Cayman Islands, Brazilian orother applicable jurisdiction’s taxes or othergovernmental charges, BR Malls InternationalFinance, in respect of the notes, and theguarantors, in respect of the guarantees, will paysuch additional amounts as may be necessary inorder that the amount you receive will equal theamount that you would have received if nowithholding tax or deduction had been applicable,subject to certain exceptions set forth under“Description of the Notes—Additional Amounts.”

Covenants............................................................... The indenture will limit the creation of liens andwill permit BR Malls to consolidate or merge with,or transfer all or substantially all of its assets to,another person only if it complies with certainrequirements. However, these limitations aresubject to a number of important exceptions. See“Description of the Notes—Covenants.”

Events of default..................................................... The indenture will set forth the events of defaultapplicable to the notes, including an event ofdefault triggered by cross-acceleration of otherdebt in an amount of US$20.0 million or more.

Further issuances .................................................... BR Malls International Finance may from time totime without notice to or consent of the holders ofnotes create and issue an unlimited principalamount of additional notes of the same series asthe notes initially issued in this offering.

Use of proceeds....................................................... The total net proceeds from the sale of the notesare estimated to be approximately US$172.0million, after deducting commissions paid to theinitial purchasers and estimated offering expenses.We intend to use the net proceeds from theoffering of the notes to: (i) develop, incorporateand manage new shopping malls; (ii) acquireadditional interests in the shopping malls in ourownership portfolio; (iii) acquire interests inshopping malls owned by third-parties and in othercompanies engaged in our business; (iv) expand theoperations of our existing shopping malls; and(v) repay our indebtedness.

Form and denomination; settlement........................ The notes will be issued in the form of global notesin fully registered form without interest coupons,

14

as described under “Form of the Notes.” Theglobal notes will be exchangeable or transferable,as the case may be, for definitive certificated notesin fully registered form without interest couponsonly in limited circumstances. The notes will beissued in registered form in denominations ofUS$2,000 and integral multiples of US$1,000 inexcess thereof. See “Description of the Notes—Form, Denomination and Title” and “Form of theNotes.”

The notes will be delivered in book-entry formthrough the facilities of DTC for the accounts ofits participants, including Euroclear andClearstream Luxembourg.

Notice to investors.................................................. The notes have not been registered under the U.S.Securities Act of 1933 and are subject tolimitations on transfers, as described under“Transfer Restrictions.”

Listing .................................................................... Application has been made to list the notes on theOfficial List of the Luxembourg Stock Exchangeand admit the notes for trading on the Euro MTFmarket of the Luxembourg Stock Exchange. Wecannot assure you, however, that this applicationwill be accepted.

In 2003, the European Commission issued aDirective of the European Parliament and of theCouncil on the harmonization of transparencyrequirements with regard to information aboutissuers whose securities are admitted to trading ona regulated market in the European Union(2003/0045(COD)). If this directive, which isknown as the Transparency Directive, wouldrequire us to publish financial information eithermore regularly than we otherwise would berequired to, or according to accounting principleswhich are materially different from the accountingprinciples which we would otherwise use toprepare our published financial information, wemay seek an alternative admission to listing,trading and/or quotation for the notes by anotherlisting authority, stock exchange and/or quotationsystem outside the European Union, such as theZurich Stock Exchange.

The notes are expected to be eligible for trading inthe PORTAL Market at the time of issuancethereof.

15

Governing law........................................................ The indenture and the notes will be governed bythe laws of the State of New York.

Trustee, registrar, transfer agent and principalpaying agent ........................................................... Deutsche Bank Trust Company Americas

Luxembourg paying agent and transfer agent ......... Deutsche Bank Luxembourg S.A.

Luxembourg listing agent ....................................... Deutsche Bank Luxembourg S.A.

16

Summary financial information

The following table presents our summary financial and operating data as of and for the years endedDecember 31, 2004, 2005 and 2006 and as of June 30, 2007 and for the six-month periods endedJune 30, 2006 and 2007. The financial data as of and for the years ended December 31, 2004, 2005 and2006 have been derived from our combined consolidated financial statements, which have been auditedby PricewaterhouseCoopers Auditores Independentes in accordance with auditing standards applicable inBrazil, as stated in their reports included elsewhere in this offering memorandum. The financial data asof June 30, 2007 and for the six month periods ended June 30, 2006 (combined) and 2007 have beenderived from our unaudited consolidated interim financial information. Our financial statements areprepared in accordance with Brazilian GAAP, which differs in significant respects from U.S. GAAP. See“Presentation of Financial and Other Information.”

Income Statement Data

As of and For the Year Ended December 31,As of and For the

Six Months Ended June 30,

2004 2005 2006 2006 2006 2007 2007

Audited Unaudited

(in thousands of R$) (in thousandsof US$)(1)

(in thousandsof R$)

(in thousandsof US$)(1)

Gross revenue from rent and services...... 71,796 82,172 93,449 48,515 40,144 76,818 39,881Taxes and contributions ......................... (6,112) (8,759) (7,498) (3,893) (2,910) (4,572) (2,374)

Net revenue from rent and services ......... 65,684 73,413 85,951 44,622 37,234 72,246 37,507Cost of rent and services ......................... (24,910) (25,756) (19,609) (10,180) (12,192) (16,596) (8,616)

Gross profit ............................................ 40,774 47,657 66,342 34,442 25,042 55,650 28,891Operating expense (income)

Marketing expenses ......................... (5,175) (2,427) (1,849) (960) (711) (1,187) (616)General and administrative

expenses....................................... (5,605) (7,464) (10,576) (5,490) (3,425) (15,390) (7,990)Board of directors’ and executive

committee’s fees ........................... (447) (514) (566) (294) — — —Depreciation and amortization ........ (277) (430) (3,878) (2,013) (254) (21,312) (11,064)Legal and tax expenses .................... (3,490) (2,152) (6,101) (3,167) (94) (3,241) (1,683)

(14,994) (12,987) (22,970) (11,925) (4,484) (41,130) (21,353)

Financial income (expense) ..................... (5,919) (3,794) (2,061) (1,070) (1,096) (30,737) (15,957)

Equity income......................................... — — — — — 1,505 781Operating income ................................... 19,861 30,876 41,311 21,447 19,462 (14,712) (7,638)Non-operating income (expense) ............ 1,124 (125) (652) (338) (82) 229 119

Income before income tax and minorityinterest ................................................ 20,985 30,751 40,659 21,108 19,380 (14,483) (7,519)

Income tax and socialcontribution ................................. (7,317) (8,597) (9,525) (4,945) (5,802) (4,426) (2,298)

Income before employee profit sharingand minority interest ........................... 13,668 22,154 31,134 16,163 13,578 (18,909) (9,817)

Employee profit sharing................... (121) (127) — — — — —Minority interests ............................ (606) (703) (786) (408) (250) (74) (38)

Net income (loss) .................................... 12,941 21,324 30,348 15,755 13,328 (18,983) (9,855)

17

Balance Sheet DataAs of December 31, As of June 30,

2004 2005 2006 2006 2007 2007

Audited Unaudited

(in thousands of R$) (inthousandsof US$)(1)

(inthousands

of R$)

(inthousands

of US$)Cash and cash equivalents .................. 3,446 3,458 6,576 3,414 5,594 2,904Marketable securities ......................... 10,070 15,677 105,640 54,844 512,014 265,816Accounts receivable............................ 12,692 13,698 17,532 9,102 27,059 14,048Total current assets ............................ 41,247 43,326 149,960 77,853 573,914 291,951

Total long-term assets ........................ 1,101 1,057 40,563 21,059 99,539 51,676

Total fixed assets................................ 84,549 85,946 490,727 254,764 790,512 410,400

Total assets ........................................ 126,897 130,329 681,250 353,676 1,463,965 760,028

Total current liabilities ....................... 35,583 50,515 86,435 44,873 76,243 39,582

Total long-term liabilities ................... 52,293 37,336 77,031 39,991 234,602 121,795

Deferred income................................. — — — — 877 455Minority interest ................................ 119 19 406 211 2,932 1,522Total shareholders’ equity .................. 1 26 517,378 268,600 1,149,311 596,673

Net worth of incorporatedcompanies....................................... 38,901 42,433 — — — —

Total liabilities and shareholders’equity ............................................. 126,897 130,329 681,250 353,675 1,463,965 760,028

Other Financial DataFor the Year Ended December 31,

2004 2005 2006 2006

Audited

(in thousands of R$, exceptpercentages)

(in thousandsof US$ except

percentages)(1)Operating income................................................................... 19,861 30,876 41,311 21,447(+) Depreciation and amortization.......................................... 8,218 7,208 10,379 5,388(+) Financial income (expense) ............................................... 5,919 3,794 2,061 1,070EBITDA(2) ............................................................................. 33,998 41,878 53,751 27,905EBITDA margin(3) ................................................................. 51.8% 57.0% 62.5% 62.5%

For the Six Months Ended June 30,

2006 2007 2007

Unaudited

(in thousands of R$,except percentages)

(in thousandsof US$, exceptpercentages)(1)

Operating income............................................................................... 19,462 (14,712) (7,638)(+) Depreciation and amortization...................................................... 3,542 25,669 13,326(+) Financial income (expense)............................................................ 1,096 31,331 16,266(+) Non-recurring expenses(5) ............................................................ — 9,111 4,730(–) Equity in the earnings of subsidiaries............................................. — (1,505) (781)Adjusted EBITDA(6) .......................................................................... 24,100 49,894 25,903Adjusted EBITDA margin(7) .............................................................. 64.7% 69.1% 69.1%

18

For the Six Months Ended June 30,

2006 2007 2007

Unaudited

(in thousands of R$,except percentages)

(in thousandsof US$, exceptpercentages)(1)

Adjusted EBITDA(6) .......................................................................... 24,100 49,894 25,903Adjusted EBITDA margin(7) .............................................................. 64.7% 69.1% 69.1%Net income (loss)................................................................................ 13,328 (18,983) (9,855)(+) Non-Recurring IPO Expenses........................................................ — 33,141 17,205(+) Other Non-Recurring Expenses(5) ................................................ — 4,674 2,427Adjusted net income (loss)(8).............................................................. 13,328 18,832 9,777

For the Year Ended December 31,

2004 2005 2006 2006

Unaudited

(in thousands of R$,except ratios)

(in thousandsof US$, except

ratios)(1)

Total indebtedness ............................................................ 48,883 37,878 64,530 33,501Total cash, cash equivalents and marketable securities...... 13,516 19,135 112,216 58,258Net indebtedness .............................................................. 35,367 18,743 (47,686) (24,757)Net indebtedness/EBITDA ................................................ 1.0x 0.4x N.M.(10) N.M.(10)EBITDA/Interest expense .................................................. 4.2x 6.6x 8.0x 8.0x

For the Six Months Ended June 30,

2007 2007

Unaudited

(inthousands of

R$, exceptratios)

(in thousandsof US$, except

ratios)(1)

Total indebtedness .................................................................................... 170,140 88,329Total cash and cash equivalents and marketable securities ........................ 517,608 268,720Net indebtedness ....................................................................................... (347,468) (180,390)Net indebtedness/EBITDA(9) .................................................................... N.M.(10) N.M.(10)EBITDA/Interest expense........................................................................... 2.1x 2.1x

(1) Translated into US$ solely for the convenience of the reader. The rate used to translate such amounts was R$1.9262 toUS$1.00 (subject to rounding adjustments), which was the exchange rate in effect as of June 30, 2007 as reported by theCentral Bank. The U.S. dollar equivalent information presented in this offering memorandum is provided solely for theconvenience of investors and should not be construed as implying that the amounts in reais represent, or could have been orcould be converted into, U.S. dollars at such rates or any other rate.

(2) EBITDA consists of operating income plus depreciation and amortization plus net financial results. EBITDA is not a financialperformance measure calculated in accordance with Brazilian GAAP or U.S. GAAP, must not be considered as an alternative tonet income, as an indicator of operating performance, or as an alternative to operating cash flows as an indicator of liquidity.EBITDA is not calculated using a standard methodology and may not be comparable to the definition of EBITDA or similarlytitled measures used by other companies. We believe that EBITDA allows a better understanding not only of our financialperformance but also of our ability to comply with our obligations and obtain funds for our capital requirements. However,EBITDA present limitations that impair its use as a measurement of our profits since it does not consider certain costs arisingfrom our business that might significantly impact our results of operations and liquidity, such as financial expenses, taxes anddepreciation.

(3) EBITDA margin represents EBITDA divided by net revenue from rent and services.(4) For more information regarding our pro forma income statement, see “Unaudited Condensed Consolidated Pro Forma

Financial Information.”(5) Consists of non-recurring expenses related to our corporate reorganization.

19

(6) Adjusted EBITDA consists of EBITDA, as adjusted for (i) non-recurring expenses related to our initial public offering ofcommon shares completed in May 2007, and (ii) non-recurring costs related to our corporate reorganization (see “—RecentEvents” and “Principal Shareholders”). Like EBITDA, Adjusted EBITDA is not a financial performance measure calculated inaccordance with Brazilian GAAP or U.S. GAAP, and should not be considered as an alternative to net income, as an indicatorof operating performance, or as an alternative to operating cash flows as an indicator of liquidity. Adjusted EBITDA is notcalculated using a standard methodology and may not be comparable to the definition of Adjusted EBITDA or similarly titledmeasures used by other companies.

(7) Adjusted EBITDA margin represents adjusted EBITDA divided by net revenues from rent and services.(8) Consists of net income (loss), as adjusted for (i) non-recurring expenses related to our initial public offering of common shares

completed in May 2007, and (ii) non-recurring costs related to our corporate reorganization (see “—Recent Events” and“Principal Shareholders”).

(9) Annualized EBITDA.(10) Not meaningful.

20

Risk factors

Investing in our notes involves a high degree of risk. You should carefully consider the risks describedbelow before making an investment decision. Our business, financial condition, results of operations,cash flows and/or prospects could be adversely affected by any of these risks. The risks described beloware those that we currently believe may adversely affect us. Additional risks and factors not currentlyknown to us, or those that we currently deem to be immaterial, may also adversely affect our business,financial condition, results of operations, cash flow and/or prospects, and/or the trading price of, and ourability to repay, the notes. For the purposes of this section, when we state that a risk, uncertainty orproblem may, could or will have an “adverse effect” on us, we mean that the risk, uncertainty orproblem could have an adverse effect on our business, financial condition, results of operations, cashflow and/or prospects and/ or the trading price of our notes, except as otherwise indicated.

RISKS RELATING TO US AND THE BRAZILIAN SHOPPING MALL INDUSTRY

Adverse economic conditions in the regions where our shopping malls are located mayadversely affect our levels of occupancy and our ability to lease available areas andthus have an adverse effect on us.

Our results of operations depend substantially on our ability to lease the areas available in the shoppingmalls that we own and/or manage. Adverse conditions in the regions where we operate may reduce ouroccupancy levels and restrict our ability to increase lease prices. Should our shopping malls fail togenerate sufficient revenue for us to meet our obligations, our financial condition and results ofoperations could be adversely affected. The following factors, among others, may adversely affect theoperating performance of our shopping malls:

➤ recessions, increases in the vacancy level of the shopping malls in which we hold ownership interestsand/or the shopping, commercial or business centers for which we provide services and periods ofincreased interest rates could result in a decline in our lease prices or an increase in defaults by tenants,and could reduce our rental and management fees that are based upon the revenue of the stores in ourshopping malls;

➤ negative perceptions regarding security, convenience and the attractiveness of the regions where ourshopping malls and the shopping, commercial or business centers for which we provide services arelocated;

➤ our inability to attract and maintain first-rate tenants;

➤ default or breaches by our tenants of their contractual obligations;

➤ increases in our operating costs, including the need for capital increases;

➤ increases in the taxes levied on our business; and

➤ regulatory changes affecting the shopping-center industry, including zoning rules.

The results of the shopping malls that we own or manage depend on our tenants’sales.

The Brazilian retail sector is historically susceptible to periods of economic slowdown, which generallylead to a decrease in consumer spending. The success of our operations also depends on several factorsthat relate to consumer spending and/or affect consumer income, including prevailing economic

21

Risk factors

conditions in Brazil (and to a lesser extent, worldwide), general business conditions, interest rates,inflation, availability of consumer credit, taxation, consumer confidence in future economic conditions,employment levels and salaries.

Our performance depends on the sales volume of our tenants and on their ability to create a flow ofconsumers in the shopping malls that we own or manage. The results and sales at our shopping mallsmay be adversely affected by external factors, such as an economic decline in the region in which ashopping mall is located, the opening of other shopping malls that compete with our shopping malls, theclosing of stores in our shopping malls or a decline in the activities of the stores in our shopping malls.

A reduction in the consumer traffic in our shopping malls, as a result of any of these or other factors,could result in a decline in the number of consumers visiting the stores located in our shopping mallsand, consequently, in a decline in the sales volume of these stores. This may adversely affect us, giventhat a substantial portion of our income is derived from lease payments by tenants and frommerchandising in the shopping malls. Difficulties experienced by our tenants could also result in defaultsin their obligations to us and in the reduction of prices and volume of merchandising at our properties.

In addition, our ability to increase our revenue and operating income partially depends on steady growthin demand for the products offered by the stores located in the shopping malls that we own and manage.A drop in demand, whether as a result of changes in consumer preferences, reduction of purchasingpower or slowdowns in the Brazilian or global economies, could result in a reduction of store revenueand consequently, adversely affect us.

The contracts under which we provide management services for shopping, commercialand business centers may be terminated or not renewed by our clients, which couldadversely affect us.

Our subsidiaries, EGEC, DACOM and DEICO provide management, consulting and marketing servicespursuant to contracts with 29 shopping malls and commercial centers, including management services for17 of the 28 shopping malls in which we hold ownership interests and marketing services for 20 of the28 shopping malls in which we hold ownership interests. Most of the contracts under which we providethese services, which represented approximately 13.3% of our gross revenue from rent and services in2006 and 15.0% of our gross revenue from rent and services for the six months ended June 30, 2007,have indefinite terms. If these contracts were terminated or were not renewed by our clients, we could beadversely affected.

The shopping mall and real estate industries in Brazil are highly competitive, and ourinability to compete successfully may adversely affect us.

Shopping centers require frequent upgrades to create new operating formats and implement newoperating strategies. Changes in customer preferences, introduction of alternative retail channels andconstruction by a growing number of shopping malls has spurred changes in existing shopping malls toconfront competition. These projects involve growing costs for marketing, selection and/or modificationof the mix of stores, anchor stores, event promotions, parking spaces, architectural attractions, rampingup of entertainment centers, services, training and modernization and updating of operationaltechnology.

Other companies, including foreign companies working in partnerships with local companies, maybecome active in the shopping mall and real estate development market segments in Brazil in the nearfuture, further increasing this competition. To the extent that one or more of our competitors launches a

22

Risk factors

successful marketing or sales campaign and is able to significantly increase sales in their shopping malls,we could be adversely affected. If we are not able to respond to such pressures promptly, or if the level ofcompetition increases, we could be adversely affected.

The opening of new shopping malls near the ones that we own or manage may requireus to make unanticipated investments and hinder our ability to renew our store leasesor to lease space to new tenants, which could adversely affect us.

The construction of a new shopping mall in the areas surrounding any of our shopping malls may affectour ability to lease our stores under favorable conditions. The arrival of new competitors in the regionswhere we operate could require unanticipated investments in our shopping malls, which may adverselyaffect us.

We may also have difficulty in renewing store leases or in leasing stores to new tenants, which may leadto a reduction in our cash flow and operating income. In addition, the proximity of new competitorscould divert existing or new tenants to such competitors, resulting in vacancies in our shopping malls.

We may not succeed in growing our business through acquisitions.

Consistent with our business strategy, we have grown though strategic acquisitions. We plan to continueimplementing this strategy but our success in acquiring new businesses will depend on our ability to enterinto satisfactory transactions and to eliminate redundant and excessive costs. We may be unable toreduce such costs or to otherwise benefit from expected gains resulting from these acquisitions, whichcould adversely affect us.

Our ability to continue to strengthen our business through acquisitions depends on several factors,including our ability to identify shopping mall and/or business targets to acquire or to access the capitalmarkets at acceptable costs and to negotiate favorable terms upon doing so. Future acquisitions may alsorequire us to increase our indebtedness, which could adversely affect us.

Acquisitions also present the risk of exposure to the obligations and contingencies of acquired shoppingmalls or companies, their management or previously incurred liabilities. The due diligence process thatwe conduct with respect to acquisitions and any contractual guarantees or indemnification that receivefrom the sellers of target shopping malls may be insufficient to protect us or to compensate us foreventual contingencies. Such significant contingencies resulting from acquisitions could adversely affectus.

We share control of our shopping malls with other investors, whose interests maydiffer from and compete with ours.

We share control of our shopping malls with institutional investors, including pension funds and othergroups whose interests may differ from ours. We depend on the consent of these other investors to makecertain significant decisions affecting our shopping malls. Our partners in some shopping malls may haveeconomic interests different from ours, and may not support our strategic policies and business purposes.In the event we are not able to achieve sufficient support to approve certain actions that could affect ourshopping malls, we may not succeed in adequately implementing our business strategies, which mayadversely affect us. Disputes between our partners and us could result in litigation or arbitration, whichmay increase our expenses and distract our directors and officers from our other businesses, which mayadversely affect us.

23

Risk factors

Compensation paid to our management is closely linked to our results of operations.As a result, our management may decide to focus on activities that enhance ourprofitability in the short-term.

Our management compensation consists both of variable compensation and stock options. Because asubstantial part of the compensation paid to our management is closely linked to our results ofoperations, our management may decide to focus our business towards the generation of profits in theshort-term, which could conflict with the interests of our noteholders.

Possible financial difficulties of our anchor stores may adversely affect us.

As of June 30, 2007, approximately 29.2% of the gross leasable area in our shopping malls was occupiedby anchor stores. If financial difficulties force any of these anchor stores to terminate their leases or failto renew them upon their scheduled expiration, we may not be able to replace them with stores of thesame category and/or under the same conditions. This in turn may negatively affect the mix of stores in agiven shopping mall, and its attractiveness, and may adversely affect us.

Lease agreements in the shopping-center industry have specific provisions that createrisks to our business and may adversely affect us.

Our lease agreements with tenants are regulated by the Brazilian Leasing Law (Lei de Locação), whichgrants certain rights to tenants, such as the compulsory renewal of their leases in case certain legalconditions are met. As such, a compulsory renewal of a lease agreement may represent two principalrisks for us, which may adversely affect our results: (i) if we planned to vacate a given store in order tochange or adapt a shopping mall’s mix of stores, such plan may be blocked if the tenant obtains ajudicial order allowing him to keep possession of the given store for a new period of time therebyfrustrating our strategy; and (ii) if we desired to increase the lease price for a specific store, this increasemay need to be approved through a lease renewal action, and the final value will be decided by a court.We would then be subject to the court’s interpretation and decision, and could be forced to accept aneven lower price for the lease of the store. The compulsory renewal of our lease agreements and/or thejudicial review of our lease prices may adversely affect us.

Because our shopping malls are public places, incidents beyond our control may occur,which could result in material damages to the image of our shopping malls and exposeus to civil liability.

Because shopping malls are public places, they are exposed to a number of incidents that may take placewithin their premises and that are beyond our control or our ability to prevent, which may harm ourconsumers and visitors. If any of these incidents were to occur, the relevant shopping mall could facematerial damages to its image, since the flow of customers could be reduced due to lack of confidence inthe premises’ security. In addition, we may be exposed to civil liability and be required to indemnify thevictims, which could adversely affect us.

We depend on the availability of public utilities and services, especially for water andelectric power. Any reduction or interruption of these services may adversely affect us.

Public utilities, especially those that provide water and electric power, are fundamental for the soundoperation of our shopping malls. Any material interruption of these services could result in an increasein our costs and potential failures in our ability to provide our services. In addition, if we becameresponsible for the operation of these utility services, we would be required to hire specialized

24

Risk factors

contractors, which would likely involve additional costs and a significant increase in our operatingexpenses. Accordingly, any interruption in the provision of these essential services may adversely affectus.

The Brazilian shopping-center industry is subject to extensive regulation, which mayresult in higher expenses or hurdles for the development of certain projects andadversely affect us.

Our activities are subject to federal, state and municipal laws, and to regulations, authorizations andlicense requirements with respect to construction, zoning, use of the soil, environmental protection,historical heritage, leasing and condominiums, all of which affect our business. We are required to obtainlicenses and permits from different governmental entities in order to carry out our projects. In the eventof noncompliance with such laws, regulations, licenses and authorizations, we may face penalties orfines, project shutdowns, cancellation of licenses or revocation of authorizations, in addition to othercivil and criminal penalties that would adversely affect us.

In addition, the Brazilian government may enact new and more stringent standards, or interpret existinglaws and regulations in a more restrictive manner, which may force companies in the shopping mall andreal estate industries, including us, to incur expenses to comply with these new rules. Any such action onthe part of public authorities may adversely affect us.

Losses not covered by insurance may adversely affect us.

We maintain insurance policies customary in our market for the protection of our shopping malls andother real estate developments. We cannot guarantee that the amount of the insurance we maintain willbe sufficient to protect us against relevant losses. In our industry, however, certain types of losses, suchas losses resulting from terrorism, acts of war and civil disturbances, are not usually covered byinsurance. If any such uninsured events occur, our investments may adversely be affected, and we may berequired to incur additional expenses, which could harm our operational performance. In addition, weeventually could be held liable for and have to indemnify victims of accidents inside our shopping mallsand inside the shopping, commercial and business centers at which we provide our services, which mayadversely affect us. We also may not be able to renew our insurance policies at the same current termsand conditions, which could adversely affect us.

Unfavorable judicial or administrative decisions may adversely affect us.

We are defendants in several judicial and administrative proceedings related to civil, labor and taxmatters. We cannot assure you that we will obtain favorable decisions in such proceedings, or that theywill be dismissed, or that our reserves for such proceedings are sufficient. Decisions reaching substantialdamages, which conflict with our interests or impede our operations, as had been initially planned, maycause an adverse affect on us. See “Business—Legal and Administrative Proceedings.”

We may not succeed in fully implementing our business strategies.

We may not be successful in implementing our business strategies. As a result, we may not be able toexpand our activities and replicate our business structure, thus hindering the implementation of ourgrowth strategy and ability to meet the demands of our different markets. Additionally, we could beunable to implement guidelines of excellence in our operations, finances or personnel. If we fail inimplementing our plans, developments or guidelines, we could be adversely affected.

25

Risk factors

RISKS RELATING TO BRAZIL

The Brazilian government has exercised, and continues to exercise, significantinfluence over the Brazilian economy. This influence, as well as Brazilian political andeconomic conditions, could adversely affect us and the trading price of our shares.

The Brazilian government frequently intervenes in the Brazilian economy and occasionally makessignificant changes in policies and regulations. The Brazilian government’s actions to control inflationand other regulations and policies have often involved, among other measures, increases in interest rates,changes in tax policies, price controls, currency devaluations, capital controls, limits on imports andother actions. Our business, financial condition, and results of operations, as well as the trading price ofour notes, may be adversely affected by changes in policy or regulations involving or affecting factorssuch as:

➤ interest rates, monetary policy and exchange controls and restrictions on remittances abroad;

➤ governmental policies related to our business and the Brazilian shopping-center industry;

➤ strikes at ports, customs and federal revenue department;

➤ inflation;

➤ social instability;

➤ liquidity of domestic capital and financial markets;

➤ fiscal policy;

➤ use of electric energy; and

➤ other political, social and economic developments in or affecting Brazil.

The Brazilian government may implement changes in policy or regulations affecting these or other factorsin the future may contribute to economic uncertainty in Brazil and heightened volatility in the Braziliansecurities markets and securities issued abroad by Brazilian companies. In addition, possible politicalcrises may affect the confidence of investors and the public in general, which may result in economicdeceleration and, therefore, adversely affecting the trading price of shares of companies listed to trade inthe Brazilian capital markets.

Fluctuations in interest rates may negatively affect us.

Debts of companies in the shopping mall and real estate industries, including ours, are subject to thefluctuation of market interest rates, as established by the Central Bank. Should such interest ratesincrease, the costs relating to the service of our debt obligations would also increase.

In addition, because companies involved in the shopping-center industry are highly dependent of thecontrol that the Brazilian government exercises over the interest rates, a sudden increase in the interestrates may reduce the activities of the consumer market and reduce consumer purchases, which couldadversely affect us.

Inflation, along with the Brazilian government’s measures to curb inflation, may havean adverse effect on the Brazilian economy, the Brazilian securities market and us.

Brazil has in the past experienced extremely high rates of inflation. Inflation, along with governmentalmeasures to curb inflation, coupled with public speculation about possible future governmental measuresto be adopted, has had significant negative effects on the Brazilian economy. Since the introduction of the

26

Risk factors

real in 1994, Brazil’s inflation rate has been substantially lower than in previous periods. However,inflationary pressures persist, and actions taken in an effort to curb inflation, coupled with speculationabout possible future governmental actions, have contributed to economic uncertainty in Brazil andheightened volatility in the Brazilian securities market. According to the Brazilian General Price Index(Índice Geral de Preços Mercado), or the IGP-M rate, the inflation rate in 2002, 2003, 2004, 2005 and2006 was 25.3%, 8.7%. 12.4%, 1.2% and 3.8%, respectively, and 1.4% in the first six months of 2007.According to Brazilian Consumer Price Index (Índice Geral de Preços ao Consumidor Ampliado), orIPCA, the inflation rate in 2002, 2003, 2004, 2005 and 2006 was 12.5%, 9.3%, 7.6%, 5.7% and 3.1%,respectively, and 2.2% in the first six months of 2007.

Brazil may experience high levels of inflation in the future. Inflationary pressures may lead to furthergovernment intervention in the economy, including the introduction of government policies that couldhave an adverse effect on us and on our clients. If Brazil again experiences high inflation in the future, wemay not be able to adjust the prices we charge our tenants to offset the effects of inflation on our coststructure.

Exchange rate instability may adversely affect the Brazilian economy and,consequently, us.

The Brazilian currency has been devalued periodically. The Brazilian government has implementedvarious economic plans and utilized a number of exchange-rate policies, including sudden devaluations,periodic mini-devaluations during which the frequency of adjustments has ranged from daily to monthly,floating exchange rate systems, exchange controls and dual exchange rate markets. From time to time,there have been significant fluctuations in the exchange rate between the Brazilian currency and the U.S.dollar and other currencies. On December 31, 2005, the U.S. dollar-real exchange rate was R$2.34 perUS$1.00, resulting from a valuation of the Brazilian currency of 13.4% since December 31, 2004. OnDecember 31, 2006, the U.S. dollar-real exchange rate was R$2.138 per US$1.00, and on June 30, 2007,the U.S. dollar-real exchange rate was R$1.9262 per US$1.00. There can be no assurance that the realwill not depreciate or be devalued against the U.S. dollar again.

Depreciations of the real in relation to the U.S. dollar could create additional inflationary pressures inBrazil and lead to increases in interest rates, which may negatively affect the Brazilian economy as awhole and, in particular, our results of operations. On the other hand, the appreciation of the real inrelation to the U.S. dollar may impact Brazil’s current accounts and balance of payments, as well asreduce the gross domestic product resulting from exports. The volatility of the real in relation to the U.S.dollar may adversely affect the Brazilian economy and, consequently, us.

We have U.S. dollar-denominated indebtedness. If the real depreciates compared to the U.S. dollar, ouroperating expenses will increase, which could have an adverse effect on us. See “Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Indebtedness.”

Developments and the perception of risks in other countries, especially emergingmarket countries, may adversely affect the market price of Brazilian securities, limitour access to the international financial and capital markets and, consequently, us.

The market value of securities of Brazilian companies is affected to different degrees by economic andmarket conditions in other emerging market countries, particularly Latin American countries. Althougheconomic conditions in such countries may differ significantly from economic conditions in Brazil,investors’ reactions to developments in these other countries may have an adverse effect on the marketvalue of securities of Brazilian issuers. As a result of economic problems in several emerging markets in

27

Risk factors

the recent years (Asian financial crisis in 1997, Russian financial crisis in 1998 and Argentine financialcrisis in 2001), investors’ scrutiny of investment opportunities in emerging markets has significantlyincreased. Such financial crises in other emerging market countries has resulted in a significant outflow offunds and reduction in the volume of foreign investments in Brazil and significantly affected the cost andaccess to capital for Brazilian companies both in Brazil and abroad, limiting their access to theinternational capital markets. We cannot assume that the international capital markets will remainaccessible for Brazilian companies or that our financial cost in such markets will be favorable to us.Crises in other emerging market countries may diminish investor interest in securities of Brazilian issuersand their affiliates or subsidiaries, including our notes. The occurrence of one or all of these factors couldadversely affect the trading price of our shares, and also restrict our access to the capital and financingmarkets on acceptable terms in the future.

RISKS RELATING TO THE NOTES AND THE GUARANTEES

BR Malls International Finance has no operations of its own, so holders of the notesmust depend on BR Malls to provide BR Malls International Finance with sufficientfunds to make payments on the notes when due.

BR Malls International Finance is a special purpose, direct wholly-owned subsidiary of BR Malls and isan exempted company incorporated with limited liability under the laws of the Cayman Islands onOctober 18, 2007. BR Malls International Finance was established to issue the notes and act as a financesubsidiary of BR Malls. Accordingly, the ability of BR Malls International Finance to pay principal,interest and other amounts due on the notes will depend upon BR Malls’ financial condition and resultsof operations. In the event of an adverse change in BR Malls’ financial condition or results of operations,BR Malls International Finance may not have sufficient funds to repay all amounts due on or withrespect to the notes.

The notes have no maturity date or sinking fund provisions and are not redeemable atthe option of holders of the notes.

The notes have no fixed final maturity date or any sinking fund provisions and are not redeemable at theoption of holders of the notes. As a result, holders of the notes will be entitled to receive a return of theprincipal amount of their investment only if we elect to redeem or repurchase the notes or in the event ofacceleration due to an event of default. Therefore, you should be aware that you may be required to bearthe financial risks of an investment in the notes for an indefinite period of time.

There are no financial covenants in the notes.

Neither we nor any of our subsidiaries are restricted from incurring additional debt or liabilities,including additional senior debt, under the notes or the indenture. If we incur additional debt orliabilities, our ability to pay our obligations on the notes could be adversely affected. We expect fromtime to time to incur additional debt and other liabilities.

Certain subsidiaries are not included as subsidiary guarantors.

Certain subsidiaries of BR Malls will not be guarantors of the notes. However, the historicalconsolidated financial statements and the pro forma condensed consolidated financial data included inthis offering memorandum include all BR Malls’s subsidiaries. The non-guarantor subsidiaries generatedapproximately 34.7% of our revenues for the six months ended June 30, 2007 and approximately 4.6%of our revenues for the year ended December 31, 2006.

28

Risk factors

Our non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingentor otherwise, to pay any amounts due pursuant to the notes, or to make any funds available therefor,whether by dividends, loans, distributions or other payments. Any right that we or other guarantors haveto receive any assets of any of the non-guarantor subsidiaries upon the liquidation or reorganization ofthose subsidiaries, and the consequent rights of holders of notes to realize proceeds from the sale of anyof those subsidiaries’ assets, will be effectively subordinated to the claims of that subsidiary’s creditors,including trade creditors and holders of debt of that subsidiary.

We may not have the ability to raise the funds necessary to finance any change ofcontrol offer required by the indenture governing the notes.

Upon the occurrence of certain specific kinds of change of control events, BR Malls International Financewill be required to offer to repurchase all outstanding notes at 101% of the principal amount thereofplus accrued and unpaid interest to the date of repurchase. However, it is possible that we will not havesufficient funds at the time of the change of control to make the required repurchase of notes. Inaddition, our existing and future indebtedness may contain prohibitions on the occurrence of events thatwould constitute a change of control or require that indebtedness to be repurchased upon a change ofcontrol. Moreover, the exercise by the holders of their right to require BR Malls International Finance torepurchase the notes upon a change of control may cause a default under such indebtedness even if thechange of control itself does not. Accordingly, BR Malls International Finance may not be able to satisfyits obligations to purchase your notes unless we are able to refinance or obtain waivers under suchindebtedness. The failure to repurchase the notes upon a change of control would cause a default underthe indenture governing the notes. In addition, certain important corporate events, such as leveragedrecapitalizations, that would increase the level of our indebtedness may not constitute a change ofcontrol under the indenture governing the notes. Therefore, if an event occurs that does not constitute achange of control, BR Malls International Finance will not be required to make an offer to repurchasethe notes and you may be required to continue to hold your notes despite the event.

Transfer of the notes will be restricted.

BR Malls International Finance have not registered and does not intend to register the offer and sale orresale of the notes under the Securities Act or the securities laws of any jurisdiction. You may not offer orsell the notes, except pursuant to an exemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act and other applicable securities laws. You should read the disclosures inthe “Transfer restrictions” for further information about these and other transfer restrictions. It is yourobligation to ensure that offers and sales of notes comply with applicable securities laws.

The foreign exchange policy of Brazil may affect the ability of the guarantors to makemoney remittances outside Brazil in respect of the guarantees.

Under Brazilian regulations, Brazilian companies are not required to obtain authorization from theCentral Bank in order to make payments in U.S. dollars outside Brazil under guarantees in favor offoreign persons, such as the holders of the notes. We cannot assure you that these regulations willcontinue to be in force at the time the guarantors that are Brazilian companies may be required toperform their payment obligations under the guarantors. If these regulations or their interpretation aremodified and an authorization from the Central Bank is required, those guarantors that are Braziliancompanies would need to seek an authorization from the Central Bank to transfer the amounts under theguarantees out of Brazil or, alternatively, make such payments with funds held by the guarantors outsideBrazil. We cannot assure you that such an authorization will be obtained or that such funds will beavailable.

29

Risk factors

Judgments of Brazilian courts enforcing the guarantors’ respective obligations underthe notes are payable only in Brazilian reais.

If proceedings were brought in the courts of Brazil seeking to enforce the guarantors’ obligations underthe notes, the guarantors would not be required to discharge their obligations in a currency other thanreais. Any judgment obtained against the guarantors in Brazilian courts in respect of any paymentobligations under the notes will be expressed in reais equivalent to the U.S. dollar amount of suchpayment at the exchange rate published by the Central Bank (i) on the date on which such judgment isrendered or (ii) on the date on which the judicial proceeding was filed, in which case the amount due inreais would be subject to a monetary correction as determined by the relevant court.

Payments on the notes and the guarantees will be junior to any secured debtobligations of BR Malls International Finance and the guarantors, as the case may be.

The notes and the guarantees will constitute senior unsecured obligations of BR Malls InternationalFinance and the guarantors, respectively, and will rank equal in right of payment with all of the otherexisting and future senior unsecured indebtedness of BR Malls International Finance and the guarantors,respectively. Although the holders of the notes will have a direct, but unsecured claim on the assets andproperty of BR Malls International Finance, payment on the notes will be subordinated to any secureddebt of BR Malls International Finance to the extent of the assets and property securing such debt.Payment on the notes will also be effectively subordinated to the payment of secured debt and othercreditors of the guarantors. In addition, under Brazilian law, the obligations of the guarantors under theguarantees are subordinated to certain statutory preferences, including claims for salaries, wages, securedobligations, social security, taxes, court fees, expenses and costs. In the event of the guarantors’liquidation, such applicable statutory preferences will have preference over any other claims, includingclaims by any holder of the notes. Prior to the issuance of the notes, BR Malls International Finance hadno debt outstanding. As of June 30, 2007, on a consolidated basis, BR Malls and its subsidiaries hadapproximately R$170.1 million of total indebtedness. Approximately R$156.3 million of this totalamount was structurally senior to the notes being sold in this offering and are secured debt of BR Malls’subsidiaries.

The guarantees may not be enforceable.

The guarantees provide a basis for a direct claim against the guarantors; however it is possible that theguarantees may not be enforceable under Brazilian law. While Brazilian law does not prohibit the givingof guarantees and, as a result, does not prevent the guarantees of the notes from being valid, binding andenforceable against the guarantors, in the event that a guarantor becomes subject to a reorganizationproceeding or to bankruptcy, the relevant guarantee, if granted up to two years before the declaration ofbankruptcy, may be deemed to have been a fraudulent transfer and declared void, based upon theguarantor being deemed not to have received fair consideration in exchange for such guarantee. Thevalidity and enforceability of the guarantees granted by the guarantors requires that the guarantees be inthe best interest of the guarantors receive fair and adequate consideration for the granting of theguarantees. Similar concepts exist under United States law. In addition, under Brazilian law, a guaranteeis considered accessory to the underlying or principal obligation and the nullity of the principalobligation causes the nullity of the accessory obligation. Therefore, in case our underlying obligationunder the notes or the indenture are declared null, the guarantees would, under Brazilian law, be deemedto be null as well.

30

Risk factors

We cannot assure you that an active trading market for the notes will develop.

The notes constitute a new issue of securities, for which there is no existing market. Although we haveapplied to list the notes on the Euro MTF market of the Luxembourg Stock Exchange, we cannotprovide you with any assurances that the application will be accepted. Further, no assurance can beprovided regarding the development of a market for the notes, the ability of holders of the notes to selltheir notes, or the price at which such holders may be able to sell their notes. Accordingly, we cannotassure you that an active trading market for the notes will develop or, if a trading market develops, thatit will continue. The lack of an active trading market for the notes would have a material adverse effecton the market price and liquidity of the notes. Even if a market for the notes develops, the notes maytrade at a discount from their initial offering price.

For U.S. federal income tax purposes, the notes could be treated as equity interests in aPFIC, which could result in adverse U.S federal income tax consequences for U.Sinvestors.

The Company believes that the notes are likely to be treated as equity in the Issuer for U.S. federalincome tax purposes, and, to the extent required to do so, intends to treat the notes as equity in theIssuer for U.S. federal income tax purposes. However, no assurance can be given that the U.S. InternalRevenue Service will not assert that the notes should be treated as indebtedness for U.S. federal incometax purposes. If the notes were treated as indebtedness for U.S. federal income tax purposes, the timingand character of income, gain and loss recognized by you could differ from the description herein. If, asthe Company believes is likely, the notes are treated as equity in the Issuer for U.S. federal income taxpurposes, U.S. holders would be subject to certain adverse U.S. federal income tax consequences in theevent that the Issuer were classified for U.S. federal income tax purposes as a “passive foreign investmentcompany” (“PFIC”). See “Taxation — U.S. Federal Income Tax Considerations.”

The Issuer may make loans to, or other investments in, the Company and its subsidiaries, or make otherinvestments with the proceeds of this offering in each case that may give rise to “passive income” forPFIC purposes. Accordingly, the Issuer may be a PFIC for the current taxable year and for future taxableyears. As a result, you may be subject to adverse U.S. federal income tax consequences on a dispositionof the notes and on certain distributions made by the Issuer. The Issuer does not intend to provide U.S.investors information that would enable U.S. investors to make a “qualified electing fund” election inrespect of the Issuer and a mark-to-market election may not be available with respect to the notes. Youshould consult your tax adviser regarding the U.S. federal income tax consequences that would apply toyou as a shareholder in a PFIC and any U.S. federal income tax elections that may be available to youwhich may help mitigate such consequences. See “Taxation — U.S. Federal Income Tax Considerations— Passive Foreign Investment Company Rules.”

31

Exchange ratesUntil March 4, 2005, there were two legal foreign exchange markets in Brazil, the commercial rateexchange market, or the commercial market, and the floating rate exchange market, or the floatingmarket. The commercial market was reserved primarily for foreign trade transactions and transactionsthat generally required prior approval from Central Bank, such as registered investments by foreignpersons and related the remittances of funds abroad (including the payment of principal and interest onloans, notes, bonds and other debt instruments denominated in foreign currencies and registered with theCentral Bank). The floating market rate generally applied to specific transactions for which Central Bankapproval was not required. Both the commercial market rate and the floating market rate were reportedby the Central Bank on a daily basis.

On March 4, 2005, the Central Bank issued Resolution No. 3,265, providing for several changes inBrazilian foreign exchange regulation, including: (i) the unification of the foreign exchange markets intoa single exchange market; (ii) the easing of several rules for acquisition of foreign currency by Brazilianresidents; and (iii) the extension of the term for converting foreign currency derived from Brazilianexports. The Central Bank may issue further regulations in relation to foreign exchange transactions, aswell as on payments and transfers of Brazilian currency between Brazilian residents and non-residents(such transfers being commonly known as the international transfer of reais), including those madethrough the so-called non-resident accounts.

From March 1995 through January 1999, the Central Bank allowed the gradual devaluation of the realagainst the U.S. dollar under an exchange rate policy that established a band within which the real/U.S.dollar exchange rate could fluctuate. Responding to pressure on the real, on January 13, 1999, theCentral Bank widened the foreign exchange rate band. Because the pressure did not ease, on January 15,1999, the Central Bank abolished the band system and allowed the real to float freely. Since thebeginning of 2001, the Brazilian exchange market has been increasingly volatile, and, until early 2003,the value of the real declined relative to the U.S. dollar, primarily due to financial and political instabilityin Brazil and Argentina. According to the Central Bank, in 2004, 2005 and 2006, however, the realappreciated in relation to the U.S. dollar 8.8%, 13.4% and 9.5%, respectively. Although the CentralBank has intervened occasionally to control unstable movements in the foreign exchange rates, theexchange market may continue to be volatile as a result of this instability or other factors, and, therefore,the real may substantially decline or appreciate in value in relation to the U.S. dollar in the future.

The following table shows the selling rate, expressed in reais per U.S. dollar (R$/US$), for the periodsindicated.

Period-endAverage for

Period(1) Low High

(per U.S. dollar)Year Ended:December 31, 2002 ..................................................................... 3.533 2.937 2.271 3.955December 31, 2003 ..................................................................... 2.889 3.065 2.822 3.662December 31, 2004 ..................................................................... 2.654 2.926 2.654 3.205December 31, 2005 ..................................................................... 2.341 2.431 2.163 2.762December 31, 2006 ..................................................................... 2.138 2.177 2.059 3.371

Month Ended:January 31, 2007......................................................................... 2.125 2.138 2.125 2.156February 28, 2007....................................................................... 2.118 2.098 2.077 2.118March 31, 2007 .......................................................................... 2.050 2.089 2.050 2.139April 30, 2007............................................................................. 2.034 2.032 2.023 2.048

32

Exchange rates

Period-endAverage for

Period(1) Low High

(per U.S. dollar)

May 31, 2007.............................................................................. 1.929 1.982 1.929 2.031June 30, 2007.............................................................................. 1.926 1.932 1.905 1.964July 31, 2007............................................................................... 1.878 1.883 1.845 1.918August 31, 2007.......................................................................... 1.962 1.966 1.873 2.112September 30, 2007..................................................................... 1.839 1.900 1.839 1.964October 31, 2007 ........................................................................ 1.744 1.801 1.744 1.828November 2007 (through November 5, 2007)............................. 1.756 1.751 1.746 1.756

(1) Represents the average of the daily exchange rates during the period.

Source: Central Bank.

33

Use of proceeds

We estimate that the total net proceeds from this offering will be approximately US$172.0 million, afterdeducting commissions and estimated expenses of the offering payable by us.

We intend to use the net proceeds from this offering by BR Malls International Finance to (i) develop,incorporate and manage new shopping malls; (ii) acquire additional interests in the shopping malls in ourownership portfolio; (iii) acquire interests in shopping malls owned by third-parties and in othercompanies engaged in our business; (iv) expand the operations of our existing shopping malls; and(v) repay our indebtedness.

The intended use of the proceeds from this offering is based on several assumptions that may beimpacted by factors beyond our control, such as future conditions in the Brazilian shopping mall, realestate and retail markets, and our ability to negotiate reasonable terms for the acquisition of additionalshopping malls and the purchase of additional interests in our shopping malls, our ability to obtainfinancing, as well as other factors described in “Forward-Looking Statements.”

34

Capitalization

The table below shows our capitalization as of June 30, 2007, on an actual basis and adjusted to reflectthe (i) the issuance of R$320.0 million in non-convertible debentures on July 27, 2007, (ii) R$550.0 inindebtedness we incurred with Itaú BBA, UBS Pactual, Citibank on August 1, 2007, (iii) receipt ofR$577.5 million in net proceeds from the follow-on equity offering; and (iv) receipt of approximatelyUS$172 million in estimated net proceeds from this offering. The information set forth below in thecolumn “actual” is derived from our combined consolidated financial statements as of June 30, 2007,prepared in accordance with Brazilian GAAP.

You should read this section together with “Presentation of Financial and Other Information”, “SelectedFinancial Information”, “Unaudited Condensed Consolidated Pro Forma Financial Information”,“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and ouraudited combined consolidated financial statements included elsewhere in this offering memorandum.

As of June 30, 2007

Unaudited

Actual

Asadjusted

before theoffering(1)

Asadjustedafter the

offering(2) Actual

Asadjusted

before theoffering(1)

Asadjustedafter the

offering(2)

(in millions of R$) (in millions of US$)(3)

Cash and cash equivalents andmarketable securities .......................... 517.6 1,095.1 1,426.4 268.7 568.5 740.5

Loans and financing—Short-term........... 8.1 558.1 558.1 4.2 289.7 289.7Loans and financing—Long-term ........... 162.0 162.0 499.1 84.1 84.1 259.1Debentures ............................................. — 320.0 320.0 — 166.1 166.1Total shareholders’ equity ...................... 1,149.3 1,726.8 1,726.8 596.7 896.5 896.5

Total capitalization(4)..................... 1,319.4 2,766.9 3,104.0 685.0 1,436.5 1,611.5

(1) Adjusted to reflect the (i) the issuance of R$320.0 million in non-convertible debentures on July 27,2007, (ii) R$550.0 in indebtedness we incurred with Itaú BBA, UBS Pactual, Citibank on August 1,2007 and (iii) receipt of R$577.5 million in net proceeds from the follow-on equity offering.

(2) Adjusted to reflect the receipt of approximately US$172 million in estimated net proceeds from thisoffering, after deducting commissions and estimated expenses of the offering payable by us.

(3) Converted for convenience only using the commercial selling rate as reported by the Central Bankon June 30, 2007 for reais into US dollars of R$1.9262 per US$1.00. These conversions should notbe considered representations that any such amounts have been, could have been or could beconverted into U.S. dollars at that or at any other exchange rate as of that or any other date.

(4) Total capitalization corresponds to the sum of total short-term and long term loans and debentures(including those not subject to settlement in cash) and shareholders’ equity.

35

Selected financial information

The following table presents our selected financial and operating data as of and for the years endedDecember 31, 2004, 2005 and 2006 and as of June 30, 2007 and for the six month periods endedJune 30, 2006 and 2007. The financial data as of and for the years ended December 31, 2004, 2005 and2006 have been derived from our combined consolidated financial statements, which have been auditedby PricewaterhouseCoopers Auditores Independentes in accordance with auditing standards applicable inBrazil, as stated in their report included elsewhere in this offering memorandum. The financial data as ofJune 30, 2007 and for the six months ended June 30, 2006 (combined) and 2007 have been derived fromour unaudited consolidated interim financial information. Our financial statements are prepared inaccordance with Brazilian GAAP, which differs in significant respects from U.S. GAAP. See “Presentationof Financial and Other Information.”

As of and For the Year EndedDecember 31,

As of and For the Six MonthsEnded June 30,

2004 2005 2006 2006 2006 2007 2007

Audited Unaudited

(in thousands of R$) (inthousandsof US$)(1)

(in thousands ofR$)

(inthousandsof US$)(1)

Income Statement Data:Gross revenue from rent and

services .......................................... 71,796 82,172 93,449 48,515 40,144 76,818 39,881Taxes and contributions.................... (6,112) (8,759) (7,498) (3,893) (2,910) (4,572) (2,374)

Net revenue from rent and services ... 65,684 73,413 85,951 44,622 37,234 72,246 37,507Cost of rent and services ................... (24,910) (25,756) (19,609) 10,180 (12,192) (16,596) (8,616)

Gross profit....................................... 40,774 47,657 66,342 34,442 25,042 55,650 28,891Operating expense (income)Marketing expenses........................... (5,175) (2,427) (1,849) (960) (711) (1,187) (616)General and administrative

expenses ........................................ (5,605) (7,464) (10,576) (5,490) (3,425) (15,390) (7,990)Board of directors’ and executive

committee’s fees............................. (447) (514) (566) (294) — — —Depreciation and amortization.......... (277) (430) (3,878) (2,013) (254) (21,312) (11,064)Legal and tax expenses...................... (3,490) (2,152) (6,101) (3,167) (94) (3,241) (1,683)

(14,994) (12,987) (22,970) (11,925) 4,484 (41,130) (21,353)

Financial income (expense)................ (5,919) (3,794) (2,061) (1,070) (1,096) (30,737) (15,957)

Equity income ................................... — — — — — 1,505 781Operating income.............................. 19,861 30,876 41,311 21,447 19,462 (14,712) (7,638)Non-operating income (expense)....... 1,124 (125) (652) (338) (82) 229 119

Income before income tax andminority interest ............................ 20,985 30,751 40,659 21,108 19,380 (14,483) (7,519)

Income tax and social contribution ... (7,317) (8,597) (9,525) (4,945) (5,802) (4,426) (2,298)Income before employee profit

sharing and minority interest ......... 13,668 22,154 31,134 16,163 13,578 (18,909) (9,817)

Employee profit sharing .................... (121) (127) — — — — —Minority interests.............................. (606) (703) (786) (408) (250) (74) (38)

Net income (loss) .............................. 12,941 21,324 30,348 15,755 13,328 (18,983) (9,855)

36

Selected financial information

Balance Sheet DataAs of December 31, As of June 30,

2004 2005 2006 2006 2007 2007

Audited Unaudited

(in thousands of R$) (inthousandsof US$)(1)

(inthousands

of R$)

(inthousandsof US$)(1)

Cash and cash equivalents ............ 3,446 3,458 6,576 3,414 5,594 2,904Marketable securities.................... 10,070 15,677 105,640 54,844 512,014 265,816Accounts receivable ...................... 12,692 13,698 17,532 9,102 27,059 14,048Total current assets ...................... 41,247 43,326 149,960 77,853 573,914 291,951

Total long-term assets................... 1,101 1,057 40,563 21,059 99,539 51,676

Total fixed assets .......................... 84,549 85,946 490,727 254,764 790,512 410,400

Total assets................................... 126,897 130,329 681,250 353,676 1,463,965 760,028

Total current liabilities ................. 35,583 50,515 86,435 44,873 76,243 39,582

Total long-term liabilities ............. 52,293 37,336 77,031 39,991 234,602 121,795

Deferred income ........................... — — — — 877 455Minority interest .......................... 119 19 406 211 2,932 1,522Total shareholders’ equity ............ 1 26 517,378 268,600 1,149,311 596,673

Net worth of incorporatedcompanies................................. 38,901 42,433 — — — —

Total liabilities and shareholders’equity........................................ 126,897 130,329 681,250 353,675 1,463,965 760,028

Other Financial DataFor the Year Ended December 31,

2004 2005 2006 2006

Audited

(in thousands of R$,except percentages)

(in thousandsof US$ except

percentages)(1)Operating income................................................................... 19,861 30,876 41,311 21,447(+) Depreciation and amortization.......................................... 8,218 7,208 10,379 5,388(+) Financial income (expense) ............................................... 5,919 3,794 2,061 1,070EBITDA(2) ............................................................................. 33,998 41,878 53,751 27,905EBITDA margin(3) ................................................................. 51.8% 57.0% 62.5% 62.5%

For the Six MonthsEnded June 30,

2006 2007 2007

Unaudited

(in thousandsof R$, exceptpercentages)

(in thousandsof US$, exceptpercentages)(1)

Operating income ................................................................................ 19,462 (14,712) (7,638)(+) Depreciation and amortization ....................................................... 3,542 25,669 13,326(+) Financial income (expense)............................................................. 1,096 31,331 16,266(+) Non-recurring expenses.................................................................. — 9,111 4,730(-) Equity in the earnings of subsidiaries .............................................. — (1,505) (781)Adjusted EBITDA(5)............................................................................ 24,100 49,894 25,903Adjusted EBITDA margin(6)................................................................ 64.7% 69.1% 69.1%

37

Selected financial information

For the Six Months Ended June 30,

2006 2007 2007

Unaudited

(in thousandsof R$, exceptpercentages)

(in thousandsof US$, exceptpercentages)(1)

Net income (loss) ................................................................................. 13,328 (18,983) (9,855)(+) Non-recurring IPO expenses ........................................................... — 33,141 17,205(+) Other non-recurring expenses(7)..................................................... — 4,674 2,427Adjusted net income (loss)(8) ............................................................... 13,328 18,832 9,777

For the Year Ended December 31,

2004 2005 2006 2006

Unaudited

(in thousands of R$,except ratios)

(in thousandsof US$, except

ratios)(1)Total indebtedness ........................................................................ 48,883 37,878 64,530 33,501Total cash and cash equivalents and marketable securities............ 13,516 19,135 112,216 58,258Net indebtedness........................................................................... 35,367 18,743 (47,686) (24,757)Net indebtedness/EBITDA ............................................................ 1.0x 0.4x N.M.(10) N.M.(10)EBITDA/Interest expense .............................................................. 4.2x 6.6x 8.0x 8.0x

For the Six Months Ended June 30,

2007 2007

Unaudited

(in thousandsof R$, except

ratios)

(in thousandsof US$, except

ratios)(1)Total indebtedness................................................................................................. 170,140 88,329Total cash and cash equivalents and marketable securities .................................... 517,608 268,720Net indebtedness ................................................................................................... (347,468) (180,390)Net indebtedness/EBITDA(9)................................................................................. N.M.(10) N.M.(10)EBITDA/Interest expense....................................................................................... 2.1x 2.1x

(1) Translated into US$ solely for the convenience of the reader. The rate used to translate such amounts was R$1.9262 toUS$1.00 (subject to rounding adjustments), which was the exchange rate in effect as of June 30, 2007 as reported by theCentral Bank. The U.S. dollar equivalent information presented in this offering memorandum is provided solely for theconvenience of investors and should not be construed as implying that the amounts in reais represent, or could have been orcould be converted into, U.S. dollars at such rates or any other rate.

(2) EBITDA consists of operating income plus depreciation and amortization plus net financial results. EBITDA is not a financialperformance measure calculated in accordance with Brazilian GAAP or U.S. GAAP, must not be considered as an alternative tonet income, as an indicator of operating performance, or as an alternative to operating cash flows as an indicator of liquidity.EBITDA is not calculated using a standard methodology and may not be comparable to the definition of EBITDA or similarlytitled measures used by other companies. We believe that EBITDA allows a better understanding not only of our financialperformance but also of our ability to comply with our obligations and obtain funds for our capital requirements. However,EBITDA present limitations that impair its use as a measurement of our profits since it does not consider certain costs arisingfrom our business that might significantly impact our results of operations and liquidity, such as financial expenses, taxes anddepreciation.

(3) EBITDA margin represents EBITDA divided by net revenue from rent and services.(4) For more information regarding our pro forma income statement, see “Unaudited Condensed Consolidated Pro Forma

Financial Information.”(5) Adjusted EBITDA consists of EBITDA, as adjusted for (i) non-recurring expenses related to our initial public offering of

common shares completed in May 2007, and (ii) non-recurring costs related to our corporate reorganization (see “—RecentEvents” and “Principal Shareholders”). Like EBITDA, Adjusted EBITDA is not a financial performance measure calculated inaccordance with Brazilian GAAP or U.S. GAAP, and should not be considered as an alternative to net income, as an indicatorof operating performance, or as an alternative to operating cash flows as an indicator of liquidity. Adjusted EBITDA is notcalculated using a standard methodology and may not be comparable to the definition of Adjusted EBITDA or similarly titledmeasures used by other companies.

(6) Adjusted EBITDA margin represents adjusted EBITDA divided by net revenues from rent and services.(7) Consists of non-recurring expenses related to our corporate restructuring.(8) Consists of net income (loss), as adjusted for (i) non-recurring expenses related to our initial public offering of common shares

completed in May 2007, and (ii) non-recurring costs related to our corporate reorganization (see “—Recent Events” and“Principal Shareholders”).

(9) Annualized EBITDA.(10) Not meaningful.

38

Unaudited condensed consolidated pro forma financialinformation

Our pro forma condensed consolidated balance sheet as of June 30, 2007 reflects the effects of: (i) theacquisition of the companies belonging to the “In Mont Group” by SPE Chance on July 16, 2007; (ii) theacquisition of “Graúna” carried out on July 8, 2007, and (iii) the funds raised through the issuance ofnon-convertible debentures on July 27, 2007 and through the incurrence of the Bridge Loans with ItaúBBA, UBS Pactual and Citibank on August 1, 2007, in each case as if they had occurred on June 30,2007. SPE Chance currently holds an indirect interest of (i) 100% in Rio Plaza Shopping; (ii) 100% inNiterói Plaza Shopping; (iii) 92.4% in Fashion Mall; and (iv) 100% in Shopping Ilha Plaza. Graúnaholds 100% of the ownership interests in Shopping Tamboré.

Our pro forma consolidated income statement as of the six-month period ended June 30, 2007 reflectsthe effects of: (i) the most material acquisitions that occurred between January 1, 2007 and the date ofthis offering (“In Mont Group”, EPI and Graúna) as if they had occurred on January 1, 2007; (ii) theamortization of the goodwill generated by the acquisition of the “In Mont Group” and “Graúna” as ifsuch amortization had been reflected commencing on January 1, 2007; (iii) the fees and interest on thenon-convertible debentures issued by us as if such debentures had been issued on January 1, 2007; and(iv) the fees and interest on the Bridge Loans as if such indebtedness had been incurred on January 1,2007. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Subsequent Events” for further information on the issuance of the debentures and the Bridge Loans.

The unaudited condensed consolidated pro forma financial information is based on preliminaryassumptions that we believe are reasonable. The unaudited condensed consolidated pro forma financialinformation is presented for comparative purposes only and does not purport to represent what ouractual results of operations or consolidated financial position would have been had the transactionsreferred to above occurred on the respective dates assumed, nor is it necessarily indicative of our futureoperating results or financial position.

The unaudited condensed consolidated pro forma financial information should be read in conjunctionwith, and is qualified in its entirety by:

➤ our audited combined consolidated financial statements and unaudited consolidated interim financialinformation and other information included in this offering memorandum; and

➤ the respective notes thereto and the report of our independent auditors, as well as the sections“Presentation of Financial and Other Information”, “Summary Financial Information”, “SelectedFinancial Information” and “Management’s Discussion and Analysis of Financial Condition andResults of Operations.”

39

Unaudited condensed consolidated pro forma financial information

As of June 30, 2007

Unaudited

Historical BR Malls(1) “In Mont”(2) Graúna(3) Eliminations Pro Forma Pro Forma

(in thousand of R$) (in thousandsof US$)(8)

Cash and cashequivalents ................ 5,594 — — — — 5,594 2,904

Marketable Securities .... 512,014 (184,440) 3,605 1,176 — 332,255 172,492Accounts receivable....... 27,059 — — — — 27,059 14,048Total current assets ....... 573,914 (184,440) 50,162 3,697 — 443,333 230,159Total long-term assets ... 99,539 — — 20,979 — 120,518 62,568Total fixed assets .......... 790,512 1,054,440 115,985 35,965 (181,676) 1,815,226 942,387

Total assets ................... 1,463,965 870,000 166,147 60,641 (181,676) 2,379,077 1,235,114Total current

liabilities.................... 76,243 550,000 41,776 738 — 668,757 347,190Total long-term

liabilities.................... 234,602 320,000 — — — 554,602 287,925Deferred income............ 877 — 2,598 — — 3,475 1,804Minority interest ........... 2,932 — — — — 2,932 1,522Total shareholders’

equity ........................ 1,149,311 — 121,773 59,903 (181,676) 1,149,311 596,673

Total liabilities andshareholders’ equity... 1,463,965 870,000 166,147 60,641 (181,676) 2,379,077 1,235,114

40

Unaudited condensed consolidated pro forma financial information

For the Six Months Ended June 30, 2007

Unaudited

(in thousand of R$)(in thousands

of US$)(8)

Historical BR Malls(4) EPI(5) Graúna(6) “In Mont”(7) Pro Forma Pro Forma

Gross revenue from rentand services..................... 76,818 — 4,817 8,776 37,787 128,198 66,555

Taxes and contributions ..... (4,572) — (167) (772) (1,902) (7,413) (3,849)Net revenue from rent and

services ........................... 72,246 — 4,650 8,004 35,885 120,785 62,706Cost of rent and services..... (16,596) — (1,934) (5,203) (4,468) (28,201) (14,641)Gross profit ........................ 55,650 — 2,716 2,801 31,417 92,584 48,066Marketing expenses ............ (1,187) — — — — (1,187) (616)General and administrative

expenses.......................... (15,390) — — (45) (15,435) (8,013)Depreciation and

amortization ................... (21,312) (43,638) — — (3,783) (68,733) (35,683)Legal and tax expenses ....... (3,241) — — — (312) (3,553) (1,845)

(41,130) (43,638) — — (4,140) (88,908) (46,157)

Financial income(expense)......................... (30,737) (53,442) — — (124) (84,303) (43,766)

Equity Income .................... 1,505 — — — 666 2,171 1,127Operating income (loss)...... (14,712) (97,080) 2,716 2,801 27,819 (78,456) (40,731)Non-operating income

(expenses) ....................... 229 (24) 205 106Income before income tax

and minority interest....... (14,483) (97,080) 2,716 2,801 27,795 (78,251) (40,625)Income tax and social

contribution.................... (4,426) — (484) — (2,993) (7,903) (4,103)Minority interests ............... (74) — — — — (74) (38)Net income ......................... (18,983) (97,080) 2,232 2,801 24,802 (86,228) (44,766)

(1) Reflects: (i) the impact of the following funds secured for the financing of the acquisition of the In Mont Group by SPE Chanceon August 1, 2007: (a) R$320 million received in connection with our issuance of non-convertible debentures on July 27, 2007,which accrue interest at the rate of CDI plus 0.5% per year for the first series (R$50 million) and IPCA plus 7.9% pear year forthe second series (R$270 million), and (b) R$550 million in indebtedness we incurred with Itaú BBA, UBS Pactual and Citibankon August 1, 2007, which is subject to variable interest rates as follows: (i) Itaú IBBA - 0.49% per month, representing 5.885%per year; (ii) UBS Pactual - 0.51145% per month, representing 6.1741% per year; and (iii) Citibank - 0.5233% per month untilJanuary 28, 2008, representing 6.28% per year, and 0.54% per month thereafter, representing 6.48% per year.

(2) Reflects In Mont Group’s assets and liabilities acquired by SPE Chance on July 16, 2007.(3) Reflects Graúna’s assets and liabilities acquired by us on July 8, 2007.(4) Reflects the impact of the amortization of the goodwill for the six-month period ended June 30, 2007 generated as a result of

the acquisition of the In Mont Group and Graúna, as well as the effect of the charges resulting from the loans secured for thefinancing of such acquisitions, as mentioned in footnote 1, above. The deferred income tax and social contribution credits onthese adjustments has not been recognized, mainly due to the following: (i) we are a holding company and, therefore, do notcarry out any direct business operations which would enable us to utilize the income tax and social contribution credits whichwould be generated by the charges resulting from the debentures issued by us; (ii) SPE Chance does not have a track record oftaxable income under the “real-profits” tax regime which could enable us to recognize the income tax and social contributioncredits that would be generated as a result of the charges due under the terms and conditions of the Bridge Loans; and (iii) InMont Group and Graúna do not have a track record of taxable income under the “real-profits” tax regime to support the

(footnotes continued on following page)

41

Unaudited condensed consolidated pro forma financial information

recognition of the income tax and social contribution credits which would be generated by the amortization of the goodwillwhich resulted from the acquisition of these companies.

(5) Reflects EPI’s operating results for the period from January 1, 2007 to the date of acquisition (April 12, 2007).(6) Reflects Graúna’s operating results for the six-month period ended June 30, 2007.(7) Reflects In Mont Group’s operating results for the six-month period ended June 30, 2007.(8) Translated into US$ solely for the convenience of the reader. The rate used to translate such amounts was R$1.9262 to

US$1.00 (subject to rounding adjustments), which was the exchange rate in effect as of June 30, 2007 as reported by theCentral Bank. The U.S. dollar equivalent information presented in this offering memorandum is provided solely for theconvenience of investors and should not be construed as implying that the amounts in reais represent, or could have been orcould be converted into, U.S. dollars at such rates or any other rate.

OTHER FINANCIAL DATA

For the Six Months Ended June 30,

2007 2007 2007

Unaudited Pro-forma Unaudited

(in thousands of R$,except percentages)

(in thousands of US$,except percentages)(1)

Operating income ................................................................... (14,712) (78,456) (40,731)(+) Depreciation and amortization .......................................... 25,669 77,160 40,059(+) Financial income (expense)................................................ 31,331 84,897 44,075(+) Non-recurring expenses..................................................... 9,111 9,111 4,730(-) Equity in the earnings of subsidiaries ................................. (1,505) (2,171) (1,127)Adjusted EBITDA(2)............................................................... 49,894 90,541 47,005Adjusted EBITDA margin(3)................................................... 69.1% 75.0% 75.0%

For the Six Months Ended June 30,

2007 2007 2007

Unaudited Pro-forma Unaudited

(in thousands of R$,except percentages)

(in thousands of US$,except percentages)(1)

Net income (loss) .................................................................... (18,983) (86,228) (44,765)(+) Non-recurring IPO expenses.............................................. 33,141 33,141 17,205(+) Other non-recurring expenses............................................ 4,674 4,674 2,427Adjusted net income (loss)(4).................................................. 18,832 (48,413) (25,134)

(1) Translated into US$ solely for the convenience of the reader. The rate used to translate such amounts was R$1.9262 toUS$1.00 (subject to rounding adjustments), which was the exchange rate in effect as of June 30, 2007 as reported by theCentral Bank. The U.S. dollar equivalent information presented in this offering memorandum is provided solely for theconvenience of investors and should not be construed as implying that the amounts in reais represent, or could have been orcould be converted into, U.S. dollars at such rates or any other rate.

(2) Adjusted EBITDA consists of EBITDA, as adjusted for (i) non-recurring expenses related to our initial public offering ofcommon shares completed in May 2007, and (ii) non-recurring costs related to our corporate reorganization (see “—RecentEvents” and “Principal Shareholders”). Like EBITDA, Adjusted EBITDA is not a financial performance measure calculated inaccordance with Brazilian GAAP or U.S. GAAP, and should not be considered as an alternative to net income, as an indicatorof operating performance, or as an alternative to operating cash flows as an indicator of liquidity. Adjusted EBITDA is notcalculated using a standard methodology and may not be comparable to the definition of Adjusted EBITDA or similarly titledmeasures used by other companies. See “Summary Financial Information” and “Selected Financial Information.”

(3) Adjusted EBITDA margin represents adjusted EBITDA divided by net revenues from rent and services. See “Summary FinancialInformation” and “Selected Financial Information.”

(4) Consists of net income (loss), as adjusted for (i) non-recurring expenses related to our initial public offering of common sharescompleted in May 2007, and (ii) non-recurring costs related to our corporate reorganization (see “—Recent Events” and“Principal Shareholders”).

42

Management’s discussion and analysis of financial conditionand results of operations

The following discussion is based on and should be read in conjunction with our audited combinedconsolidated financial statements for the years ended December 31, 2004, 2005 and 2006 and ourunaudited combined consolidated financial statements for the six months ended June 30, 2006(combined) and 2007, as well as their respective notes, attached to this offering memorandum, and thesections “Presentation of Financial and Other Information”, “Summary Financial Information”,“Selected Financial Information” and other financial information presented elsewhere in this offeringmemorandum.

This section contains discussions regarding estimates and forward-looking statements that involve risksand uncertainties. Our actual results may differ significantly from those discussed in these estimates andforward-looking statements as a result of various factors, including, without limitation, those describedin “Forward-Looking Statements” and “Risk Factors.”

OVERVIEW

We are the leading company in the shopping mall sector in Brazil. We are the largest owner of shoppingmalls in terms of total gross leasable area, gross leasable area owned and number of shopping malls andthe largest provider of management and consulting services for shopping, commercial and businesscenters as well as leasing and merchandising services for stores and common spaces in shopping malls interms of gross commercial area, according to data provided by ABRASCE.

We currently hold ownership interests in 28 shopping malls, including one which is under constructionand one in which our interest is held through convertible debentures. On the date of this offeringmemorandum, the shopping malls that we own accounted for 975.2 thousand square meters in grosscommercial area and 826.9 thousand square meters in gross leasable area, with approximately fivethousand stores and total sales of R$6.9 billion in 2006. On average, we hold a 44.5% stake in theshopping malls we own, equal to 368.3 thousand square meters in gross leasable area. Our averageownership interest in each of the 28 shopping malls in our portfolio reflects the weighted average of ourownership interests in the individual shopping malls.

On the date of this offering memorandum, we provide management, leasing, marketing and consultingservices to 29 shopping and commercial centers, including management services for 17 of the 28shopping malls in which we hold ownership interests and marketing services for 20 of the 28 shoppingmalls in which we hold ownership interests. On the date of this offering memorandum, these mallsincluded 878.6 thousand square meters in gross commercial area with five thousand stores. We alsoprovide marketing services to the supermarket chains Pão de Açúcar and Sendas.

We are the only company in our sector with a presence throughout all of the regions of Brazil, holdingownership interests in shopping malls in each of the five regions of the country. In addition, our portfoliois strategically diversified according to our target customers’ income classes, covering consumers in allsuch classes.

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Management’s discussion and analysis of financial condition and results of operations

Pantanal Shopping (MT): 10% Araguaia Shopping (GO): 50% Shopping Campo Grande (MS): 65.1% Goiânia Shopping (GO): 49.6%

Shopping Center Recife (PE): 31.1% Natal Shopping (RN): 45% Shopping Center Iguatemi Maceió (AL): 34.2%

NorteShopping (RJ): 74.1% Shopping ABC (SP): 0.7% Shopping Piracicaba (SP): 11.5% Big Shopping (MG): 13.0% Minas Shopping (MG): 1.0% TopShopping (RJ): 35% Shopping Del Rey (MG): 65% Independência Shopping (MG): 8% Shopping Villa-Lobos (SP): 39.7% Shopping Tamboré (SP): 100% Niterói Plaza (RJ): 100% Fashion Mall (RJ): 92.4% Ilha Plaza (RJ): 100% Rio Plaza (RJ): 100% Esplanada Shopping (SP): 2.4%

Amazonas Shopping (AM): 17.2% Shopping Iguatemi Belém (PA): 12.2%

Shopping Center Iguatemi Caxias (RS): 45.5% Shopping Estação (PR): 100% Shopping Curitiba (PR): 35%Shopping Mueller Joinville (SC): 10%

The following table contains certain key information regarding the shopping malls in which we holdownership interests:

As of the date of this offering memorandum(except if otherwise indicated)

Shopping Center State

OurInterests

(%)GCA

(m2)(1)GLA

(m2)(1)

Number ofStores

(in units)(2) Visitors(3)Total Sales

(R$)(4)

(amounts in thousands except if otherwise indicated)Shopping Recife(5) ............................ PE 31.1 78.4 61.2 410 24,000 206,656NorteShopping .................................. RJ 74.1 98.4 77.8 334 28,800 195,353Niterói Plaza(6) ................................. RJ 100.0 34.2 31.9 236 21,360 106,461Shopping Villa Lobos ........................ SP 39.7 27.4 27.4 216 8,400 79,946Shopping ABC(7) .............................. SP 0.7 48.7 46.5 236 11,000 78,173Minas Shopping(6) ............................ MG 1.0 32.3 28.6 184 11,500 69,399Amazonas Shopping(8)(9) ................. AM 17.2 44.6 38.5 206 15,600 92,219Shopping Center Iguatemi Belém(8)... PA 12.2 34.8 18.4 187 16,200 51,116Shopping Campo Grande .................. MS 65.1 57.4 28.2 165 9,000 51,909Fashion Mall(6)................................. RJ 92.4 14.1 14.1 144 3,600 32,672Shopping Curitiba(9) ......................... PR 35.0 28.3 24.0 154 11,200 38,780Shopping Del Rey.............................. MG 65.0 59.3 37.4 176 14,400 62,152Pantanal Shopping(10) ...................... MT 10.0 43.3 43.3 202 9,000 43,462Shopping Tamboré(9)........................ SP 100.0 32.1 32.1 160 12,000 50,578TopShopping(11) .............................. RJ 35.0 18.1 18.1 133 9,600 47,659Shopping Center Iguatemi

Maceió(8)(9).................................. AL 34.2 33.9 24.2 158 9,600 57,576Shopping Center Piracicaba(8)(9) ...... SP 11.5 27.8 27.8 145 7,200 37,491Shopping Estação(10)(12).................. PR 100.0 54.6 54.6 153 5,400 38,212Shopping Iguatemi Caxias do Sul ...... RS 45.5 27.6 15.1 94 10,800 27,919Goiânia Shopping(17)........................ GO 49.6 19.3 16.9 119 7,300 32,340Natal Shopping(9) ............................. RN 45.0 17.1 17.1 133 7,200 21,734Ilha Plaza(6) ...................................... RJ 100.0 20.3 20.3 142 7,200 32,248Big Shopping(6)................................. MG 13.0 17.6 17.6 85 12,000 34,553Araguaia Shopping(10)(13) ............... GO 50.0 18.5 18.5 100 15,600 21,928Rio Plaza(6)....................................... RJ 100.0 6.6 6.6 44 2,300 16,248Shopping Independência(14).............. MG 8.0 25.4 25.4 164 — —Esplanada Shopping(15) .................... SP 2.4 28.0 28.0 164 10.8 50,578Shopping Mueller Joinville(16) .......... SC 10.0 27.0 27.0 134 7,320 42,540

Total .......................................... 975.2 826.9 4,818 308,380 1,619.9

(footnotes on following page)

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Management’s discussion and analysis of financial condition and results of operations

(1) One square meter is equal to 10.76 square feet.(2) Includes stores within the gross leasable area we own and stores within the gross leasable area

owned by third parties.(3) For the year ended December 31, 2006.(4) Total sales for the three months ended March 31, 2007.(5) ASCR, a company in which we have a 32.5% ownership interest, manages this shopping mall.(6) Ownership interest acquired in July 2007. In relation to Fashion Mall, an additional ownership

interest of 10.0% was acquired in October 2007. In relation to Ilha Plaza, an additional ownershipinterest of 17.5% was acquired in September 2007.

(7) Ownership interest acquired in April 2007.(8) Ownership interest acquired through EPI in April 2007. In addition, the additional ownership

interest we acquired in Amazonas Shopping in May 2007 is currently in the process of beingregistered pursuant to Brazilian law.

(9) Ownership interest acquired in May 2007. In addition, the ownership interest acquired in ShoppingTamboré in May 2007 is currently in the process of being registered pursuant to Brazilian law.

(10) Ownership interest acquired in March 2007.(11) Subject to a purchase and sale agreement for a 35% ownership interest that will be effective within

120 days from June 22, 2007.(12) Ownership interest acquired in February 2007. Includes the Estação Convention Center, an anchor

store with 25 thousand square meters of gross leasable area.(13) Ownership interest consists of convertible debentures with profit sharing rights through which we

have, among others, the right to receive 50% of the shopping mall’s net income and to appoint theshopping mall’s management.

(14) Not yet in operation, scheduled to open in March 2008.(15) Ownership interest acquired in August 2007.(16) Ownership interest acquired in October 2007.(17) Ownership interest acquired between January and October 2007.

Our gross revenue from rent and services, or gross revenue, is derived from the following activities:(i) our ownership of shopping malls, through leasing stores and other merchandising spaces, parking lotfees and up-front transfer fees from store leasors, or key money, which represented 85.0% of our grossrevenue for the six months ended June 30, 2007; (ii) management, leasing, consulting and merchandisingservices for stores and common spaces in shopping malls, which represented 15.0% of our gross revenuefor the six months ended June 30, 2007.

Since October 2006, we have acquired the following interests in 21 new shopping malls, increasing ourown gross leasable area by approximately 244 thousand square meters by means of total investments ofR$1.5 billion: (i) on October 2, 2006, 30.0% of Shopping Del Rey (an increase in our ownershipinterest); (ii) on January 2, 2007, 38.7% of Goiânia Shopping; (iii) on February 5, 2007, 100.0% ofShopping Estação; (iv) on March 1, 2007, 10.0% of Pantanal Shopping; (v) on March 1, 2007,convertible debentures with participation in the profits of the company responsible for the developmentof Araguaia Shopping, which give us, among other rights, the right to receive 50% of the net income ofAraguaia Shopping and the right to appoint its officers and directors; (vi) on April 11, 2007, 0.7% ofShopping ABC; (vii) on April 11, 2007, 6.9% of Goiânia Shopping (an increase in our ownershipinterest); (viii) on April 13, 2007, 8.5% of Shopping Center Piracicaba, 12.2% of Shopping CenterIguatemi Belém, 11.1% of Amazonas Shopping and 16.6% of Shopping Iguatemi Maceió by means ofthe acquisition of the total capital stock of EPI; (ix) on May 2, 2007, 17.6% of Shopping IguatemiMaceió (an increase in our ownership interest); (x) on May 14, 2007, 6.1% of Amazonas Shopping (anincrease in our ownership interest); (xi) on May 18, 2007, 100.0% of Shopping Tamboré; (xii) onMay 21, 2007, 3.0% of Shopping Center Piracicaba (an increase in our ownership interest); (xiii) onMay 22, 2007, 35.9% of Natal Shopping; (xiv) on May 23, 2007, 20.0% of Shopping Curitiba; (xv) on

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Management’s discussion and analysis of financial condition and results of operations

June 22, 2007, 35.0% of Top Shopping; (xvi) on June 28, 2007, 15.0% of Shopping Curitiba (anincrease in our ownership interest); (xvii) on June 29, 2007, 9.1% of Natal Shopping (an increase in ourownership interest); (xviii) on July 3, 2007, 1% of Minas Shopping; (xix) on July 3, 2007, 13.0% of BigShopping; (xx) on July 16, 2007, 100.0% of Niterói Plaza Shopping; (xxi) on July 16, 2007, 82.4% ofFashion Mall; (xxii) on July 16, 2007, 82.5% of Ilha Plaza; (xxiii) on July 16, 2007, 100.0% of RioPlaza; (xxiv) on August 3, 2007, 2.4% of Esplanada Shopping; (xxv) on August 9, 2007, 12.9% ofShopping Villa-Lobos (an increase in our ownership interest); (xxvi) on September 27, 2007, 17.5% ofIlha Plaza (an increase in our ownership interest); (xxvii) on October 4, 2007, 10.0% of Fashion Mall(an increase in our ownership interest), (xxviii) on October 19, 2007, 10.0% of Shopping MuellerJoinville by means of the acquisition of the total capital stock of KGM37 Empreendimentos Ltda.; and(xxix) on October 22, 2007, 4.0% of Goiânia Shopping (an increase in our ownership interest). Inaddition, on March 13, 2007, we acquired a 99.9% ownership interest in DEICO, which is responsiblefor the management, leasing and/or planning of 13 shopping malls.

We believe we have a strong financial position with growth in net revenue, EBITDA and net income since2004. The following table presents certain consolidated financial and operational information, including,where indicated, on a pro-forma basis, for the indicated periods.

As of and for the Year EndedDecember 31,

2004 2005 2006

Audited

(amounts in millions of R$,except as otherwise indicated)

Net revenue from rent and services................................................ 65,684 73,413 85,951EBITDA(1) .................................................................................... 33,998 41,878 53,751EBITDA margin(2) ........................................................................ 51.8% 57.0% 62.5%Net income (loss)........................................................................... 12,941 21,324 30,348Net margin(3)................................................................................ 19.7% 29.0% 35.3%Shopping centers GLA (in thousand square meters)(4)(5).............. 203.2 208.6 235.8Shopping centers (our ownership interest) GLA (in thousand

square meters)(5)(6)................................................................... 85.3 86.9 101.4As of and for the Six Months Ended

June 30,

2006 2007 2007

UnauditedPro-forma

Unaudited(7)

(amounts in thousands of R$,except as otherwise indicated)

Net revenue from rent and services................................................ 37,234 72,246 120,785Adjusted EBITDA(8) ..................................................................... 24,100 49,894 90,541Adjusted EBITDA margin(9) ......................................................... 64.7% 69.1% 75.0%Net income (loss) adjusted(10) ...................................................... 13,328 18,832 (48,413)Shopping centers GLA (in thousand square meters)(5)(6).............. 235.8 641.7 799.8Shopping centers (our ownership interest) GLA (in thousand

square meters)(6)(7)................................................................... 90.2 283.0 364.9

(1) EBITDA consists of operating income plus depreciation and amortization plus net financial results.EBITDA is not a financial performance measure calculated in accordance with Brazilian GAAP orU.S. GAAP, must not be considered as an alternative to net income, as an indicator of operatingperformance, or as an alternative to operating cash flows as an indicator of liquidity. EBITDA is notcalculated using a standard methodology and may not be comparable to the definition of EBITDAor similarly titled measures used by other companies. We believe that EBITDA allows a betterunderstanding not only of our financial performance but also of our ability to comply with our

(footnotes continued on following page)

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Management’s discussion and analysis of financial condition and results of operations

obligations and obtain funds for our capital requirements. However, EBITDA presents limitationsthat impair its use as a measurement of our profits since it does not consider certain costs arisingfrom our business that might significantly impact our results of operations and liquidity, such asfinancial expenses, taxes and depreciation. See “Summary Financial Information.”

(2) Represents EBITDA divided by net revenue from rent and services.(3) Net income as a percentage of net revenue from rent and services.(4) Represents total gross leasable area of all shopping malls in which we hold an ownership interest

and does not reflect our ownership interest in each development.(5) One square meter is equal to 10.76 square feet.(6) Reflects our proportional interest in the total gross leasable area of all shopping malls in which we

hold an ownership interest.(7) For more information regarding our pro forma income statement, see “Unaudited Condensed

Consolidated Pro Forma Financial Information.”(8) Adjusted EBITDA consists of EBITDA, as adjusted for (i) non-recurring expenses related to our

initial public offering of common shares completed in May 2007, and (ii) non-recurring costs relatedto our corporate reorganization (see “—Recent Events” and “Principal Shareholders”). LikeEBITDA, Adjusted EBITDA is not a financial performance measure calculated in accordance withBrazilian GAAP or U.S. GAAP, and should not be considered as an alternative to net income, as anindicator of operating performance, or as an alternative to operating cash flows as an indicator ofliquidity. Adjusted EBITDA is not calculated using a standard methodology and may not becomparable to the definition of Adjusted EBITDA or similarly titled measures used by othercompanies.

(9) Represents adjusted EBITDA divided by net revenues from rent and services.(10) Consists of net income (loss), as adjusted for (i) non-recurring expenses related to our initial public

offering of common shares completed in May 2007, and (ii) non-recurring costs related to ourcorporate reorganization (see “—Recent Events”, “Selected Financial Information” and “PrincipalShareholders”).

BRAZILIAN MACROECONOMIC ENVIRONMENT

Since Brazil’s current administration took office in January 2003, it generally has continued the previousadministration’s macroeconomic policies, giving priority to fiscal responsibility, and the Brazilianeconomy has experienced greater stability.

In 2004, the Brazilian economy showed significant improvements in its main economic indexes. GDPincreased by 5.7% in accordance with the new valuation method adopted in March 2007 and theaverage unemployment rate in the country’s main metropolitan decreased from 10.9% in December 2003to 9.6% in December 2004, according to information provided by IBGE. Brazil had a primary surplus inits public accounts (before debt service) of 4.6% in 2004, which exceeded the 4.3% GDP target set bythe International Monetary Fund as part of its loan agreement then in force with Brazil. In 2004, Brazilhad a trade surplus of US$34 billion. Inflation, as measured by the IPCA, was 7.6% in 2004.

The real appreciated 8.8% against the dollar in 2004. However, the growth in the economic activitycaused some concern with respect to inflation, resulting in the Federal Government’s decision to keep theSELIC rate at a higher level (Special System for Settlement and Custody—“Sistema Especial deLiquidação e Custódia—SELIC”), which was 17.8% on December 31, 2004.

In 2005, the Central Bank kept interest rates high in order to meet its annual inflation target of 5.1%.However, with the economic slowdown, the Federal Government began to reduce base interest rates inNovember 2005, in order to foster the country’s economic recovery. On December 31, 2005, Brazil’sannual base interest rate was 18.0%.

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Management’s discussion and analysis of financial condition and results of operations

The real appreciated 13.4% against the dollar in 2005. Nevertheless, Brazil had a trade surplus ofUS$44.8 billion, according to the Central Bank. GDP increased by 2.9%, and the average unemploymentrate in the country’s main metropolitan areas fell from 9.6% in December 2004 to 8.3% in December2005, according to estimates published by IBGE. Inflation, as measured by the IPCA, was 5.7% in 2005.

During 2006, the Central Bank continued to reduce the SELIC interest rate, which dropped to 13.3% inDecember 2006. Over this period, inflation, as measured by the IPCA, was 3.1% and Brazilian GDPincreased by 3.7%. The real appreciated 9.5% against the dollar, reaching R$2.138 per US$1.00 onDecember 31, 2006. The Central Bank adopted inflation targets, to be measured by the IPCA, of 4.5%for 2006 and 2007, subject to a standard deviation of 2.0%.

During the six months ended June 30, 2007, the Central Bank continued to reduce the SELIC interestrate, which fell 12.0% on June 30, 2007. Over this period, inflation, as measured by the IPCA, was2.2% and the real appreciated 11.0% against the dollar, reaching R$1.9262 per US$1.00 on June 30,2007.

The table below shows Brazil’s GDP growth, inflation, interest rates, dollar exchange rates and theappreciation (devaluation) of the real against the dollar for the indicated periods.

For the Year Ended December 31,For the Six-Month Period

Ended June 30,

2004 2005 2006 2006 2007

Real GDP growth.......................................... 5.7% 2.9% 3.7% 2.7% N/AInflation (IGP-M)(1)...................................... 12.4% 1.2% 3.8% 1.5% 1.4%Inflation (IPCA)(2) ........................................ 7.6% 5.7% 3.1% 1.7% 2.2%Interbank Certificate(3) ................................. 17.8% 18.0% 13.2% 15.3% 12.0%Appreciation (devaluation) of the real

against the dollar ....................................... 8.8% 13.4% 9.5% 8.2% 11.0%Exchange rate per US$1.00 as at the end of

the year...................................................... R$ 2.654 R$ 2.341 R$ 2.138 R$ 2.164 R$ 1.926Average exchange rate per US$1.00(4) .......... R$ 2.926 R$ 2.434 R$ 2.177 R$ 2.188 R$ 1.932

(1) IGP-M is the general market price index measured by the FGV/SP.(2) IPCA is a consumer price index measured by IBGE.(3) The CDI rate is the average daily inter-financial deposit rate in Brazil, cumulative for the last month

of the period and adjusted for inflation.(4) Represents the averages of the exchange rates during the period.

Sources: IBGE, IPEA Data, Central Bank, Cetip and Bloomberg.

EFFECTS OF MACROECONOMIC CONDITIONS AND EXCHANGE RATE VARIATIONS ON OURRESULTS OF OPERATIONS

Our business is directly affected by changes in Brazilian macroeconomic conditions. Increases in Brazil’sbase interest rate, unemployment rate, inflation and general price levels (including public tariffs) mayreduce the availability of credit and the spending power of our target customer market and adverselyaffect their confidence in future economic conditions in Brazil. These factors, combined with lowBrazilian GDP growth rates, may reduce overall consumption levels in the shopping malls that we ownand/or manage. Because the majority of the leasing agreements in these shopping malls, which are ourmain source of revenue, provide that lessees must pay a percentage of their total sales as rent, an overalldecrease in consumption could reduce our leasing revenue.

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Management’s discussion and analysis of financial condition and results of operations

In addition, inflation has affected and will continue to affect our financial performance and results ofoperations. The minimum rent paid by our lessees under their leasing agreements is usually adjusted bythe IGP-M, an inflationary index published by FGV. A higher inflation rate in Brazil may result in anincrease in this minimum rent; however, as lessees tend to pass on to consumers any increases in theirown costs, higher inflation may result in our lessees charging higher prices for the products they sell,which, in turn, may ultimately reduce their sales and therefore the total value of the rents calculated as apercentage of total sales.

We are also subject to exchange rate variation risks, as 12.0% of our loans and financing were linked tothe dollar as of June 30, 2007. Accordingly, a devaluation of the real against the dollar could result inforeign exchange losses on such loans and financing, which would directly affect our financial results.

FACTORS THAT AFFECT OUR RESULTS

Industry and operational

Our operations and results are affected by several significant factors which impact the operations andresults of the Brazilian shopping mall industry, including: (i) increases in retail activity in Brazil;(ii) increases in the percentage of retail sales made in stores located in shopping malls; (iii) theprofessionalization of lessees and creation of national retail chains; (iv) availability of new internationalbrands in Brazil; and (v) competition. In addition, our results are also affected by (i) management ofleasing agreements; (ii) our ability to optimize the use of our operational resources; (iii) the need toimprove our assets through ongoing investments to keep up with new trends and to ensure that ourshopping malls remain attractive to the public; and (iv) the training of our staff in order to ensureexcellence in the services we provide for our clients.

Seasonality

Our operating results are subject to seasonal trends affecting the shopping mall industry. Sales inBrazilian shopping malls generally increase in the weeks before Mother’s Day (May), Valentine’s Day(June), Father’s Day (August), Children’s Day (October) and Christmas (December). In addition, thelarge majority of the lessees in our shopping malls pay double minimum rent in December under theirrespective lease agreements.

CRITICAL ACCOUNTING PRACTICES

Critical accounting policies are those that are important to our financial condition and results ofoperations and that require complex or subjective judgments on the part of our management, usually as aresult of the need to prepare estimates on the effects of matters that are inherently uncertain. To theextent that the number of estimates and assumptions that affect the future resolution of uncertaintiesincreases, these judgments become more subjective and complex.

Use of estimates

We periodically evaluate the need to adjust the value of our permanent assets based on several factors,such as the level of our profitability and market developments. When necessary, in the case of eventssuch as a significant loss in the market value of property and equipment or a material adverse change inthe use of permanent assets, we prepare a cash flow analysis to determine whether the book value of ourproperty and equipment will be recoverable through our future cash flows. We use several assumptionsand estimates to determine future cash flows, which are affected by different internal and external

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Management’s discussion and analysis of financial condition and results of operations

factors, such as economic and industry trends, interest rates, exchange rates, changes in businessstrategies and the offering of products and services to the market. The results of this analysis may besignificantly different depending on the assumptions used.

We recognize depreciation expenses of our property and equipment using the straight-line method. Thedetermination of an asset’s useful life requires a certain level of judgment and is inherently uncertain dueto the changes in the uses of our various shopping malls, industry competition and the marketpositioning of each shopping mall, among other factors, that may result in a loss in value of property andequipment or may require the analysis mentioned above. In the event we are required to materiallychange the assumptions used to determine the useful lives of our property and equipment, ourdepreciation expenses may materially change.

Provision for contingencies

We are currently a party to tax, labor and civil proceedings arising out of the normal course of ourbusiness. We classify as “probable,” “possible,” or “remote” the risk that contingencies arising fromthese proceedings will materialize into actual losses. We record provisions for these contingencies in ourbooks when we consider the loss relating to the proceedings as probable. We do not make provisions forcontingencies whose risk we consider possible or remote. We base our decision as to the probability oflosses from such proceedings on the opinions of our external and internal legal counsels, taking intoconsideration the analysis of possible outcomes and strategies for challenging or entering into agreementsin relation to such proceedings. Changes in the factors taken into account for the classification of ourrisk of loss in the proceedings to which we are party may result in revisions to our provision forcontingencies.

OTHER ACCOUNTING POLICIES

Recognition of revenue and expenses

The results of each year are calculated in accordance with the accruals method. Revenue and expensesare mainly a result of the leasing of spaces in our shopping malls. We recognize our share in the revenueand costs of each of the shopping malls we own in proportion to our ownership interest therein.

Investments

Our investments in affiliates are calculated in accordance with the equity equivalence method, andconsolidated in accordance with our ownership interests in these companies. Our investments insubsidiaries are consolidated in full. The remaining investments are recorded at cost value, less anyprovisions for adjustments relating to their net realizable value (NRV), if applicable. The goodwillresulting from our investments in ECISA, EGEC, DACOM, DEICO, Cuiabá Participações S.A., EGECPAR II Participações Ltda. and EPI is based on each such company’s future profitability and will besubject to amortization over a period of ten years, in accordance with the straight-line method (exceptfor the goodwill resulting from our investments in EGEC PAR II, which will be subject to amortizationover a period of nine years).

OUR MAIN SOURCES OF REVENUE

Gross revenue from rent and services

Our gross revenue from rent and services, or gross revenue, is derived from the following activities:(i) our ownership of shopping malls, through leasing stores and other merchandising spaces and parking

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Management’s discussion and analysis of financial condition and results of operations

lot fees, which represented 85.2% of our gross revenue for the six months ended June 30, 2007;(ii) management and consulting services for shopping malls, which represented 8.8% of our grossrevenue for the six months ended June 30, 2007; (iii) leasing and merchandising services for stores andcommon spaces in shopping malls, which represented 6.0% of our gross revenue for the six monthsended June 30, 2007; and (iv) rendering of other services, which represented 0.03% of our gross revenuefor the six months ended June 30, 2007.

Most of our revenue comes from our participation in shopping malls’ revenue, calculated in proportionto our interest in the ownership interests of each shopping mall. The main types of shopping mallrevenue in which we participate are the following:

➤ Leasing. The stores in our shopping malls enter into lease agreements with an average term of fiveyears, in which rent is based on the higher of: (i) a minimum market value-based rent and (ii) apercentage of the total sales of the tenants. A tenant usually pays the higher amount on a monthlybasis, and, in the month of December, our tenants generally pay double rent. The revenues derivedfrom leasing stores also includes revenue from other merchandising spaces. The revenue derived fromleasing stores and other merchandising spaces in our shopping malls represented 64.5% of our totalgross revenue for the six months ended June 30, 2007;

➤ Parking space fees. Some shopping malls charge a fee for the use of their parking spaces. The revenuederived from parking space fees in our shopping malls represented 12.3% of our total gross revenuefor the six months ended June 30, 2007;

➤ Key money. Our tenants pay an additional amount entitling them to the use of commercial space inshopping malls. These amounts are negotiated based on the market value of commercial spaces, withthe spaces with greater visibility and consumer flow usually having the highest values. The revenuederived from key money in our shopping malls represented 8.1% of our total gross revenue for the sixmonths ended June 30, 2007; and

➤ Transfer fees. Shopping malls are entitled to a percentage of the transfer price of commercial spacefrom one tenant to another. The revenue from transfer fees in our shopping malls represented 0.3% ofour total gross revenue for the six months ended June 30, 2007.

Our revenue from services is generated from the following:

➤ Management of developments and respective tenants: our subsidiaries EGEC and DEICO providemanagement and consulting services to our shopping malls and to shopping malls owned by third-parties. As a result, EGEC and DEICO generate the following types of revenue on a monthly basis,among others: (i) a fee paid by the shopping malls, which corresponds to a percentage of eachshopping mall’s operating revenue, after deduction of operating costs (except for the management feeitself); and (ii) a fee paid by the shopping malls’ lessees, which corresponds to either a predeterminedmonthly amount, or a percentage of the condominium’s total costs and promotions fund. Our revenuefrom management services represented 8.8% of our total gross revenue from rent and services for thesix months ended June 30, 2007; and

➤ Leasing and merchandising of stores and common spaces: our subsidiaries DACOM and DEICOprovide leasing and merchandising services for stores and common spaces, which are generally chargedas a percentage of the value of the agreements for leasing of stores, kiosks and merchandising space, aswell as of key money and transfer fees. Our revenue from these services represented 6.0% of our totalgross revenue from rent and services for the six months ended June 30, 2007.

Our revenue from providing services to the shopping malls in which we hold ownership interests areconsolidated in our financial statements. Therefore, to the extent reflected in our financial statements,this item solely corresponds to the amounts other investors in these shopping malls pay to us.

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Management’s discussion and analysis of financial condition and results of operations

The tables below shows a breakdown of our total gross revenue from rent and services:

For the Year Ended December 31,

2004

% ofTotalGross

Revenue 2005

% ofTotalGross

Revenue 2006

% ofTotalGross

RevenueGross Revenue from Rent and Services Audited

(in thousands of R$, except percentages)

Leasing.............................................................. 57,900 80.6 62,526 76.1 67,494 72.2Parking fees....................................................... 11,364 15.8 15,067 18.3 16,415 17.6Key money ........................................................ 1,834 2.6 4,009 4.9 4,975 5.3Transfer fees...................................................... 158 0.2 306 0.4 331 0.4Management and merchandising services .......... 540 0.8 — — 3,808 4.1Other ................................................................ — — 264 0.3 426 0.4

Total gross revenue from rent andservices ................................................... 71,796 100.0 82,172 100.0 93,449 100.0

For the Six-Month Period Ended June 30,

2006

% ofTotalGross

Revenue 2007

% ofTotalGross

Revenue

Gross Revenue from Rent and Services Unaudited

(in thousands of R$, except percentages)

Leasing ........................................................................................... 29,955 74.6 49,475 64.4Parking fees .................................................................................... 7,299 18.2 9,445 12.3Key money...................................................................................... 1,425 3.5 6,196 8.1Transfer fees ................................................................................... 372 0.9 202 0.3Management and merchandising services ........................................ 910 2.3 11,245 15.0Other .............................................................................................. 183 0.5 255 0.3

Total gross revenue from rent and services .............................. 40,144 100.0 76,818 100.0

OUR MAIN COSTS

Cost of rent and services

Our cost of rent and services consists mainly of costs incurred by shopping malls, which are recognizedin proportion to the percentage of our direct and indirect stakes in their respective ownership interests.These costs are recorded in our financial statements as “cost of rent and services” and consist mainly ofexpenses relating to the following:

➤ Payroll: salaries and wages, social security contributions, and benefits provided to the employees ofeach shopping mall;

➤ Services provided by third-parties: include, among others, (i) shopping mall management fees;(ii) legal fees; (iii) expenses from services provided by individual contractors; and (iv) expenses fromservices provided by corporate contractors;

➤ Condominium costs: expenses relating to the maintenance of vacant stores (in particular servicecharges and IPTU), which are borne by the owners of each shopping mall;

➤ Promotion fund: contribution owed by shopping mall owners for a promotions fund maintained bylessees to cover part of the shopping mall’s marketing and advertisement costs;

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Management’s discussion and analysis of financial condition and results of operations

➤ Depreciation: includes the depreciation of the shopping mall’s buildings, calculated in accordancewith the straight-line method and on the basis of a depreciation rate substantially determined inappraisal reports; and

➤ Commercial costs: costs relating to brokering services provided by our subsidiaries DACOM andDEICO with respect to the marketing and merchandising of each shopping mall’s stores and commonspaces.

The tables below shows a breakdown of our cost of rent and services:

For the Year Ended December 31,

2004

% ofTotalCost 2005

% ofTotalCost 2006

% ofTotalCost

Cost of Rent and Services Audited

(in thousands of R$, except percentages)

Expenses from Payroll ............................................... 861 3.5 1,060 4.1 670 3.4Services provided by third parties .............................. 5,619 22.5 7,494 29.1 6,741 34.4Condominium costs .................................................. 4,098 16.4 4,464 17.3 2,222 11.3Promotion fund......................................................... 3,232 13.0 3,240 12.6 1,808 9.2Tax, loans and financing ........................................... 818 3.3 967 3.8 622 3.2Commercial costs ...................................................... 1,141 4.6 925 3.6 216 1.1Depreciation and amortization .................................. 7,941 31.9 6,778 26.3 6,501 33.2Other costs................................................................ 1,200 4.8 828 3.2 829 4.2

Total ......................................................................... 24,910 100.0 25,756 100.0 19,609 100.0

For the Six-Month Period Ended June 30,

2006

% ofTotalGross

Revenue 2007

% ofTotalGross

Revenue

Cost of Rent and Services Unaudited

(in thousands of R$, except percentages)

Expenses from Payroll .................................................................... 565 4.6 2,719 16.3Services provided by third parties.................................................... 3,586 29.4 3,149 19.0Condominium costs ........................................................................ 2,246 18.4 3,183 19.2Promotion fund .............................................................................. 1,668 13.7 767 4.6Tax, loans and financing................................................................. 303 2.5 535 3.2Commercial costs............................................................................ 198 1.6 231 1.41Depreciation and amortization........................................................ 3,288 27 4,358 26.3Other costs ..................................................................................... 338 2.8 1,654 10.0

Total............................................................................................... 12,192 100.0 16,596 100.0

COMPONENTS OF OUR RESULTS OF OPERATIONS

Following are the main components of our statement of income:

Gross revenue from rent and services

For a description of our gross revenue from leasing and the provision of services, see “—Our MainSources of Revenue.”

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Management’s discussion and analysis of financial condition and results of operations

Taxes and contributions

Taxes and contributions consists of the following deductions: (i) sales taxes, which in turn encompass thefollowing federal contributions: (a) PIS (contribution to the Brazilian Social Integration Program), leviedat the rate of 1.65% since December 2002 on a non value-added basis and (b) COFINS (Brazilian Taxfor Social Security Financing), levied at the rate of 3% until January 2004 and 7.6% as of February2004, on a non value-added basis; (ii) services rendering taxes, consisting primarily of the taxes onservices (Imposto Sobre Serviços), or ISS, which is a municipal tax levied at a current rate of 5% on ourrevenue from management and parking fees; and (iii) others, which include rebates and discounts offeredto store tenants as provided under the lease agreements.

Net revenue from rent and services

Our net revenue from rent and services consists of our gross revenue less taxes and contributions.

Gross profit

Our gross profit is comprised of our net revenue less our cost of rent and services.

Cost of rent and services

For a description of our cost of rent and services, see “—Our Main Costs.”

Operating expense (income)

Our operating expense (income) consist primarily of marketing expenses, general and administrativeexpenses, management fees, depreciation and amortization, legal and tax expenses (contingencies) andfinancial income and expenses.

Marketing expenses. Our marketing expenses primarily consist of expenses with advertising, marketingcampaigns, sponsoring events, promotions, as well as losses on the collection of credits.

General and administrative expenses. These expenses consist mainly of expenses from payroll (salariesand wages, social security contributions, and benefits), expenses from third-party services providers hiredby our central administration (auditors, legal counsel and others), consumables, rent, service chargesrelating to our offices, travel expenses and legal and court fees.

The tables below shows a breakdown of our general and administrative expenses for periods indicated:

Year Ended December 31,

2004% of Total

Cost 2005% of Total

Cost 2006% of Total

Cost

Audited

(in thousands of R$, except percentages)

Payroll ............................................................... 1,424 25.4 1,647 22.1 2,393 22.6Services provided by third parties—legal

entities............................................................ 2,980 53.2 3,261 43.7 4,350 41.1Consumables...................................................... 128 2.3 335 4.5 712 6.7Rent................................................................... 328 5.9 374 5.0 509 4.8Other general and administrative expenses......... 745 13.3 1,847 24.7 2,612 24.7

Total.................................................................. 5,605 100.0 7,464 100.0 10,576 100.0

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Management’s discussion and analysis of financial condition and results of operations

For the Six-Month PeriodEnded June 30,

2006

% of TotalGross

Revenue 2007

% of TotalGross

Revenue

Unaudited

(in thousands of R$, except percentages)

Payroll ......................................................................................... 1,376 40.2 6,949 45.2Services provided by third parties—legal entities .......................... 1,215 35.5 6,449 41.9Services provide by third parties—natural persons ....................... 12 0.4 21 0.1Services provided by third parties—concessionaires ..................... 71 2.1 197 1.3Consumables ............................................................................... 114 3.3 135 0.9Other general and administrative expenses .................................. 662 19.3 3,165 20.6Presumed Credits—PIS/COFINS .................................................. (25) (0.7) (1,526) (9.9)

Total............................................................................................ 3,425 100.0 15,390 100.0

Legal and tax expenses. Our legal and tax expenses primarily consist of different charges and taxes andprovision for contingencies relating to tax proceedings to which we are party.

Depreciation and amortization. Our depreciation and amortization expenses primarily consist ofexpenses derived from the adjustment of the value of our permanent assets and amortization of goodwillfrom our acquisitions.

Net financial income (expense)

Financial income. Represents the income of receivables from financial investments, as well as foreignexchange gains on foreign currency liabilities.

Financial expenses. Represent mainly interest, charges, monetary variation and foreign exchange lossesrelating to debts denominated both in reais and in foreign currencies and expenses incurred in connectionwith our initial public offering of shares as of April 2, 2007.

Net operating income

Our net operating income consists of gross profit less net operating expense and net financial expense.

Non-operating income (expense)

Our non-operating income (expense), net consists of gains and losses from sales of permanent assets.

Income tax and social contribution

Income tax and social contribution are calculated on a monthly basis, under the “real profit” regime,whereby we are required to pay income tax and social contribution based on our actual net income, asadjusted in accordance with applicable tax laws. The applicable income tax rate is 15% plus a surchargeof 10% and the social contribution rate is 9%. Certain subsidiaries and affiliates have adopted the“presumed profit” taxation regime, whereby income tax is calculated at the rate of 32% of revenue fromrent and services and 100% of financial income. Social contribution is calculated at a rate of 32% ofgross revenue, to which nominal rates apply.

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Management’s discussion and analysis of financial condition and results of operations

Minority interests

The interest held by our minority shareholders represents the amount excluded from our results ofoperating in respect of the interests of other shareholders in our consolidated subsidiaries.

SIX-MONTHS ENDED JUNE 30, 2006 (COMBINED) COMPARED TO JUNE 30, 2007

Income Statement

For the sixmonths endedJune 30, 2006

% of NetRevenue

For the sixmonths endedJune 30, 2007

% of NetRevenue

Variation(%)

Unaudited

(in thousands of R$, except percentages)

Gross revenue from rent and services .......... 40,144 107.8 76,818 106.3 91.4Taxes and contributions .............................. (2,910) (7.8) (4,572) (6.3) 57.1Net revenue from rent and services.............. 37,234 100.0 72,246 100.0 94.0Cost of rent and services.............................. (12,192) (32.7) (16,596) (23.0) 36.1Gross profit................................................. 25,042 67.3 55,650 77.0 122.2Operating expense (income) ........................ (5,580) (15.0) (70,362) (97.4) 1,161.0Marketing expenses..................................... (711) (1.9) (1,187) (1.6) 66.9General and administrative expenses ........... (3,425) (9.2) (15,390) (21.3) 349.3Depreciation and amortization .................... (254) (0.7) (21,312) (29.5) 8,290.6Legal and tax expenses ................................ (94) (0.3) (3,241) (4.5) 3,347.9Financial income (expense).......................... (1,096) (2.9) (30,737) (42.5) 2,704.5Equity income ............................................. 1,505 2.1 —Operating income........................................ 19,462 52.3 (14,712) (20.4) —Non-operating income (expense) ................. (81) (0.2) 229 0.3 —Income before income tax and minority

interest..................................................... 19,380 52.0 (14,483) (20.0) —Income tax and social contribution ............. (5,802) (15.6) (4,426) (6.1) (23.7)Income before employee profit sharing and

minority interest ...................................... 13,578 36.5 (18,909) (26.2) —Minority interests ........................................ (250) (0.7) (74) (0.1) (70.4)Net income (loss) ........................................ 13,328 35.8% (18,983) (26.3) —

Gross revenue from rent and services

Our gross revenue from rent and services increased by 91.5%, from R$40.1 million in the six-monthperiod ended June 30, 2006 to R$76.8 million in the same period of 2007. This increase in our grossrevenue from rent and services was mainly a result of the following:

(i) the revenues from EGEC, DACOM and DEICO, our subsidiaries responsible for the rendering ofservices, which we did not own in the six-month period ended June 30, 2006, and which resulted inR$10.2 million in net revenue from rent and services in the first six months of 2007;

(ii) recording of the rent revenues related to the acquisitions of the following ownership interests,none of which were owned in the first six months of 2006: 100% of Shopping Estação in March2007, which contributed R$7.8 million to our gross revenue from rent in the period ended June 30,2007; 38.7% of Shopping Goiânia in January 2007, which contributed R$4.6 million to our grossrevenue from rent in the period ended June 30, 2007; 34.2% of Shopping Iguatemi Maceió in May207, which generated R$1.0 million of our gross revenue from rent in the period ending June 30,2007. These acquisitions added 69.5 thousand square meters to our own gross leasable area;

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Management’s discussion and analysis of financial condition and results of operations

(iii) the acquisition of an additional 30% stake in Shopping Del Rey’s ownership interests, whichtook place in the beginning of October 2006. This acquisition added approximately 11,233 squaremeters to our gross leasable area and contributed to a 11% increase (approximately R$369thousand) in our revenue derived from Shopping Del Rey in the first six months of 2007 ascompared to the same period in 2006;

(iv) additional revenues from the expanded area of Norte Shopping (approximately 33,000 squaremeters), which was completed in January 2007, and which resulted in additional revenue of R$4.8million in this shopping mall during the six-month period ended June 30, 2007 as compared to thesame period in 2006.

(v) additional revenues from Shopping Recife in the amount of R$1.7 million, which resulted from(a) increased revenue derived from Recife Locadora de Equipamentos para Autogeração Ltda.,which provides electricity to Shopping Recife, (b) increased assignment and key money; and(c) increased revenues from rent due to the reduction in vacancy rates from 4.1% to 0.9% of thegross leasable area in Shopping Recife.

Taxes, contributions and other

Taxes and contributions increased by 57.1%, from R$2.9 million in the six-month period ended June 30,2006 (or 7.8% of our net revenue from rent and services) to R$4.6 million in the same period of 2007(or 6.3% of our net revenue from rent and services). This increase was mainly a result of the significantincrease in our revenues subject to taxes and contribution for the same period.

Net revenue from rent and services

As a result of the foregoing, our net revenue from rent and services increased by R$35 million, or 94.0%,from R$37.2 in the six-month period ended June 30, 2006 to R$72.2 in the same period of 2007.

Cost of rent and services

The cost of rent and services increased by 36.1%, from R$12.2 million in the six-month period endedJune 30, 2006, representing 32.7% of our net revenue from rent and services, to R$16.6 million,representing 23% of our net revenue from rent and services, in the same period of 2007. This increasewas mainly a result of the following:

(i) additional costs of approximately R$3.0 million related to the acquisitions of ownership interestsin shopping malls carried out in the six-month period ended June 30, 2007;

(ii) costs of approximately R$2.4 million related to the rendering of services by EGEC, DACOMand DEICO to the shopping malls not included in our portfolio in the six-month period endedJune 30, 2006 but included in our portfolio in the six-month period ended June 30, 2007; and

(iii) loss arising from a legal proceeding with respect to Shopping Villa-Lobos that resulted in thereimbursement of R$496 thousand in key money previously received. The costs of Shopping Villa-Lobos increased R$371 thousand in the six-month period ended June 30, 2007.

These increases were offset by the following: (i) Norte Shopping reduced its costs by approximatelyR$833 thousand in the first six months of 2007 as compared to the same period in 2006; (ii) ShoppingRecife reduced its costs by approximately R$182 thousand in the first six months of 2007 as comparedto the same period in 2006; and (iii) Shopping Campo Grande reduced its costs by approximately R$831thousand in the first six months of 2007 as compared to the same period in 2006. These reductions aremainly due to a decrease in costs of services rendered to us by third parties as a result of renegotiations ofthe terms and condition of such services, as well as to a lower vacancy rates in our shopping malls.

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Management’s discussion and analysis of financial condition and results of operations

Gross profit

As a result of the foregoing, our gross profit increased by R$30.6 million, or 122.4%, from R$25 millionin the six-month period ended June 30, 2006 (or 67.3% of our net revenue from rent and services whenit reached R$25.0 million) to R$55.6 million in the same period of 2007 (or 77% of our net revenuefrom rent and services).

Operating expenses

Operating expenses increased by R$64.8 million from R$5.6 million in the six-month period endedJune 30, 2006 to R$70.4 million in the same period of 2007. This increase was mainly a result of thefollowing:

➤ Marketing Expenses. Our commercial expenses for the six month period ended on June 30, 2007increased by approximately R$476 thousand, or 66.9%, from R$711 thousand (representing 1.9% ofour net revenue from rent and services) in the six-month period ended June 30, 2006 to R$1.2 million(representing 1.6% of our net revenue from rent and services) in the same period of 2007.

➤ Administrative Expenses. Our administrative expenses for the six-month period ended on June 30,2007 increased by approximately R$12 million, from R$3.4 million (or 9.2% of our net revenue fromrent and services) in the six-month period ended June 30, 2006 to R$15.4 million (or 21.3% of our netrevenue from rent and services) in the same period. This variation results from: (i) increase inpersonnel expense of approximately R$5.6 million in the first six months of 2007 resulting from newhires; (ii) increase in services expense of approximately R$5.4 million in the first six months of 2007due to consulting expenses, judicial assessments, external auditor expenses and utility expenses;(iii) increase of R$2.5 million in other administrative expenses in the first six months of 2007 resultingfrom advertisement, rent, condominium and travel expenses; and (iv) increase in the PIS/COFINSpresumed credit of approximately R$1.5 million.

➤ Legal and Tax Expenses. Our legal and judicial expenses for the six-month period ended on June 30,2007 increased by approximately R$3.1 million, from R$94 thousand in the six-month period endedJune 30, 2006 to R$3.2 million in the same period of 2007. These expenses increased as a result of PISand COFINS taxes.

➤ Depreciation and Amortization. Depreciation and amortization expenses increased R$21.0 million,from R$0.3 million in the six-month period ended June 30, 2006 to R$21.3 million in the same periodof 2007. This expense results from our acquisition of ownership interests in various companies that inturn had interests in shopping malls subsequent to June 30, 2007.

Our operational expenses in the six-month period ended June 30, 2007 included non-recurring expensesrelated to our initial share offer, travels and brokerage and other expenses related to the acquisitionsmade in this period and non recurring expenses related to our corporate and operational reorganizationin preparation of our initial public offering of shares, which totaled in R$9.1 million.

Our operating expenses, excluding amortization and non-recurring expenses, reached R$10.7 million inthe six-month period ended June 30, 2007, an increase of R$6.5 million, or 155%, as compared to thesame period in 2006.

Net financial income (expense)

We recorded net financial expenses of R$30.7 million (or 42.5% of our net revenue from rent andservices) in the six-month period ended June 30, 2007 as compared to net financial expenses of R$1.1million (or 2.9% of our net revenue from rent and services) in the same period of 2006. Our financial

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Management’s discussion and analysis of financial condition and results of operations

income increased by R$11.8 million (from R$7.4 million (or 19.8% of our net revenue from rent andservices) during the six-month period ended June 30, 2006 to R$19.2 million (or 26.5% of our netrevenue from rent and services) in the same period of 2007, due to the interest accrued in the investmentsmade with the net proceeds from our initial public offering of shares in May 2007 of approximatelyR$621.2 million. Our financial expenses increased by R$41.4 million, or 487.1%, from R$8.5 million inthe six-month period ended June 30, 2006 (representing 22.7% of our net revenue from rent andservices) to R$49.9 million in the same period in 2007 (representing or 69.1% of our net revenue fromrent and services). The increase in financial expenses is mainly a result of the non-recurring expenses(including commissions paid to underwriters) arising from our initial public offering of shares in theamount of approximately R$28.7 million and two loans in reais with respect to which we were requiredto pay the IOF, commissions and financial charges: (i) a loan extended by Unibanco, in the amount ofR$70.0 million, with maturity in February 2019, remunerated based on the IGP-M, plus 9.70% perannum (see “—Financing Agreements—Bank Credit Notes with Unibanco”); (ii) a loan extended by ItaúBBA, in the amount of R$70 million, with maturity in February 2019, remunerated based on the IGP-M,plus 9.75% per annum (see “—Financing Agreements—Bank Credit Notes with Itaú BBA”).

Non-operating expense (income)

Our net non-operating expense (income) increased from an expense of R$0.1 million in the six-monthperiod ended June 30, 2006 to income of R$0.2 million in the same period of 2007 (or 0.3% of our netrevenue from rent and services).

Income tax and social contribution

Taxes and contributions decreased by R$1.4 million, or 24.1%, from R$5.8 million (or 15.6% of ournet revenue from rent and services) in the six-month period ended June 30, 2006 to R$4.4 million (or6.1% of our net revenue from rent and services) in the same period of 2007. This decrease was mainly aresult of (i) the adoption of the “real profit” (lucro real) taxation regime by our subsidiary ECISAParticipações in the second quarter of 2007; (ii) the increase in the taxes recoverable due to thecalculation of the credits of PIS and COFINS and other taxes and (iii) the tax benefit from the goodwillon the acquisitions of our subsidiaries ECISA Engenharia and ECISA Participações.

Income (loss) before minority interest

As a result of the foregoing, our income before minority interest decreased from R$13.6 million in thesix-month period ended June 30, 2006 (or 36.5% of our net income from rent and services) to a loss ofR$18.9 million in the same period of 2007.

Minority interest

The participation of minority shareholders decreased by 135%, from R$0.2 million in the six monthperiod ended June 30, 2006 to R$0.07 million in the same period of 2007.

Net income (loss)

As a result of the foregoing, we recorded a loss of R$19 million in the six-month period ended June 30,2007 as compared to a net income of R$13.3 million (representing 35.8% of our net revenue from rentand services) in the same period in 2006.

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Management’s discussion and analysis of financial condition and results of operations

YEAR ENDED DECEMBER 31, 2006 COMPARED TO DECEMBER 31, 2005

Income Statement 2005% of NetRevenue 2006

% of NetRevenue

Variation (%)2005/2006

Audited

(in thousands of R$, except percentages)

Gross revenue from rent and services ..................... 82,172 111.9 93,449 108.7 13.7Taxes and contributions......................................... (8,759) (11.9) (7,498) (8.7) (14.4)Net revenue from rent and services ........................ 73,413 100.0 85,951 100.0 17.1Cost of rent and services ........................................ (25,756) (35.1) (19,609) (22.8) (23.9)Gross profit............................................................ 47,657 64.9 66,342 77.2 39.2Operating expense (income) ................................... (12,987) (17.7) (22,970) (26.7) 76.9

Marketing expenses ........................................ (2,427) (3.3) (1,849) (2.2) (23.8)General and administrative expenses............... (7,464) (10.2) (10,576) (12.3) 41.7Board of directors’ and executive committee’s

fees.............................................................. (514) (0.7) (566) (0.7) 10.1Depreciation and amortization........................ (430) (0.6) (3,878) (4.5) 801.9Legal and tax expenses.................................... (2,152) (2.9) (6,101) (7.1) 183.5Financial income (expense) ............................. (3,794) (5.2) (2,061) (2.4) (45.7)

Operating income .................................................. 30,876 42.1 41,311 48.1 33.8Non-operating income (expense)............................ (125) (0.2) (652) (0.8) 421.6Income before income tax and minority interest..... 30,751 41.9 40,659 47.3 33.2

Income tax and social contribution ................. (8,597) (11.7) (9,525) (11.1) 10.8Income before employee profit sharing and

minority interest ................................................. 22,154 30.2 31,134 36.2 40.5Employee profit sharing .................................. (127) (0.2) — — —Minority interests ........................................... (703) (1.0) (786) (0.9) 11.8

Net income (loss) ................................................... 21,324 29.0 30,348 35.3 42.3

Gross revenue from rent and services

Our gross revenue from rent and services increased by 13.7%, from R$82.2 million in 2005 to R$93.4million in 2006. This increase was mainly a result of the following factors:

(i) our subsidiaries EGEC and DACOM, which were acquired in October 2006, added R$2.2million and R$1.6 million, respectively, to our gross revenue;

(ii) the acquisition of an additional 30% stake in Shopping Del Rey’s ownership interests, whichtook place in the beginning of October 2006. This acquisition added approximately 11,200 squaremeters to our gross leasable area and contributed to a 40.8% increase (approximately R$2.5million) in our revenue from Shopping Del Rey;

(iii) an average increase of approximately 2.0% in the remaining shopping malls’ gross leasable area,which, combined with a reduction in our average vacancy rate from 3.3% as of December 31, 2005to 3.0% as of December 31, 2006 and the growth in revenue per square meter of gross leasable areain our shopping malls, added approximately R$2.5 million to our gross revenue in 2006; and

(iv) an increase in our revenue from parking fees, which added approximately R$1.4 million to ourgross revenue. The increase in our parking revenue was mainly a result of an increase by 98.9% inShopping Del Rey’s parking revenue, which began charging parking fees in May 2005.

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Management’s discussion and analysis of financial condition and results of operations

Taxes and contributions

Taxes and contributions decreased by 14.4%, from R$8.8 million in 2005 (or 12.0% of our net revenuefrom rent and services) to R$7.5 million in 2006 (or 8.7% of our net revenue from rent and services).This decrease was mainly a result of the adoption of the “presumed profit” (lucro presumido) taxationregime by our subsidiary ECISA Participações, whereby PIS and COFINS rates are lower than thoseapplicable under the “real profit” taxation regime.

Net revenue from rent and services

As a result of the foregoing, our net revenue from rent and services increased by 17.1%, from R$73.4million in 2005 to R$86.0 million in 2006.

Cost of rent and services

The cost of rent and services decreased by 23.9%, from R$25.8 million in 2005 (or 35.1% of our netrevenue from rent and services) to R$19.6 million in 2006 (or 22.8% of our net revenue from rent andservices). This reduction was mainly a result of the following: (i) a R$3.7 million reduction incondominium fees relating to vacant stores resulting from a reduction in our average vacancy rates andin NorteShopping center’s condominium cost; (ii) a R$0.8 million decrease in expenses from third-partyservices providers, mainly as a result of the renegotiation of the services contracts for NorteShopping;(iii) a R$0.6 million decrease in our shopping malls’ commercial costs; and (iv) a decrease of R$1.4million in our expenses from the promotions fund.

Gross profit

As a result of the foregoing, our gross profit increased by 39.2%, from R$47.7 million in 2005 (or64.9% of our net revenue from rent and services) to R$66.3 million in 2006 (or 77.2% of our netrevenue from rent and services).

Operating expense (income)

➤ Marketing expenses. Our marketing expenses decreased by 23.8%, from R$2.4 million in 2005 (or3.3% of our net revenue from rent and services) to R$1.9 million in 2006 (or 2.2% of our net revenuefrom rent and services).

➤ General and administrative expenses. Our general and administrative expenses increased by 41.7%,from R$7.5 million in 2005 (or 10.2% of our net revenue from rent and services) to R$10.6 million in2006 (or 12.4% of our net revenue from rent and services). This variation was mainly a result of thefollowing: (i) an increase in the cost of services provided by third parties (in particular legal servicesprovided in the context of our recent corporate restructuring) and (ii) payroll expenses, whichincreased by approximately R$0.7 million.

➤ Legal and tax expenses. Our legal and tax expenses increased 183.5% from R$2.2 million in 2005to R$6.1 million in 2006, as a result of the payment of CPMF on financial investments, an increase inthe value of our investments and the creation of a R$0.8 million provision for contingencies relating tocivil proceedings to which we are party.

➤ Depreciation and amortization. Depreciation and amortization expenses increased 801.9%, fromR$0.4 million in 2005 to R$3.9 million in 2006, as a result of amortization of premiums of R$3.6million.

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Management’s discussion and analysis of financial condition and results of operations

Net financial income (expense)

Our net financial expenses decreased by 45.7%, from R$3.8 million in 2005 (or 5.2% of our netrevenue) to R$2.1 million in 2006 (or 2.4% of our net revenue). This decrease in net financial expenseswas mainly a consequence of a 39.0% increase in our financial revenue (which resulted from theR$193.0 million capital increase carried out in November 2006) and the recognition of expenses fromhedging operations carried out in 2005, which amounted to R$1.6 million.

Operating income

As a result of the foregoing, our net operating income increased by 33.7%, from R$30.9 million in 2005(or 42.1% of our net revenue from rent and services) to R$41.3 million in 2006 (or 48.1% of our netrevenue from rent and services).

Non-operating expense (income)

Our net non-operating expense (income) changed from an expense of R$0.1 million in 2005 (or 0.2% ofour net revenue from rent and services) to an expense of R$0.7 million in 2006 (or 0.8% of our netrevenue from rent and services). The increase was mainly a result of the sale of IT equipment, which waspart of our permanent assets, for a price below the cost of acquisition, net of depreciation.

Income tax and social contribution

Our expenses from income tax and social contribution increased by 10.8%, from R$8.6 million in 2005(or 11.7% of our net revenue from rent and services) to R$9.5 million in 2006 (or 11.1% our netrevenue from rent and services) as a result of our increased taxable income in 2006.

Income before minority interest

As a result of the foregoing, our income before minority interest increased by 40.5%, from R$22.2million in 2005 (or 30.2% of our net income from rent and services) to R$31.1 million in 2006 (or36.2% of our net income from rent and services).

Minority interest

The participation of minority shareholders increased by 11.8%, from R$0.7 million in 2005 (or 1.0% ofour net revenue from rent and services) to R$0.8 million in 2006 (or 0.9% of our net revenue from rentand services).

Net income (loss)

As a result of the foregoing, our net income increased by 42.3%, from R$21.3 million in 2005 (or 29.0%of our net revenue from rent and services) to R$30.4 million in 2006 (or 35.3% of our net revenue fromrent and services for the period).

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Management’s discussion and analysis of financial condition and results of operations

YEAR ENDED DECEMBER 31, 2005 COMPARED TO DECEMBER 31, 2004

Income Statement 2004% of NetRevenue 2005

% of NetRevenue

% Variation2004/2005

Audited

(in thousands of R$, except percentages)

Gross revenue from rent and services ....................... 71,796 109.3 82,172 111.9 14.5Taxes and contributions........................................... (6,112) (9.3) (8,759) (11.9) 43.3Net revenue from rent and services .......................... 65,684 100.0 73,413 100.0 11.8Cost of rent and services .......................................... (24,910) (37.9) (25,756) (35.1) 3.4Gross profit ............................................................. 40,774 62.1 47,657 64.9 16.9Operating expense (income)..................................... (14,994) (22.8) (12,987) (17.7) (13.4)

Marketing expenses .......................................... (5,175) (7.9) (2,427) (3.3) (53.1)General and administrative expenses................. (5,605) (8.5) (7,464) (10.2) 33.2Board of directors’ and executive committee’s

fees................................................................ (447) (0.7) (514) (0.7) 15.0Depreciation and amortization.......................... (277) (0.4) (430) (0.6) 55.2Legal and tax expenses ..................................... (3,490) (5.3) (2,152) (2.9) (38.3)

Financial income (expense) ...................................... (5,919) (9.0) (3,794) (5.2) (35.9)Operating income .................................................... 19,861 30.2 30,876 42.1 55.5Non-operating income (expense).............................. 1,124 1.7 (125) (0.2) (111.1)Income before income tax and minority interest....... 20,985 31.9 30,751 41.9 46.5

Income tax and social contribution ................... (7,317) (11.1) (8,597) (11.7) 17.5Income before employee profit sharing and minority

interest ................................................................. 13,668 20.8 22,154 30.2 62.1Employee profit sharing.................................... (121) (0.2) (127) (0.2) 5.0Minority interests ............................................. (606) (0.9) (703) (1.0) 16.0

Net income (loss) ..................................................... 12,941 19.7 21,324 29.0 64.8

Gross revenue from rent and services

Our gross revenue from rent and services increased by 14.5%, from R$71.8 million in 2004 to R$82.2million in 2005. This increase in our gross revenue from rent and services was mainly a result of thefollowing:

(i) an increase of approximately 2.7% in our shopping malls’ gross leasable area (which resulted inthe addition of 1,900 square meters to our total gross leasable area), which, combined with areduction in our average vacancy rate (from 4.2% as of December 31, 2004 to 3.3% as ofDecember 31, 2005) and the growth of revenue per gross leasable area of all of our shopping malls,added approximately R$4.6 million to our gross revenue in 2005;

(ii) a 32.6% increase, from R$11.4 million in 2004 to R$15.1 million in 2005, in our revenue fromparking fees, which added approximately R$3.7 million to our gross revenue. The increase in ourparking revenue was mainly a result of an increase by 96.0% in Shopping Recife’s parking revenue,as well as of the fact that Shopping Del Rey began charging fees for its parking spaces in May 2005;and

(iii) a 118.6% increase in fees charged on the leasing of vacant stores, from R$1.8 million in 2004 toR$4.0 million in 2005, of the transfer fee charged from the leasing of empty stores that resultedfrom new contracts we entered into with retailers, particularly at Shopping Recife, Shopping Villa-Lobos and Norte-Shopping.

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Management’s discussion and analysis of financial condition and results of operations

Taxes and contributions

Taxes and contributions increased by 42.6%, from R$6.1 million in 2004 (or 9.3% of our gross revenue)to R$8.7 million in 2005 (or 11.9% of our gross revenue). This variation was mainly a result of theincrease from 3.65% to 9.25% in PIS and COFINS rates applicable to companies which operate underthe “real profit” taxation regime. This increase was implemented in August 2004 and affected, inparticular, the net revenue of our subsidiary ECISA Engenharia.

Net revenue from rent and services

As a result of the foregoing, our net revenue increased by 11.7%, from R$65.7 million in 2004 toR$73.4 million in 2005.

Cost of rent and services

Our cost of rent and services increased by 3.6%, from R$24.9 million in 2004 (or 37.9% of our netrevenue from rent and services) to R$25.8 million in 2005 (or 35.1% of our net revenue from rent andservices). This increase was mainly a result of an increase of 33.1% (or R$1.8 million) in our expensesfrom third-party services providers primarily to NorteShopping and Shopping Recife, which togethercontributed with a R$0.9 million increase. However, this increase was partially offset by renegotiationsof our services contracts with third parties that we have undergone in 2005.

Gross profit

As a result of the foregoing, our gross profit increased by 16.9%, from R$40.8 million in 2004 (or62.1% of our net revenue from rent and services) to R$47.7 million in 2005 (or 64.9% of our netrevenue from rent and services).

Operating expense (income)

➤ Marketing expenses. Our marketing expenses decreased by 53.1%, from R$5.2 million in 2004 (or7.9% of our net revenue from rent and services) to R$2.4 million in 2005 (or 3.3% of our net revenuefrom rent and services). This decrease was mainly a result of a reduction of approximately R$2.7million in our losses resulting from overdue rents for 2005.

➤ General and administrative expenses. Our general and administrative expenses increased by 33.9%,from R$5.6 million in 2004 (or 8.5% of our net revenue from rent and services) to R$7.5 million in2005 (or 10.2% of our net revenue from rent and services). This variation was mainly due to thepayment of tax penalties of R$0.8 million, which were recorded as “other general and administrativeexpenses” in our 2005 financial statements.

➤ Legal and tax expenses. Our legal and tax expenses decreased R$1.3 million from R$3.5 million in2004 to R$2.2 million in 2005. These expenses amounted to 2.9% of our net revenue from rent andservices in 2005, versus 5.3% in 2004.

Financial income (expense)

Our net financial expenses decreased by 35.6%, from an expense of R$5.9 million in 2004 (or 9.0% ofour net revenue) to an expense of R$3.8 million in 2005 (or 5.2% of our net revenue). This decrease wasmainly a consequence of a reduction in our total debt from R$48.9 million as of December 31, 2004 toR$37.9 million as of December 31, 2005.

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Management’s discussion and analysis of financial condition and results of operations

Net Operating income

As a result of the foregoing, our net operating income increased by 55.3%, from R$19.9 million in 2004(or 30.2% of our net revenue from rent and services) to R$30.9 million in 2005 (or 42.1% of our netrevenue from rent and services).

Non-operating income

Our net non-operating results decreased from R$1.1 million in 2005 (or 1.7% of our net revenue fromrent and services) to negative R$0.1 million in 2005 (or 0.2% of our net revenue from rent and services).The decrease was mainly a result of the sale in 2005 of IT equipment which was part of our permanentassets for a price below its acquisition cost, net of depreciation.

Income tax and social contribution

Our expenses from income tax and social contribution increased from R$7.3 million in 2004 (or 11.1%of our net income from rent and services) to R$8.6 million as of December 31, 2005 (or 11.7% our netincome from rent and services).

Minority interests

The participation of minority shareholders increased by 16.0%, from R$0.6 million in 2004 (or 0.9% ofour net income from rent and services) to R$0.7 million in 2005 (or 1.0% of our net income from rentand services).

Net income (loss)

As a result of the forgoing, our net income increased by 64.8%, from R$12.9 million in 2004 (or 19.7%of our net income from rent and services) to R$21.3 million in 2005 (or 29.0% of our net income fromrent and services).

LIQUIDITY AND CAPITAL RESOURCES

Sources

Our main sources of liquidity and capital resources are the collection of rent from our shopping mallsand leasing and merchandising fees from the shopping malls that we manage (in which we may or maynot hold ownership interests), in addition to revenue from the investment of cash and cash equivalents.

CASH FLOWS

Operating activities

Our net cash from operating activities in the six-month period ended June 30, 2007 amounted toapproximately R$58.5 million. Our net cash from operating activities for the six month period endedJune 30, 2007 was generated principally by the net results of the shopping malls that were added to ourportfolio during that period.

In 2006 our cash flows from operating activities was greater than in 2005. As a result net cash generatedby operating activities totaled R$73.9 million in 2006 compared to R$45.0 million in 2005 and R$31.0million in 2004.

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Management’s discussion and analysis of financial condition and results of operations

Investing activities

Our net cash used in investing activities in the six-month period ended June 30, 2007 totaledapproximately R$338 million and, in 2006, 2005 and 2004, R$418.7 million, R$14.9 million andR$12.0 million, respectively. Our net cash used in investing activities in the six-month period endedJune 30, 2007 was used for the acquisition of ownership interest in Shopping Del Rey, ShoppingGoiânia, Shopping Estação, Pantanal Shopping, Araguaia Shopping, Shopping ABC, Shopping IguatemiMaceió, Shopping Iguatemi Belém, Amazonas Shopping, Shopping Piracicaba, Shopping Tamboré, NatalShopping and Shopping Curitiba.

Financing activities

Cash derived from our financing activities amounted to R$140 million in the six-month period endedJune 30, 2007. This amount was mainly due to two loans in the form of credit notes issued in favor ofItaú BBA and Unibanco, each in the amount of R$70 million. See “—Indebtedness—FinancingAgreements.” Cash used to service our indebtedness in the six-month period ended June 30, 2007amounted to approximately R$40.7 million.

In 2006, 2005 and 2004, net cash provided by financing activities amounted to approximately R$348million, R$29.9 million and R$23.3 million, respectively.

CAPITAL EXPENDITURES

Our main capital expenditures relate to the acquisition of ownership interests in existing shopping malls,expansion and implementation of new developments, and investments in the maintenance andmodernization of our assets, in addition to obligations regarding the servicing of our debts, payment offederal, state and municipal taxes, and payment of dividends and interests on shareholders’ equity to ourshareholders. Our capital expenditures amounted to R$12 million, R$9.3 million, R$94.5 million andR$338 million, as of December 31, 2004, 2005 and 2006 and June 30, 2007, respectively.

Since October 2006, we have acquired the following interests in 21 new shopping malls, increasing ourown gross leasable area by approximately 244 thousand square meters by means of a total investment ofR$1.45 billion: (i) on October 2, 2006, 30.0% of Shopping Del Rey (an increase in our ownershipinterest); (ii) on January 2, 2007, 38.7% of Goiânia Shopping; (iii) on February 5, 2007, 100.0% ofShopping Estação; (iv) on March 1, 2007, 10.0% of Pantanal Shopping; (v) on March 1, 2007,convertible debentures with participation in the profits of the company responsible for the developmentof Araguaia Shopping, which give us, among other rights, the right to receive 50% of the net income ofAraguaia Shopping and the right to appoint its officers and directors; (vi) on April 11, 2007, 0.7% ofShopping ABC; (vii) on April 11, 2007, 6.9% of Goiânia Shopping (an increase in our ownershipinterest); (viii) on April 13, 2007, 8.5% of Shopping Center Piracicaba, 12.2% of Shopping CenterIguatemi Belém, 11.1% of Amazonas Shopping and 16.6% of Shopping Iguatemi Maceió by means ofthe acquisition of the total capital stock of EPI; (ix) on May 2, 2007, 17.6% of Shopping IguatemiMaceió (an increase in our ownership interest); (x) on May 14, 2007, 6.1% of Amazonas Shopping (anincrease in our ownership interest); (xi) on May 18, 2007, 100.0% of Shopping Tamboré; (xii) onMay 21, 2007, 3.0% of Shopping Center Piracicaba (an increase in our ownership interest); (xiii) onMay 22, 2007, 35.9% of Natal Shopping; (xiv) on May 23, 2007, 20.0% of Shopping Curitiba (anincrease in our ownership interest); (xv) on June 22, 2007, 35.0% of Top Shopping; (xvi) on June 28,2007, 15.0% of Shopping Curitiba; (xvii) on June 29, 2007, 9.1% of Natal Shopping (an increase in ourownership interest); (xviii) on July 3, 2007, 1% of Minas Shopping; (xix) on July 3, 2007, 13.0% of BigShopping; (xx) on July 16, 2007, 100.0% of Niterói Plaza Shopping; (xxi) on July 16, 2007, 82.4% of

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Management’s discussion and analysis of financial condition and results of operations

Fashion Mall; (xxii) on July 16, 2007, 82.5% of Ilha Plaza; (xxiii) on July 16, 2007, 100.0% of RioPlaza; (xxiv) on August 3, 2007, 2.4% of Esplanada Shopping; (xxv) on August 9, 2007, 12.9% ofShopping Villa-Lobos (an increase in our ownership interest); (xxvi) on September 27, 2007, 17.5% ofIlha Plaza (an increase in our ownership interest); (xxvii) on October 4, 2007, 10.0% of Fashion Mall(an increase in our ownership interest); (xxviii) on October 19, 2007, 10.0% of Shopping MuellerJoinville by means of the acquisition of the total capital stock of KGM37 Empreendimentos Ltda.; and(xxix) on October 22, 2007, 4.0% of Goiânia Shopping (an increase in our ownership interest). Inaddition, on March 13, 2007, we acquired a 99.9% ownership interest in DEICO, which is responsiblefor the management, leasing and/or planning of 13 shopping malls.

INDEBTEDNESS

On June 30, 2007, our short and long-term debts totaled R$8.1 million and R$162 million, respectively,as compared to R$25.2 million and R$39.3 million, respectively, on December 31, 2006. The increase inour long-term debt is due to two real-denominated loans contracted in February 2007 with Itaú BBA andUnibanco, in the amount of R$70.0 million each.

Our cash and cash equivalents and marketable securities on June 30, 2007 reflect the proceeds from ourinitial public offering of shares, which amounted to approximately R$621.2 million, net of direct IPOcosts and fees. On June 30, 2007, cash and cash equivalents and marketable securities amounted toapproximately R$5.6 million and R$512.0 million, respectively.

The tables below set forth additional information on our total short- and long-term debt and cash andcash equivalents on June 30, 2007:

FinancialInstitution

Amount(R$ thousand) (%) Maturity Index

Principal(R$ thousand) Rates

Safra................ 887 0.52% September-2007(1) US$ 922 US$ + 12.25% p.a.Citibank

N.A. ............ 19,260 11.32% July-2008 US$ 10,000 US$ + 12% p.a.BNB ................ 3,815 2.24% February-2011 Nominal 3,770 11.90% p.a.Unibanco......... 73,107 42.90% February-2019 IGP-M 70,000 IGP-M + 9.70% p.a.Itaú BBA ......... 73,071 42.95% February-2019 IGP-M 70,000 IGP-M + 9.75% p.a.Total ............... 170,140 100.0%

(1) Last installment due under this financing was paid in October 1, 2007.

DebtsOn December 31, 2006

(R$ thousand)On June 30, 2007

(R$ thousand)Increase

(R$ thousand) AV (%)

Short-term............................................. 25,188 8,146 (17,042) (67.66)%Long-term ............................................. 39,342 161,994 122,652 311.76%Total ..................................................... 64,530 170,140 105,610 163.66%Cash and cash equivalents and

marketable securities.......................... 112,216 517,608 405,392 361.26%Net debt ................................................ (47,686) (347,468) (299,782) 628.66%Net debt/ EBITDA................................. (0.8)x (3.5)x 4.4x 437.50%

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Management’s discussion and analysis of financial condition and results of operations

The chart below sets forth information on the schedule of payment of our indebtedness as of June 30,2007:

Amortization Schedule(R$ thousand)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

993

36,827

20,220 18,51916,153 14,647 13,155 11,812 10,610 9,533 8,566 7,702

1,463

Subsequent Events

Debentures

On July 23, 2007, we issued 32,000 non-convertible unsecured debentures guaranteed by oursubsidiaries ECISA Participações, ECISA Engenharia and Graúna, each with a nominal value ofR$10,000.00, in an aggregate principal amount of R$320.0 million. The issuance consisted of two seriesand was carried out in the Brazilian capital markets. The first series consisted of 5,000 debenturesmaturing on July 15, 2014, amortized over four equal, annual and successive installments beginning onJuly 15, 2011, and paying interest at the CDI plus 0.50% per year semi-annually. The second seriesconsisted of 27,000 debentures maturing on July 15, 2016, amortized in four equal, annual andsuccessive installments beginning on July 15, 2013 and paying interest at the IPCA plus 7.90% per yearpayable annually. The debentures were rated “A+” by Standard & Poor’s.

Financing granted by Itaú BBA, UBS Pactual and Citibank

On August 1, 2007, we incurred R$550 million of indebtedness with Itaú BBA, UBS Pactual andCitibank. These Bridge Loans were initially contracted for a 360-day repayment term and are subject tovariable interest rates as follows: (i) Itaú IBBA—0.49% per month, representing 5.885% per year; (ii)UBS Pactual—0.51145% per month, representing 6.1741% per year; and (iii) Citibank—0.5233% permonth until January 28, 2008, representing 6.28% per year, and 0.54% per month thereafter,representing 6.48% per year. We, at our discretion, may request the repayment term to be extended forfive years.

Under the terms of the Bridge Loans, we are required to maintain certain financial ratios (which arecalculated on a quarterly basis) and to limit our total indebtedness and cash flow levels. Any breach ofthis obligation may result in the acceleration of the loans.

The Bridge Loans are guaranteed by (i) Ecisa Engenharia, Ecisa Participações and us; (ii) a pledge ofshares representing 100% of the capital stock of SPE Chance; and (iii) the assignment of our rights toshare in the net revenues of the stores in Shopping Fashion Mall, Niterói Plaza, Ilha Plaza and Rio Plaza,among others.

Under the terms of the Bridge Loans, upon the occurrence of a public offering, we are required to prepaythe Bridge Loans. On October 4, 2007, Itaú BBA, UBS Pactual and Citibank agreed to waive this

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Management’s discussion and analysis of financial condition and results of operations

prepayment covenant provided we obtain a R$470.0 million line of credit with Itaú BBA and such line ofcredit is totally disbursed and used to prepay the Bridge Loans within 90 days from the completion of thefollow-on equity offering. If we do not satisfy these conditions, part of the proceeds from the follow-onequity offering may be used to prepay the Bridge Loans.

In addition to the Bridge Loans, we have entered into swap transactions with Itaú BBA, UBS Pactual andCitibank in amounts equal to the total amounts borrowed under such loans. Our swap agreements aresubject to the following interest rates: (i) Itaú BBA and Citibank—CDI plus 0.4% per year during thefirst 180 days and CDI plus 0.6% per year thereafter; and (ii) UBS Pactual—CDI plus 0.4% per year.

Financing agreements

The main financing agreements to which we are party are described below.

Credit facility from BNB

We entered into a loan agreement with BNB on February 21, 2006, by which BNB granted a creditfacility in the amount of R$11.7 million to us and EMAMI Participações S.A., Milburn do Brasil Ltda.,and Magus Investimentos Ltda. for the expansion of Shopping Recife. Our ownership interest in suchloan is equal to 32.4%. The credit facility initially established interest at 14% per year (which interest iscurrently 11.5%), on a monthly basis that must be paid (i) quarterly, during the 24-month periodbetween February 21, 2006 and February 21, 2008, and (ii) monthly, from March 21, 2008 onwards.The maturity date of this agreement is March 21, 2011. The outstanding balance under this agreementwas R$3.8 million as of June 30, 2007.

The credit facility provided by BNB is secured by (i) a R$11.7 million guarantee issued by Bradesco infavor of BNB; and (ii) guarantees provided by João Carlos Paes Mendonça, Reginaldo Paes Mendonça,José Eduardo Mendonça, Waldemar Coelho da Costa Filho, Ione Brito da Costa and their respectivespouses, GAP Empreendimentos Ltda., Map Empreendimentos Ltda. and Dyl. In addition to customaryacceleration provisions, the agreement provides for acceleration in the event of (i) replacement of anymember of our management for a person who the bank does not consider to be suitable for the position;(ii) suspension of our operations for more than 30 days; and/or (iii) failure to repay, immediately, anyadditional funds withdrawn without the bank’s prior agreement.

Agency agreement with Citibank N.A.

We entered into an Agency Agreement with Citibank on July 3, 1995, by means of which we issuedUS$10 million fixed rate notes, with an issue price corresponding to 100% of their face value. OnJuly 17, 2003, we amended the notes and extended the maturity date of the principal to July 3, 2008.This amendment also provided for the payment of 12% of annual interest, to be paid semi-annually inJanuary and July. The first installment was due on January 3, 2005 and the last installment is due onJuly 3, 2008. The outstanding balance under this agreement was R$19.3 million as of June 30, 2007.

Financing agreement with Safra

We, Ancar S.A., or Ancar, Magus Investimentos Ltda., or Magus, and Milburn do Brasil S/C Ltda., orMilburn, as issuers, entered into a Mortgage Bond Indenture agreement with Chase Manhattan Bank(the trustee) on July 3, 1997, pursuant to which we issued US$75 million in mortgage bonds, to financeand refinance the mortgages relating to Shopping Recife. These bonds were guaranteed by mortgages on

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Management’s discussion and analysis of financial condition and results of operations

Shopping Recife. On December 15, 2001, we entered into an agreement with Credit Suisse First BostonMortgage Capital LLC (Instrumento de Assunção Parcial de Dívida com Subrogação de Crédito eOutros Pactos), by means of which our mortgage bonds were acquired by Credit Suisse First BostonMortgage Capital LLC. Our mortgage bonds were then acquired by National Bank of New York(“Safra”), which is the current holder of our mortgage bonds. The outstanding balance of our bonds wasR$0.9 million as of June 30, 2007. The last installment payment due under this agreement was paid onOctober 1, 2007.

Bank credit notes with Itaú BBA

On February 15, 2007, our subsidiary Nattca issued two bank credit notes in the total amount of R$70million for the acquisition of real estate. The credit notes were issued to Itaú BBA and are adjusted byIGP-M plus 9.7489% per year (corresponding to 0.7782% per month), calculated on an exponential“pro rata” basis, using a 360-day year. These note will be repaid in 132 successive monthly installments.The first installment is due on March 17, 2008 and the last installment on February 15, 2019. Theoutstanding balance of these bank credit notes was R$73.1 million as of June 30, 2007. These bankcredit notes are primarily guaranteed by (i) a securitization of 100% of the property acquired using thebank credit bill, through an agreement between Nattca, ECISA Engenharia and Itaú BBA, wherebyNattca’s ownership stake in the property would be 99.99% and of ECISA’s would be 0.01%; (ii) apledge of Nattca’s stock held by ECISA through the same agreement; (iii) an assignment of (A) Nattca’srights to share in the gross revenue of the stores in Shopping Estação, net of expenditures, which must beborne by Nattca in its capacity as operator and owner of Shopping Estação and (B) Nattca’s checkingaccount deposits with Itaú BBA, (iv) an endorsement of the Nattca’s insurance policy for physicaldamage to Shopping Estação and to the convention center on the grounds of Shopping Estação;(v) (A) BC Malls Participações S.A.; (B) ECISA Participações; and (C) ECISA Engenharia. Itaú BBAassigned the credit notes above and respective guarantees to the Brazilian Securitization Company(Cibrasec Companhia Brasileira de Securitização), or Cibrasec, as a result of a securitization transaction.The mortgage certificates issued as a consequence of this transaction were acquired by Banco Itaú S.A.

Bank credit notes with Unibanco

On February 14, 2007, our subsidiaries ECISA Participações and ECISA Engenharia issued two bankcredit notes in the total amount of R$70 million for the acquisition of real estate. The credit note wasissued to Unibanco – União de Bancos Brasileiros S.A., or Unibanco, and is adjusted by IGP-M plus9.70% per year. These notes will be repaid in 13 successive monthly installments, after the initial graceperiod of one year. The first installment is due in March, 2008 and the last installment in February 2019.The outstanding balance of these notes was R$73.1 million as of June 30, 2007.

These bank credit notes are guaranteed by (i) mortgages of the real estate properties that form ShoppingCampo Grande and Shopping Iguatemi Caxias do Sul; (ii) assignments of (A) our rights to share in thegross revenue of the stores in Shopping Campo Grande and Shopping Iguatemi Caxias do Sul Estação,net of expenditures which must be borne by us in our capacity as operator and owner of such shoppingmalls; and (B) our checking account deposits with Unibanco in the amount equivalent to threeinstallments due under the notes.

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Management’s discussion and analysis of financial condition and results of operations

CONTRACTUAL OBLIGATIONS

The table below presents the maturity of our monetary obligations arising from material contractualobligations, as of June 30, 2007, related to the acquisitions of Shopping Del Rey, a portion of theproperties and improvements related to the Goiânia Shopping, Amazonas Shopping and DEICO. Theamounts presented below also include interest calculated on the respective principal amount.

Total Short-term Long-term

(in thousands of R$)

Obligations payable due to acquisitions ................................................... 53,008 18,909 34,098

Total........................................................................................................ 53,008 18,909 34,098

OFF BALANCE SHEET TRANSACTIONS

We do not have any off balance sheet transactions or commitments other than those recorded in ourfinancial statements. We do not have any relationships with any special purpose companies that are notreflected in our financial statements.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

We are exposed to market risks in relation to our contracts and rights as a result of possible fluctuationsin interest rates and foreign currency exchange rates, as described below.

Interest rate risk

As of June 30, 2007, approximately 88.2% of our total R$170.1 million indebtedness was subject tofluctuations of several interest rates; such as CDI and IGP-M. See “—Indebtedness.” In the event of anincrease in interest rates corresponding to 10% of the rates currently applicable to our indebtedness, ourannual financial expenses and costs as of June 30, 2007 would have increased by approximately R$1.7million.

Foreign exchange risk

As of June 30, 2007, approximately 11.8% of our total indebtedness was denominated or linked to theU.S. dollar. In the event of a hypothetical valuation of 10% of the real against the US dollar, taking as areference the exchange rate of the real against the U.S. dollar as of June 30, 2007, our operating expensesfor June 30, 2007 would have increased by approximately R$2.0 million.

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Industry and regulatory overviewGLOBAL SHOPPING CENTER AND SHOPPING MALL INDUSTRY

Modern-day shopping centers and shopping malls, which range from small commercial conveniencecenters to major regional shopping malls, were first constructed in the United States during the 1920s. Atthat time, small commercial centers usually anchored by supermarkets, pharmacies or othercomplementary convenience stores were built in suburban areas. These first types of shopping centerswere developed in the form of strip malls, whereby the stores were lined up next to one another withparking spaces in front.

During the 1950s, the first two shopping centers anchored by traditional department stores were built.Following World War II, which brought an expansion of the suburbs and a significant growth inpopulation, the demand for new convenience centers in the United States grew significantly.

However, it was during the 1980s that the American shopping center and shopping mall industry showedunprecedented growth. During this period, there was also a surge in major regional shopping centers andshopping malls, those with more than 80,000 square meters of gross leasable area. Between 1989 and1993, as a result of the savings and loan crisis in the United States, the development of new shoppingcenters and shopping malls fell drastically since 1993.

In 1993, the structure of shopping center and shopping mall ownership in the United States changedsignificantly when various family-owned companies began transforming themselves into REITs (RealEstate Investment Trusts) and listing on U.S. stock exchanges. The incorporation of the listed REITscontributed to a new consolidation of the shopping center and shopping mall industry. The newlyincorporated REITs included, among others, the following companies: Simon Property, General GrowthProperties, Kimco Realty, Developers Diversified, Taubman, The Inland Real State Group of Companies,Westfield Group, CBL & Associates Properties, The Macerich Company and The Mills Corp.

According to the National Research Bureau, in 2005 there were 48,695 shopping centers and shoppingmalls in the United States, totaling 562.9 million square meters of gross leasable area and with anaverage size of approximately 11,600 square meters per shopping center and shopping mall.Approximately 62% of the shopping centers in the United States have gross leasable areas of less than10,000 square meters. The graph below shows the distribution of shopping centers and shopping malls inthe United States by size in terms of number.

Distribution by Size(by number of shopping centers and shopping malls)

62.2%

23.9%

0.7% 0.9%

3.3%

9.0%

Less than 9,290 m² From 9,290 to 18.580 m² From 18,580 to 37,160 m²

From 37,160 to 74,320 m² From 74,320 to 92,900m² Over 92,900m²

Source: National Research Bureau

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Industry and regulatory overview

According to the National Research Bureau, over the last 20 years, both the number and total leasablearea of American shopping centers and shopping malls have grown at a compound annual growth rate ofapproximately 2.9%, while the American population has grown at a compound annual growth rate ofapproximately 1.1%. As a result of this growth, the gross leasable area per capita in the United Stateshas grown from a rate of 1.37 square meters per capita in 1986 to 1.91 square meters per capita in 2005.

Sales generated at American shopping centers and shopping malls totaled more than US$1.5 trillion in2005, according to the National Research Bureau, growing at a compound annual rate of 5.5% over thepast 20 years and from approximately US$1,700 per square meter in 1986 to approximately US$2,718per square meter in 2005.

The table below presents the key indicators for the shopping center and shopping mall industry in theUnited States from 1986 to 2005.

The Shopping Center and Shopping Mall Industry in the United States

Year

Nº of ShoppingCenters and

ShoppingMalls

Total GLA(millions of

square meters)

EstimatedSales

(billions ofdollars)

Average Sales(US$/m2)(1)

New ShoppingCenters

U.S. Population(millions)

GLA perCapita

1986..... 28,496 327.3 556.5 1,700.4 — 238.9 1.371987..... 30,641 345.9 602.3 1,741.4 2,145 241.4 1.431988..... 32,563 366.7 641.1 1,748.4 1,922 243.8 1.501989..... 34,683 391.5 682.8 1,744.1 2,120 246.3 1.591990..... 36,515 407.9 706.4 1,731.9 1,832 248.8 1.641991..... 37,975 424.0 716.9 1,690.9 1,460 251.6 1.691992..... 38,966 434.6 768.2 1,767.5 991 254.3 1.711993..... 39,633 443.2 806.6 1,820.0 667 257.1 1.721994..... 40,368 451.6 851.3 1,885.1 735 259.9 1.741995..... 41,235 461.4 893.8 1,937.0 867 262.8 1.761996..... 42,130 473.8 933.9 1,970.9 895 265.3 1.791997..... 42,953 485.8 980.0 2,017.3 823 267.2 1.821998..... 43,661 495.4 1,032.4 2,084.0 708 269.4 1.841999..... 44,426 507.5 1,105.3 2,177.7 765 273.5 1.862000..... 45,115 517.0 1,181.1 2,284.4 689 274.7 1.882001..... 45,827 527.6 1,221.7 2,315.7 712 284.0 1.862002..... 46,438 536.4 1,277.2 2,380.9 611 286.8 1.872003..... 47,104 544.8 1,339.2 2,457.9 666 290.6 1.872004..... 47,834 553.0 1,432.6 2,590.4 730 292.9 1.892005..... 48,695 562.9 1,530.4 2,718.6 861 295.1 1.91

Source: National Research Bureau Shopping Center Database and Statistical Model

(1) One square meter is equal to 10.76 square feet.

BRAZILIAN SHOPPING CENTER AND SHOPPING MALL INDUSTRY

History

One of the first shopping centers were launched in Brazil in 1966, five years after which ECISA builtConjunto Nacional de Brasília. During the 1970s, in addition to Conjunto Nacional de Brasília, five newshopping centers were built; however it was from the 1980s onward that growth of the Brazilianshopping center industry emerged, with the number of shopping centers increasing considerably by theend of the 1990s, when the new launches began to slow.

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Industry and regulatory overview

Since 1966, the number of shopping malls in Brazil has grown sharply, totaling 346 shopping malls onDecember 31, 2006, according to ABRASCE. There are several growth factors for shopping malls inBrazil, including urban growth, need for greater security and comfort when shopping, the Brazilianclimate, the introduction of women into the workforce, economic stability with the introduction of theReal Plan and increased investment in shopping malls by pension funds.

The chart below shows the growth of the number of shopping malls in Brazil since 2000.

Growth in number of shopping malls(units per year)

13

230 240 252 254 257 263

333

2000

2001

2002

2003

2004

2005

2006

In Operation In Construction

Source: ABRASCE

According to ABRASCE, in 2006 there are approximately 7.4 million square meters of gross leasablearea distributed among the 346 total shopping malls in Brazil. In regional terms, approximately 60.6%of the total gross leasable area of shopping malls is in the Southeast, which has the greatest populationdensity and income per capita, resulting in the region’s being responsible for the largest portion ofBrazil’s PIB.

Within the Southeast, approximately 40% of the stock of gross leasable area of shopping malls is locatedin the state of São Paulo and 13% in the state of Rio de Janeiro, which are historically the two stateswith the best economic conditions and population densities, according to ABRASCE.

The average gross leasable area of shopping malls per capita in Brazil is approximately 0.037 squaremeters per capita, compared to 1.91 square meters per capita in the United States, according to theNational Research Bureau.

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Industry and regulatory overview

The graphs below show the growth of gross leasable area of shopping malls in Brazil since 2000 and howsuch gross leasable area was regionally distributed in 2006:

Growth in gross leasable area of shopping malls(millions of square meters per year)

5.1 5.2 5.5 5.66.2 6.4

7.4

2000 2001 2002 2003 2004 2005 2006

Source: ABRASCE

Regional distribution of shopping malls in 2006North

2%Northeast

14%

Midwest

9%

Southeast

55%

South

20%

Source: ABRASCE

OVERVIEW OF THE SHOPPING MALL INDUSTRY IN BRAZIL

Shopping malls attract consumers in Brazil because they gather a diversified group of stores and servicesinto a single location that offers advantages such as parking space, air conditioning and a sense ofsecurity and protection against tropical rains during the Christmas shopping season (when retail salespeak in Brazil). All these factors have resulted in shopping malls’ sales increasing more rapidly than salesin the entire Brazilian retail market in recent years.

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Industry and regulatory overview

The following graph shows the motivations for consumer expenditures in shopping malls in 2003 inBrazil.

Reasons for spending in shopping malls

Entertainment15%

Shopping

42%

Services

13%

Food11%

Other16%

Leisure 3%

Source: Instituto de Pesquisa e Desenvolvimento de Mercado (IPDM) and Shopping Centers Magazine.

According to ABRASCE, sales in Brazilian shopping malls represent approximately 18% of totaldomestic retail market sales in the country (excluding car sales). In the United States and Europe,shopping-center sales represent 70% and 30-35% of total sales in the retail market, respectively. Thesenumbers show the significant potential for growth of the shopping-center industry in Brazil.

We believe that the Brazilian economy currently presents favorable conditions as demonstrated by recentdecreases in interest rates and general economic stability. The growth in consumption over inflation ratesin the last years, has had a positive impact on the profits of shopping malls. Recent increases in the totalsales in Brazil’s retail market have increased the demand for leasable spaces in shopping malls. Thedecreasing number of shopping-center openings over the last five years, and the limited availability ofnew gross leasable area in existing shopping malls, have not been able to meet the demand for new spaceby Brazil’s main retailers. According to Valor Análise Setorial, the 3.0-4.0% vacancy rate and the 8.0%default rate of the shopping malls decreased significantly in comparison to previous years. Theimprovement in such index reflects a higher demand for commercial spaces in the shopping mall and, asa consequence, higher rents, a fact already observed in the principal areas.

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Industry and regulatory overview

The following graph shows the growth in sales for the Brazilian shopping-mall market, in reais anddollars, forecasting such growth to be approximately 10% for 2006.

0

5

10

15

20

25

30

35

40

45

50

2000

Bilh

ões

R$ US$

PROJECTED

SOURCE: ABRASCE

GROWTH IN SALES FOR THE SECTOR

2001 2002 2003 2004 2005 2006

Source: CB Richard Ellis.

An important characteristic of the Brazilian shopping mall market is its fragmented ownership, both interms of number of stores and gross leasable area thereof. According to Valor Setorial, the nine majorgroups of shopping mall owners hold only 18.3% of the total number and 31.5% of the total grossleasable area of shopping malls.

Although the Brazilian shopping-mall market is highly fragmented and diversified, it is one of the mostspecialized in the world. Brazil is ranked tenth worldwide in the number of shopping malls in operation,according to ABRASCE.

In the last five years, the Brazilian shopping-mall industry has invested in market niches, developingenterprises with “neighborhood” or “community” formats, which are smaller than the average shoppingmall and are located in medium-sized cities. Due to the lack of financing alternatives to fund new or largeshopping malls in capital cities and large urban malls, developers have begun to operate smaller marketsin Brazil’s countryside through smaller and less costly buildings. Recently, shopping malls have also beenincreasing the range of services they offer, including by offering entertainment, leisure and culturalservices. The shopping-mall concept is continuously updated over time, through changes in its profile orimplementation of different formats.

According to ABRASCE, the shopping-mall industry has played an important role in Brazil’s economy,and in 2006 was responsible for approximately 524 thousand direct jobs. The industry has significantlyincreased its integration with the community through social actions, according to ABRASCE.

Classification of shopping centers and shopping malls

ABRASCE’s criteria for classification of commercial developments, including shopping malls, include(i) maintenance of the property by the store owners of the majority of the leased stores, (ii) existence of

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Industry and regulatory overview

parking spaces compatible with the flow of consumers and (iii) use of anchor stores and leisure areaswith the purpose of attracting the public.

Types of shopping centers

According to the methodology used by ABRASCE, shopping centers and shopping malls are classified inthe following categories:

➤ Neighborhood Shopping Centers: Projected to provide convenience for the everyday purchasingneeds of the consumer. A supermarket serves as the anchor store, supported by stores that offer otherconvenience articles.

➤ Community Shopping Centers: Usually offer a wider variety of clothing and other goods. Among themost common anchor stores are supermarkets and department and discount stores. Tenants alsoinclude off-price retailers selling clothing, household objects and furniture, toys, electronics or sportinggoods.

➤ Regional Shopping Centers: Offer a variety of goods and services. Their main attractions aretraditional anchor stores, discount department stores and supermarkets, as well as options for leisure,entertainment and cultural activities. A regional shopping center does not usually have open spaces,and instead its stores face inward to an internal mall.

➤ Specialized Malls: Aimed at a specific store mix for a given group of activities, such as fashion,interior decorating, boating equipment, sporting goods, automobiles or other activities.

➤ Outlet Centers: Consist mainly of factory stores that sell their own brands at a discount, in additionto other off-price retailers. Normally they include non-sophisticated stores with lower rents andreduced construction costs. Specialized shopping centers in Brazil are generally built using this type ofconstruction.

➤ Power Centers: Comprised basically of anchor stores and a few satellite stores; this category emergedin Brazil in 1996 and is not yet very common. Its anchor stores are “category killers,” discountdepartment stores, purchasing clubs and off-price retailers.

➤ Discount Centers: Normally offer discounts based on reduced operating costs. Comprised of storeswith high sales volume and low prices, such as retailers that sell clothing, home appliances andfurniture.

➤ Festival Malls: This is the least common type of shopping center in Brazil. Almost always located inareas frequented by tourists, it is designed for leisure, culture, tourism and food service, and includesstores such as restaurants, fast food shops and movie theaters.

Most of the existing shopping malls in Brazil are regional shopping malls. However, the number ofthematic malls (such as malls focused on automobiles, textiles or interior decoration) has been growing,as well as the number of projects for construction of festival malls.

Companies and groups

The groups that operate in the Brazilian shopping-mall industry do so either directly or throughassociated companies. It is common for one group to associate with another to implement new projectsfor many reasons, including the scarcity of available funds for investments. When this happens,entrepreneurs establish joint ventures and create or hire one company for management, another forleasing and yet another for the construction of the shopping mall. According to ABRASCE, the maingroups operating in the sector are BR Malls, Multiplan, Sonae, Brascan and Ancar.

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Industry and regulatory overview

Anchor store

The need for an anchor store within a shopping mall is due to the need to attract consumers, particularlyto shopping malls constructed outside large urban centers. Shopping mall that are better located have lessneed for anchor stores. Accordingly, the location and the characteristics of a shopping mall determine thenumber of anchor stores it needs.

An anchor store is often important at the time a shopping mall commences its operations, because itcreates a flow of consumers. After a shopping mall becomes viable, or if a shopping mall is targeted at aspecific set of consumers, it may not require an anchor store, since these stores occupy a large portion ofthe shopping mall’s gross leasable area and frequently pay lower rent than other tenants or no rent at all.

Some anchor stores have a policy of owning, as opposed to leasing, all of their store space. In these cases,a shopping mall may be developed contiguously to an anchor store, creating synergies between theanchor and the shopping mall, but with each owned and maintained separately.

Specialized malls, outlet centers and festival malls generally do not have anchor stores. There is a currenttrend towards the replacement of anchor stores (department stores or supermarkets) by other stores orbusinesses that attract the public, such as food services, medical centers and leisure and service centers.

Satellites are stores with special structural and marketing characteristics that normally vary between 30and 200 square meters of gross leasable area. They are usually located close to anchor stores and generalcommon areas. Satellites are normally the biggest source of revenue for shopping malls, as they payhigher rents per square meter of gross leasable area.

Competition

The format and operational strategy of shopping malls must be continuously reviewed. Changes inconsumer preferences, the advent of alternative retail systems and the construction of the growingnumber of shopping malls have led to modifications in existing shopping malls in response to theincreased competition, often through the combination of shopping options with leisure and food services.

Competition for consumers and the search for diversification are closely linked to projects to revitalizeand redefine shopping malls. These projects may include increasing marketing expenditures; selectingand/or modifying tenant mix; selecting and/or modifying anchor tenants; hosting promotional events;increasing the number of parking spaces; developing architectural projects; expanding the number ofleisure and service centers; personnel; and streamlining and computerizing operations.

Operation

Management companies which are often associated with the one or more of a shopping mall’s ownersare responsible for the operation of a shopping mall. The ownership of the stores within a shopping mallgives managers and shopping-center owners more power to control and manage the established strategiesof the shopping mall, in comparison to that which would exist if tenants were able to act individually.Other companies involved in the operation of shopping malls are suppliers and service providers ofinformation technology, landscaping, interior decoration, safety equipment, parking and leisure services.

Revenue and expenses

The principal revenue derived from the ownership of a shopping mall is the rent payments (a minimumrent payment on a percentage rent, whichever is greater) during the term of a lease agreement (which

79

Industry and regulatory overview

generally are for five years). The amount of the minimum rent payment is set by the market price for theleased area and percentage rent is a fixed percentage of the tenant’s total or individual monthly sales. Theamount of rent can also vary based on the term of the lease and on the kind of store being leased. Certainshopping malls conduct a monthly audit of their stores in order to assess actual sales volumes andtherefore control the amount of rent that is being charged.

Shopping mall can also earn revenue by using common areas intended for merchandising as temporaryleasing spaces for kiosks or similar establishments, and by charging consumers for the use of parkingspace. Expenses for common areas are divided pro rata among the tenants, which pay the condominiumcharges and contribute to a marketing fund in addition to rent.

Sources of funding

The profile of investors in Brazilian shopping malls has changed over time. Initially, investors in thesector were solely banks, holding companies, construction companies and individuals. Later, in the1980s, pension funds began to invest in shopping malls, and they have become the primary investors inthe sector.

Usually, the construction of shopping malls are financed with the entrepreneur’s capital and with fundsprovided under credit facilities from financial institutions such as the BNDES, and the Federal SavingsBank (Caixa Econômica Federal), or CEF.

During the pre-operating phase of a shopping mall, revenue are derived from co-participationagreements, under which the shopping mall charges tenants a fee for services rendered with respect to thestores to be leased, such as architectural and legal consulting, installation, projects and others. These feesmay be waived, at the discretion of the shopping mall.

The key factors in attracting investors for shopping-center projects are the location of the development,the experience, level of commitment and financial situation of the developer, the construction companyand the management company, and feasibility study for the project.

The economic value of a shopping mall is determined by its estimated future cash flow and profitability;and is not generally linked to its construction costs.

REGULATION OF SHOPPING CENTERS

Overview

Shopping mall can be set up by (i) incorporation, or building condominiums, with the creation ofautonomous condominiums established pursuant to the Brazilian Condominium and Development Law(Lei de Condomínio e Incorporação) and the Brazilian Civil Code, in which case each store represents anautonomous unit and the relationship between the condominium members is regulated by thecondominium agreement and internal regulation, or (ii) a deed for an undivided shopping mall under thepro-indiviso condominium model, also regulated by the Brazilian Civil Code, in which case thedevelopment represents a single property and the relationship between the co-owners is regulated by aco-owners’ agreement.

A deed of general rules, the condominium agreement, the internal regulation and the co-participationagreement, if applicable, are the main instruments governing a shopping mall’s operations, the rights andobligations of the owners and tenants, and the contracting of a management company for a shoppingmall.

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Industry and regulatory overview

The organization and regulation of the relationship between the shopping mall, store owners and theshopping mall’s manager are also governed by the following instruments:

➤ the lease agreements with tenants;

➤ public deeds of general rules for lease agreements; and

➤ the agreements of tenants’ associations.

Condominiums

In Brazil, the main shopping malls are normally organized as condominiums.

The main difference between civil condominiums (also known as pro-indiviso) and buildingcondominiums is that only the building condominium allows the developer to sell the units separately, inwhole or in part, without the consent of the owners of the other units.

The systems of building condominium and civil condominium may coexist in the same development. It iscommon for a shopping mall organized as a building condominium, in which each store is independentlyowned, to have many of such stores with two or more owners sharing a civil condominium.

Civil Condominiums

Civil condominiums are regulated by Article 1,314 and subsequent articles of the Brazilian Civil Code. Inthis type of condominium, two or more co-owners exercise their ownership through a notional fractionheld by each, and neither co-owner is entitled to a personal private area. All co-owners share ownershipof the store, in proportion to the participation of each. The following provisions are applicable to suchcondominiums:

➤ each condominium member may sell its interest, subject to a right of first refusal of the others;

➤ each condominium member may mortgage its interest in the condominium without the consent of theother members;

➤ a condominium member may demand partition at any time. However, condominiums members mayagree not to allow partition for a period of five years, which may be extended, provided that inextraordinary situations, partition may be ordered through judicial intervention;

➤ each condominium member is entitled to receive the earnings generated by the common property inproportion to its participation; and

➤ each condominium member must pay its share of expenses incurred for the benefit of commonproperty, even if such expenses are incurred entirely by another condominium member.

Accordingly, in shopping malls organized as civil condominiums, the development consists of a singleproperty, with one real estate register, in which case the holders of interests in the development areowners of a share of the development.

Building Condominiums

Building condominiums, on the other hand, are regulated by Article 1,331 and subsequent articles of theBrazilian Civil Code and by the Brazilian Condominium and Development Law. In this type ofcondominium, private areas (autonomous units that may be held by a single owner) and common areas

81

Industry and regulatory overview

(held in common by all owners of the private areas) coexist. Accordingly, in the shopping mallsorganized as building condominiums, each store represents an autonomous unit, and common areas ofthe shopping mall where consumers circulate are common areas.

In the building condominium, differently from the civil condominium, the owners of other units do nothave a right of first refusal with respect to the sale of an autonomous unit.

Condominium Agreement

The Brazilian Civil Code provides that in a building condominium, the relationship between the ownersof the autonomous units is governed by law and by the condominium agreement that may provide for,among other matters, quorum for the resolutions of the meeting of condominium members. Unless thecondominium agreement requires a larger quorum, the condominium resolutions of shopping malls mustbe approved by a vote of the majority of condominium members and the vote of each condominiummember is weighted in accordance with the notional fraction it holds in the respective store orautonomous unit. However, without prejudice to the provisions governing the condominium, theBrazilian Civil Code expressly requires the following quorums for approval of the following resolutions:

➤ the majority of condominium members to carry out useful improvements;

➤ two-thirds of the condominium members to carry out cosmetic improvements; expand existingcommon areas; and amend the condominium agreement or the internal regulations of thecondominium; and

➤ the unanimous vote of the condominium members to build another floor or, on common property,another building and change the purpose of the building or the real estate unit.

Lease Agreements in Shopping Centers

Leases in shopping malls are governed by the Brazilian Leasing Laws (Lei de Locação), which regulatesthe rights and obligations of lessors and lessees.

General Characteristics of Commercial Leases

The main characteristics of commercial leases are set forth below:

➤ Compulsory Renewal of the Lease. According to the Brazilian Leasing Laws, the lessee is entitled tothe renewal of a lease agreement if the following conditions are met: (i) the agreement was made inwriting for a term equal to or exceeding five years (or previous lease agreements had an uninterruptedterm equal to or exceeding five years); and (ii) the tenant is engaged in the same business for aminimum uninterrupted period of three years.

➤ Rent Adjustment. The Brazilian Leasing Laws also provides that both the lessee and the lessor may,after the expiration of three years of the term of the lease agreement or similar agreement entered intoby the lessee and the lessor, file a legal action for a rent adjustment, in order to adjust the rent tomarket rates, in view of possible circumstances that might have caused appreciation or depreciation ofthe rent.

➤ Right of First Refusal. The Lease Law entitles the lessee, upon registration of the agreement, with therelevant real Estate registrar to the right of first refusal with respect to the acquisition of lease propertyby third parties, on the same terms.

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Industry and regulatory overview

Specific Characteristics of Shopping Center Leases

Shopping center leases have particularities not generally found in other commercial leases. Given thatshopping-center leases involve transactions beyond the simple use of a space for agreed-to remuneration,the Lease Law expressly provides shopping malls and store owners greater contractual freedom to defineof rights and obligations of the parties during the lease.

Shopping center leases generally include the following provisions: (i) rent calculated based on apercentage of the tenant’s sales; (ii) the payment of double rent in a certain month of the year, inaccordance with the business sector; (iii) the ability of the lessor to inspect the tenants’ activities in orderto determine the tenants’ sales; (iv) mandatory tenant contributions to marketing funds; (v) prohibitionson the tenant’s ability to change its business; (vi) limitations on the sublease, assignment or loan of theleased space; (vii) territorial exclusivity or non-competition clauses; (viii) the need for approval of thestores’ project by the lessor; and (ix) the determination of a “step clause” (a contractual provision thatestablishes previously determined future increases in rents).

The rent to be paid by the store owner is generally equal to the higher of (i) a fixed minimum amountcalculated according to the location and size of the store occupied by the tenant, called “minimum rent”;and (ii) a variable amount, or the percentage of the sales of the store owner, called “percentage rent.”

Key Money

Another characteristic of shopping-center leases is referred to as key money. In performing its activities inthe shopping mall, the tenant benefits from the tenant mix and from the structure planned, built andopened by the shopping mall, which, in comparison with stores located outside a shopping mall,represents goodwill. In addition, five years after the lease agreement, the tenant is usually entitled torenew the lease agreement, which restricts the shopping mall’s ability to alter the store mix to improvethe traffic and sales of the shopping mall. Because of these rights and benefits provided to the tenants, theshopping mall charges a price for key money to use the space in the shopping mall. The amount and theterms of the payment of key money are established between the shopping mall and the tenant upon thetenant’s agreement to join the enterprise (before or after completion of construction).

Deed

In addition to the lease agreement, the relationship between the shopping mall and the tenant is alsoregulated by the deed of general rules. The deed provides for the organization and operation of theshopping mall, and its main provisions generally are:

➤ the lessor’s rights to monitor the sales of the lessee, in order to determine the amount of the rent to bepaid in cases in which the rent charged is based on sales;

➤ the operating hours of the stores;

➤ implementation of discounts and sales;

➤ prohibition of changes in a lessee’s business, in order to maintain the original tenant mix;

➤ approval of the plan and layout of the store, as well as the period of execution; and

➤ penalties for the lessee’s failure to perform its obligations.

The purpose of the deed of general rules is to outline the guidelines for the relationship betweenshopping-center owners and tenants, including each party’s rights and obligations in connection with the

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Industry and regulatory overview

operation of the shopping-center, as well as to establish the general rules for all those that take partdirectly or indirectly in the property, including the tenants, the shopping-center owner and any third-party contractors.

The tenants agree to respect the deed of general rules when they sign the lease agreement and thusassume the commitment to comply with its terms and conditions.

Co-Participation Agreement (Condominium Convention)

The relationship between co-owners of civil condominiums is defined by the law. However, co-ownersmay enter into agreements that regulate the rights and obligations of the parties interested inco-participation. This co-participation agreement is also normally called a condominium convention.

In the civil condominiums used in shopping malls, the co-participation agreement governs the following,among others: (i) rules for the use and management of joint property; (ii) duties of the manager;(iii) responsibilities related to the leasing of joint property; (iv) management and distribution of revenue;(v) management of the mix of stores; and (vi) tenant’s right of first refusal.

Tenants’ Association

One of the obligations assumed by the tenant is to become a member of a Tenants’ Association. ATenants’ Association is a non-profit entity organized by the tenants of a shopping mall with its own legalidentity, to support and represent the interests of its members, improve the relations among the lessees,establish rules and regulations on ethics and discipline to govern members’ activities, perform studies andservices for its members, and provide for the marketing of the shopping mall.

Tenant are required to make a monthly contribution to a marketing fund in order to cover advertisingand marketing expenses. The shopping mall is also a member of the Tenants’ Association and exercisesan important role in the definition of guidelines and strategies for marketing campaigns necessary for thedevelopment and integration of the shopping mall with the local community.

Management Agreement and Internal Regulations

The responsibility for managing a shopping mall is frequently delegated to a company specialized in themanagement and administration of shopping malls. The manager will work as the representative of theshopping mall, with powers to control, manage and inspect the premises.

If the shopping mall is managed by a legal entity other than the shopping mall itself, the tenants mustenter into a management agreement with such managing company, which will be an integral part of thelease agreement. The rules related to the management of the shopping mall are normally included in thecondominium convention and the lease agreement itself. These instruments provide for the manager to beable to introduce changes in the structural plans of the buildings, to inspect the activities of the tenants,to maintain areas of common use and to establish the amount and terms of payment of the managementfee by tenants.

The manager of the shopping mall is also responsible for preparing internal regulations to govern theactivities of shopping-center tenants in further detail, and secondarily to the other documents andagreements.

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Industry and regulatory overview

Environmental matters

Environmental Licenses and Authorizations

Activities related to the shopping-center industry are subject to federal, state and municipal rules andrequirements regarding environmental licensing and control. Environmental licenses must be obtained forboth the initial construction stages of the development and for any expansions performed thereafter.Licenses granted must also be periodically renewed.

Environmental inspections are carried out by governmental agencies and other entities that may imposeadministrative sanctions for noncompliance with applicable legislation. For developments that have aregional environmental impact or that are carried out in areas of special interest to or owned by theFederal Government, the licensing authority is Brazilian Institute for the Environment and RenewableNatural Sources (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis), orIBAMA. In all other cases, licensing authority lies with state environmental agencies.

The environmental licensing process is basically comprised of the issuance of three licenses: (i) theprevious license, (ii) the installation license, and (iii) the operating license. Each license is issuedaccording to the stage of construction of the shopping mall and the maintenance of a valid licensedepends on the shopping mall’s compliance with the conditions established by the applicableenvironmental agency. Failure to maintain a valid environmental license is classified as an environmentalcrime, and subjects the violator to administrative penalties, such as fines and interruption of activities,even if no damage to the environment has taken place.

Possible delays or denials on the issuance or renewal of license requests by the competent environmentalauthority, as well as our possible inability to meet the requirements established by the environmentalauthorities during the environmental licensing process, may result in restrictions on, or the prohibitionof, the construction and regular maintenance of our shopping malls.

Solid Wastes

Given the field in which we operate, our principal focus for environmental control is the final disposal ofwaste and the management of fluids. As such, we have contracts with private and public companies thatselectively collect the solid waste we generate and are responsible for the final disposal thereof atlocations that are publicly provided for such disposal. Fluid management can be done at our ownstations built for such activity or through a public contractor. Brazilian environmental legislationestablishes rules for the proper disposal of solid wastes, including those resulting from civil construction.Improper waste disposal that causes environmental damage subjects the party to the penalties describedunder “Environmental Responsibility” below.

Environmental Responsibility

Brazilian environmental legislation establishes legal and administrative penalties for individuals and legalentities who engage in activities deemed to be environmental infringements or crimes, in addition toestablishing the obligation to repair the environmental damage. The penalties to which we may besubject as a result of environmental crimes and infringements include:

➤ the imposition of fines that, at the administrative level, may amount to R$50.0 million, depending onthe infringer’s financial condition, the facts of the case, as well as the prior record of the infringer.Double or triple fines per event may be imposed in the case of repeated infringements;

➤ suspension or prohibition of development activities; and

➤ the loss of tax benefits and incentives.

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Industry and regulatory overview

Pursuant to Brazilian environmental policies, environmental damages carry joint and strict liability,direct and indirect, meaning that recovery measures may affect all persons directly or indirectly involved,irrespective of fault. Thus, activities potentially causing environmental damage performed by thirdparties contracted by the developer to perform services such as cutting down trees or moving land do notexempt such developer from the responsibility for possible environmental damages if they should fail tocomply with the applicable environmental requirements.

Brazilian environmental legislation also provides for the “piercing of the corporate veil”, in relation tothe controller of an entity, if limited liability legal status is an impediment to the collection ofcompensation for damages caused to the environment.

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OVERVIEW

We are the leading company in the shopping mall sector in Brazil. We are the largest owner of shoppingmalls in terms of total gross leasable area, gross leasable area owned and number of shopping malls andthe largest provider of management and consulting services for shopping, commercial and businesscenters as well as leasing and merchandising services for stores and common spaces in shopping malls interms of gross commercial area, according to data provided by ABRASCE.

We currently hold ownership interests in 28 shopping malls, including one which is under constructionand one in which our interest is held through convertible debentures. On the date of this offeringmemorandum, the shopping malls that we own accounted for 975.2 thousand square meters in grosscommercial area and 826.9 thousand square meters in gross leasable area, with approximately fivethousand stores and total sales of R$6.9 billion in 2006. On average, we hold a 44.5% stake in theshopping malls we own, equal to 368.3 thousand square meters in gross leasable area. Our averageownership interest in each of the 28 shopping malls in our portfolio reflects the weighted average of ourownership interests in the individual shopping malls.

On the date of this offering memorandum, we provide management, leasing, marketing and consultingservices to 29 shopping and commercial centers, including management services for 17 of the 28shopping malls in which we hold ownership interests and marketing services for 20 of the 28 shoppingmalls in which we hold ownership interests. On the date of this offering memorandum, these mallsincluded 878.6 thousand square meters in gross commercial area with five thousand stores. We alsoprovide marketing services to the supermarket chains Pão de Açúcar and Sendas.

We are the only company in our sector with a presence throughout all of the regions of Brazil, holdingownership interests in shopping malls in each of the five regions of the country. In addition, our portfoliois strategically diversified according to our target customers’ income classes, covering consumers in allsuch classes.

Pantanal Shopping (MT): 10% Araguaia Shopping (GO): 50% Shopping Campo Grande (MS): 65.1% Goiânia Shopping (GO): 49.6%

Shopping Center Recife (PE): 31.1% Natal Shopping (RN): 45% Shopping Center Iguatemi Maceió (AL): 34.2%

NorteShopping (RJ): 74.1% Shopping ABC (SP): 0.7% Shopping Piracicaba (SP): 11.5% Big Shopping (MG): 13.0% Minas Shopping (MG): 1.0% TopShopping (RJ): 35% Shopping Del Rey (MG): 65% Independência Shopping (MG): 8% Shopping Villa-Lobos (SP): 39.7% Shopping Tamboré (SP): 100% Niterói Plaza (RJ): 100% Fashion Mall (RJ): 92.4% Ilha Plaza (RJ): 100% Rio Plaza (RJ): 100% Esplanada Shopping (SP): 2.4%

Amazonas Shopping (AM): 17.2% Shopping Iguatemi Belém (PA): 12.2%

Shopping Center Iguatemi Caxias (RS): 45.5% Shopping Estação (PR): 100% Shopping Curitiba (PR): 35%Shopping Mueller Joinville (SC): 10%

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The following table contains certain key information regarding the shopping malls in which we holdownership interests:

As of the date of this offering memorandum(except if otherwise indicated)

Shopping Center State

OurInterests

(%)(1)GCA

(m2)(1)GLA

(m2)(1)

Number ofStores

(in units)(2) Visitors(3)Total Sales

(R$)(4)

(amounts in thousands except if otherwise indicated)Shopping Recife(5) ............................ PE 31.1 78.4 61.2 410 24,000 206,656NorteShopping .................................. RJ 74.1 98.4 77.8 334 28,800 195,353Niterói Plaza(6) ................................. RJ 100.0 34.2 31.9 236 21,360 106,461Shopping Villa Lobos ........................ SP 39.7 27.4 27.4 216 8,400 79,946Shopping ABC(7) .............................. SP 0.7 48.7 46.5 236 11,000 78,173Minas Shopping(6) ............................ MG 1.0 32.3 28.6 184 11,500 69,399Amazonas Shopping(8)(9) ................. AM 17.2 44.6 38.5 206 15,600 92,219Shopping Center Iguatemi Belém(8)... PA 12.2 34.8 18.4 187 16,200 51,116Shopping Campo Grande .................. MS 65.1 57.4 28.2 165 9,000 51,909Fashion Mall(6)................................. RJ 92.4 14.1 14.1 144 3,600 32,672Shopping Curitiba(9) ......................... PR 35.0 28.3 24.0 154 11,200 38,780Shopping Del Rey.............................. MG 65.0 59.3 37.4 176 14,400 62,152Pantanal Shopping(10) ...................... MT 10.0 43.3 43.3 202 9,000 43,462Shopping Tamboré(9)........................ SP 100.0 32.1 32.1 160 12,000 50,578TopShopping(11) .............................. RJ 35.0 18.1 18.1 133 9,600 47,659Shopping Center Iguatemi

Maceió(8)(9).................................. AL 34.2 33.9 24.2 158 9,600 57,576Shopping Center Piracicaba(8)(9) ...... SP 11.5 27.8 27.8 145 7,200 37,491Shopping Estação(10)(12).................. PR 100.0 54.6 54.6 153 5,400 38,212Shopping Iguatemi Caxias do Sul ...... RS 45.5 27.6 15.1 94 10,800 27,919Goiânia Shopping(17)........................ GO 49.6 19.3 16.9 119 7,300 32,340Natal Shopping(9) ............................. RN 45.0 17.1 17.1 133 7,200 21,734Ilha Plaza(6) ...................................... RJ 100.0 20.3 20.3 142 7,200 32,248Big Shopping(6)................................. MG 13.0 17.6 17.6 85 12,000 34,553Araguaia Shopping(10)(13) ............... GO 50.0 18.5 18.5 100 15,600 21,928Rio Plaza(6)....................................... RJ 100.0 6.6 6.6 44 2,300 16,248Shopping Independência(14).............. MG 8.0 25.4 25.4 164 — —Esplanada Shopping(15) .................... SP 2.4 28.0 28.0 164 10.8 50,578Shopping Mueller Joinville(16) .......... SC 10.0 27.0 27.0 134 7,320 42,540

Total .......................................... 975.2 826.9 4,818 308,380 1,619.9

(1) One square meter is equal to 10.76 square feet.(2) Includes stores within the gross leasable area we own and stores within the gross leasable area

owned by third parties.(3) For the year ended December 31, 2006.(4) Total sales for the three months ended March 31, 2007.(5) ASCR, a company in which we have a 32.5% ownership interest, manages this shopping mall.(6) Ownership interest acquired in July 2007. In relation to Fashion Mall, an additional ownership

interest of 10.0% was acquired in October 2007. In relation to Ilha Plaza, an additional ownershipinterest of 17.5% was acquired in September 2007.

(7) Ownership interest acquired in April 2007.(8) Ownership interest acquired through EPI in April 2007. In addition, the additional ownership

interest we acquired in Amazonas Shopping in May 2007 is currently in the process of beingregistered pursuant to Brazilian law.

(footnotes continued on next page)

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(9) Ownership interest acquired in May 2007. In addition, the ownership interest acquired in ShoppingTamboré in May 2007 is currently in the process of being registered pursuant to Brazilian law.

(10) Ownership interest acquired in March 2007.(11) Subject to a purchase and sale agreement for a 35% ownership interest that will be effective within

120 days from June 22, 2007.(12) Ownership interest acquired in February 2007. Includes the Estação Convention Center, an anchor

store with 25 thousand square meters of gross leasable area.(13) Ownership interest consists of convertible debentures with profit sharing rights through which we

have, among others, the right to receive 50% of the shopping mall’s net income and to appoint theshopping mall’s management.

(14) Not yet in operation, scheduled to open in March 2008.(15) Ownership interest acquired in August 2007.(16) Ownership interest acquired in October 2007.(17) Ownership interest acquired between January and October 2007.

Our gross revenue from rent and services, or gross revenue, is derived from the following activities:(i) our ownership of shopping malls, through leasing stores and other merchandising spaces, parking lotfees and up-front transfer fees from store leasors, or key money, which represented 85.0% of our grossrevenue for the six months ended June 30, 2007; (ii) management, leasing, consulting and merchandisingservices for stores and common spaces in shopping malls, which represented 15.0% of our gross revenuefor the six months ended June 30, 2007.

Since October 2006, we have acquired the following interests in 21 new shopping malls, increasing ourown gross leasable area by approximately 244 thousand square meters by means of total investments ofR$1.5 billion: (i) on October 2, 2006, 30.0% of Shopping Del Rey (an increase in our ownershipinterest); (ii) on January 2, 2007, 38.7% of Goiânia Shopping; (iii) on February 5, 2007, 100.0% ofShopping Estação; (iv) on March 1, 2007, 10.0% of Pantanal Shopping; (v) on March 1, 2007,convertible debentures with participation in the profits of the company responsible for the developmentof Araguaia Shopping, which give us, among other rights, the right to receive 50% of the net income ofAraguaia Shopping and the right to appoint its officers and directors; (vi) on April 11, 2007, 0.7% ofShopping ABC; (vii) on April 11, 2007, 6.9% of Goiânia Shopping (an increase in our ownershipinterest); (viii) on April 13, 2007, 8.5% of Shopping Center Piracicaba, 12.2% of Shopping CenterIguatemi Belém, 11.1% of Amazonas Shopping and 16.6% of Shopping Iguatemi Maceió by means ofthe acquisition of the total capital stock of EPI; (ix) on May 2, 2007, 17.6% of Shopping IguatemiMaceió (an increase in our ownership interest); (x) on May 14, 2007, 6.1% of Amazonas Shopping (anincrease in our ownership interest); (xi) on May 18, 2007, 100.0% of Shopping Tamboré; (xii) onMay 21, 2007, 3.0% of Shopping Center Piracicaba (an increase in our ownership interest); (xiii) onMay 22, 2007, 35.9% of Natal Shopping; (xiv) on May 23, 2007, 20.0% of Shopping Curitiba; (xv) onJune 22, 2007, 35.0% of Top Shopping; (xvi) on June 28, 2007, 15.0% of Shopping Curitiba (anincrease in our ownership interest); (xvii) on June 29, 2007, 9.1% of Natal Shopping (an increase in ourownership interest); (xviii) on July 3, 2007, 1% of Minas Shopping; (xix) on July 3, 2007, 13.0% of BigShopping; (xx) on July 16, 2007, 100.0% of Niterói Plaza Shopping; (xxi) on July 16, 2007, 82.4% ofFashion Mall; (xxii) on July 16, 2007, 82.5% of Ilha Plaza; (xxiii) on July 16, 2007, 100.0% of RioPlaza; (xxiv) on August 3, 2007, 2.4% of Esplanada Shopping; (xxv) on August 9, 2007, 12.9% ofShopping Villa-Lobos (an increase in our ownership interest); (xxvi) on September 27, 2007, 17.5% ofIlha Plaza (an increase in our ownership interest); (xxvii) on October 4, 2007, 10.0% of Fashion Mall(an increase in our ownership interest), (xxviii) on October 19, 2007, 10.0% of Shopping MuellerJoinville by means of the acquisition of the total capital stock of KGM37 Empreendimentos Ltda; and(xxix) on October 22, 2007, 4.0% of Goiânia Shopping (an increase in our ownership interest). Inaddition, on March 13, 2007, we acquired a 99.9% ownership interest in DEICO, which is responsiblefor the management, leasing and/or planning of 13 shopping malls.

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We believe we have a strong financial position with growth in net revenue, EBITDA and net income since2004. The following table presents certain consolidated financial and operational information, including,where indicated, on a pro-forma basis, for the indicated periods.

For the Year EndedDecember 31,

2004 2005 2006

Audited

(amounts in millions of R$,except as otherwise indicated)

Net revenue from rent and services ............................................ 65,684 73,413 85,951EBITDA(1)................................................................................. 33,998 41,878 53,751EBITDA margin(2)..................................................................... 51.8% 57.0% 62.5%Net income (loss) ....................................................................... 12,941 21,324 30,348Net margin(3) ............................................................................ 19.7% 29.0% 35.3%Shopping centers GLA (in thousand square meters)(4)(5) ........... 203.2 208.6 235.8Shopping centers (our ownership interest) GLA (in thousand

square meters)(5)(6)................................................................ 85.3 86.9 101.4For the Six Months Ended

June 30,

2006 2007 2007

UnauditedPro-forma

Unaudited(7)

(amounts in thousands of R$,except as otherwise indicated)

Net revenue from rent and services ............................................ 37,234 72,246 120,785Adjusted EBITDA(8) .................................................................. 24,100 49,894 90,541Adjusted EBITDA margin(9) ...................................................... 64.7% 69.1% 75.0%Net income (loss) adjusted(10) ................................................... 13,328 18,832 (48,413)Shopping centers GLA (in thousand square meters)(5)(6) ........... 235.8 641.7 799.8Shopping centers (our ownership interest) GLA (in thousand

square meters)(6)(7)................................................................ 90.2 283.0 364.9

(1) EBITDA consists of operating income plus depreciation and amortization plus net financial results.EBITDA is not a financial performance measure calculated in accordance with Brazilian GAAP orU.S. GAAP, must not be considered as an alternative to net income, as an indicator of operatingperformance, or as an alternative to operating cash flows as an indicator of liquidity. EBITDA is notcalculated using a standard methodology and may not be comparable to the definition of EBITDAor similarly titled measures used by other companies. We believe that EBITDA allows a betterunderstanding not only of our financial performance but also of our ability to comply with ourobligations and obtain funds for our capital requirements. However, EBITDA presents limitationsthat impair its use as a measurement of our profits since it does not consider certain costs arisingfrom our business that might significantly impact our results of operations and liquidity, such asfinancial expenses, taxes and depreciation. See “Summary Financial Information.”

(2) Represents EBITDA divided by net revenue from rent and services.(3) Net income as a percentage of net revenue from rent and services.(4) Represents total gross leasable area of all shopping malls in which we hold an ownership interest

and does not reflect our ownership interest in each development.(5) One square meter is equal to 10.76 square feet.(6) Reflects our proportional interest in the total gross leasable area of all shopping malls in which we

hold an ownership interest.

(footnotes continued on following page)

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(7) For more information regarding our pro forma income statement, see “Unaudited CondensedConsolidated Pro Forma Financial Information.”

(8) Adjusted EBITDA consists of EBITDA, as adjusted for (i) non-recurring expenses related to ourinitial public offering of common shares completed in May 2007, and (ii) non-recurring costs relatedto our corporate reorganization (see “—Recent Events” and “Principal Shareholders”). LikeEBITDA, Adjusted EBITDA is not a financial performance measure calculated in accordance withBrazilian GAAP or U.S. GAAP, and should not be considered as an alternative to net income, as anindicator of operating performance, or as an alternative to operating cash flows as an indicator ofliquidity. Adjusted EBITDA is not calculated using a standard methodology and may not becomparable to the definition of Adjusted EBITDA or similarly titled measures used by othercompanies.

(9) Represents adjusted EBITDA divided by net revenues from rent and services.(10) Consists of net income (loss), as adjusted for (i) non-recurring expenses related to our initial public

offering of common shares completed in May 2007, and (ii) non-recurring costs related to ourcorporate reorganization (see “—Recent Events”, “Selected Financial Information” and “PrincipalShareholders”).

COMPETITIVE STRENGTHS

We believe that our strengths are:

Strategically diversified portfolio of shopping malls. Our portfolio of shopping malls is strategicallydiversified with respect to both geographic location and target customer income segment. We own thelargest shopping mall in the Northeast region in terms of gross leasable area (Shopping Recife) as well asthe largest shopping mall targeted to the upper-middle income class (NorteShopping) of Brazil. The grossleasable area of the shopping malls that we own is distributed among several diverse regions of thecountry as follows: 52% in the Southeast, 13% in the Midwest, 13% in the Northeast, 15% in the Southand 7% in the North. Our portfolio includes shopping malls ranging from those targeting the low tomiddle income classes, such as Araguaia Shopping, to the upper-income class, such as Shopping Villa-Lobos and Fashion Mall. We believe our nationwide presence and our experience operating shoppingmalls that we target to different income classes (i) allows us to benefit from the economic growth of eachregion and income class, (ii) minimizes the impact of fluctuations in regional economies and sectors and(iii) provides us with a key competitive advantage for the implementation of our growth andconsolidation strategy.

Professional management and strong shareholder base. We have a team of professionals widelyrecognized in the market with significant experience in the shopping mall, real estate and financialsectors, as well as in management of businesses. Our compensation policy seeks to align the interests ofthese professionals with those of our shareholders through variable compensation and a stock optionplan that rewards strong performance and the attainment of specified goals. Our principal shareholdersbring together (i) ECISA, which has more than 50 years of experience in the construction and shoppingmall sectors, (ii) GP Investments’ experience in many successful private equity ventures, includinginvestments in Gafisa S.A., Equatorial Energia S.A., Lupatech S.A., ALL—América Latina Logística doBrasil, S.A. and Submarino S.A. and (iii) Equity International, led by Samuel Zell, one of the largestglobal real estate investors, with investments in emerging market companies such as Gafisa S.A., aninvestment held with GP Investments since 2005, and Desarrolladora Homex S.A.

Unique capacity for consolidation in the shopping mall industry. We believe the Brazilian shoppingmall industry presents unique growth opportunities for us. The combination of growth in retail sales andthe decrease in interest rates together with the fragmentation in the Brazilian shopping-center marketcreates a strong opportunity for both the development of new shopping mall projects and for the

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acquisition of ownership interests in existing shopping malls. We believe that we have competitiveadvantages to implement our growth strategy, such as (i) the successful experience of our managementteam and our principal shareholders in mergers and acquisitions; (ii) a willingness to invest in bothminority and majority interests, regardless of whether we are able to immediately manage the targetshopping mall; and (iii) privileged access to opportunities generated by the extensive network of ourshareholders’ contacts and the customer base of our subsidiaries EGEC, DACOM and DEICO. SinceOctober 2006, we have acquired ownership interests in 21 new shopping malls, adding approximately244 thousand square meters of gross leasable area to our portfolio.

Recognized, successful and growing services business. Our management, consulting and marketingservices for shopping malls and commercial and business centers represented approximately 15.0% ofour gross revenue from rent and services for the six months ended June 30, 2007. During the last nineyears, we believe we have developed a solid reputation for our services, resulting in us routinely securingnew clients while maintaining our existing client base, including those shopping malls in which we do nothold ownership interests. We also believe that our close relationships with owners of the shopping,commercial and business centers that we manage, together with our understanding of their operations,provides us with a significant competitive advantage for the implementation of our growth andconsolidation strategy. We provide these services to 29 shopping malls and commercial centers, includingsupermarket chains. We also believe that our services business has the potential to continue to grow asthe Brazilian shopping-center sector becomes increasingly professionalized.

Potential for growth with high margins and strong cash generation. From January 1, 2004 toDecember 31, 2006, we have demonstrated relatively high and consistent growth in our net revenue fromrent and services, with compound annual growth of 20.4% from 2004 to 2006, an increase of 94.0%from the six month period ended June 30, 2006 to the same period in 2007, and what we believe to behigh margins (EBITDA margins of 51.8% in 2004, 57.0% in 2005 and 62.5% in 2006 and an adjustedEBITDA margin of 69.1% for the six month period ended June 30, 2007), resulting in strong cash flowgeneration.

Strong relationships with retailers. We believe that the extensive base of our shopping and commercialcenters and business clients distinguishes us in the sectors in which we operate. Through the provision ofour services, we have established close relationships with a large number of retailers in Brazil, including:Lojas Americanas, Ponto Frio, Marisa, Casa & Vídeo, Leader Magazine, C&A, Riachuelo,Pernambucanas, Renner, Carrefour, Casas Bahia, Hiper Bompreço, and Pão de Açúcar. In addition, webelieve that our capacity for identifying anchor stores more suitable for new shopping mall projects, fromthe conceptual phase of such projects through when we turn spaces over to stores for operation,strengthens our relationships with retailers. We believe that attracting the best anchor stores is animportant factor in the success of a shopping mall, particularly during the start of its operations, whenintense marketing campaigns help position it in its region.

STRATEGY

We believe that the implementation of our principal commercial, financial and investment strategies willresult in improvements in the development of our operations, maximizing profitability for ourshareholders and generating advantages over our competitors. Our main strategies are:

Focus on the creation of value through acquisitions of ownership interests in shopping malls. We planto focus our efforts on implementing our strategy of growth through acquisitions. We have amanagement division exclusively dedicated to the prospecting, analysis and execution of shopping mall

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acquisitions, focusing on (i) increasing our ownership interests in the shopping malls that are already partof our ownership portfolio; (ii) acquiring ownership interests in shopping malls that we manage butwhich are not in our portfolio; (iii) acquiring ownership interests in other shopping malls that we do notmanage; and (iv) acquisitions of other companies, like us, in the shopping mall industry. Our growthstrategy focuses on generating value for our shareholders through acquisitions that provide adequatereturns, independent of the location, income segment of target customers, minimum percent ofownership interest and immediate control of the management of the shopping mall. We expect to use ourexpertise in managing shopping malls to improve the operations of those shopping malls that we acquire,further adding value to our investments.

Expand existing shopping malls and develop new shopping malls. We plan to take advantage ofopportunities to expand the shopping malls in which we hold ownership interests in order to (i) obtaineconomies of scale where certain fixed costs are not significantly affected by such expansions, and(ii) maximize our revenue from growth in such shopping malls. For example, we recently expanded ourNorteShopping shopping mall by 33 thousand square meters, making it one of the largest in the state ofRio de Janeiro in terms of gross leasable area, and we intend to begin the expansion of GoiâniaShopping, Amazonas Shopping, Shopping Tamboré, Shopping Iguatemi Caxias do Sul, Shopping CenterIguatemi Belém, Top Shopping, Minas Shopping, Niterói Plaza, Shopping Estação, Shopping IguatemiMaceió and Big Shopping, which we expect to conclude by the end of 2008 and 2009 (see “Business—Projects Under Development—Expansions Scheduled to Occur in 2007 and 2008”). We also believe thatthe market for new shopping malls in Brazil presents significant potential for growth. We have alreadyapproved the general terms and conditions that will govern the development, construction andjoint operation of two additional shopping malls: one with 25 thousand square meters of planned grossleasable area in Granja Viana, a neighborhood in the municipality of Cotia, within the metropolitan areaof São Paulo, and another with 38 thousand square meters of planned gross leasable area (which can beexpanded to a total 76 thousand square meters of gross leasable area) in the Mooca neighborhood in thecity of São Paulo. Both shopping malls are scheduled to open in June 2009.

Expand our services business. We believe that our management, consulting and marketing services willbenefit from the accelerated growth of the shopping mall industry in Brazil. We expect increasedprofessionalism in the management of real estate properties will improve the demand for such services.We intend to continue to grow our services business by providing services to shopping malls we intend todevelop, shopping malls in which we hold ownership interests but for which we do not yet provideservices and shopping malls held by third parties that we believe would be in our interest to have in ourportfolio.

Implement standards of excellence throughout our operations. Using the same strategy adopted by ourshareholders for the companies in which they invest, we plan to implement standards of excellence in ouroperations, finances and personnel, by adopting leading practices such as zero-base budgeting, variablecompensation focused on the attainment of pre-defined goals and systematic monitoring of keyperformance indicators. We will focus particular attention on the recruitment and retention of ouremployees, seeking to align their interests with those of our shareholders, including through the use ofstock options.

CORPORATE STRUCTURE

The chart on the following page shows our current shareholders, as well as our current shareholdingsand ownership interests in shopping malls:

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PRINCIPAL SUBSIDIARIES

Our principal subsidiaries are as follows:

ECISA Engenharia and ECISA Participações

We hold a 100% ownership interest in ECISA Engenharia and ECISA Participações, which have thefollowing corporate purposes: (i) investment in and ownership of shopping malls and industrial andcommercial buildings owned by us and by third parties; (ii) the financial planning, development,marketing, management and establishment of shopping malls and industrial and commercial buildings;(iii) the operation of parking areas; (iv) providing technical assistance for the implementation,organization and operation of industrial, commercial and other enterprises, and (v) the acquisition ofequity interests in other companies. Through ECISA Engenharia and ECISA Participações, we holdinterests in the following shopping malls: Shopping Del Rey, Independência Shopping; Goiânia Shopping,Shopping Recife, Shopping Villa Lobos, Shopping Iguatemi Caxias do Sul, NorteShopping, ShoppingCampo Grande, Shopping Estação, Pantanal Shopping and Araguaia Shopping (in which we holdownership interests through convertible debentures with profit sharing rights)

EGEC

ECISA holds a 100% ownership interest in EGEC. EGEC plans, manages, establishes and operatesshopping malls and commercial enterprises of any nature, whether owned by us or by third parties.EGEC also coordinates the acquisition and leasing of commercial property.

DACOM Gestão and DACOM Desenvolvimento

ECISA holds a 100% ownership interest in DACOM Gestão and DACOM Desenvolvimento, companiesthat provide consulting services, business management and planning services for shopping malls, as wellas monitoring, supervision and operation of shopping malls.

SISA

ECISA Engenharia holds an 8% ownership interest in SISA, which organizes, implements and managesreal estate and commercial developments, in particular shopping malls. SISA holds 100% of ShoppingIndependência.

EGEC PAR II, GS and Graúna

ECISA Engenharia holds a 100% ownership interest in EGEC PAR II, which was incorporatedspecifically to hold interests in GS. EGEC PAR II holds a 65.5% ownership interest in GS, which owns75.83% of the Goiânia Shopping.

On December 29, 2005, GS acquired portion of the real estate of Goiânia Shopping for R$22.6 million,with R$18.1 million to be paid in 48 monthly installments beginning on February 5, 2006 and ending onJanuary 5, 2010. As a guaranty for the payment of the balance of the price, a chattel mortgage was takenon the acquired real estate.

On December 18, 2006, GS and Invest Mall Participações S.A. entered into a share purchase agreementwith Fundação Saelpa de Seguridade Social – Funasa to acquire a portion of the real estate of GoiâniaShopping, for R$3.1 million, with R$2.5 million being payable in 12 monthly installments beginning 30days from the delivery of the real estate.

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EGEC PAR II holds a 100% ownership interest in Graúna, which was incorporated by the shareholdersof Tamboré S.A. to hold an ownership interest in Shopping Tamboré. Our ownership interest in Graúnawas acquired on May 18, 2007.

Nattca

ECISA Participações holds approximately 99.9% of the ownership interests of Nattca Participações S.A.,which in turn holds an ownership interest in Shopping Estação (which interest is currently 100%). Theremaining shares of Nattca are held by ECISA Engenharia. Nattca’s outstanding shares were pledged toItaú BBA as collateral under the financing agreement for the Shopping Estação acquisition.

SPE Indianápolis

ECISA holds an approximate 100% ownership interest in SPE Indianápolis, which establishes anddevelops shopping malls and holds ownership interests in other companies. SPE Indianápolis holds anownership interest of 78.648% in Cuiabá Participações S.A., which in turn holds a 43.8% interest inPantanal Plaza. Pantanal Plaza holds a 29% interest in the Pantanal Shopping building. Thus, SPEIndianápolis holds a total indirect ownership interest in Pantanal Shopping of approximately 10%. SPEIndianápolis also holds 35% of TopShopping.

In addition to these holdings, SPE Indianapolis also holds convertible debentures with profit sharingrights through which it has, among others, the right to receive 50% of its net income and appoint itsmanagement.

SPE Indianapolis also holds a 99.99% interest ownership in Eximia, which leases properties and holdsownership interests in other companies. Eximia holds (i) 13% of Big Shopping and (ii) 1% of MinasShopping.

DEICO

ECISA holds an approximate 99.9% ownership interest in DEICO, which prepares economic andtechnical projects, manages and coordinates projects, promotions and publicity consulting, providesconsulting for real estate launches, administration and leasing of real estate and shares in the ownershipof other companies. DEICO manages, leases and/or has planned 13 shopping malls and will providethese same services for the following shopping malls: (i) Amazonas Shopping; (ii) Shopping JaraguáAraraquara; (iii) Shopping Jaraguá Brasil; (iv) Shopping Jaraguá Conceição; (v) Shopping JaraguáIndaiatuba; (vi) Maxi Shopping Jundiaí; (vii) Shopping Midway Mall; (viii) Shopping ABC Santo André;(ix) Shopping Aldeota; (x) Shopping Piracicaba, (xi) Shopping Tamboré; (xii) Fantasy Shopping; and(xiii) Shopping Butantã.

EPI

ECISA Engenharia holds approximately a 99.99% ownership interest in EPI, which holds ownershipinterests in real estate developments. EPI holds the following ownership interests: (i) 11.5% of shoppingmall Piracicaba, (ii) 12.2% of Shopping Center Iguatemi Belém (iii) 17.2% of Amazonas Shopping and(iv) 34.2% of Shopping Center Iguatemi Maceió.

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SPE Mônaco

We hold an approximate 50% ownership interest in SPE Mônaco, which merchandises, providesfinancial planning for, develops, leases, manages and constructs shopping malls and operates parkinglots. SPE Mônaco holds a 90% ownership interest in Natal Shopping. Ancar holds the remaining 50%ownership interest in SPE Mônaco.

On June 11, 2007, BR Malls and Ancar entered into an investment agreement, whereby BR Malls andAncar each agreed to acquire 50% of and undertook to acquire the entire real estate ownership interestin Natal Shopping, through SPE Mônaco.

On June 11, 2007, we entered into the SPE Mônaco shareholders’ agreement with Ancar, which has a30-year term and sets forth, among other matters: (i) financing rules for new developments involvingamounts greater than the cash flow of SPE Mônaco; (ii) rules for the appointment and engagement ofshareholders and/or their respective affiliates for the provision of management and leasing services forNatal Shopping, whereby in the three years subsequent to the execution date of the agreement, Ancarwill provide management services and BR Malls shall provide leasing services; and (iii) preemptive rightsin connection with the sale of the shares of SPE Mônaco.

Exímia

ECISA Participações and SPE Indianápolis hold a 100% ownership interest in Exímia, which leasesproperties owned by Exímia and holds ownership interests in other companies. Exímia holds a 1%ownership interest in Minas Shopping and a 13% ownership interest in Big Shopping.

SPE Chance

ECISA Engenharia and ECISA Participações hold a 100% ownership interest in SPE Chance, whichmerchandises, provides financial planning for, develops, leases, manages and constructs shopping mallsand operates parking lots. SPE Chance holds the following ownership interests: (i) 100% of Rio PlazaShopping; (ii) 100% of Niterói Plaza Shopping; (iii) 92.4% of Fashion Mall; and (iv) 100% of ShoppingIlha Plaza.

SPE Monza

ECISA Engenharia holds a 100% ownership interest in SPE Monza, which merchandises, providesfinancial planning for, develops, leases, manages and constructs shopping malls and operates parkinglots. SPE Monza holds 60% of the capital stock of Shopping Center Mooca EmpreendimentosImobiliários.

Shopping Center Mooca Empreendimentos Imobiliários

SPE Monza holds a 60% ownership interest in Shopping Center Mooca Empreendimentos Imobiliários(Companhia AJMS Participações Ltda. holds the remaining 40% ownership interest). Shopping CenterMooca Empreendimentos Imobiliários promotes, develops and merchandises spaces in shopping malls,exclusively through the purchase, sale and leasing of such spaces. SPE Monza acquired ownershipinterest in Shopping Center Mooca Empreendimentos Imobiliários with the purpose of developing ashopping mall in the Mooca (Shopping Mooca) neighborhood, in the city of São Paulo, in the state ofSão Paulo. Shopping Mooca opening is scheduled for June 2009, is expected to originally haveapproximately 38 thousand square meters of gross leasable area; however the shopping mall has capacityto double this area through future expansions.

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SPE Xangai

ECISA Engenharia and ECISA Participações hold a 100% ownership interest in SPE Xangai, whichmerchandises, provides financial planning for, develops, leases, manages and constructs shopping mallsand operates parking lots. SPE Xangai holds 60% ownership interest in Shopping Raposo Tavares,whose opening is scheduled for June 2009, will be located on a 33 thousand square meter tract of land inGranja Viana, a neighborhood in the municipality of Cotia, within the metropolitan area of São Paulo.

Ras Shopping Centers

ECISA Participações holds a 50% ownership interest in Ras Shopping Centers (Iguatemi Empresa deShopping Centers S.A. holds the remaining 50% ownership interest). Ras Shopping Centersmerchandises, provides financial planning for, develops, leases, manages and constructs shopping mallsand operates parking lots. Ras Shopping Centers holds 4.85% ownership interest in Shopping CenterEsplanada.

Christaltur

ECISA Engenharia holds a 49.99% ownership interest in Christaltur (Cisalpina Participações Ltda. holdsthe remaining 50.01%). Christaltur constructs real estate developments and holds ownership interests inother companies. Following the acquisition of Christaltur, we hold a 39.72% ownership interest inShopping Villa-Lobos in terms of its gross leasable area.

KGM37

ECISA Engenharia and ECISA Participações hold 100.0% of the capital stock of KGM37, whosecorporate purpose is, among others, the economic planning, development, sales, administration,management and implementation of shopping centers and commercial and industrial buildings. KGM37holds a 10% ownership stake in Shopping Center Mueller de Joinville.

Other Companies

We also own interests in the following companies:

CompanyOwnershipInterest (%)

BR Malls International Finance Limited................................................................................ 100.0SDR ...................................................................................................................................... 99.8ASCR.................................................................................................................................... 32.5EMCE................................................................................................................................... 99.8Recife Parking....................................................................................................................... 32.5Campo Grande Parking......................................................................................................... 60.2Villa-Lobos Parking .............................................................................................................. 26.9Recife Locadora de Equipamentos para Autogeração Ltda.................................................... 32.5

MARKETS IN WHICH WE OPERATE

Ownership interests in shopping malls

We hold ownership interests in the following 28 shopping malls: (i) Shopping Recife, located in the cityof Recife, state of Pernambuco; (ii) Goiânia Shopping, located in the city of Goiânia, state of Goiás;(iii) NorteShopping located in the city of Rio de Janeiro, state of Rio de Janeiro; (iv) Shopping Campo

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Grande, located in the city of Campo Grande, state of Mato Grosso do Sul; (v) Shopping Del Rey,located in city of Belo Horizonte, state of Minas Gerais; (vi) Shopping Villa-Lobos, located in the city ofSão Paulo, state of São Paulo; (vii) Independência Shopping, located in the city of Juiz de Fora, state ofMinas Gerais; (viii) Shopping Iguatemi Caxias do Sul, located in the city of Caxias do Sul, state of RioGrande do Sul; (ix) Shopping Estação, located in the city of Curitiba, state of Paraná; (x) PantanalShopping, located in the city of Cuiaba, state of Mato Grosso; (xi) Araguaia Shopping, located in the cityof Goiânia, state of Goiás (our ownership interest in Araguaia Shopping is through convertibledebentures with profit sharing rights through which we have, among others, the right to receive 50% ofits net income and appoint its management); (xii) Shopping ABC, located in the city of Santo André, stateof São Paulo; (xiii) Shopping Piracicaba, located in the city of Piracicaba, state of São Paulo;(xiv) Amazonas Shopping, located in the city of Manaus, state of Amazonas; (xv) Shopping IguatemiBelém, located in the city of Belém, state of Pará; (xvi) Shopping Iguatemi Maceió, located in the city ofMaceió, state of Alagoas; (xvii) Natal Shopping located in the city of Natal, state of Rio Grande doNorte; (xviii) Shopping Tamboré, located in the city of Barueri, state of São Paulo; (xix) ShoppingCuritiba, located in the city of Curitiba, state of Paraná; (xx) TopShopping, located in the city of NovaIguaçu, state of Rio de Janeiro; (xxi) Big Shopping, located in the city of Contagem, state of MinasGerais; (xxii) Minas Shopping, located in the city of Belo Horizonte, state of Minas Gerais;(xxiii) Niterói Plaza, located in city of Niterói, state of Rio de Janeiro; (xxiv) Fashion Mall, located in thecity of Rio de Janeiro, state of Rio de Janeiro; (xxv) Ilha Plaza located in the city of Rio de Janeiro, stateof Rio de Janeiro; (xxvi) Rio Plaza, located in the city of Rio de Janeiro, state of Rio de Janeiro;(xxvii) Esplanada Shopping located in the city of Sorocaba, state of São Paulo; and (xxviii) ShoppingMueller Joinville, located in the city of Joinville, state of Santa Catarina. Therefore, we are present in theNortheast, Midwest, Southeast and Southern regions of Brazil.

The map below shows the location of our shopping malls, as well as the percentage interest that we holdin each shopping mall.

Pantanal Shopping (MT): 10% Araguaia Shopping (GO): 50% Shopping Campo Grande (MS): 65.1% Goiânia Shopping (GO): 49.6%

Shopping Center Recife (PE): 31.1% Natal Shopping (RN): 45% Shopping Center Iguatemi Maceió (AL): 34.2%

NorteShopping (RJ): 74.1% Shopping ABC (SP): 0.7% Shopping Piracicaba (SP): 11.5% Big Shopping (MG): 13.0% Minas Shopping (MG): 1.0% TopShopping (RJ): 35% Shopping Del Rey (MG): 65% Independência Shopping (MG): 8% Shopping Villa-Lobos (SP): 39.7% Shopping Tamboré (SP): 100% Niterói Plaza (RJ): 100% Fashion Mall (RJ): 92.4% Ilha Plaza (RJ): 100% Rio Plaza (RJ): 100% Esplanada Shopping (SP): 2.4%

Amazonas Shopping (AM): 17.2% Shopping Iguatemi Belém (PA): 12.2%

Shopping Center Iguatemi Caxias (RS): 45.5% Shopping Estação (PR): 100% Shopping Curitiba (PR): 35%Shopping Mueller Joinville (SC): 10%

Our shopping malls target Brazilian consumers in the upper, upper-middle, and middle classes, who arecharacterized by their loyalty to certain shopping malls and demand for quality. Two of the shoppingmalls which are part of our portfolio (NorteShopping and Shopping Recife) are among the largestBrazilian shopping malls in terms of gross commercial area, based on data provided by ABRASCE.Following a recent expansion, NorteShopping became the largest shopping mall in the state of Rio deJaneiro, according to ABRASCE.

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Management of shopping, commercial and business centers

We specialize in the management of shopping malls we own, shopping malls owned by third parties andcommercial centers. We are currently responsible for the management of 24 shopping malls and onecommercial center located throughout Brazil. In addition, we provide marketing administration servicesto Top Shopping.

We participate in all stages of the implementation of developments, from the planning (includingfeasibility study), building and launching of shopping malls to the management and financial,commercial and legal administration of their activities. Our business model is aimed at reducing costs,maximizing profits and building a transparent relationship with our lessees. We believe that our strengthin the area of management of shopping malls lies in the importance that we place in our relationship withlessees.

Leasing and merchandising of stores and common space

We specialize in the leasing and merchandising of stores and common spaces in shopping malls, as wellas in the planning of shopping mall events. We currently provide services to 28 developments in severalBrazilian regions, in particular in the states of Rio de Janeiro and São Paulo. These 28 developmentsrepresent a total gross leasable area of 855.0 thousand square meters and 4,477 stores. Additionally, wealso provide leasing and merchandising services to two developments that are supermarkets.

Our specific activities in respect of leasing and merchandising of stores and common spaces in shoppingmalls include the planning and management of the mix of stores and the establishment of the shoppingmall’s commercial policy. We actively target stores and large retail chains through our relationships withreal estate brokers located throughout the country. We act as intermediaries in the negotiation of leasingagreements between the developments and the potential lessees, having brokered leasing agreements withmany of the important anchor and satellite stores which operate in the Brazilian shopping mall industry,including TIM, Leader Magazine, Renner, Mr. Pretzels, Centauro, O Boticário, Taco, C&A, LojasAmericanas, Casa & Vídeo, Marisa, Richards, Casas Bahia, Ponto Frio, Arezzo, Pão de Açúcar,Cinemark, Multiplex Severiano Ribeiro. We also provide consulting services to retailers looking for newproperties or to relocate.

We lease kiosks and stands located in the common areas of shopping malls which are used to sell andpromote goods and services, with the purpose of complementing the shopping mall’s mix of stores andstrengthening its commercial links. We also lease merchandising space, as shopping malls have becomean important marketing medium over the last few years, offering several different advertisement options,both indoors and outdoors. We also organize events in the shopping mall’s internal and parking areas,not only to increase sales and the number of visitors to the shopping mall, but also to increase ourexposure in the local press.

Anchor stores play an important role in the attraction of visitors to a shopping mall, in particular in theearly stages of its operations, as a result of their intensive marketing campaigns, which assists in thepositioning of the shopping mall within the region where it operates. Therefore, we attempt to identifyand attract those anchor stores that we believe are best suited to a particular development in the earlystages of planning and implementation of the project. We maintain close commercial relationships withmost of the anchor stores which currently operate in Brazil, including Lojas Americanas, Ponto Frio,Casa & Vídeo, Leader Magazine, C&A, Renner, Carrefour, Casas Bahia, Pão de Açúcar and Hard RockCafé.

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SHOPPING CENTERS

The following is a description of the main characteristics of the shopping malls in which we holdownership interests:

Shopping Recife

Shopping Recife opened in October 1980 in Recife, the capital city of the state of Pernambuco. Recifehad a population of approximately 1.5 million in 2006, based on information from Target Institute ofMarket Research (Instituto Target Pesquisa de Mercado), or ITPM. According to data published byABRASCE, Shopping Recife is currently one of the largest commercial centers in Latin America.

Shopping Recife has a gross commercial area of 78,400 square meters and a gross leasable area of61,200 square meters, in addition to 5,000 parking spaces and 410 stores, composed of 401 satellitestores and nine anchor stores.

Shopping Recife’s consumer market spreads across all age brackets with approximately 68% belongingto upper and upper-middle income classes. In 2006, approximately 73% of Shopping Recife’s consumersvisited the development on a weekly basis. According to information provided by the Institute of Social,Political and Economic Researches (Instituto de Pesquisas Sociais, Políticas e Econômicas), or IPESPE,74 out of every 100 visits to Shopping Recife in September 2006 resulted in a purchase.

Pursuant to sales reports filed by lessees, Shopping Recife’s sales volume increased from R$649 million in2004 to R$1,042.8 million in 2006. Shopping Recife attracts approximately 24 million visitors per year.Approximately 300,000 cars per month are parked in its parking lot. Shopping Recife is currentlymanaged by our indirect subsidiary ASCR.

The table below shows the main characteristics of Shopping Recife:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest(%)(1) .............................. 31.1%GCA (square meters)(1) ................................................ 78,400Total GLA(square meters)(1) ........................................ 61,200Number of stores(1)(2).................................................. 410Main stores ................................................................... Zara, C&A, Renner, Mega Store Saraiva, Lojas

Americanas, Hiper Bom Preço and Tok&StokNumber of visitors per year........................................... 24 millionNumber of parking spaces............................................. 5,000Total sales—2006(3) ..................................................... R$1,042.8 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Shopping Recife’s main competitors are as follows:

Shopping CenterYear

OpenedNumber of

Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

Guararapes ............................... 1993 227 43,500 2,000 C&A, Lojas Americanas,Game Station and Insinuante

Tacaruna................................... 1997 220 40,800 2,270 C&A, Bom Preço, LojasAmericanas, Riachuelo andPB Kids

Source: ABRASCE and the mentioned shopping malls’ respective websites.

NorteShopping

NorteShopping opened in July 1986 with a gross leasable area of 31,000 square meters and is located inthe North Region of the city of Rio de Janeiro. NorteShopping’s anchor stores include a Carrefoursupermarket, which occupies a 13,000 square meters space within NorteShopping. NorteShopping’s firstexpansion took place in 1988 and resulted in the creation of two movie theatres, and 30 new stores, aswell as in the attraction of C&A as an additional anchor store.

We believe that NorteShopping currently has one of the broadest store mixes among all shopping mallslocated in the city of Rio de Janeiro. Currently, NorteShopping had 334 stores, of which 325 weresatellite stores and nine were anchor stores (Carrefour, Renner, C&C, C&A, Casa & Vídeo, LeaderMagazine, Lojas Americanas, Casas Bahia and Ponto Frio), as well as a diversified portfolio of services,which include: a Federal Police station dedicated to the issuing of passports, a Traffic Department station(Detra), a Public Finances Department station, a Labor and Employment Ministry station, a Post Office,an indoor car wash, ATMs, banks (Banco Itaú, Sudameris and Caixa Econômica Federal), hairdressers, alaunderette, family restrooms, baby changing facilities, free baby strollers, a key cutter, a newsstand andan instant photograph booth. NorteShopping also contains four movie theaters (Art Filmes and LuisSeveriano Ribeiro) and the Theatre Miguel Falabella (456 seats), which is considered one of Rio deJaneiro’s most modern theatres. NorteShopping also includes a commercial center called Vida Center,which is located in the shopping mall’s top floor and is occupied by medical and dental practices, beautyclinics, laboratories, a unit of Centro Educacional da Lagoa (which provides nursery services andeducation to children from infancy through to their college admission exams), and language schools suchas Aliança Francesa and Wise Up.

NorteShopping is surrounded by a covered parking area offering 4,692 parking spaces. We believe thatNorteShopping is currently a key shopping, leisure, fashion and cultural point of reference in the city ofRio de Janeiro. According to Instituto Motivo e Ação, or IMA, NorteShopping receives an average of28.8 million visitors per year, 15% of whom belong to the upper class and 51% of whom belong to theupper-middle class, 62% of whom are female and 79% of whom are at least 20 years old.

According to IMA, in 2006, 57% of NorteShopping center’s consumers visited the shopping mall at leastonce a week, and 67% of its consumers declared that they make purchases every time that they visitNorteShopping. In the same survey, approximately 89% of NorteShopping center’s consumers declaredthat they are very satisfied with the development, while 65% declared themselves to be frequentcustomers of NorteShopping. NorteShopping’s key businesses, include the following, which areconsistently among the most successful units in these chains, according to data provided by thebusinesses themselves: McDonald’s (its NorteShopping store is one of McDonald’s top 10 stores in Brazilin sales volumes) and CVC Viagens e Turismo (its NorteShopping store was the leader in sales among all

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230 CVC stores in Brazil in 2006). We believe that NorteShopping has one of the highest sales persquare meter in the state of Rio de Janeiro.

NorteShopping completed its second large-scale expansion on January 15, 2007, which was called “PátioNorteShopping” As a result of this expansion NorteShopping currently has a gross commercial area of98,400 square meters and gross leasable area of 77,800 square meters. It is now the largest shoppingmall in the state of Rio de Janeiro.

Pátio NorteShopping includes a 33,000 square meters leisure and entertainment area, and has pioneeredthe “Lifestyle Center” concept in Brazil, a trend which was first observed in the U.S. and which seeks toprovide carefully planned open-air spaces that reflect the lifestyle of local residents. Pátio NorteShoppinghas 35 stores and a parking area which provides 192 parking spaces.

We are currently responsible for the management of NorteShopping. The table below shows the maincharacteristics of NorteShopping:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1) .......................... 74.1%GCA (square meters)(1) ............................................. 98,400Total GLA (square meters)(1) .................................... 77,800Number of stores(1)(2) .............................................. 334Main Stores ............................................................... Carrefour, Renner, C&C, C&A, Casa & Vídeo,

Leader Magazine, Lojas Americanas, Casas Bahiaand Ponto Frio

Number of visitors per year ....................................... 28.8 millionNumber of parking spaces ......................................... 4,692Total sales—2006(3).................................................. R$797.4 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

NorteShopping has three main competitors, as shown in the table below:

Shopping CenterYear

OpenedNumber of

Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

Barra Shopping .................. 1981 584 69,100 4,700 Zara, Ponto Frio, Casa & Vídeo,C&A, Fast Shop, Fnac, LeaderMagazine, Lojas Americanas,Renner and Saraiva.

Nova America.................... 1995 233 40,700 2,487 C&A, Casa & Vídeo, Ponto Frio,Kalunga, Lojas Americanas andCasas Bahia.

Carioca.............................. 2001 194 35,200 1,824 Hipermercado Extra, Cinemark,Leader, Lojas Americanas, C&Aand Casa & Vídeo.

Source: ABRASCE and shopping malls’ websites

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Shopping Campo Grande

Shopping Campo Grande opened in October 1989 and is located in the city of Campo Grande, state ofMato Grosso do Sul. We believe that Shopping Campo Grande is the most complete shopping andentertainment center in the city. Shopping Campo Grande has a gross commercial area of 57,400 squaremeters and a gross leasable area of 28,200 square meters, in addition to 2,120 parking spaces.

Shopping Campo Grande has 165 stores, of which 158 are satellite stores and seven are anchor stores,including: Casas Bahia, Renner, Pernambucanas, Riachuelo, Lojas Americanas, C&A and a Carrefourhypermarket. In addition to offering many well-known regional and national brands, Shopping CampoGrande has bank and post office branches.

According to IMA, approximately 9.0 million people visited Shopping Campo Grande in 2006. Salesreported by lessees during 2006 amounted to approximately R$229.6 million, an increase of 9.4% incomparison to 2005. As of April 2006, approximately 60% of Shopping Campo Grande’s customers arefrom the upper and middle-upper classes, while 70% of them owned vehicles, 65% had credit cards,44% had a college degree and 74% had access to the Internet.

According to data published by State Science and Technology Planning Department (Secretaria de Estadode Planejamento Ciência e Tecnologia) (i) Campo Grande has the largest population and ICMScollection in the state of Mato Grosso do Sul, and (ii) the main economic activities carried out in CampoGrande are retail activities (45%) and the provision of services (40%). According to ITPM, CampoGrande has 766,010 inhabitants; the city experienced population growth of 2.4% in 2006 and per capitaincome was R$8,900 during the same period. These statistics rank Campo Grande in seventeenth placein the IPC Target 2006 (among 5,564 Brazilian cities). Shopping Campo Grande is the only shoppingmall in Campo Grande and therefore it has no direct competitor in the area.

We are responsible for the management of Shopping Campo Grande. The table below shows the maincharacteristics of Shopping Campo Grande:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1)................ 65.1%GCA (square meters)(1) ................................... 57,400Total GLA (square meters)(1) .......................... 28,200Number of stores(1)(2) .................................... 165Main stores...................................................... Renner, Pernambucanas, Riachuelo, Lojas Americanas e

C&A and Hipermercado CarrefourNumber of visitors per year ............................. 9.0 millionNumber of parking spaces ............................... 2,120Total sales—2006(3)........................................ R$229.6 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Shopping Del Rey

Shopping Del Rey opened in October 1991 and is located in the city of Belo Horizonte, state of MinasGerais. Shopping Del Rey has a gross commercial area of 59,300 square meters and a gross leasable areaof 37,400 square meters, in addition to 2,356 parking spaces. Shopping Del Rey has 176 stores, of which167 are satellite stores and nine are anchor stores, namely: C&A, Riachuelo, Renner, Lojas Americanas,Dadalto, Pernambucanas, Marisa, Carrefour and Multiplex. In addition, Shopping Del Rey housesLeitura and Ri Happy megastores, as well as Ponto Frio, Casas Bahia and Ricardo Eletro stores. Webelieve that Shopping Del Rey is one of the main shopping malls in the state of Minas Gerais, with totalsales reported by lessees of over R$271 million during 2006. Approximately 14.4 million people visitedShopping Del Rey in 2006, approximately 66% of whom belonged to the upper and middle-upperclasses and 55% of whom are aged between 18 and 34 years old. Additionally, approximately 50% of itsvisitors have completed secondary education, 26% have a college degree and 75% are homeowners,according to data compiled by Instituto Ipsos in 2003.

The following services are also available at Shopping Del Rey, among others: a post office, bankbranches (Bradesco, Banco Itaú, Unibanco, Banco do Brasil and Caixa Econômica Federal), a travelagency, an exchange bureau, a hairdresser, a video shop, a national lottery agent and a newsstand.

Shopping Del Rey is undergoing a R$3.3 million redecoration program during 2007, which will includechanges to its landscaped areas, lighting and internal corridors. We currently hold a 65% ownershipinterest in this shopping mall and are responsible for its management.

The table below shows the main characteristics of Shopping Del Rey:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1)................... 65.0%GCA (square meters)(1)...................................... 59,300Total GLA(square meters)(1) .............................. 37,400Number of stores(1)(2) ....................................... 176Main stores ........................................................ C&A, Riachuelo, Renner, Lojas Americanas, Dadalto,

Pernambucanas, Marisa, Carrefour and MultiplexNumber of visitors per year ................................ 14.4 millionNumber of parking spaces .................................. 2,356Total sales—2006(3) .......................................... R$271.2 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Shopping Del Rey has three main competitors, as shown in the table below:

Shopping CenterYear

OpenedNumber of

Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

BH Shopping .................. 1979 289 35,500 3,128 Carrefour, C&A, LojasAmericanas, Riachuelo, Rennerand Zara

Itaúpower ....................... 2005 100 33,000 3,300 C&A, Renner, Riachuelo and LojasAmericanas

Minas Shopping.............. 2001 189 32,000 3,000 Lojas Americanas, Riachuelo,C&A and Dadalto

Source: ABRASCE and shopping malls’ websites

Shopping Iguatemi Caxias do Sul

We opened shopping mall Iguatemi Caxias do Sul in November 1996, as a result of a joint venture withIguatemi Empresas de Shopping Centers S.A. Shopping Iguatemi Caxias do Sul is located in the city ofCaxias do Sul, state of Rio Grande do Sul, and has a gross commercial area of 27,600 square meters anda gross leasable area of 15,100 square meters, in addition to 1,700 parking spaces. The shopping mallhouses 94 stores, of which 92 are satellite stores and two are anchor stores (Loja Renner and a Carrefourhypermarket). Shopping center Iguatemi Caxias do Sul also boasts six multiplex movie theatres and highquality restaurants. One of the shopping mall’s main strengths is that it offers a number of nationalstores and brands which cannot be found anywhere else in its region.

Shopping Iguatemi Caxias do Sul serves a geographic area covering 56 cities in the Northeast Region ofthe state of Rio Grande do Sul. The eleven principal cities area had a total population of 764.9 thousandpeople in 2002, over 90% of whom were literate. According to data compiled by IBGE at the time, theaverage household annual income amounted to R$16,243.

Shopping Iguatemi Caxias do Sul receives approximately 10.8 million visitors per year. In 2004, 78.0%of such visitors belonged to the upper and middle-upper classes according to Instituto Luciano Monteiroe Associados. We are currently responsible for the management of Shopping Iguatemi Caxias do Sul. Ourownership interest in Shopping Iguatemi Caxias do Sul represents our first investment in the shoppingmall segment in the South Region of Brazil. We intend to expand Shopping Center’s area during 2007.There are no other shopping malls in Caxias do Sul; therefore Shopping Iguatemi Caxias do Sul has nodirect competitor in the area.

The table below shows the main characteristics of Shopping Iguatemi Caxias do Sul:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1) ..................................... 45.5%GCA (square meters)(1)......................................................... 27,600Total GLA (square meters)(1)................................................ 15,100Number of stores(1)(2).......................................................... 94Main stores ........................................................................... Loja Renner and Hipermercado CarrefourNumber of visitors per year................................................... 10.8 millionNumber of parking spaces..................................................... 1,700Total sales—2006(3) ............................................................. R$121.3 million

(footnotes on following page)

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(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping Villa-Lobos

Shopping Villa-Lobos opened in April 2000 and is located in the city of São Paulo, in the state of SãoPaulo. Shopping Villa-Lobos boasts a gross commercial area of 27,400 square meters and a grossleasable area of 27,400 square meters, in addition to 1,913 parking spaces. It has 216 stores, of which214 are satellite stores and two are anchor stores. Shopping Villa-Lobos also has a number of restaurantsand offers entertainment and other services. Shopping Villa-Lobos receives approximately 8.4 millionvisitors per year, 97% of whom belong to the upper and middle-upper classes, according to datacompiled by GIS Market Estados de Mercado during 2006. Shopping Villa-Lobos is located at MarginalPinheiros, a highway which runs adjacently to the Pinheiros River and is used by approximately 300,000cars per day.

Shopping Villa-Lobos is currently managed by the company Saphyr Gestão. The table below shows themain characteristics of Shopping Villa-Lobos:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest(%)(1) ........... 39.7%GCA (square meters)(1) ............................. 27,400Total GLA (square meters)(1)..................... 27,400Number of stores(1)(2)............................... 216Main stores ................................................ Zara, C&A, Pão de Açúcar, Fast Shop and Livraria CulturaNumber of visitors per year........................ 8.4 millionNumber of parking spaces.......................... 1,913Total sales—2006(3) .................................. R$148.9 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping CenterYear

OpenedNumber of

Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

Ibirapuera ..................... 1976 503 49,600 3,110 Zara, Camicado, Fast Shop andCentauro

Morumbi Shopping....... 1982 411 45,300 2,830 Zara, FNAC, Swarovski and PumaIguatemi........................ 1966 325 40,700 2,539 Ferragamo, Diesel, Empório Armani

and ZaraPátio Higienópolis ........ 1999 259 24,900 1,350 Fast Shop, Les Lis Blanc and H SternJardins Region .............. NA NA NA NA Diesel, Emporio Armani and Louis

Vuitton

Source: ABRASCE and shopping malls’ websites

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Goiânia Shopping

Goiânia Shopping opened in October 1995 and is located in the city of Goiânia, state of Goiás. It is oneof the city’s most modern shopping, leisure and entertainment centers. The first expansion of GoiâniaShopping took place in 2000. This expansion resulted in an increase in its total built area fromapproximately 34,700 square meters to approximately 46,300 square meters, the opening of a C&Astore and the expansion of the Bretas Hypermarket. The last stage of its first expansion program wascompleted in December 2000 and resulted in the opening of eight Severiano Ribeiro Multiplex moviescreens, with a total capacity of 2,100 seats. Multiplex Severiano Ribeiro is considered by many localresidents as the best cinema in the city of Goiânia. Goiânia Shopping has a gross commercial area of19,300 square meters and a gross leasable area of 16,900 square meters, in addition to 962 parkingspaces. We intend to carry out a further expansion of Shopping Goiânia during 2007 and expect toconclude such expansion by the end of 2008.

Goiânia Shopping has a diversified and sophisticated mix of stores, with a total of 119 stores, three ofwhich are anchor stores (the Bretas hypermarket, C&A and Cinemas Severiano Ribeiro) and 116 ofwhich are satellite stores, as well as a services area. Goiânia Shopping receives approximately 7.3 millioncustomers per year. According to market research conducted by Verus Institute (Instituto Verus) in 2003,approximately 71% of these customers belong to the upper and middle-upper classes, 53% are agedbetween 20 and 39 years old, 52% had completed their secondary education and 56% owned a vehicle.

Goiânia Shopping is located in a privileged area in the city of Goiânia and a significant percentage of thecity’s economically active population resides within its primary area of influence. This area not onlypresents a high demographic density, but also registers one of the highest rates of economic growth in thecity.

We currently hold a 49.6% ownership interest in Goiânia Shopping, and are also responsible for theshopping mall’s management. The table below shows the main characteristics of Goiânia Shopping:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1)......................... 49.6%GCA(square meters)(1) ............................................. 19,300Total GLA(square meters)(1) .................................... 16,900Number of stores(1)(2) ............................................. 119Main stores............................................................... Hipermercado Bretas, C&A and Cinemas

Severiano RibeiroNumber of visitors per year ...................................... 7.3 millionNumber of parking spaces ........................................ 962Total sales—2006(3)................................................. R$137.2 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Goiânia Shopping has three main competitor shopping malls, as described in the table below:

Shopping CenterYear

OpenedNumberof Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

Flamboyant...... 1981 265 46,100 3,000 C&A, Renner, Lojas Americanas, Tok&Stock,Riachuelo and Saraiva.

Buriti ............... 1996 234 32,000 1,000 C&A, Lojas Americanas, HipermercadoBretas

Bougainville ..... 2006 148 11,500 550 Renner, Calvin Klein, M. Officer, Zoomp andColcci.

Source: ABRASCE and shopping malls’ websites

Independência Shopping

The opening of Independência Shopping in the city of Juiz de Fora, state of Minas Gerais, is scheduledfor March 2008. The total cost of the development is expected to reach R$100 million and we expectthat our share of this cost will correspond to approximately R$8 million.

Juiz de Fora has approximately 500,000 inhabitants and is considered to be the main city in the MataMineira region. The city is located 170 kilometers from the city of Rio de Janeiro, 250 kilometers fromthe city of de Belo Horizonte and 450 kilometers from the city of de São Paulo; it is therefore placed atthe intersection of the country’s three main cities and its largest economic region. Juiz de Fora occupiesfourth place in the IPC Target 2006 for the state of Minas Gerais, according to information provided byITPM. It has a solid infrastructure in the areas of transportation logistics, urban planning and businesssupport. Juiz de Fora is the only Brazilian city of its size which is not yet served by a traditional shoppingmall. Independência Shopping will meet the demands of a region with a population of approximately2.1 million people, covering approximately 98 cities in a 100 kilometers radius, and is expected to boostlocal and regional trading significantly. We estimate that the development will generate 1,500 jobsduring the building stage and 2,000 jobs after completion.

Independência Shopping is located at Avenida Independência (the main entrance to the city and thereforean avenue traveled by tourists and residents of neighboring cities), near downtown, the local airport andthe Juiz de Fora Convention Center. Once completed, Independência Shopping will have a grosscommercial area of approximately 25,400 square meters and a gross leasable area of approximately25,400 square meters. The shopping mall will be spread over five floors, two of which will be occupiedby stores, cinemas and restaurants and three of which will provide 1,300 parking spaces.

We are currently responsible for the management of Independência Shopping. The table below shows themain characteristics of Independência Shopping:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1)......................... 8.0%GCA (square meters)(1) ............................................ 25,400Total GLA (square meters)(1) ................................... 25,400Number of stores(1)(2) ............................................. 164Main stores............................................................... —Number of visitors per year ...................................... —Number of parking spaces ........................................ 1,300

(footnotes on following page)

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(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.

The shopping malls’ main competitor is described in the table below:

Commercial CenterYear

OpenedNumberof Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

Mister....................................... 1988 141 9,000 350 O Boticário, Mr. Cat, FalabellaArquitetura, Andarella,Melissa Fashion, Uncle K,Vitor Hugo.

Source: ABRASCE and shopping malls’ websites

Shopping Estação

Shopping Estação was opened in November 1997 and is located at one of the main avenues of Curitiba,the capital city of the state of Paraná. Shopping Estação has a gross commercial area of 54,600 squaremeters and a gross leasable area of 54,600 square meters, in addition to 1,746 parking spaces. It has 153stores (149 of which are satellite stores and four of which are anchor stores), including O Boticário,Arezzo, Bob’s and McDonalds. The mix of stores offered at Shopping Estação is currently beingimproved with the addition of anchor stores such as the Estação Convention Center, which occupies anarea of 25,000 square meters. The majority of the shopping mall’s customers belong to the upper-middleand middle classes, and it is visited by an average of 5.4 million customers per year. Shopping Estação’smain competitors are: Parkshopping Birigui, Crystal Shopping, Shopping Mueller and Shopping Curitiba.

Two parcels of real estate of Shopping Estação are subject to various claims in the amount ofapproximately R$12.5 million to labor and civil creditors of Rede Ferroviária Federal—RFFSA, orRFFSA, from the previous ownership of the land. RFFSA sold the credits to third parties when there werealready judgments against it, which possibly constituted fraud in the inducement. There is also aguaranty deposit agreement between Nattca and the sellers to pay the amounts of the debt up to R$7million. The buildings constructed on the property still were not registered with the real estate registryand the municipal government of Curitiba has not allowed total use of the buildings.

We acquired a 100% interest in Shopping Estação’s in February 2007. The table below shows the maincharacteristics of Shopping Estação:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1) ................................... 100.0%GCA (square meters)(1)....................................................... 54,600Total GLA(square meters)(1)............................................... 54,600Number of stores(1)(2) ........................................................ 153Main stores ......................................................................... O Boticário, Arezzo, Bob’s and McDonaldsNumber of visitors per year ................................................. 5.4 millionNumber of parking spaces ................................................... 1,746Total sales—2006(3) ........................................................... R$148.9 million

(footnotes on following page)

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(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping Estação has four main competitor shopping malls, as described in the table below:

Shopping CenterYear

OpenedNumberof Stores

GLA(squaremeters)

Number ofParkingSpaces Main Stores

Shopping Mueller................. 1983 212 33,300 1,500 C&A, Renner, Lojas Americanas,Zara and Cinemark

Park Shopping Barigui.......... 2003 181 38,800 2,338 FNAC, Centauro, Ponto Frio, PBKids, Livraria Curitiba, Zara,C&A and Hot Zone

Crystal Shopping.................. 1996 139 12,300 600 —Shopping Curitiba ................ 1996 148 23,600 1,069 C&A, Lojas Americanas and

Renner

Source: ABRASCE and shopping malls’ websites

Pantanal Shopping

Pantanal Shopping was opened in November 2004 and is located in the city of Cuiabá, in the state ofMato Grosso, on one of the most important avenues of the city.

Pantanal Shopping has 43,300 square meters of gross commercial area, 43,300 square meters of grossleasable area and 2,000 parking spaces. Its 202 stores consist of 196 satellites stores and six anchorstores, including: Lojas Americanas, Renner, Ponto Frio, Novo Mundo, Supermercado Modelo IGA andCinemas Multiplex. Approximately 9.0 million consumers visit Pantanal Shopping per year.

In February 2007, we acquired approximately 10% of Pantanal Shopping. The table below shows themain characteristics of Pantanal Shopping:

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1) ................... 10.0GCA (square meters)(1)....................................... 43,300Total GLA(square meters)(1)............................... 43,300Number of stores(1)(2)........................................ 202Main stores ......................................................... Lojas Americanas, Renner, Ponto Frio, Novo Mundo,

Supermercado Modelo IGA and Cinemas MultiplexNumber of visitors per year................................. 9.0 millionNumber of parking spaces................................... 2,000Total sales—2006(3) ........................................... R$176.4 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Araguaia Shopping

Araguaia Shopping was opened in July 2001 and is located in the city of Goiânia, in the state of Goiás.Araguaia Shopping has 18,500 square meters of gross commercial area and 18,500 square meters ofgross leasable area, 1,900 parking spaces and 100 stores, of which 95 are satellite stores and five areanchor stores. The stores include Novo Mundo, Lojas Americanas, Tecelagem Avenida and Bretas.Approximately 15.6 thousand consumers visit this shopping mall per year.

Our ownership interest in Araguaia Shopping is through convertible debentures with profit sharing rightsthrough which we have, among others, the right to receive 50% of its net income and appoint itsmanagement.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

BR Malls’ ownership interest (%)(1)................... 50% of Araguais Shopping’s net incomeGCA (square meters)(1) ...................................... 18,500Total GLA(square meters)(1) .............................. 18,500Number of stores(1)(2) ....................................... 100Main stores......................................................... Novo Mundo, Lojas Americanas, Tecelagem Avenidas

and BretasNumber of visitors per year ................................ 15.6 millionNumber of parking spaces .................................. 1,900Total sales—2006(3) .......................................... R$93.4 million

(1) As of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping ABC

Shopping ABC is the largest shopping mall in the region of ABC, São Paulo, in terms of gross leasablearea. Shopping ABC opened in August 1996, and since 2000 has undergone a major renovation andrevitalization.

The opening of Shopping ABC’s loft floor (Piso Loft) was part of the expansion process of the shoppingmall in January 2005. The loft floor resulted in the fourth floor of stores in the development and was anew concept for space in shopping malls. The loft floor, which has an expansive and clean environmentand architecture, offers a differentiated range of products and services.

Shopping ABC is visited by an average 926,000 customers per month, in particular customers in theupper and upper-middle income classes. Shopping ABC has a gross commercial area of 48,700 squaremeters and a gross leasable area of 46,500 square meters and offers 1,870 parking spaces, 1,200 seats inthe food area, five movie theaters and 276 stores, of which 181 are satellite stores and 11 are anchorstores, including: C&A, Casas Bahia, Renner, Riachuelo, Lojas Americanas, Tok & Stok, Fast Shop andMix Móveis.

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As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) ................................................ 0.7%GCA (square meters)(1).................................................... 48,700Total GLA (square meters)(1)........................................... 46,500Number of stores(1)(2) ..................................................... 276Main stores ...................................................................... C&A, Casas Bahia, Renner, Riachuelo, Lojas

Americanas, Tok & Stok, Fast ShopNumber of visitors per year .............................................. 11 millionNumber of parking spaces ................................................ 1,870Total sales—2006(3) ........................................................ R$320 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping ABC’s main competitors are the shopping malls listed below:

Shopping CentersYear of

inaugurationNumber of

stores

GLA(squaremeters)

Parkingspaces Main stores

ABC Plaza Shopping ........... 1997 277 63,000 2,350 C&A, Kalunga,Pernambucanas, HipermercadoExtra and C&C

Metrópole Shopping ........... 1980 162 24,900 1,148 Renner and Lojas Americanas

Shopping Piracicaba

Shopping Piracicaba is the largest and most complete shopping and entertainment center in its region.The shopping mall was opened 19 years ago and is located in the city of Piracicaba, São Paulo.

Shopping Piracicaba is visited by an average of approximately 600,000 customers per month, inparticular customers in the upper and upper-middle income classes according to the data provided by theshopping’s loyalty program (Programa de Fidelidade). Shopping Piracicaba has a gross leasable area of27,800 square meters, 2,000 parking spaces, five movie theaters and 145 stores, of which 137 aresatellite stores and eight are anchor stores, including: C&A, Casas Bahia, Lojas Americanas, Marisa,Renner, Nobel Mega Store and Dicico.

We are responsible for the management and leasing of the stores in this shopping mall.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) ................................ 11,5%GCA (square meters)(1) .................................... 27,800Total GLA (square meters)(1) ........................... 27,800Number of stores(1)(2) ..................................... 145Main stores ....................................................... C&A, Casas Bahia, Renner, Lojas Americanas, Marisa,

and Nobel Mega StoreNumber of visitors per year .............................. 7.2 millionNumber of parking spaces ................................ 2,000Total sales—2006(3)......................................... R$155.2 million

(footnotes on following page)

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(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Amazonas Shopping

Amazonas Shopping is located in the city of Manaus, which is considered one of the best cities inNorthern Brazil to conduct business and is the fourth largest city in Brazil in terms of GDP according toIBGE. Amazonas Shopping opened in November 1991 and is strategically located because it receivestraffic flow from all neighborhoods in Manaus.

The shopping mall’s first expansion was completed in November 2000. A new expansion project hasbeen approved and is expected to add a gross leasable area of 10,000 square meters to the shopping mall.

Amazonas Shopping has a gross commercial area of 44,600 square meters and a gross leasable area of38,500 thousand square meters, 2,000 parking spaces and 206 stores, of which 199 are satellite storesand seven are anchor stores, including: Riachuelo, C&A, Carrefour, Renner, Marisa and City Lar.

We are responsible for the management and leasing of the stores in Amazonas Shopping.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) ........................... 17.2%GCA (square meters)(1) ............................... 44,600Total GLA (square meters)(1) ...................... 38,500Number of stores(1)(2) ................................ 206Main stores.................................................. C&A, Carrefour, Riachuelo, Renner, Marisa and City LairNumber of visitors per year ......................... 15.6 millionNumber of parking spaces ........................... 2,000Total sales—2006(3) ................................... R$395 million

(1) Includes stores which are part of our gross leasable area and stores within the gross leasable areaowned by third parties.

(2) Pursuant to sales reports filed by lessees.

Shopping Iguatemi Belém

Shopping Center Iguatemi Belém opened in October 1993 and is located in the city of Belém, state ofPará. In 2005, Belém had a population of approximately 2.05 million, of which 1.1 million areinhabitants in the city’s urban area. Shopping Center Iguatemi Belém is centrally located and the marketsin which it operates comprises the neighborhoods with highest purchasing power in the city, whereapproximately 70% of the upper and upper-middle income population of the city is concentrated.

Based on a survey conducted in June 2006 by the Instituto Paulista Connection Research, 80% of thecustomers visiting the shopping mall are satisfied or very satisfied with the services provided. Theshopping mall’s customers are 60% female and 40% male, and 58% of these customers belong to theupper and upper-middle income classes and when added with the shopping mall’s middle incomecustomers, make up a total of 95% of the customers. Shopping Iguatemi Belem receives an average of156,000 vehicles and 45,000 customers daily, respectively.

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Iguatemi Belém is currently under an expansion process that will add 2,700 square meters to theshopping mall, with an opening scheduled for the second semester of 2007.

Shopping Iguatemi Belém has a gross commercial area of 34,800 square meters and a gross leasable areaof 18,400 square meters and 187 stores, of which five are anchor stores

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) ............................................. 12.2%GCA (square meters)(1) ................................................. 34,8000Total GLA (square meters)(1) ........................................ 18,400Number of stores(1)(2) .................................................. 187Main stores.................................................................... Y.Yamada. Visão, Lojas Americanas and C&ANumber of visitors per year ........................................... 16.2 millionNumber of parking spaces ............................................. 798Total sales—2006(3)...................................................... R$216 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping Iguatemi Maceió

Shopping Center Iguatemi Maceió opened in April 1989 and was the first shopping mall in the state ofAlagoas.

Shopping Iguatemi Maceió is visited by an average of approximately 800,000 customers per month.Shopping Iguatemi Maceió has a gross commercial area of 33,900 square meters, a gross leasable area of24,200 square meters and 157 stores, of which six are anchor stores, including: Lojas Americanas, C&A,Hiper Bompreço, Marisa, Lojas Riachuelo and Super Insinuante.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1).................................................... 34.2%GCA (square meters)(1) ....................................................... 33,900Total GLA (square meters)(1) .............................................. 24,200Number of stores(1)(2)......................................................... 157Main stores .......................................................................... Lojas Americanas, C&A, Hiper Bompreço,

Marisa, Lojas Riachuelo, Super InsinuanteNumber of visitors per year.................................................. 9 millionNumber of parking spaces.................................................... 1,500Total sales—2006(3) ............................................................ R$258.7 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Shopping Tamboré

Shopping Tamboré opened in 1992 and is located in the city of Barueri, state of São Paulo. ShoppingTamboré is visited by an average of approximately 1 million customers per month and is one of thelargest and most important shopping malls in the region made up of the cities of Barueri, Santana deParnaíba, Carapicuíba, Osasco, Jandira, Itapevi and Cotia.

Shopping Tamboré has a gross commercial area and a gross leasable area of 32,100 square meters, with160 stores, of which ten are anchor stores, including: Cinemark, C&A, Academia Bio Ritmo, Centauro,Fast Shop, Lojas Americanas, Casas Bahia, Preçolândia, C&C Casa e Construção and Carrefour.Shopping Tamboré offers a unique food area with 30 operations and a gastronomic space (“EspaçoGastronômico”) that consists of five restaurants offering various types of cuisine from around the world.

The majority of the customers visiting Shopping Tamboré belong to the upper-middle income class,approximately 58% of whom are aged between 25 and 44 years old and approximately 52% of whomare female. The shopping mall also is also visited by people who work but not live in the region, whorepresents approximately 35% of its total visitors.

We are responsible for the management and leasing of the stores of Shopping Tamboré.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1).................................... 100.0%GCA (square meters)(1) ....................................... 32,100Total GLA (square meters)(1) .............................. 32,100Number of stores(1)(2)......................................... 160Main stores .......................................................... Cinemark, C&A, Academia Bio Ritmo, Centauro,

Fast Shop, Lojas Americanas, Casas Bahia, CarrefourNumber of visitors per year.................................. 12 millionNumber of parking spaces.................................... 2,200Total sales—2006(3) ............................................ R$198.2 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Natal Shopping

Natal Shopping opened in June 1992 and was the first regional shopping mall of the state of Rio Grandedo Norte.

Natal Shopping is visited by an average of approximately 600,000 customers per month. Natal Shoppinghas a gross commercial area of 17,100 square meters and a gross leasable area of 17,100 square metersand 133 stores, of which three are anchor stores, including: Lojas Americanas, C&A and Rio Center.

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As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) ........................................ 45.0%GCA (square meters)(1) ............................................ 17,100Total GLA (square meters)(1) ................................... 17,100Number of stores(1)(2) ............................................. 133Main stores............................................................... Lojas Americanas, C&A, Rio Center and SicilianoNumber of visitors per year ...................................... 7.2 millionNumber of parking spaces ........................................ 900Total sales—2006(3)................................................. R$96 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping Curitiba

Shopping Curitiba opened in September 1996 and is located in the city of Curitiba, state of São Paulo.The facade of the shopping mall has been certified as an historic structure. Shopping Curitiba is locatedin the intersection of the two largest avenues of the city. Curitiba is Brazil’s sixth largest city in terms ofGDP and the tenth largest in terms of GDP per capita, and is also considered the best capital state inBrazil, according to the Life Condition Index.

Shopping Curitiba is visited by an average of approximately 940,000 customers per month,approximately 51% of whom are aged between 20 and 39 years old. A majority of the shopping mall’scustomers belong to the upper and upper-middle income classes, and approximately 60% are female and40% are male.

Shopping Curitiba has a gross commercial area of 28,300 square meters and a gross leasable area of24,000 square meters and 154 stores, of which three are anchor stores: Lojas Americanas, C&A andRenner.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 35.0%GCA (square meters)(1)......................................................... 28,300Total GLA (square meters)(1)................................................ 24,000Number of stores(1)(2).......................................................... 154Main stores ........................................................................... Lojas Americanas, C&A and RennerNumber of visitors per year................................................... 11.2 millionNumber of parking spaces..................................................... 1,069Total sales—2006(3) ............................................................. R$172.5 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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The main competitors of Shopping Curitiba are the shopping malls listed below:

Shopping CentersYear of

inaugurationNumberof stores

GLA(squaremeters)

Parkingspaces Main stores

Shopping Mueller..................... 1983 212 33,300 1,500 Lojas Americanas, Renner,C&A, Zara and Cinemark

ParkShoppingBarigui ............... 2003 181 38,800 2,338 FNAC, Centauro, Ponto Frio,PB Kids, Livraria Curitiba,Zara, C&A, Hot Zone

Crystal Shopping...................... 1996 139 12,300 600Shopping Estação..................... 1997 153 52,000 1,700 Lojas Colombo, Marisa,

Renner, Lojas Americanas,Riachuelo and UCI

Top Shopping

Top Shopping opened in 1996 and is located in the center of the city Nova Iguaçu, state of Rio deJaneiro. Top Shopping is one of the biggest and most important shopping malls in Baixada Fluminense.Top Shopping benefits from its central location and the ease of access since it is served by express roadswith high circulation, such as Via Dutra and Via Light.

Top Shopping has a gross commercial and leasable areas of 18,100 square meters, 660 parking spacesand 133 stores, 129 of which are satellite stores and four of which are anchor stores, including: LeaderMagazine, Lojas Americanas, Casa e Vídeo and Riachuelo.

Top Shopping is visited by an average of approximately 9.6 million customers per month, approximately53% of whom belong to the upper and middle-upper classes, approximately 46% of whom visit theshopping mall at least twice a week, and approximately 82% of whom are homeowners, according todata compiled by IMA.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 35.0%GCA (square meters)(1)......................................................... 18,100Total GLA (square meters)(1)................................................ 18,100Number of stores(1)(2).......................................................... 133Main stores ........................................................................... Leader Magazine, Lojas Americanas,

Casa e Vídeo and RiachueloNumber of visitors per year................................................... 9.6 millionNumber of parking spaces..................................................... 660Total sales—2006(3) ............................................................. R$203 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

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Minas Shopping

Minas Shopping opened in 1991 and is located in the city of Belo Horizonte, the fifth largest city inBrazil, which population was approximately 5.3 million inhabitants in 2006.

Minas Shopping has a gross leasable area of 28,600 square meters, in addition to 1,700 parking spaces.The shopping mall has 184 stores, of which 180 are satellite stores and four are anchor stores, including:Lojas Americanas, Riachuelo, C&A and Dadalto.

Minas Shopping is visited by an average of approximately one million customers per month, the majorityof whom belongs to the upper and upper-middle income classes.

Minas Shopping is in the process of being expanded by 7,100 square meters, with a launching scheduledto 2007 and 2008.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) .......................................... 1.0%GCA (square meters)(1) .............................................. 32,300Total GLA (square meters)(1) ..................................... 28,600Number of stores(1)(2) ............................................... 184Main stores................................................................. Lojas Americanas, Riachuelo, C&A and DadaltoNumber of visitors per year ........................................ 11.5 millionNumber of parking spaces .......................................... 1,700Total sales—2006(3)................................................... R$297 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Big Shopping

Big Shopping opened in 1994 and is located in one of the main avenues of the city of Contagem, in thestate of Minas Gerais, whose population was approximately 600 thousand in 2006.

Big Shopping has a gross commercial and leasable area of 17,600 square meters, in addition to 1,050parking spaces. The shopping mall has 85 stores, of which 81 are satellite stores and four are anchorstores, including: Lojas Americanas, Dadalto, Marisa and Hipermercado Via Brasil.

Big Shopping is visited by an average of approximately one million consumers per month, the majority ofwhom belongs to the upper-middle and middle income classes.

An expansion project for an additional 6,901 square meters was approved for Big Shopping by itsdevelopers and is currently being planned, with completion of the project scheduled for 2009.

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As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 13%GCA (square meters)(1)......................................................... 17,600Total GLA (square meters)(1)................................................ 17,600Number of stores(1)(2).......................................................... 85Main stores ........................................................................... Lojas Americanas, Dadalto, Marisa,

Hipermercado Via BrasilNumber of visitors per year................................................... 12 millionNumber of parking spaces..................................................... 1,050Total sales—2006(3) ............................................................. R$140 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Niterói Plaza Shopping

Niterói Plaza opened in 1986 and is the biggest shopping mall in the city of Niterói, in the state of Rio deJaneiro. The shopping mall has undergone expansions in 1993 and 1995. Its most recent expansion, in2004, included a new area of stores, increased the number of parking spaces and included the firstmultiplex in Niterói, which is operated by Cinemark. The project of Niterói Plaza Shopping, prepared byCoutinho, Diegues Arquitetos was awarded in 1986 by the Institute of Brazilian Architects (Instituto dosArquitetos do Brasil), or IAB, with an honorable mention in the category of commercial buildings.

Niterói Plaza is visited by an average of approximately 21.4 million customers per year, approximately59% of whom are female and approximately 41% of whom are male. According to a survey conductedby i9 Brasil in 2004, approximately 69% of its customers are between 25 and 50 years old. Niterói Plazais targeted to the upper and upper-middle income classes, who comprise approximately 73% of thecustomers of the shopping mall.

The shopping mall has a gross commercial area of 34,200 square meters and a gross leasable area of31,900 square meters, in addition to 1,475 parking spaces. The shopping mall houses 236 stores, ofwhich 231 are satellite stores and five, are anchor stores, including: C&A, Renner, Casa & Vídeo,Leader and Lojas Americanas.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 100%GCA (square meters)(1)......................................................... 34,200Total GLA (square meters)(1)................................................ 31,900Number of stores(1)(2).......................................................... 276Main stores ........................................................................... C&A, Renner, Casa & Vídeo, Leader and

Lojas AmericanasNumber of visitors per year................................................... 21 millionNumber of parking spaces..................................................... 1,475Total sales—2006(3) ............................................................. R$458 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(footnotes continued on following page)

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(2) Includes stores which are part of our gross leasable area and stores within the gross leasable areaowned by third parties.

(3) Pursuant to sales reports filed by lessees.

Ilha Plaza Shopping

Ilha Plaza Shopping opened in 1992 and is located in the neighborhood of Ilha do Governador, in thestate of Rio de Janeiro. Ilha Plaza Shopping was the first shopping mall built in its region. Ilha Plaza isvisited by an average of approximately 7.2 million customers per year. Ilha Plaza is mainly targeted toconsumers belonging to the upper and upper-middle income classes, who comprise approximately 72%of the customers of the shopping mall, approximately 63% of whom are female and 37% are male.

The shopping mall has a gross commercial area and a gross leasable area of 20,300 square meters, inaddition to 705 parking spaces. The shopping mall has 142 stores, of which 137 are satellite stores andfive are anchor stores, including: C&A, Casa&Vídeo, Leader Magazine, Lojas Americanas, Ponto Frioand Renner.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1) ............................ 100%GCA (square meters)(1) ................................ 20,300Total GLA (square meters)(1) ....................... 20,300Number of stores(1)(2) ................................. 142Main stores ................................................... C&A, Casa&Vídeo, Leader Magazine, Lojas Americanas,

Ponto Frio and RennerNumber of visitors per year .......................... 7.2 millionNumber of parking spaces............................. 705Total sales—2006(3)..................................... R$153 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Rio Plaza Shopping

Rio Plaza Shopping opened in 1994 and is located in the city of Rio de Janeiro, state of Rio de Janeiro.Rio Plaza holds the largest gastronomic center of the neighborhood of Botafogo and its surroundings,and offers various restaurants, such as the Outback Steakhouse, Joe & Leo’s, Fiammetta and Gula Gula.

Rio Plaza Shopping is visited by an average of approximately 2.3 million customers per year,approximately 51% of whom are female and 49% of whom are male.

The shopping mall has a gross commercial area and a gross leasable area of 6,600 square meters, 348parking spaces and 50 stores, of which 43 satellite stores and one anchor store.

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As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 100%GCA (square meters)(1)......................................................... 6,600Total GLA (square meters)(1)................................................ 6,600Number of stores(1)(2).......................................................... 44Main stores ........................................................................... Tok & Stok, Outback, Joe & Leo´sNumber of visitors per year................................................... 2.3 millionNumber of parking spaces..................................................... 348Total sales—2006(3) ............................................................. R$60 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Fashion Mall

Fashion Mall opened in 1982 and was the third shopping mall opened in Rio de Janeiro. Fashion Mallserves a geographic area covering the neighborhoods of São Conrado, Lagoa, Leblon, Ipanema, JardimBotânico, Gávea, Joá, Barra da Tijuca and Itanhangua. Fashion Mall is visited by an average ofapproximately 3.6 million customers per year, approximately 61% of whom are female and 39% ofwhom are male. Fashion Mall is targeted to the upper and upper-middle income classes, who compriseapproximately 90% of its customers.

The shopping mall has a gross commercial area and a gross leasable area of 14,108 square meters, 747parking spaces and 138 satellite stores.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 92.4%GCA (square meters)(1)......................................................... 14,108Total GLA (square meters)(1)................................................ 14,108Number of stores(1)(2).......................................................... 138Main stores ........................................................................... Fast Shop, Emporio Armani, H. Stern,

Clube Chocolate, DieselNumber of visitors per year................................................... 3.6 millionNumber of parking spaces..................................................... 747Total sales—2006(3) ............................................................. R$161 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Esplanada Shopping

Esplanada Shopping opened in 1991 and is located in the city of Sorocaba, in the state of São Paulo.Esplanada Shopping is visited by an average of approximately 10.8 million customers per year.Esplanada Shopping is targeted to the upper-middle income class. The shopping mall has a gross

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commercial area and a gross leasable area of 28,000 square meters, 2,500 parking spaces and 164satellite stores.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (%)(1)..................................................... 2.4%GCA (square meters)(1)......................................................... 28,000Total GLA (square meters)(1)................................................ 28,000Number of stores(1)(2).......................................................... 164Main stores ........................................................................... Carrefour, Lojas Renner, Lojas

Americanas, Casas Bahia and C&ANumber of visitors per year................................................... 10.8 millionNumber of parking spaces..................................................... 2,500Total sales—2006(3) ............................................................. R$245 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Shopping Mueller Joinville

Shopping Mueller Joinville was opened in 1995. The mall is located in the city of Joinville, in the state ofSanta Catarina. Joinville’s GDP per capita was R$13,582 in 2004. Shopping Mueller Joinville is visitedby an average of approximately 7.3 million customers per year, mostly upper-middle income consumers.The mall has a gross commercial area and a gross leasable area of 27,049 square meters, 1,000 parkingspaces and 134 satellites stores.

As of and for the Year Ended December 31, 2006(unless otherwise indicated)

Ownership interest (1) .............................................. 10%GCA (square meters)(1) ............................................ 27,049Total GLA (square meters)(1) ................................... 27,049Number of stores(1)(2) ............................................. 134Main Stores .............................................................. Lojas Americanas, Renner, Ponto Frio,

Pernambucanas, Marisa, The Best AcademyNumber of visitors per year ...................................... 7.3 millionNumber of parking spaces ........................................ 1.000Total Sales - 2006(3)................................................. R$181 million

(1) Includes the ownership interest held as of the date of this offering memorandum.(2) Includes stores which are part of our gross leasable area and stores within the gross leasable area

owned by third parties.(3) Pursuant to sales reports filed by lessees.

Management Services

We currently provide services to 20 of the 28 shopping malls in which we hold ownership interests,including: (i) NorteShopping; (ii) Shopping Campo Grande; (iii) Shopping Del Rey; (iv) ShoppingIguatemi Caxias do Sul; (v) Goiânia Shopping; (vi) Independência Shopping; (vii) Shopping Estação;

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(viii) Araguaia Shopping;; (ix) Shopping Villa-Lobos; (x) Shopping ABC; (xi) Shopping Piracicaba;(xii) Amazonas Shopping; (xiii) Shopping Tamboré, (xiv) Shopping Curitiba; (xv) Shopping Recife;(xvi) Top Shopping; (xvii) Niterói Plaza Shopping; (xviii) Fashion Mall; (xix) Ilha Plaza Shopping; and(xx) Rio Plaza Shopping (for additional information on these shopping malls, see “Developments”). Wealso provide management, consulting and/or marketing administration services, to the followingshopping, commercial and corporate centers:

West Shopping Rio

We provide management services to West Shopping Rio, which opened in 1997. West Shopping Rio islocated in the western region of the city of Rio de Janeiro and has a gross commercial area of 30,900square meters, a gross leasable area of 30,900 square meters, 1,100 parking spaces and 158 stores, 152of which are satellite stores and 6 of which are anchor stores or megastores including Casa & Vídeo,C&A, Leader, Superlar, Lojas Americanas, Casas Bahia, Ponto Frio and Di Satinni. West Shopping Riois visited by 12 million consumers per year, 20% of whom belong to the upper class and approximately63% of such consumers belong to the middle class. Approximately 50% of such consumers are femaleand 64% are at least 25 years old, according to information compiled by IMA in June 2003.

Shopping Itaipu MultiCenter

We provide management services to Shopping Itaipu MultiCenter, which is located in the city of Niterói,state of Rio de Janeiro. Shopping Itaipu MultiCenter opened in September 1999 and has a grosscommercial area of 23,600 square meters, 1,000 parking spaces and 163 stores, 161 of which aresatellite stores and two of which are anchor stores, including Sendas, Casa & Vídeo and Universo.Shopping Itaipu MultiCenter also has four movie screens and a business center with 93 units. ShoppingItaipu MultiCenter is visited by 2.8 million consumers per year.

Center Shopping Rio

We provide management services to Center Shopping Rio, which is located in Jacarepaguá, city of Rio deJaneiro. The shopping mall opened in April 2001, has a gross commercial area of 12,700 square meters,a gross leasable area of 12,700 square meters, 770 parking spaces and 113 stores, 109 of which aresatellite stores and four of which are anchor stores, including Casa & Video, Lojas Americanas, LeaderMagazine and Casas Bahia. Center Shopping Rio also boasts four movie screens, an amusement park(Parks & Games) and a diversified range of restaurants. The shopping mall is visited by approximately5.4 million people per year.

Jaraguá Brasil

We provide management and leasing services for Jaraguá Brasil. Opened in 1998, Jaraguá Brasil islocated in the city of Campinas, in the state of São Paulo. Jaraguá Brasil has a gross leasable area of2,800 square meters, 395 parking spaces and 43 stores, of which 51 are satellite stores and two areanchor stores. Among the stores are: Caixa Econômica Federal and Academia Douglas Fernandes.Jaraguá Brasil is visited by approximately 1.1 million people per month.

Shopping Jaraguá Conceição

We provide management and leasing services for Shopping Jaraguá Conceição. Opened in 1995,Shopping Jaraguá Conceição is located in the city of Campinas, in the state of São Paulo. ShoppingJaraguá Conceição has a gross leasable area of 1,900 square meters, 130 parking spaces and 40 stores,all of which are satellite stores. The shopping mall is visited by approximately 1 million people per year.

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Jaraguá Araraquara

We provide management and leasing services for Jaraguá Araraquara. Opened in 2001, JaraguáAraraquara is located in the city of Araraquara, in the state of São Paulo. Jaraguá Araraquara has a grossleasable area 11,000 square meters, 730 parking spaces and 80 stores, of which 78 are satellite stores andtwo are anchor stores. Monthly visitors number 84 thousand people. Jaraguá Araraquara is visited byapproximately 2.4 million people per year.

Shopping Jaraguá Indaiatuba

We provide management and leasing services for Shopping Jaraguá Indaiatuba. Opened in 1993,Shopping Jaraguá Indaiatuba is located in the city of Indaiatuba, in the state of São Paulo. ShoppingJaraguá Indaiatuba has a gross leasable area of 7,900 square meters, 210 parking spaces and 55 stores,of which 54 are satellite stores and one is anchor stores. The shopping mall is visited by approximately1.9 million people per year.

Shopping Aldeota

We provide management and leasing services for Shopping Aldeota. Opened in 1998, Shopping Aldeotais located in the city of Fortaleza, in the state of Ceará. Shopping Aldeota has a gross leasable area of30,200 square meters, 430 parking spaces and 267 stores, of which 267 are satellite stores and one is areanchor stores. The shopping mall is visited by approximately 4.3 million people per year.

Shopping Crystal Plaza

We provide leasing and mall and merchandising services to Shopping Crystal Plaza. Shopping CrystalPlaza opened in November 1996, and is located in the city of Curitiba. According to IBGE/2004estimates, Curitiba has approximately 1.7 million inhabitants; however its metropolitan area consists of26 cities, which corresponds to a total of three million inhabitants. Shopping Crystal Plaza has a grossleasable area of 12,300 square meters distributed over four floors, 600 parking spaces and 139 stores.

PROJECTS UNDER DEVELOPMENT

We have a well defined growth strategy that seeks to generate substantial and profitable growthconsistent with market opportunities. The construction of Independência Shopping, which we intend toopen in March 2008, is among our main current projects.

Expansions

We believe that the expansion of existing shopping malls represents an excellent opportunity to achievefurther operating and financial growth. We believe that the expansion of existing shopping mallsincreases traffic to their original areas and presents low risks, as they are planned only upon previouslyidentified demand. Our expansions have also increased our sources of revenue by including new storesand, generally, balancing the proportion of anchor stores to satellite stores.

In January 2007, the expansion of NorteShopping (Pátio) was completed, which added 33,198 squaremeters to its gross leasable area and resulted in the largest shopping mall in the state of Rio de Janeiro, interms of gross leasable area. Pátio NorteShopping includes a leisure and entertainment area made up often UCI movie theaters, a bowling alley and a gym (Academia A! Body Tech). This expansion has

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pioneered the “Lifestyle Center” concept in Rio de Janeiro, which includes very popular restaurants, suchas Outback, Galeria Gourmet and Na Pressão, among others. Pátio Norte Shopping has 35 stores and192 parking spaces.

Expansions Scheduled to Occur in 2007 and 2008

Goiânia Shopping

The expansion of Goiânia Shopping is expected to add 8,379 square meters to its gross leasable area,including 4,786 square meters for satellite stores, 1,595 square meters for anchor stores, 246 squaremeters for an entertainment area, and 1,752 square meters for the commercial building. We expect toinvest R$18.4 million in this project, with a total 50% ownership interest in the expansion shoppingmall. The completion of this project is scheduled for the second semester of 2008.

Shopping Iguatemi Caxias do Sul

The expansion of Shopping Iguatemi Caxias do Sul is expected to add 13,000 square meters to its grossleasable area, including approximately 7,000 square meters for anchor stores, 4,000 square meters forthe entertainment area and megastores and 2,000 square meters for satellite stores. There is also spacefor a “Lifestyle Center” concept. Low vacancy and default levels, a lack of entertainment options andhigh concentration of tourists to the shopping mall’s region were the main reasons for our investment ofR$14.9 million in this project. The completion of this project is scheduled for the second semester of2008.

Amazonas Shopping

The expansion of Amazonas Shopping is expected to add 13,500 square meters to the gross leasable areaof the shopping mall. The project is expected to add more anchor stores to the current mix of stores andto revitalize the structure of the existing shopping mall. The amount required for this investment has notyet been calculated. BR Malls will have a 53% ownership interest in such shopping mall, which isscheduled to open in the second semester of 2008.

Shopping Iguatemi Belém

The expansion of Shopping Iguatemi Belém is expected to add 2,700 square meters to its gross leasablearea.

Shopping Estação

The future expansion of Shopping Estação is expected to add 3.6 thousand square meters to the grossleasable area of the shopping mall, of which BR Malls already holds an 100% ownership interest. Thecompletion of this expansion is scheduled for 2008.

Shopping Iguatemi Maceió

This future expansion of Shopping Iguatemi Maceió is expected to add 5,915 square meters to its grossleasable area, of which we will hold a 25% ownership interest. The completion of this expansion isscheduled for 2008.

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Shopping Tamboré

The expansion of Shopping Tamboré is expected to increase its gross leasable area by 50% (15,276square meters). The completion of this expansion is scheduled for the first semester of 2009. We willinvest approximately R$47.0 million in this project, which will strengthen the position of the shoppingmall as the largest and most complete shopping mall in the region, due to an adjustment of its mix ofstores, which will include new anchor and satellite stores and offer parking spaces to approximately1,300 vehicles.

In addition to the growth plan already prepared, we expect to build five commercial towers and aparking area of 1,500 vehicles, totaling 150,000 square meters of gross leasable area. The acquisition ofShopping Tamboré also presents potential for further construction of 686,224 square meters in an areanext to the shopping mall.

Top Shopping

BR Malls has a 100% ownership interest in the 12,000 square meters of land available for the expansionof Top Shopping, which is expected to serve as a good opportunity to improve its current mix of storesand to offer a more profitable balance between its anchor and satellite stores. In addition, the shoppingmall is expected to be revitalized to improve its existing structure. The completion of this expansion isscheduled for the second semester of 2009.

Big Shopping

The expansion of Big Shopping will add 6,901 square meters to its gross leasable area. This projectincludes the opening of new anchor stores. We have a 13.0% ownership interest in this expansion. Thecompletion of this expansion is scheduled for the second semester of 2009. There is also the possibility ofanother expansion that would add an additional 8,119 square meters to the gross leasable area of theshopping mall.

Minas Shopping

The expansion of Minas Shopping is expected to add 7,140 square meters to its gross leasable area. Theexpansion will include the construction of movie theaters and commercial buildings. We have a 1%ownership interest in this expansion. The completion of this project is scheduled for the second semesterof 2009.

Developments

Mooca

On July 25, 2007, BR Malls entered into an agreement with Construtora São José for the developmentand joint construction and leasing of a new shopping mall, which will be managed and leased by BRMalls. The shopping mall will be located at Avenida do Estado, in the neighborhood of Mooca, in thecity of São Paulo. The shopping mall is expected to have approximately 38,000 square meters of grossleasable area, and we will have a 60.0% ownership interest in this shopping mall. The total estimatedinvestment amount is approximately R$129.0 million, and we will invest 60.0% of this amount. Thecompletion of this shopping mall is scheduled for June 2009.

The shopping mall will be located on approximately 70 thousand square meters of property in theneighborhood of Mooca. The area of 38,000 square meters originally allocated to the shopping mallcould be doubled as a result of future expansions.

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We believe that the neighborhood of Mooca is located in a region with high purchasing power, mainlyoccupied by upper and middle income residents. In addition, the region has few shopping malls in themain area of the neighborhood. The size of the development ranks the shopping mall as the largest of theregion, which attracts a large number of communities and contributes to the increase of the potential ofoperating efficiency.

The shopping mall will include an area available for the Lifestyle Center concept successfully introducedby BR Malls in the Brazilian market with the expansion of NorteShopping. This concept utilizes open-airspaces and excellent landscaping, with areas available for restaurants, leisure and entertainment based onthe life style of the residents of the region. Due to our solid relationship with storeowners in Brazil, anumber of stores have already shown interest in the shopping mall, many of whom have stores in ourother shopping malls.

Granja Vianna

On August 31, 2007, we completed the acquisition of an area of 33,000 square meters located atRodovia Raposo Tavares, kilometer 23.5, in the municipality of Cotia, in the metropolitan area of SãoPaulo. We have already approved the general terms and conditions that will be the basis for the jointconstruction and leasing of a new shopping mall, which will be managed by us. We will have 60.0%ownership interest in the total gross leasable area of the shopping mall, corresponding to approximately25,000 square meters. The total estimated investment amount is estimated to be R$82.0 million (ofwhich we will invest R$42.0 million). The opening is scheduled to June 2009.

We believe that the neighborhood of Granja Vianna is located in a region with high purchasing powerthat lacks large and medium-sized shopping malls.

The shopping mall is expected to include an area available for the Lifestyle Center concept, which wassuccessfully introduced by us in the Brazilian market through the expansion of NorteShopping. The mixof stores is expected to be distributed as follows: 54% for anchor stores and 46% for satellite stores. Anumber of stores contacted by us have already shown interest in the shopping mall, many of whom havestores in our other shopping malls. The project has already been approved by the city hall, which webelieve will significantly reduce the period for construction and the risk level for the project.

COMPETITION

Our main competitors are Brascan Residential Properties S.A., Multiplan Empreendimentos ImobiliáriosS.A., Iguatemi Empresa de Shopping Centers S.A., Ancar S.A., and Sonae Group (a Portuguese groupthat also operates in Brazil). These companies are active players in our industry, including with respect tothe holding of equity participations in shopping malls and provision of management services.

RELATIONSHIPS WITH LESSEES AND PARTNERS

We constantly seek to offer a broad and renewed range of services in our shopping malls in order toincrease the number of visitors and sales volume, therefore maximizing the profits of our lessees andinvestors and strengthening our relationship with them. In order to achieve this objective, we prepare anannual strategic plan for each of the shopping malls that we manage, in order to establish relevant goalsfor the following 12 months. These plans take into account internal and external factors, such ascompetition levels, business weaknesses, market opportunities and threats, among others. We believe thatthis methodology has been a key factor in the successful management of our operations.

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Our business policy also includes an ongoing effort to identify stores in shopping malls with potential forgrowth or which are at financial risk, in order to ensure that the shopping malls in which we holdownership interests or/and which we manage remain attractive. Accordingly, lessees are provided advicewith respect to renovations or a change of location of their stores, among other measures considerednecessary to improve their performance.

We are in constant contact with retailers, suppliers and service providers (including those considered aspotential clients) through our shopping mall management services. We thrive on the constant renovationof our store mixes, which requires an ongoing search for new lessees and new store concepts. We believethat our history and sense of tradition in the industry have helped us to develop a relationship of trustand loyalty with our lessees, which assists us in carrying out an efficient process of attracting newoperators.

In order to protect the shopping malls’ profitability, the costs charged by our services providers areregularly monitored. This regular review helps us to achieve economies of scale, benefit from greaternegotiating power and reduce our costs, which leads, ultimately, to the uniformity of the services used bythe developments and the maximization of profits.

With respect to the developments in which we hold ownership interests, we maintain partnerships withthe main and most renowned industry players, including institutional investors, business groups andpension funds, such as Previ, Refer, Petros, Valia, Capef, Sendas, Ecia, Agenco, JCPM, MB Engenharia,Prebeg, Sogin, Iguatemi and Marcelino Martins. To a great extent, these successful partnerships arereflected in the fact that certain of these entities are our partners in more than one development, whichdemonstrates the mutual trust that we have established. We believe that the establishment of thisrelationships of trust is a key factor behind our having secured contracts manage our clients’ (and notour own) shopping malls, such as Itaipu MultiCenter and Center Shopping Rio.

LEASING POLICY

The leasing of each shopping mall’s stores is key to the success of the shopping mall. In this context, ourleasing strategy for our shopping malls takes into consideration existing market conditions, the area ofprimary influence of the shopping mall and local purchasing habits when determining the adequate mixof stores for the development. We not only maintain an extensive database of retailers and potentialinvestors, but also have direct access to the most well-known Brazilian retail chains. As a result, we haveexpertise in the selection of the best retailers for each shopping mall and we assist each shopping mall toachieve the expected level of profitability and to protect and maintain the long-term quality and profileof the shopping mall. Our work is meant to ensure a high level of commitment to the commercialrelationships among the developments and their management, lessees and advertisers.

Brazilian shopping malls attract customers by gathering a diversified group of stores and services in asingle location that offers advantages such as parking, air conditioning and a sense of security andprotection against tropical rains during the Christmas shopping season, when retail sales peak in Brazil.Currently, shopping malls not only offer a diversified group of stores and brands, but also offer anumber of services, leisure and entertainment options. Therefore, shopping malls are an importantmarketing and advertising channel for small, medium and large businesses. The use of common spaces,as well as the organization of events, provides an excellent opportunity to reach a large number ofconsumers and to improve brand recognition through promotional campaigns, sale of products,collection of consumer data and direct marketing. We offer a number of strategically placed spaces in theinternal and external areas of our shopping malls for marketing and advertisement purposes, includingscreens, windows, doors and stairways.

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DEFAULT AND COLLECTION POLICY

Our management strategy includes a stringent collection and default policy, which we believe hasallowed us to consistently enjoy a low level of lessee default. In addition, we have adopted a solid criteriafor the selection of lessees that are expected to meet certain minimum standards in order to qualify forthe occupation of stores in our shopping malls. Lessees are required to complete a registration form andto present documents issued by credit protection agencies confirming their financial status and that oftheir guarantors, as well as deeds confirming the ownership of real estate worth at least 12 times therelevant monthly occupation cost.

The rents to be paid by the lessees are set as a percentage of sales, subject to a minimum predeterminedmonthly amount. Therefore, we monitor the performance of each store on a monthly basis, with thepurpose of calculating the rent to be paid by each lessee (i.e., the greater of either the set percentage ofsales and/or the minimum monthly rent). In the event of default, we immediately initiate collectionproceedings involving administrative negotiations with the relevant lessee for payment of the outstandingamount. This amount is recorded on the shopping mall’s books for a maximum of 45 days. Once thepossibility of settlement has been exhausted, we initiate eviction proceedings against the lessee in default(within the limits permitted by the Brazilian Leasing Laws) should any outstanding amounts remainunpaid after three months of the date of default (including the 45-day period previously mentioned).Following the eviction, we initiate proceedings for the judicial collection of the outstanding amount.

Our experience in the industry has enabled us to develop specific skills in the drafting of leasingagreements and preventing losses from defaults from occurring. We believe that this experience is one ofthe main reasons behind the efficiency of our collection policy and our low level of lessee default.

SEASONALITY

Our results of operations are subject to seasonal trends affecting the Brazilian shopping mall industry.Shopping mall sales generally increase in the weeks before Mother’s Day (May), Valentine’s Day (June),Father’s Day (August), Children’s Day (October) and Christmas (December). In addition, the largemajority of lessees in our shopping malls pay double rent in December, under the terms of theirrespective leasing agreements.

INTELLECTUAL PROPERTY

Trademarks

Registration of a brand with the National Institute of Intellectual Property (Instituto Nacional dePropriedade Intelectual), or INPI, grants the owner of a brand the exclusive right to use of the brandthroughout Brazil for a 10-year period, which may be extended by successive equal periods. During theregistration process, the petitioner only has an expectation of rights with respect to the use of therelevant brands for identification of its products or services.

According to information provided by INPI, we are the holders of 15 registered trademarks in Brazil,either directly or through our subsidiaries, including “ECISA”, our logo, “Del Rey—Administradora”,“EGEC”, “NorteShopping”, “Festival Goiânia Shopping de Cantor Mirim”, “Deico”, logotype “SãoPaulo Shopping Center”, Master Shopping”, “Shopping Villa”, “Shopping Estação”, “ShoppingTamboré”; “Niterói Shopping Center”, “Shopping Center de Niterói”, “Plaza I”, “Plaza 3”, “PlazaOne”, “Plaza Shopping”, “Plaza Shopping Center”, “Plaza II”, “COFAC”, “Rio Off-Price”, “RioOff-Shopping”, “Rio Off-Shopping Price”, “Rio Plaza Shopping”, “Fashion Prime”, “Fashion Prime

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Gold Shopping”, “Fashion Mall” “Shopping & Charme” and logotype “Villa-Lobos Parking”, inaddition to 44 trademark requests pending registration with the INPI. Our trademark registrations arerenewed every 10 years, upon the expiration of their terms. In addition, we continually seek to obtain thetrademark registration of new brands in order to foster the public’s loyalty to our corporate image.

In addition, on July 1, 2007, we entered into a trademark license agreement with Tamboré S.A. by meansof which Tamboré S.A. has licensed to Graúna the use of two trademarks related to Shopping Tamboré.

Domain names

We are the holders of several domain names in Brazil, including www.brmalls.com.br,www.ecisa.com.br, www.egec.com.br, www.norteshopping.com.br and www.shoppingdelrey.com.br.

Software

We do not own a tailor-made management software. We use software developed by Group Software, arecognized Brazilian company, for the management of our operations.

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PROPERTIES

The table below shows the gross commercial and leasable areas of each of the shopping malls in whichwe hold ownership interests, as well as their number of stores and their respective gross leasable areaoccupancy rates as of the date of this offering memorandum, except if otherwise indicated:

Development

GCA(squaremeters)

GLA(squaremeters)

Numberof

stores(unit)(1)

Occupancyrate(%)(2)

OurInterest

(%)

Shopping Recife(3) ................................................................................... 78.4 61.2 410 99.1 31.1NorteShopping ......................................................................................... 98.4 77.8 334 92.9 74.1Shopping Villa-Lobo ................................................................................ 27.4 27.4 216 98.6 39.7Shopping ABC(10) ................................................................................... 48.7 46.5 276 93.7 0.7Amazonas Shopping(11)(12) .................................................................... 44.6 38.5 206 98.8 17.2Shopping Del Rey..................................................................................... 59.3 37.4 176 97.4 65.0Shopping Center Iguatemi Belém(11) ....................................................... 34.8 18.4 187 99.7 12.2Shopping Curitiba(12).............................................................................. 28.3 24.0 154 98.4 35.0Pantanal Shopping(4)(11)......................................................................... 43.3 43.3 202 93.9 10.0Shopping Tamboré(10) ............................................................................ 32.1 32.1 160 98.8 100.0Shopping Campo Grande ......................................................................... 57.4 28.2 165 96.3 65.1Shopping Center Iguatemi Maceió(11)(12) .............................................. 33.9 24.2 158 79.3 34.2Shopping Center Piracicaba(11)(12)......................................................... 27.8 27.8 145 94.0 11.5Shopping Estação(5)................................................................................. 54.6 54.6 153 97.5 100.0Shopping Iguatemi Caxias do Sul ............................................................. 27.6 15.1 94 96.6 45.5Goiânia Shopping(9) ................................................................................ 19.3 16.9 119 93.7 49.6Natal Shopping (12) ................................................................................. 17.1 17.1 133 94.7 45.0Araguaia Shopping(7)(8) .......................................................................... 18.4 18.4 100 92.4 50.0TopShopping(13) ..................................................................................... 18.1 18.1 133 98.4 35.0Shopping Independência(6) ...................................................................... 25.4 25.4 164 n.a. 8.0Minas Shopping(14)................................................................................. 32.3 28.6 184 n.a. 1.0Big Shopping(14)...................................................................................... 17.6 17.6 85 n.a. 13.0Fashion Mall(15)...................................................................................... 14.1 14.1 144 n.a. 92.4Niterói Plaza(15) ...................................................................................... 34.2 31.9 236 n.a. 100.0Ilha Plaza(15) ........................................................................................... 20.3 20.3 142 n.a. 100.0Rio Plaza(15)............................................................................................ 6.6 6.6 44 n.a. 100.0Esplanada Shopping(16)........................................................................... 28.0 28.0 164 n.a. 2.4Shopping Mueller Joinville(17)................................................................. 27.0 27.0 134 n.a. 10.0

(1) Includes stores which are part of our gross leasable area and stores within the gross leasable area owned by third parties.(2) As of June 30, 2007.(3) The management of Shopping Recife is carried out by means of ASCR, a company in which we hold 32.5% ownership interest.(4) Managed by third parties. We provide leasing services.(5) Ownership interest acquired as of February 2007. Includes the area of the Estação Convention Center, an anchor store with

25 thousand square meters of gross leasable area.(6) This shopping mall is under construction and is scheduled to open in March 2008.(7) Ownership interest acquired in March 2007.(8) Ownership interest held by means of convertible debentures with profit sharing rights, through which we have, among other

rights, the right to receive a remuneration corresponding to 50% of the net income of this shopping mall and appoint itsmanagement.

(9) Ownership interest acquired between January and October 2007.(10) Ownership interest acquired in April 2007.(11) Ownership interest acquired through EPI in April 2007. In addition, the additional ownership interest we acquired in

Amazonas Shopping in May 2007 is currently in the process of being registered with the land registry.(12) Ownership interest acquired in May 2007. In addition, the ownership interest acquired in Shopping Tamboré in May 2007 is

currently in the process of being registered with the land registry.(13) Subject to a purchase and sale agreement for a 35% ownership interest that will be effective in up to 120 days from June 22,

2007.(14) Ownership interest acquired in July 2007.(15) Ownership interest acquired in July 2007. In relation to Fashion Mall, an additional ownership interest of 10.0% was acquired

in October 2007. In relation to Ilha Plaza, an additional ownership interest of 17.5% was acquired in September 2007.(16) Ownership interest acquired in August 2007.(17) Ownership interest acquired in October 2007.

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INSURANCE

We maintain insurance policies covering specified and general risks through CHUBB do Brasil Cia. deSeguros, which covers all shopping malls in which we hold ownership interests, as well as certain of theshopping malls managed by EGEC. We believe that our insurance policies adequately covers the risksthat may adversely impact our operations and developments including fire, theft, electrical damage, riot,flooding, loss of profits and damage to equipment. Our insurance policies are in effect until January2008 and contain standard terms and conditions applicable to insurance policies with similar coveragelevels. The maximum aggregate indemnifications to be paid under our insurance policies are (i) forspecified risks—R$175 million for property damage and R$38.1 million for loss of profits and (ii) forgeneral risks—R$91.8 million for property damage and R$15 million for loss of profits.

We maintain insurance for the directors and officers of our company and our subsidiaries, withworldwide coverage from Unibanco AIG for loss and damages to third parties and with automaticcoverage for our subsidiaries of up to 20% of our assets, expiring in June 2008. The policy consists of(i) a total premium in the amount of approximately R$109 thousand; (ii) a deductible, for claims relatedto the capital markets in the amount of approximately R$29 thousand, and (iii) a maximum limit ofapproximately R$19.4 million.

Additionally, maintain a public liability insurance policy with CHUBB do Brasil Cia. de Seguros, whichapplies to all shopping malls in which we hold ownership interests, as well as shopping malls managedby EGEC. We believe that this policy adequately covers our public liability regarding involuntary,physical and/or property damages caused to third parties as a result of the operation of our shoppingmalls, the parking of vehicles owned by third parties in the parking areas of our shopping malls and ourrole as an employer. The total insured amount (which in the aggregate ranges from R$5,000 to R$4million per shopping mall depending on the type of event) relates to the amounts for which we may beliable upon final judicial decisions not subject to appeal or as a result of an express agreement executedby the insurance company. This public liability insurance policy is in effect until January 2008.

EMCE maintains an insurance policy with Chubb do Brasil Cia. de Seguros to cover potential damagesto the electricity generator located at Condominium NorteShopping. The basic insured amount isequivalent to R$4.8 million and the additional insured amount (which relates to loss of rental incomeand payment of rent) is equivalent to R$500,000. This insurance policy is in effect until January 2008.

ENVIRONMENTAL RESPONSIBILITY

We are committed to adopting best environmental protection practices. We seek to comply with all ofthe requirements set under all applicable federal, state and municipal environmental laws andregulations. We also participate in certain environmental projects described below.

Project for the recycling of sewage water—NorteShopping

As a result of the high level of water consumption in NorteShopping, we are currently implementing asystem for the recycling of part of the sewage water generated by the shopping mall. The water recycledthrough this process will be used in the shopping mall’s toilet facilities and central air conditioningsystem cooling towers. We will, therefore, be able to minimize the volume of sewage released into thepublic sewage network and of water provided by the local water companies. We believe that this will notonly benefit the environment, but also reduce our water and sewage costs.

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Project for the co-generation of electricity—NorteShopping

As a result of the expansion of NorteShopping in 1996, we had to increase the capacity of the part ofNorteShopping mall’s central air-conditioning system used in the production of cold water. As theinstallation of a new cold water tank to meet the additional demand was not an option, we implementeda system which allows us to burn natural gas in a turbine attached to a generator. The gases released bythis turbine are collected by a recycling boiler and used in the generation of the steam necessary forrunning the equipment used for the cooling of the water distributed to NorteShopping mall’s stores andcommunal areas through the central air-conditioning system. This is not only an environmentally friendlyand efficient electrical generation, but has also allowed NorteShopping to reduce electricity costs fromlocal energy companies.

Project for the co-generation of electricity—Shopping Campo Grande

Shopping Campo Grande’s air-conditioning system is composed of eight equipment rooms containingelectric cooling machinery and ice tanks. This equipment is almost 18-years old and, despite regularservicing, is technologically obsolete and does not use electricity in an efficient manner. As aconsequence, and also in view of the high prices charged by the local energy company, we haveimplemented an electricity generation project which allows us to produce part of the electricity necessaryfor running the shopping mall. The system utilizes turbines attached to the equipment used for coolingthe water distributed throughout the shopping mall for the generation of electricity. The implementationof this project resulted in a reduction of Shopping Campo Grande’s electricity costs. The electricitygeneration system installed in Shopping Campo Grande is an environmentally friendly and efficientmethod of generation of electricity.

Monitoring of the quality of air inside the shopping malls

We regularly monitor the level of concentration of solid particles, carbon dioxide, mold, mildew andbacteria in the air that circulates in our shopping malls, as well as their temperature and humidity levels,and the speed at which air is pumped into the internal areas.

EMPLOYEES

As of December 31, 2004, 2005 and 2006, we had 108, 115 and 123 employees, respectively, of which71, 75 and 88, respectively, had been hired in accordance with the Brazilian Labor and EmploymentCode (Consolidação das Leis do Trabalho), or CLT. The remaining employees entered into serviceagreements with us. As of August 31, 2006 and 2007, we had 83 and 156 employees, of which 50 and156, respectively had been hired in accordance with the CLT. All of our employees are based in Brazil(mainly in the city of Rio de Janeiro).

The table below provides a breakdown of the function of our employees for the periods presented:

As of December 31, As of June 30,

Category 2004 2005 2006 2006 2007

Executive ............................................................................................ 8 8 8 8 5Administrative and operational........................................................... 63 67 80 80 156

We believe that our remuneration policy is in line with the average remuneration paid in our industry.We adjust the remuneration paid to our employees whenever it is deemed necessary in accordance with

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the Brazilian labor and employment legislation and the date of renegotiation of our union agreements. Inaddition, we increase employees’ salaries in the event of promotion, which are merit-based.

We offer health insurance coverage and commuting and food vouchers to all of our employees. Inaddition, our employees are entitled to participate in a profit sharing plan, which is conditional upon theCompany meeting predetermined budget and operating targets. Under the terms of our profit sharingagreement, a percentage of our annual net income, after deducting income tax and social contribution,are paid to our employees, in line with the targets met by the Company. We have developed a code ofconduct that seeks to explain to our employees our corporate values, objectives, mission, culture, strategyand principles. We also offer training for our employees.

The majority of our employees are members of the Union of Employees of Entertainment Establishmentsand Companies engaged in the Purchase, Sale, Leasing and Management of Real Estate of the City of Riode Janeiro (Sindicato dos Empregados em Casas de Diversão e Empresas de Compra, Venda, Locação eAdministração de Imóveis do Município do Rio de Janeiro). We believe we maintain a good relationshipwith the unions which represent our employees.

We have outsourced services which are not part of our core business, such as cleaning, security andsurveillance, maintenance, engineering, landscaping and ambulatory care, totaling 390 outsourced peoplein these activities. In addition, we also outsource real estate brokerage. We have implemented a Programfor the Prevention of Environmental Risks (Programa de Prevenção de Riscos Ambientais) and anOccupational Health and Medicine Program (Programa de Controle Médico de Saúde Occupacional), asrequired under applicable laws and regulations.

STOCK OPTION PLAN

For information on our stock option plan see “Management—Stock Option Plan.”

LEGAL AND ADMINISTRATIVE PROCEEDINGS

We are currently party to a number of legal and administrative proceedings arising from the ordinarycourse of our business. As of June 30, 2007, we recorded provisions relating to the tax proceedings in theamount of R$9 million. See “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations—Critical Accounting Policies—Provision for Contingencies.” As of June 30, 2007, ourestimated losses for proceedings that may result in unfavorable outcomes and for which we did notrecord provisions was R$49.3 million. Our results may be adversely affected should our provisions proveinsufficient to cover all losses resulting from claims filed against us.

Below are the principal legal and administrative proceedings in which we are currently involved:

Civil Claims

As of the date of this offering memorandum, we were party to approximately 680 civil proceedingsprimarily involving claims for the payment of indemnification for damage to property, renewal of leasingagreements, collection of debts and annulment of contractual clauses. We have described below ourprincipal civil claims.

Klace

Klace Pisos e Azulejos S.A. filed a civil claim against Center Norte (predecessor of ECISA) seeking toenforce a clause in the contract for the sale of a property that provides for the (i) payment of the

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purchase price by means of seven promissory notes with a face value of CR$17.1 million each and(ii) monthly monetary adjustment of ECISA’s payments using IGP-DI. The lower court ruled in our favorbecause Klace’s plead for inflation adjustment based on the IGP-DI was incorrect given that the contractwas entered into before the Real Plan and accordingly it should be adjusted pursuant to certain Real Planguidelines. Klace filed two appeals that were rejected and has filed two additional appeals that are stillpending. Based on our outside counsel’s opinion, we believe that an outcome that is favorable to us isprobable. Accordingly, we have not recorded any provisions in connection with this claim. In case of anunfavorable outcome, we estimate that the total amount of our losses involved in this claim would beR$37.6 million.

Patrimônio da União in Pernambuco

Ecisa Engenharia, Magus Investimentos Ltda. and Milburn petitioned for an injunction against a federalgovernmental agency challenging the legality of a fee levied on the transfer of real property. The petitionand appeal thereof were denied. The plaintiffs are now waiting for the issuance of an additional courtdecision to determine whether to appeal to a higher court. Based on our outside counsel’s opinion, weexpect the likelihood of success is possible. Accordingly, we have not recorded any provisions inconnection with this claim. In case of an unfavorable outcome, we estimate that the total amount of ourlosses involved in this claim would be R$12.4 million.

Writ of prevention filed by Geral de Turismo Ltda.

Shopping Niterói Plaza entered into a legal agreement with a hotel located next to it in October 1996that includes various covenants, including a covenant concerning the method of waste disposal used bythe shopping mall. The plaintiff in this action has filed a complaint, in the court records of this writ ofprevention, claiming alleged noncompliance with this affirmative covenant and seeking damages ofapproximately R$85.0 million. However, in accordance with our outside counsel’s opinion, we believethat an award for the plaintiff is not probable, since (i) the procedural requirements have not been metand (ii) the complaint does not sufficiently establish the alleged noncompliance for several reasons, oneof which is the existence of a final and unappealable decision, dated September 29, 2004, that confirmsthat there was previously no failure to comply with the affirmative covenant.

Labor Claims

As of the date of this offering memorandum, we and our subsidiaries were defendants in seven laborclaims. The claims relate to the payment of overtime allegedly worked by our employees and therecognition of employment relationship. We estimate that our total liability with respect to these laborclaims amounted to R$159.8 thousand as of June 30, 2007, of which R$42 thousand representedprobable losses and R$117.8 thousand represented possible losses.

In addition to the labor claims filed directly against us, NorteShopping, Shopping Villa-Lobos, ShoppingCaxias do Sul, Shopping Campo Grande and Shopping Recife are defendants in approximately 120 laborclaims. The total amount involved in these claims amounted to approximately R$2.5 million, as ofJune 30, 2007, of which approximately R$1.6 million refers to labor claims filed directly and exclusivelyagainst the shopping mall and R$0.9 million to labor claims in which the shopping malls figure asco-defendants.

Tax Proceedings

We are party to a number of legal and administrative tax proceedings. Below are the principal taxproceedings in which we are currently involved:

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COFINS

ECISA is party to a lawsuit filed against the federal government challenging the payment of COFINStaxes on monthly income from the leasing of stores in our shopping malls. The lawsuit challenges (i) theconstitutionality of the increase in the basis used for calculating COFINS, which was established by Law9718/98 and (ii) the applicability of the law to the nature of the services provided. As a result of theinjunction granted by a federal court, we are currently not paying COFINS on income resulting from theleasing of our stores. We are currently awaiting the review of an appeal filed by us seeking clarificationof the court’s decision which granted our request. We believe, based on our outside counsel’s opinion,that the case is likely to be decided in our favor.

ECISA is party to three administrative proceedings before the Brazilian federal tax authorities. Theseproceedings relate to the payment of COFINS on income resulting from the leasing of real estate. Thefirst proceeding relates to COFINS applied from May 31, 2001 to July 31, 2001 in the approximateamount of R$662.3 thousand (as of June 2007) and is suspended as a result of the injunction granted inthe lawsuit described above. The second proceeding relates to the collection of COFINS amounts in theamount of R$6.2 million (as of June 2007) for the period between August 31, 2001 and January 31,2004, and is suspended as a result of the injunction granted in the lawsuit described above. As ofJune 30, 2007, ECISA maintained a provision of R$6.9 million for payment of any potential liabilitiesregarding these two proceedings.

The third proceeding relates to the collection of COFINS amounts for the period between February 1,2004 and March 31, 2005, which is covered by Law 10833/03, that changed the basis of the calculationof COFINS to include all income earned by legal entities in Brazil. The debt relating to this thirdproceeding is being paid by ECISA in 60 installments since February 2007. Such debt amounted toR$7.4 million as of June 30, 2007. We have recorded no provisions in relation to this proceeding.

PIS and COFINS—Ecisa Engenharia e Ecisa Participações

ECISA Engenharia and ECISA Participações filed two writs of security challenging the constitutionalityof the increase in the basis used for calculating PIS and COFINS, which was established by Law9718/1998 and which changed the basis of the calculation of COFINS to include all income earned bylegal entities in Brazil, beyond operating income which was previously the only basis. In this case, webelieve that a favorable outcome for us is probable because the STF addressed the matter.

IPTU

ECISA is party to 12 administrative proceedings filed by the Revenue Department of the City of Rio deJaneiro to collect Urban Building and Territorial Tax (Imposto Predial e Territorial Urbano), or IPTU,against NorteShopping stores. The total amount involved in these proceedings was R$13.8 million as ofJune 30, 2007 (excluding monetary adjustments and interests). ECISA filed an appeal from theunfavorable rulings from the lower court and such appeal is currently being reviewed by the Council ofTaxpayers of the City of Rio de Janeiro.

In addition, ECISA is party to 281 collection lawsuits filed by the City of Rio de Janeiro to recoveramounts relating to the payment of IPTU and Waste Collection Charges (Taxa de Coleta Domiciliar deLixo) for 1999. These charges relate to the stores and parking area of NorteShopping, and the totalamount involved in these lawsuits is equivalent to approximately R$15.5 million, as of June 30, 2007. Inorder to guarantee any eventual decision against us on these lawsuits, part of the properties thatconstitute NorteShopping were pledged.

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Upon the acquisition of the São Conrado Fashion Mall and Ilha Plaza shopping malls, we identified,through the audit work performed prior to their respective acquisitions, and included in the respectiveacquisition prices of these shopping malls, contingencies related to IPTU debits.

The debits with respect to São Conrado Fashion Mall amount to R$6.6 million, of which: R$3.3million is related to debits payment on which have been suspended by the government; and R$3.2million is related to debits under analysis, which may be challenged or required to be paid ininstallments.

With respect to the debits related to Ilha Plaza, R$6.4 million are related to tax collectionproceedings and payment on which is suspended by decision of the Federal Supreme Court, whichgranted an injunction for such; R$5.9 million is related to three tax collection proceedings regardingamounts for which we were double charged and are being challenged in the courts with a probablefavorable outcome; and R$3.7 million is related to another amount that was double charged and whichis being appealed, with a letter of guarantee already having been tendered. In July 2007, another actionwas brought in the amount of R$6.7 million, but which was already stopped because it represented adouble charge.

Income tax, social contribution and COFINS installments

ECISA has been paying off in installments outstanding income tax and social contribution for the yearended December 31, 2001. In February 2007, ECISA was authorized to pay off in installmentsoutstanding COFINS for the period between February 1, 2004 and March 31, 2005, in connection withthe administrative proceeding described in “—Legal and Administrative Proceedings—Tax Proceedings—COFINS” in the amount of R$8.1 million.

MATERIAL CONTRACTS

Contracts for the provision of management services—EGEC

EGEC has entered into several contracts for the provision of management services, including forshopping malls in which ECISA holds ownership interests. The objective of the contracts is the provisionof shopping mall management services in a way that maximizes income, controls and reduces lesseedefaults and decreases budget costs of the shopping malls. The majority of the contracts have nopre-established termination date. EGEC’s remuneration for the provision of shopping mall managementservices usually includes a fixed management fee and a variable administrative fee based on a percentageof the shopping mall’s income. EGEC’s gross revenue for the provision of the services described aboveamounted to R$12.2 million for the year ended December 31, 2006.

Contracts for the provision of services—DACOM

DACOM has entered into several contracts for the provision of services, including for shopping malls inwhich ECISA holds ownership interests. These contracts provide for (i) the commercial planning of eachdevelopment, in line with the guidelines set by our clients; (ii) the improvement of the commercialrelationships between our clients and their respective lessees; (iii) the ongoing analysis and updating ofeach development’s mix of stores, with change of location of stores as a result of the execution of newleasing agreements; (iv) the representation of our clients before their respective lessees; and (v) the hiringand payment of brokers to represent our clients in the leasing of commercial space. The majority of thecontracts have no pre-established termination date. The amounts to be paid under the contracts abovedepend on a number of criteria, including the classification of each contract in one of the following

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categories: (i) contracts for the leasing of equipment (displays, back lights and windows); (ii) contractsfor the leasing of shopping mall space (stands, kiosks, fairs and events); (iii) contracts for the leasing ofstores; (iv) contracts for key money; (v) contracts for the leasing of commercial rooms; (vi) contracts forthe leasing of merchandising space; and (vii) contracts for the guarantee of leasing and merchandising ofstores and common spaces in shopping malls. DACOM’s gross revenue for the provision of the servicesdescribed above amounted to R$7.1 million for the year ended December 31, 2006.

Store leasing agreements

Our main source of revenue is the payment of rent relating to the leasing of stores in the shopping mallsin which we hold ownership interests and the shopping malls that we manage. Our experience in theindustry has enabled us to develop specific skills in the drafting of leasing agreements and minimizinglosses from defaults. Such leasing agreements usually have a term ranging from five to ten years, andinclude clauses requiring security interests to guarantee payment of rents and imposing fines in the eventof early termination of the agreement by the lessee. The rent effectively charged amounts to the greaterof: (i) a minimum monthly rent set in line with market conditions prevalent at the time of execution ofthe agreement, or (ii) a monthly rent based on a percentage of each lessee’s gross sales for thecorresponding month (usually set between 2% and 7% of gross sales). In addition to the monthly rent,lessees also make a mandatory contribution to the shopping mall’s joint promotions fund (Fundo dePromoções Coletivas), which is usually set between 10% and 20% of each lessee’s minimum monthlyrent. The leasing agreement executed between the lessees and the shopping malls are subject to theprovisions of the Brazilian Leasing Laws, which give certain rights to lessees, including the right to themandatory renewal of the leasing agreement in certain circumstances.

The table below shows the gross revenue derived from our store leasing agreements for the periodsindicated:

For the Six Months Ended June 30,

(amounts in thousand of R$,except as otherwise indicated)

2007 Variation (%) 2006 Variation (%)Variation

2007/2006 (%)

Gross Revenue ....................................................... 65,541 39,051 91.4Norteshopping....................................................... 18,377 23.9 13,544 33.7 35.7Shopping Recife ..................................................... 11,176 14.5 9,461 23.6 18.1Shopping Estação................................................... 7,780 10.1 — — —Shopping Del Rey .................................................. 7,032 9.2 3,417 8.5 105.8Shopping Campo Grande....................................... 6,265 8.2 6,124 15.3 2.3Shopping Villa Lobos............................................. 5,053 6.6 4,815 12.0 5.0Goiânia Shopping .................................................. 4,590 6.0 — — —Shopping Iguatemi Caxias do Sul........................... 1,842 2.4 1,690 4.2 9.0Shopping Iguatemi Maceió .................................... 1,021 1.3 — — —Amazonas Shopping .............................................. 629 0.8 — — —Shopping Iguatemi Belém....................................... 620 0.8 — — —Shopping Piracicaba............................................... 432 0.6 — — —Shopping Curitiba.................................................. 369 0.5 — — —Natal Shopping...................................................... 306 0.4 — — —Shopping ABC ....................................................... 50 0.1 — — —

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We are managed by a board of directors and an executive committee. We are subject to certain corporategovernance and management rules of the Novo Mercado and provisions of our bylaws as describedbelow.

BOARD OF DIRECTORS

Our board of directors is our decision-making body responsible for formulating general guidelines andpolicies for our business, including our long term strategies. Among other things, our board of directorsis responsible for appointing and supervising our executive officers.

Under the Brazilian Corporate Law, members of a company’s board of directors must be shareholders ofthe company, although there is no requirement as to the minimum number of shares that an individualmust hold in order to serve as a director. According to the Listing Rules of Novo Mercado, a company’sboard of directors must be composed of at least five members, of whom at least 20% must beindependent directors. Members of the board of directors are elected for a unified two-year term inoffice, and they may be reelected. Under the Listing Rules of Novo Mercado, an individual must meet anumber of requirements in order to serve as an independent director, including the absence of anymaterial link with the company or its principal shareholders.

The Listing Rules of Novo Mercado provide that all members of our board of directors must execute aManagement Compliance Statement as a requirement for serving in the board. As a result of thiscompliance statement, our directors are personally responsible for our compliance with the terms of theContract for Participation in the Novo Mercado, the Market Arbitration Chamber Rules and the ListingRules of Novo Mercado. The qualification of any of our directors as independent must be expresslydeclared in the minutes of the shareholders’ general meeting that elects them.

In line with the provisions set forth in our bylaws, our board of directors is composed of up to sevenmembers and up to an equal number of alternates. All members of our board of directors are ourshareholders, have been elected at shareholders’ general meetings for a two-year term in office and maybe reelected. Members of our board of directors may be removed from office at any time by a decision ofthe shareholders’ general meeting. Under the provisions of the Listing Rules of Novo Mercado, themembers of our board of directors may be elected under special circumstances, only once, for a three-year term in office, during the transitional period and provided that control over us is not concentrated(controle difuso). Members of our board of directors may be elected either by separate or multiple votingprocedures.

Pursuant to CVM Instruction No. 282, of June 26, 1998 the minimum percentage of voting capitalrequired to adopt cumulative voting in publicly-held companies may vary from 5% to 10% dependingon the size of a company’s capital stock. The size of our capital stock entitles shareholders representing10% of our total capital to request the adoption of cumulative voting in order to elect the members toour board of directors. If the adoption of cumulative voting is not requested, directors are elected by amajority vote of our shareholders, and shareholders that, individually or collectively, represent at least15% of our shares, are entitled to appoint a director and its alternate in separate voting. The decisions ofour board of directors are taken by a majority vote of its members. Neither the chairman nor the vicechairman of our board of directors is entitled to cast tie-breaking votes, in additional to their personalvotes. Our board of directors meets quarterly or whenever requested by its chairman, vice chairman orany two directors acting together.

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The table below shows the names, ages, positions, dates of election and terms in office of the currentmembers of our board of directors.

Name Position Election Date Term in Office

Richard Paul Matheson.............................................. Chairman February 9, 2007 three yearsCarlos Medeiros......................................................... Vice-Chairman February 9, 2007 three yearsAdayl de Barros Stewart ............................................. Director February 9, 2007 three yearsFersen Lamas Lambranho .......................................... Director February 9, 2007 three yearsThomas Joseph McDonald ......................................... Director February 9, 2007 three yearsIra Chaplik................................................................. Director February 9, 2007 three yearsDanilo Palmer ............................................................ Independent

DirectorMarch 5, 2007 three years

The business address of the members of our board of directors is Praia de Botafogo 501, TorreCorcovado, suite 702 (part), CEP 22250-040 in Rio de Janeiro, Rio de Janeiro, Brazil.

In line with the provisions set forth by the Brazilian Corporate Law, members of our board of directorsmay not vote on any matter or intervene in any transaction that would result in such members having aconflict of interest with us. The members of our board of directors are not subject to mandatoryretirement due to age.

The following is a summary of the business experience of the current members of our board of directors.

Richard Paul Matheson. Mr. Matheson holds a bachelor’s degree in economics from UniversidadeGama Filho. He joined ECISA in 1960, and became chief financial officer and a shareholder in themid-1960s. In 2000, he became president of ECISA.

Carlos Medeiros. Mr. Medeiros holds a bachelor’s degree in finance and foreign trade from New YorkUniversity, and has completed the TGPM Program at Harvard Business School. He joined the GP Groupin 1998, and has been a partner thereof since 2002. He serves as a member of the board of directors ofGP Investments Ltd., Gafisa S.A., Tele Norte Leste Participações S.A. and Contax Participações S.A. Hepreviously served as a member of the board of directors of Lupatech S.A., Kuala S.A., Pegasus TelecomS.A. and Internet Group Inc. He was an associate at Salomon Brothers Inc. in New York from 1994 to1998.

Adayl de Barros Stewart. Mrs. Stewart holds a bachelor’s degree in languages from PontifíciaUniversidade Católica do Rio de Janeiro and a master’s degree in psychology from CEPERJ. She holds amajority ownership interest in Dyl, which holds an ownership interest in us of approximately 19.75%.

Fersen Lamas Lambranho. Mr. Lambranho holds a bachelor’s degree in civil engineering from theUniversidade Federal do Rio de Janeiro and a master’s degree in business administration fromCOPPEAD-UFRJ. He also completed the Owner President Management Program at the HarvardBusiness School. He joined the GP Group in 1998 and became a partner thereof in 1999. He is apresident and co-chief executive officer of GP Investimentos S.A. He previously served as a member ofthe board of directors of Gafisa S.A., Tele Norte Leste Participações S.A., São Carlos Empreendimentos eParticipações S.A., ABC Supermercados S.A., Playcenter S.A., Shoptime S.A. and Americanas.com S.A.He was previously chief executive officer of Lojas Americanas S.A., where he served as a director from1998 to 2003.

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Thomas Joseph McDonald. Mr. McDonald graduated from the University of Notre Dame with a B.A.in international relations and Spanish. He is Chief Strategic Officer of Equity International.Mr. McDonald is primarily responsible for building and optimizing our partnerships. He is also adirector of various Equity International portfolio companies, including Gafisa S.A., a leading Brazilianhomebuilder, and Parque Arauco, a leading Chilean shopping mall operator. Mr. McDonald joinedEquity International in 1999. Since 1989, Mr. McDonald has worked in Equity Group related companiesin the United States and abroad, and is fluent in Spanish and Portuguese. He has lived and worked inLatin America for the majority of his professional career.

Ira Chaplik. Mr. Chaplik holds a bachelor’s degree in accounting and a law degree from the Universityof Illinois. He is a Certified Public Accountant and the Chief Operating Officer of Equity International.Having been associated with Equity international since its inception in 1999, he is primarily responsiblefor its operations, legal management and its investment portfolio, and is a director of various portfoliocompanies. He is also a director of Alto Palermo S.A., the leading Argentine shopping mall company.Mr. Chaplik began with Equity Group Investments, LLC (EGI), a private investment company owned bySam Zell, in 1989. He has relevant experience in the real estate sector and corporate transactions in thepublic and private sectors. Before working with EGI, Mr. Chaplik worked for Altheimer & Gray, a lawfirm.

Danilo Palmer. Mr. Palmer holds a bachelor’s degree in accounting from Escola Técnica de Comérciode Ipanema in 1961 and in accounting and business administration from Universidade Moraes Junior in1977. He worked for several well-known companies such as Cia Cervejaria Brahma, LaboratóriosMoura Brasil, Grupo Caemi and Coca-Cola. In 1999 he became the vice president of the board ofdirectors of Cia Cervejaria Brahma where he stayed until such company was extinguished through acorporate restructure with Companhia de Bebidas das Américas. From 1999 to 2001, Mr. Palmer was amember of the board of directors of Companhia de Bebidas da Américas. Currently, he is a partner ofDPA—Serviços Ltda., MRP Administração, Participação e Assessoria Ltda. and QC Quality LavanderiasLtda.

EXECUTIVE COMMITTEE

Our executive officers are our legal representatives and are principally responsible for the day-to-daymanagement of our business and for implementing the general policies and guidelines set forth in ourbylaws and by our shareholders and board of directors.

Brazilian Corporate Law provides that executive officers must reside in Brazil, and that they may or maynot be shareholders of the company which they serve. In addition, up to one-third of the members of acompany’s board of directors may also serve as executive officers.

The members of our executive committee are elected by our board of directors for a three-year term inoffice. Any executive officer may be removed by our board of directors before the expiration of his or herterm. In addition to discharging the responsibilities described in our bylaws, our executive officers areresponsible for carrying out any other duties determined by our board of directors. According to theprovisions set forth in our bylaws, our executive committee must be composed of a minimum of six anda maximum of seven executive officers, including one chief executive officer, one chief financial officer,one investor relations officer, one commercial officer, one operational officer and two businessdevelopment officers, elected by our board of directors for a three-year term in office, reelection beingpermitted. Members of our executive committee may be removed from office at any time by a decision ofour board of directors. An executive officer may serve in more than one position at the same time,

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subject to the approval of our board of directors. Our executive committee is currently composed of fivemembers (Mr. Leandro Bousquet Viana serves both as chief financial officer and investor relationsofficer), who were elected by our board of directors on February 9, 2007 for a three-year term in office.

The Listing Rules of Novo Mercado provide that all executive officers must execute a managementcompliance statement as a requirement for serving executive committee. As a result of this compliancestatement, our executive officers are personally responsible for our compliance with the terms of theContract for Participation in the Novo Mercado, the Market Arbitration Chamber Rules and the ListingRules of Novo Mercado.

The table below shows the names, ages and positions of the current members of our executivecommittee.

Name Position Date of Election Term in Office

Carlos Medeiros .................................. Chief Executive Officer February 9, 2007 three yearsLeandro Bousquet Viana ..................... Chief Financial Officer and

Investor Relations OfficerFebruary 9, 2007 three years

Hugo Matheson Drummond ............... Development Officer February 9, 2007 three yearsLeonardo Matheson Drummond ......... Business Development Officer February 9, 2007 three yearsLuiz Alberto Quinta ............................ Operational Officer May 3, 2007 three years

The business address of our executive officers is Praia de Botafogo 501, Torre Corcovado, suite 702(part), CEP 22250-040 in Rio de Janeiro, Rio de Janeiro, Brazil.

The following is a summary of the business experience of the current executive officers.

Carlos Medeiros. See “—Board of Directors.”

Leandro Bousquet Viana. Mr. Bousquet holds a bachelor’s degree in economics from PontifíciaUniversidade Católica do Rio de Janeiro in 1994. Mr. Bousquet has more than 12 years of experience inthe real estate sector, particularly in the areas of investment and debt transactions, having previouslyworked for UBS Pactual before joining BR Malls. He was also previously responsible for proprietaryinvestments at Banco CR2 and Banco BBM.

Hugo Matheson Drummond. Mr. Drumond holds a bachelor’s degree in civil engineering fromUniversidade do Estado do Rio de Janeiro in 1986 and has worked in the shopping mall sector for morethan 20 years. He founded EGEC in 1997. Prior to working at EGEC, he was the general manager ofvarious shopping malls between 1985 and 1997, including NorteShopping.

Leonardo Matheson Drumond. Mr. Drumond holds a bachelor’s degree in engineering from PontificiaUniversidade Católica do Rio de Janeiro. Mr. Drumond co-founded DACOM in 1999. Prior to workingat DACOM, Mr. Drumond worked in various sectors, from international commerce to retailing.

Luiz Alberto Quinta. Mr. Quinta holds a bachelor’s degree in engineering from Universidade Federalde Goiás Pontifícia, master’s degree in business administration from IBMEC-Rio de Janeiro and a jointmaster’s degree management administration from Fundação Getúlio Vargas/California University.Mr. Quinta has 22 years of experience on shopping mall management. Prior to working for us, he wasan executive officer of Multiplan Group.

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FISCAL COUNCIL

Under the Brazilian Corporate Law, the fiscal council is a corporate body independent from themanagement of the company and its external auditors. The fiscal council is not a permanent body, andwhenever installed, must consist of no less than three and no more than five members. The primaryresponsibility of the fiscal council is to review management’s activities and the company’s financialstatements and to report its findings to the shareholders of the company. The fiscal council is notequivalent to an audit committee as contemplated by U.S. securities laws.

Each member of the fiscal council is entitled to receive compensation in an amount equal to at least 10%of the average amount paid to each executive officer (excluding benefits and profit sharing). Individualswho are also employees or members of our administrative bodies, the controlling shareholder, or thecontrolling shareholder’s group, as well as spouses or parents of our management, cannot serve on thefiscal council.

Under the Listing Rules of the Novo Mercado, all members of our fiscal council must execute acompliance statement as a requirement for serving on the fiscal council. As a result of this compliancestatement, the members of the fiscal council must comply with the Listing Rules of the Novo Mercadoand the Market Arbitration Chamber Rules.

Under our bylaws, our fiscal council is not a permanent body, and whenever installed, it must becomposed of three members and an equal number of alternates. Pursuant to CVM Instruction 324, ofJanuary 19, 2000, a fiscal council may be convened by a shareholders’ general meeting, when requestedby shareholders representing at least 2% of our total voting capital stock. Moreover, minorityshareholders representing at least 10% of our total voting capital stock may appoint, through a separateballot, one member of our fiscal council and a respective alternate, and the remaining shareholders mayappoint one member of our fiscal council in addition to the total number of members elected by theseparate voting process.

COMPENSATION

Pursuant to the Brazilian Corporate Law, our shareholders are responsible for establishing, at a generalshareholders’ meeting, the individual or the aggregate annual amount that we pay to the members of ourboard of directors, our executive committee and our fiscal council, if then in operation. When establishedon an aggregate basis, such amount is distributed by our board of directors.

The total compensation paid to the management of ECISA, EGEC and DACOM, prior to our corporaterestructuring, during the year ended December 31, 2006 was approximately R$1.74 million. See“Business—Historical Background.” The aggregate compensation payable to members of our board ofdirectors and our executive committee during 2007 will be up to R$5.0 million, as approved by ourshareholders’ special general meeting held on February 9, 2007.

Our board of directors is responsible for the payment of the overall annual compensation owed to themembers of our executive committee. Each of these members will be paid R$360 thousand during 2007,with the exception of our chief executive officer, who will be paid R$480 thousand. As a result, based onthe current structure of our executive committee, which is composed of six members, the totalcompensation to be paid to our officers in 2007 will amount to approximately R$2.28 million. Eachmember of our board of directors will be entitled to annual compensation amounting to approximatelyR$48 thousand during 2007. As a result, based on the current structure of our board of directors, which

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is composed of seven members, the total compensation to be paid to our directors in 2007 will amountto R$300 thousand.

In addition to the fixed compensation, our executive officers are entitled to the payment of variablecompensation, as a result of our profit sharing program, which is linked to certain financial andoperational targets applicable to both our Company and each of our officers and employees. Assumingthat all targets established for 2007 are met, our chief executive officer will be entitled to the payment of15 additional monthly salaries, while the remaining members of our executive committee will each beentitled to the payment of 12 additional monthly salaries.

As a result of the variable compensation program described above, should we meet the targets forpayment of variable compensation to our management, the total amount of variable compensationpayable to our management for the 2007 would amount to R$2.4 million (based on the current structureof our executive committee, which is composed of six members). This would bring the total cost ofpayment of compensation to our management to approximately R$5.0 million.

Our compensation policy also includes a stock option plan which, similar to our variable compensationprogram, rewards members of our management in line with their performance and targets (see “—StockOption Plan”).

In light of our membership in the Novo Mercado segment of BOVESPA, we expect to spendapproximately R$400 thousand per year in compensation paid to the fiscal council.

AGREEMENTS BETWEEN THE COMPANY AND ITS DIRECTORS OR EXECUTIVE OFFICERS

We are not party to any agreement or significant obligation with any of the members of our board ofdirectors or our executive committee.

FAMILY RELATIONSHIPS

Executive officers Hugo Matheson and Leonardo Drummond are siblings, as well as nephews of theChairman of our board of directors, Mr. Richard Paul Matheson, who holds approximately 13.75% ofour capital stock.

SHARE OWNERSHIP

The table below shows the names and number of our shares beneficially held by the members of ourboard of directors and executive committee as of the date of this offering memorandum:

Name Position Number of Shares

Richard Paul Matheson ....................................................... Chairman 19,790,039Carlos Medeiros .................................................................. Director 158,228(1)Adayl de Barros Stewart ...................................................... Director 1(2)Fersen Lamas Lambranho.................................................... Director 1(1)Thomas Joseph McDonald .................................................. Director 1(3)Ira Chaplik .......................................................................... Director 1(4)Danilo Palmer...................................................................... Director 1Hugo Matheson Drummond................................................ Officer 2,000,029Leonardo Matheson Drummond ......................................... Officer 2,000,029

Total ................................................................................... 23,948,330

(footnotes on following page)

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(1) Excluding any indirect interest due to Mr. Medeiros beneficial ownership of shares in GPInvestments. GP Investments indirectly holds a 19.10% ownership interest in us through twoentities: (i) Private Partners A, LLC, which holds a 18.00% ownership interest in us; and (ii) PrivateEquity Partner B, LLC, which holds a 1.10% ownership interest in us.

(2) Excluding any indirect interest due to Mr. Stewart beneficial ownership of shares in DylParticipações. Dyl Participações directly holds a 13.75% ownership interest in us.

(3) Excluding any indirect interest due to Mr. McDonald beneficial ownership of shares in EquityInternational. Equity International indirectly holds a 19.13% ownership interest in us through twoentities: (i) EI Brazil Investments, LLC, which holds a 19.10% ownership interest in us; and (ii) EIBrazil Investments III, LLC, which holds a 0.03% ownership interest in us.

(4) Excluding any indirect interest due to Mr. Chaplik beneficial ownership of shares in EquityInternational. Equity International indirectly holds a 19.13% ownership interest in us through twoentities: (i) EI Brazil Investments, LLC, which holds a 19.10% ownership interest in us; and (ii) EIBrazil Investments III, LLC, which holds a 0.03% ownership interest in us.

STOCK OPTION PLAN

At our shareholders’ special general meeting held on February 9, 2007, our shareholders approved theterms and conditions of our stock option plan, which was then amended at our annual and specialshareholders’ meeting held on April 2, 2007. Our stock option plan seeks to: (i) encourage the expansionand success of our business in line with our corporate objectives, allowing our directors, executiveofficers and senior employees to acquire shares in our capital stock and therefore facilitating theirintegration into our Company; (ii) enable us to attract directors, executive officers and senior employeesof a very high caliber, by offering them the additional benefit of becoming one of our shareholders;(iii) align the interests of our directors, executive officers and senior employees with the interests of ourshareholders, (iv) to enable the retention of management services and high level employees, offering suchexecutives and employees as an additional incentive, the possibility of becoming our shareholders in ourCompany; and (v) to incentivize a greater convergence of these executives and employees with ourobjectives. In the context of our stock option plan, we entered into share option agreements with ourdirectors, executive officers and senior employees, the beneficiaries, by means of which they shall beentitled to purchase shares issued by us, in accordance with the terms and conditions set forth in thestock option plan, as well as any particular requirements listed in each of the share option agreements.

Pursuant to our current stock option plan (through which we may issue stock options each year in anamount not to exceed 10% of the then outstanding number of common shares in any year), our board ofdirectors approved on February 9, 2007 our first stock option program through which options weregranted to our management. The table below sets forth the total number of common shares grantedunder the first stock option program:

BeneficiaryNumber of

Common SharesExercise Price perCommon Share(1)

Carlos Medeiros, Chief Executive Officer.............................................. 2,373,418 R$6.32Leandro Bousquet Viana, Chief Financial Officer.................................. 1,028,481 R$6.32

Total ..................................................................................................... 3,401,899

(1) Annually adjusted by IGP-M plus 3%.

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Management

The options under our first stock option program may be exercised as of January 1, 2008 subject to thefollowing conditions: (i) with respect to our chief executive officer, they must be exercised in four annuallots, with each lot equal to approximately 25% of the total lot and (ii) with respect to our chief financialofficer, they must be exercised in five annual lots, with each lot equal to approximately 20% of the totallot. If our chief executive officer and/or chief financial officer no longer serve in our management duringthe exercise period of their options, all remaining options held by them that were not duly exercised willbe automatically cancelled.

On May 31, 2007, our board of directors approved on May 31, 2007 our second stock option programthrough which options were granted to our management and certain employees indicated by ourexecutive committee representing approximately 1.25% of our capital stock on the date of grant, or1,800,000 common shares. at the strike price of R$15.00. The options under our second stock optionprogram may be exercised from April 2008 onwards subject to the following conditions: (i) they must beexercised in five annual lots, with each lot equal to approximately 20% of the total lot; and (ii) if theholders of our options granted under our second stock option program no longer serve in our Companyduring the exercise period of their options, all remaining options held by them that were not dulyexercised will be automatically cancelled.

Although the only options currently outstanding are those issued under our first and second stock optionprograms, we intend to approve a future stock option program to cover the maximum number of optionswe are allowed to issue in 2007 under our current stock option plan. Any future stock options will bearan exercise price equivalent to the average value of our common shares on the BOVESPA in the 30 dayspreceding the grant date and will follow the same terms and conditions established for our second stockoption program.

Pursuant to Article 171, paragraph 3, of the Brazilian Corporate Law, our shareholders have nopreemptive rights with respect to the shares issued upon the exercise of these stock options.

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Principal shareholders

PRINCIPAL SHAREHOLDERS

As of the date of this offering memorandum, our share capital amounted to R$1,774,842,196.23, fullysubscribed and paid-in, represented by 167,966,139 common shares without par value. Our share capitalmay be increased without an amendment to our by-laws, up to the limit of 176,000,000 common shares,upon resolution of our board of directors, which will determine the price per share, the number ofcommon shares to be issued and other terms and conditions for subscription of and payment for theshares within the limit of the authorized capital.

The table below shows the name and interests held by our shareholders with ownership interestequivalent to or greater than 5% of our share capital as of the date of this offering memorandum:

As of the date of thisoffering memorandum

Shareholders SharesTotal ShareCapital (%)

EI Brazil Investments, LLC(1) .......................................................................... 27,500,000 16.4%EI Brazil Investments III, LLC .......................................................................... 5,467,008 3.3%Private Equity Partners A, LLC(1)(2) ............................................................... 25,913,390 15.4%Private Equity Partners B, LLC(1)(2)................................................................ 1,586,610 0.9%Richard Paul Matheson.................................................................................... 19,790,038 11.8%Dyl Empreendimentos e Participações S.A........................................................ 19,790,038 11.8%Leonardo Matheson Drummond...................................................................... 2,000,029 1.2%Hugo Matheson Drummond............................................................................ 2,000,029 1.2%Carlos Medeiros(3) .......................................................................................... 158,228 0.1%Other ............................................................................................................... 63,760,768 38.0%

Total................................................................................................................ 167,966,139 100.0%

(1) All the shares hold by EI Brazil Investments, LLC, Private Equity Partners A, LLC and PrivateEquity Partners B, LLC were pledged in favor of Itaú BBA—Nassau Branch as guarantee to afinance transaction. See “—Pledge of Shares.”

(2) Through these companies, GP Investments Ltd. holds an indirect stake in us of approximately 7.5%.(3) Certain members of our management team own equity interest in our shareholders. See

“Management—Share Ownership.”

PLEDGE OF SHARES

Itaú BBA—Nassau Branch entered into three loan agreements on December 20, 2006, and amended onJune 15, 2007, with EI Brazil Investments, LLC, Private Equity Partners A, LLC and Private EquityPartners B, LLC, pursuant to which Itaú BBA—Nassau Branch lent US$11.1 million, US$10.4 millionand R$1.38 million, respectively, each maturing on November 25, 2011. The loans are secured by,among others, a pledge over our shares held by EI Brazil Investments, LLC (in the amount of 27,500,000shares), of Private Equity Partners A, LLC (25,913,390 shares) and of Private Equity Partners B, LLC(1,586,160 shares), representing an aggregate of 32.74% of our total capital stock.

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Principal shareholders

SHAREHOLDERS’ AGREEMENTS

Our shareholders are not party to any shareholders’ agreement.

On June 11, 2007, we entered into the SPE Mônaco shareholders’ agreement with Ancar, which has a30-year term and sets forth, among other matters: (i) financing rules for new developments involvingamounts greater than the cash flow of SPE Mônaco; (ii) rules for the appointment and engagement ofshareholders and/or their respective affiliates for the provision of management and leasing services forNatal Shopping, whereby in the three years subsequent to the execution date of the agreement, Ancarwill provide management services and BR Malls shall provide leasing services; and (iii) preemptive rightsin connection with the sale of the shares of SPE Mônaco.

MATERIAL CHANGES IMPLEMENTED TO OUR OWNERSHIP STRUCTURE DURING THE LASTTHREE YEARS

On April 8, 2005, we completed the conversion of ECISA Engenharia into a private company, through apublic offering of shares carried out for this purpose. ECISA Engenharia was partially split onOctober 21, 2005. As a result of the split, ECISA Participações was created with the purpose ofincorporating certain assets previously held by ECISA Engenharia, including holding ownership interestsin NorteShopping and Shopping Campo Grande. Shares in ECISA Participações’ capital stock weretransferred to the shareholders of ECISA Engenharia, in proportion to the interest ownership held bythem in ECISA Engenharia’ capital stock before the spin-off.

ECISA Engenharia was again partially split on September 30, 2006. As a result of this operation,activities previously undertaken by ECISA Engenharia which were not directly related to the shoppingmall industry have been transferred to another company. ECISA Engenharia and ECISA Participaçõesacquired 100% of EGEC and DACOM’s capital stock on October 11, 2006. On November 13, 2006,Equity International made a substantial investment in BR Malls. Following such investment, GP Groupand Equity International became the main shareholders of the BR Malls. On the same date, BR Mallsacquired shares representing 28.8% of the capital stock of ECISA Engenharia and ECISA Participações,through its subsidiary Licia Participações Ltda.

At that time, all shares issued by Licia were held by GP Group and Equity International. As aconsequence, GP Group and Equity International acquired an indirect interest in ECISA Engenharia andECISA Participações’ capital stock. BR Malls further acquired additional interests in ECISA Engenhariaand ECISA Participações on December 20, 2006, through Licia. As a result, we became the holder of65% the total capital stock of each of ECISA Engenharia and ECISA Participações. We split and/orincorporated certain companies of our group as a result of the corporate restructuring implementedtowards the end of December 2006. As a consequence, our corporate structure was streamlined and BRMalls was able directly hold all of its interests in ECISA Engenharia and ECISA Participações (thereforebecoming the direct holder of 55% of the capital stock of these companies).

On December 29, 2006, all shares issued by ECISA Engenharia and ECISA Participações (with theexception of those already held by us) were incorporated by us. As a consequence, (i) ECISA Engenhariaand ECISA Participações became our wholly-owned subsidiaries; and (ii) the former shareholders ofECISA Engenharia and ECISA Participações received shares in us.

On January 2, 2007, we acquired direct ownership interest of 100% in EgecPar II’s and indirectownership interest of 65.5% in GS’ capital stock, which in turn owns a 75.83% ownership interest inGoiânia Shopping’s capital stock. Therefore, we are now indirect holders of 49.6% of Goiânia Shopping.

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Principal shareholders

On February 5, 2007, we acquired a 100.0% ownership interest in Shopping Estação through ourwholly-owned subsidiary Nattca.

On March 1, 2007, through SPE Indianápolis we acquired (i) an ownership interest of 10.0% inPantanal Shopping; and (ii) convertible debentures with profit sharing rights pursuant to which we have,among others, the right to receive 50% of the Araguaia Shopping’s net income and appoint AraguaiaShopping’s management. In addition, we acquired a 99.9% ownership interest in DEICO, whichprovides management, leasing and/or planning services to 13 shopping malls.

On April 13, 2007, we acquired direct ownership interest of 100% in EPI’s capital stock, which in turncurrently holds ownership interest of 11.5% in Shopping Piracicaba, 34.2% in Shopping IguatemiMaceió, 12.2% in Shopping Iguatemi Belém and 17.2% in Shopping Amazonas.

We completed an initial public offering of our common shares in May 2007 in which we issued a total of43,807,911 common shares without par value, including common shares in the form of GDSs, in Braziland abroad and received approximately R$621.2 million in net proceeds.

On May 18, 2007, we acquired direct ownership interest of 100% in Graúna’s capital stock, which inturn currently holds ownership interest of 15% in Minas Shopping and 13% in Big Shopping. OnJuly 16, 2007, we acquired 100% of the companies from In Mont Group.

On October 23, 2007, we completed a follow-on equity offering of our common shares in which weissued a total of 24,000,000 common shares without par value, including common shares in the form ofGDSs, in Brazil and abroad and received approximately R$577.5 million in net proceeds.

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Related party transactions

As of the date of this offering memorandum, we have no related party transactions in effect. We mayenter into related party transactions in the normal course of our business in the future, which will beconducted on an arms’ length basis.

As permitted by the accounting rules provided by Brazilian GAAP, we do not consider as related partytransactions any of the transactions we entered into with the shopping malls in which we hold ownershipinterests. These transactions include the provision of management and consulting services, as well asleasing and merchandising services for stores and common spaces in these shopping malls. See“Business—Material Contracts.”

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Description Of The NotesThe following summary describes certain provisions of the notes and the indenture. This summary issubject to and qualified in its entirety by reference to the provisions of the indenture and the notes.Capitalized terms used in the following summary and not otherwise defined herein shall have themeaning ascribed to them in the indenture. You may obtain copies of the indenture and specimen notesupon request to BR Malls at the addresses set forth under “Summary.”

BR Malls Finance will issue the notes pursuant to an indenture, to be dated as of November 8, 2007,among BR Malls Finance, the Guarantors, Deutsche Bank Trust Company Americas, as trustee (whichterm includes any successor as trustee under the indenture), registrar, transfer agent and principal payingagent, and Deutsche Bank Luxembourg S.A., as Luxembourg paying agent, transfer agent andLuxembourg listing agent. BR Malls Finance has, under the indenture, appointed a registrar, payingagents and transfer agents, which are identified on the inside back cover page of this offeringmemorandum. A copy of the indenture, including the form of the notes, is available for inspection duringnormal business hours at the offices of the trustee and any of the other paying agents set forth on theinside back cover page of this offering memorandum. The trustee or any paying agent will also act astransfer agent and registrar in the event that BR Malls Finance issues certificates for the notes indefinitive registered form as set forth in “Form of the Notes—Individual Definitive Notes.”

This description of notes is a summary of the material provisions of the notes and the indenture. Youshould refer to the indenture for a complete description of the terms and conditions of the notes and theindenture, including the obligations of BR Malls Finance, the Guarantors and your rights.

You will find the definitions of capitalized terms used in this section under “—Certain Definitions.” Forpurposes of this section of this offering memorandum, BR Malls is referred to as “Parent” and suchreferences refer only to BR Malls and not its Subsidiaries.

General

The notes:

➤ will be senior unsecured obligations of BR Malls Finance;

➤ will be fully and unconditionally guaranteed by the Guarantors;

➤ will initially be limited to an aggregate principal amount of US$175,000,000;

➤ will be perpetual notes with no fixed final maturity date;

➤ will be issued in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof;

➤ will be represented by one or more registered notes in global form and may be exchanged for notesin definitive form only in limited circumstances; and

➤ will not be required to be registered under the Securities Act.

Interest on the notes:

➤ will accrue at the rate of 9.750% per annum;

➤ will accrue from the date of issuance or from the most recent interest payment date;

➤ will be payable in cash quarterly in arrears on February 8, May 8, August 8, and November 8, ofeach year, commencing on February 8, 2008;

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Description of the Notes

➤ will be payable to the holders of record on January 24, April 23, July 24 and October 24,immediately preceding the related interest payment dates; and

➤ will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Principal of, and interest and any additional amounts on, the notes will be payable, and the transfer ofnotes will be registrable, at the office of the trustee, and at the offices of the paying agents and transferagents, respectively. For so long as the notes are listed on the Euro MTF market of the LuxembourgStock Exchange and the rules of that stock exchange will so require, BR Malls Finance will maintain apaying agent and transfer agent in Luxembourg.

The indenture does not limit the amount of debt or other obligations that may be incurred by BR MallsFinance, the Guarantors or any of the Subsidiaries. The indenture does not contain any restrictivecovenants or other provisions designed to protect holders of the notes in the event BR Malls Finance, anyof the Guarantors or any of the Subsidiaries participates in a highly leveraged transaction.

BR Malls Finance is entitled, without the consent of the holders, to issue additional notes under theindenture on the same terms and conditions as the notes being offered hereby in an unlimited aggregateprincipal amount (the “Additional Notes”). The notes and the Additional Notes, if any, will be treated asa single class for all purposes of the indenture, including waivers and amendments. Unless the contextotherwise requires, for all purposes of the indenture and this “Description of the Notes,” references tothe notes include any Additional Notes actually issued.

Guarantees

Each of the Guarantors will unconditionally and irrevocably, jointly and severally guarantee, on a seniorunsecured basis, the due and punctual payment of all amounts due and payable on the notes (includingthe payment of additional amounts described under “—Additional Amounts”) when and as the sameshall become due and payable. Not all of Parent’s Subsidiaries will guarantee the notes. In the event of abankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, thesenon-guarantor Subsidiaries will pay the holders of their debts and their trade creditors before they will beable to distribute any of their assets to us. The non-guarantor Subsidiaries generated 34.7% of our totalrevenues for the six-month period ended June 30, 2007 and approximately 4.6% of our total revenuesfor the year ended December 31, 2006.

The guarantees will be limited to the maximum amount that would not render the Guarantors’ respectiveobligations subject to avoidance under applicable fraudulent conveyance laws. By virtue of thislimitation, the Guarantors’ respective obligations under the guarantees could be significantly less thanamounts payable with respect to the notes, or the Guarantors may have effectively no obligation underthe guarantees. See “Risk Factors—Risks Relating to the Notes and the Guarantees—The guaranteesmay not be enforceable.”

Ranking

Notes

The notes will constitute direct senior unsecured obligations of BR Malls Finance. If BR Malls Financewere to issue any debt other than the notes, the notes would rank at least pari passu in priority ofpayment with all other existing and future senior unsecured Debt of BR Malls Finance, subject to certainstatutory preferences under applicable law, including labor and tax claims.

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Description of the Notes

The obligations of BR Malls Finance under the notes will rank:

➤ equal in right of payment to all other existing and future senior unsecured debt of BR Malls Finance,subject to certain statutory preferences under applicable law, including labor and tax claims;

➤ senior in right of payment to BR Malls Finance’s subordinated debt; and

➤ effectively subordinated to the debt and other obligations (including subordinated debt and tradepayables) of Parent’s Subsidiaries that are not Guarantors and jointly controlled companies and tosecured debt of BR Malls Finance to the extent of such security.

Guarantees

The obligations of each Guarantor under the notes will rank:

➤ pari passu in priority of payment with all existing and future senior unsecured debt of thatGuarantor, subject to certain statutory preferences under applicable law, including labor and taxclaims;

➤ senior in right of payment to any subordinated debt of that Guarantor; and

➤ effectively subordinated to the debt and other obligations (including subordinated debt and tradepayables) of that Guarantor’s subsidiaries and jointly controlled companies and to secured debt ofthat Guarantor to the extent of such security.

BR Malls Finance is a financing subsidiary of Parent. BR Malls Finance’s ability to service its debt,including the notes, is dependent upon the cash flows of Parent and its other Subsidiaries. Certain lawsrestrict the ability of Parent and its Subsidiaries to pay dividends or make loans or advances. If theserestrictions were applied to Subsidiaries other than the Guarantors then BR Malls Finance would not beable to use the earnings of those Subsidiaries to make payments on the notes.

Not all of Parent’s Subsidiaries will guarantee the notes. Claims of creditors of such non-guarantorSubsidiaries, including trade creditors and creditors holding Debt or guarantees issued by suchnon-guarantor Subsidiaries, and claims of preferred stockholders of such non-guarantor Subsidiariesgenerally will have priority with respect to the assets and earnings of such non-guarantor Subsidiariesover the claims of BR Malls Finance’s creditors, including holders of the notes. Accordingly, the noteswill be effectively subordinated to creditors (including trade creditors) and preferred stockholders, if any,of Parent’s non-guarantor Subsidiaries. The indenture does not require any existing Subsidiaries of Parent(other than the Guarantors) to guarantee the notes, and it does not restrict any Guarantor from disposingof its assets to a third party or a Subsidiary of Parent that is not guaranteeing the notes.

As of June 30, 2007, Parent and its Subsidiaries had approximately R$170.1 million of total debt.Approximately R$156.3 million of this total amount was structurally senior to the notes being sold inthis offering, and are secured debt of Parent’s Subsidiaries.

Redemption

The notes will not be redeemable, except as described below. Any optional or tax redemption mayrequire the prior approval of the Central Bank.

Optional Redemption

The notes will be redeemable, from time to time, at the option of BR Malls Finance, in whole or in part,on any interest payment date on or after November 8, 2012, upon giving not less than 30 nor more than

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Description of the Notes

60 days’ notice to the holders (which notice will be irrevocable), at 100% of the principal amountthereof, plus accrued and unpaid interest and any additional amounts payable with respect thereto;provided that if BR Malls Finance does not redeem the entire aggregate principal amount of the notesoutstanding at the time of any such redemption, then after giving effect to such redemption at least thegreater of (a) US$150 million aggregate principal amount of the notes and (b) 30% of the originalaggregate principal amount of the notes (excluding any Additional Notes) shall remain outstanding.

Tax Redemption

The notes will be redeemable, at the option of BR Malls Finance, in whole, but not in part, upon givingnot less than 30 nor more than 60 days’ notice to the holders (which notice will be irrevocable), at 100%of the principal amount thereof, plus accrued interest and any additional amounts payable with respectthereto, only if (i) BR Malls Finance has or will become obligated to pay additional amounts as discussedbelow under “—Additional Amounts” with respect to such notes; or (ii) any of the Guarantors has orwill become obligated to pay additional amounts as discussed below under “—Additional Amounts”with respect to payments on the guarantees, in either case, in excess of the additional amounts thatwould be imposed on such payments as of the date of the indenture (determined without regard to anyinterest, fees, penalties or other additions to tax) and as a result of any change in, or amendment to, thetreaties, laws, regulations or administrative tax practice of a Taxing Jurisdiction (as defined below under“—Additional Amounts”), or any change in the application or official interpretation of such laws orregulations, which change or amendment becomes effective or, in the case of a change or amendment inapplication or official interpretation is announced by the relevant taxing authority after the date of theindenture, and (iii) such obligation cannot be avoided by BR Malls Finance or the Guarantors takingreasonable measures available to them as determined in their reasonable business judgment. For theavoidance of doubt, reasonable measures do not include changing the jurisdiction of incorporation of BRMalls Finance, any of the relevant Guarantors as the case may be, or any of the Subsidiaries. No suchnotice of redemption will be given earlier than 60 days prior to the earliest date on which BR MallsFinance or any of the Guarantors, as the case may be, would be obligated to pay such additionalamounts if a payment in respect of such notes were then due.

Prior to the publication or mailing of any notice of redemption of the notes as described above, BR MallsFinance must deliver to the trustee an officers’ certificate to the effect that the obligations of BR MallsFinance to pay additional amounts cannot be avoided by BR Malls Finance taking reasonable measuresavailable to it. BR Malls Finance will also deliver an opinion of an independent legal counsel ofrecognized standing stating that BR Malls Finance or the relevant Guarantor, as the case may be, eitherwould be or should be obligated to pay additional amounts due to a change, or amendment to, treaties,laws, regulations or administrative tax practice of a Taxing Jurisdiction or any change in the applicationor official interpretation of such laws or regulations thereof (as described above). The trustee will acceptthis certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set forthin clauses (i) and (ii) of the preceding paragraph, in which event it will be conclusive and binding on theholders.

Open Market Purchases

BR Malls Finance or its affiliates may at any time purchase notes in the open market or otherwise at anyprice. Any such purchased notes may be held in treasury but will not be resold, except in compliancewith applicable requirements or exemptions under the relevant securities laws in transactions that do notaffect the ability of non-affiliated holders of notes to resell such notes without restriction.

Repurchase upon Change of ControlUpon the occurrence of a Change of Control Triggering Event, each holder will have the right to requirethat BR Malls Finance purchase all or a portion (in integral multiples of US$1,000) of the holder’s notes

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Description of the Notes

at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interestthereon through the date of purchase (the “Change of Control Payment”).

Within 30 days following the date upon which the Change of Control Triggering Event occurred, BRMalls Finance must send, by first-class mail, a notice to each holder, with a copy to the trustee, offeringto purchase the notes as described above (a “Change of Control Offer”). The Change of Control Offershall state, among other things, the purchase date, which must be no earlier than 30 days nor later than60 days from the date the notice is mailed, other than as may be required by law (the “Change ofControl Payment Date”).

On the Change of Control Payment Date, BR Malls Finance will, to the extent lawful:

(1) accept for payment all notes or portions thereof properly tendered and not withdrawnpursuant to the Change of Control Offer;

(2) deposit with the paying agent funds in an amount equal to the Change of Control Paymentin respect of all notes or portions thereof so tendered and not withdrawn; and

(3) deliver or cause to be delivered to the trustee the notes so accepted together with anOfficers’ Certificate stating the aggregate principal amount of notes or portions thereof beingpurchased by us.

If only a portion of a note is purchased pursuant to a Change of Control Offer, a new note in a principalamount equal to the portion thereof not purchased will be issued in the name of the holder thereof uponcancellation of the original note (or appropriate adjustments to the amount and beneficial interests in aGlobal Note will be made, as appropriate). In all cases holders of the notes shall be treated on an equalbasis.

BR Malls Finance will not be required to make a Change of Control Offer upon a Change of Control if(1) a third party makes the Change of Control Offer in the manner, at the times and otherwise incompliance with the requirements set forth in the indenture applicable to a Change of Control Offermade by us and purchases all notes properly tendered and not withdrawn under the Change of ControlOffer, or (2) notice of redemption has been given pursuant to the indenture as described under thecaption “—Optional Redemption,” unless and until there is a default in payment of the applicableredemption price.

Other existing and future indebtedness of Parent and its Subsidiaries may contain prohibitions on theoccurrence of events that would constitute a Change of Control or require that indebtedness to berepurchased upon a Change of Control. Moreover, the exercise by the holders of their right to requireBR Malls Finance to repurchase the notes upon a Change of Control may cause a default under suchindebtedness even if the Change of Control itself does not.

If a Change of Control Offer occurs, there can be no assurance that BR Malls Finance will have availablefunds sufficient to make the Change of Control Payment for all the notes that might be delivered byholders seeking to accept the Change of Control Offer. In the event BR Malls Finance is required topurchase outstanding notes pursuant to a Change of Control Offer, BR Malls Finance expects that itwould seek third-party financing to the extent it does not have available funds to meet its purchaseobligations. However, there can be no assurance that BR Malls Finance would be able to obtainnecessary financing.

Holders will not be entitled to require BR Malls Finance to purchase their notes in the event of atakeover, recapitalization, leveraged buyout or similar transaction which does not result in a Change ofControl.

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Description of the Notes

BR Malls Finance will comply with the requirements of Rule 14e-l under the Exchange Act and any otherapplicable securities laws and regulations to the extent such laws and regulations are applicable inconnection with a Change of Control Offer. To the extent that the provisions of any securities laws orregulations conflict with the “Change of Control” provisions of the Indenture, BR Malls Finance willcomply with the applicable securities laws and regulations and will not be deemed to have breached itsobligations under the indenture by doing so.

The definition of Change of Control includes a phrase relating to the direct or indirect the sale, transfer,assignment, lease, conveyance or other disposition of “all or substantially all” of the properties or assetsof us and our Subsidiaries taken as a whole. Although there is a limited body of case law interpreting thephrase “substantially all,” there is no precise established definition of the phrase under applicable law.Accordingly, the ability of a holder to require BR Malls Finance to repurchase the notes as a result of asale, lease, transfer, conveyance or other disposition of less than all of the assets of Parent and itsSubsidiaries taken as a whole to another person or group may be uncertain.

Payments

BR Malls Finance and the Guarantors will make all payments on the notes and the related guarantees, asapplicable, exclusively in such coin or currency of the United States as at the time of payment will belegal tender for the payment of public and private debts.

BR Malls Finance or any of the Guarantors will make payments of principal and interest on the notes tothe principal paying agent (as identified on the inside back cover page of this offering memorandum),which will pass such funds to the trustee and the other paying agents or to the holders.

BR Malls Finance or any of the Guarantors will make payments of principal to the principal payingagent for distribution to the holders upon surrender of the relevant notes at the specified office of thetrustee or any of the paying agents. BR Malls Finance or any of the Guarantors will pay principal on thenotes to the persons in whose name the notes are registered at the close of business on the 15th daybefore the due date for payment. Payments of principal and interest in respect of each note will be madeby the paying agents by U.S. dollar check drawn on a bank in New York City and mailed to the holderof such note at its registered address. Upon application by the holder to the specified office of any payingagent not less than 15 days before the due date for any payment in respect of a note, such payment maybe made by transfer to a U.S. dollar account maintained by the payee with a bank in New York City.

Under the terms of the indenture, payment by BR Malls Finance or any of the Guarantors of any amountpayable under the notes or a guarantee, as applicable, on the due date thereof to the principal payingagent in accordance with the indenture will satisfy such obligation of BR Malls Finance or suchGuarantors to make such payment; provided, however, that the liability of the principal paying agentshall not exceed any amounts paid to it by BR Malls Finance or any of the Guarantors, or held by it, onbehalf of the holders under the indenture. BR Malls Finance and each of the Guarantors have agreed inthe indenture to indemnify the holders in the event that there is a subsequent failure by the trustee or anypaying agent to pay any amount due in respect of the notes in accordance with the indenture (including,without limitation, any failure to pay any amount due as a result of the imposition of any present orfuture taxes, duties, assessments, fees or governmental charges of whatever nature (and any fines,penalties or interest related thereto) imposed or levied by or on behalf of Japan or any politicalsubdivision or authority thereof or therein, having power to tax) as will result in the receipt by theholders of such amounts as would have been received by them had no such failure occurred.

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All payments will be subject in all cases to any applicable tax or other laws and regulations, but withoutprejudice to the provisions of “—Additional Amounts.” No commissions or expenses will be charged tothe holders in respect of such payments.

Subject to applicable law, the trustee and the paying agents will pay to BR Malls Finance upon requestany monies held by them for the payment of principal or interest that remains unclaimed for two years,and, thereafter, holders entitled to such monies must look to BR Malls Finance for payment as generalcreditors. After the return of such monies by the trustee or the paying agents to BR Malls Finance,neither the trustee nor the paying agents shall be liable to the holders in respect of such monies.

Listing of the Notes

Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange andto admit the notes for trading on the Euro MTF market of the Luxembourg Stock Exchange. However,BR Malls Finance and the Guarantors cannot assure you that this application will be approved by theLuxembourg Stock Exchange.

If maintaining the listing of the notes on the Luxembourg Stock Exchange would require BR MallsFinance and the Guarantors to publish financial information either more regularly than they otherwisewould be required to under applicable law, or according to accounting principles which are materiallydifferent from the accounting principles which they would otherwise use to prepare their publishedfinancial information, or if costs relating thereto are unduly burdensome, BR Malls Finance may seek analternative admission to listing, trading and/or quotation for the notes by another listing authority, stockexchange and/or quotation system.

The notes are also expected to be designated as eligible for trading in the PORTAL Market.

Form, Denomination and Title

The notes will be in registered form without coupons attached in amounts of US$2,000 and integralmultiples of US$1,000 in excess thereof.

Notes sold in offshore transactions in reliance on Regulation S will be represented by one or morepermanent global notes in fully registered form without coupons deposited with a custodian for andregistered in the name of a nominee of DTC for the accounts of Euroclear and Clearstream Luxembourg.Notes sold in reliance on Rule 144A will be represented by one or more permanent global notes in fullyregistered form without coupons deposited with a custodian for and registered in the name of a nomineeof DTC. Notes represented by the global notes will trade in DTC’s Same-Day Funds Settlement Systemand secondary market trading activity in such notes will therefore settle in immediately available funds.There can be no assurance as to the effect, if any, of settlements in immediately available funds ontrading activity in the notes. Beneficial interests in the global notes will be shown on, and transfersthereof will be effected only through, records maintained by DTC and its direct and indirect participants,including Euroclear and Clearstream Luxembourg. Except in certain limited circumstances, definitiveregistered notes will not be issued in exchange for beneficial interests in the global notes. See “Form ofthe Notes—Global Notes.”

Title to the notes will pass by registration in the register. The holder of any note will (except as otherwiserequired by law) be treated as its absolute owner for all purposes (whether or not it is overdue andregardless of any notice of ownership, trust or any interest in it, writing on, or theft or loss of, thedefinitive note issued in respect of it) and no person will be liable for so treating the holder.

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Transfer of Notes

Notes may be transferred in whole or in part in an authorized denomination upon the surrender of thenote to be transferred, together with the form of transfer endorsed on it duly completed and executed, atthe specified office of the registrar or the specified office of any transfer agent. Each new note to beissued upon exchange of notes or transfer of notes will, within three Business Days of the receipt of arequest for exchange or form of transfer, be mailed at the risk of the holder entitled to the note to suchaddress as may be specified in such request or form of transfer.

Notes will be subject to certain restrictions on transfer as more fully set out in the indenture. See“Transfer Restrictions.” Transfer of beneficial interests in the global notes will be effected only throughrecords maintained by DTC and its participants. See “Form of the Notes.”

Transfer will be effected without charge by or on behalf of BR Malls Finance, the registrar or the transferagents, but upon payment, or the giving of such indemnity as the registrar or the relevant transfer agentmay require, in respect of any tax or other governmental charges which may be imposed in relation to it.BR Malls Finance is not required to transfer or exchange any note selected for redemption.

No holder may require the transfer of a note to be registered during the period of 15 days ending on thedue date for any payment of principal or interest on that note.

Additional Amounts

All payments by BR Malls Finance or any of the Guarantors in respect of the notes or the guarantees, asapplicable, will be made free and clear of, and without withholding or deduction for or on account of,any present or future taxes, duties, assessments, fees or other governmental charges of whatever nature(and any fines, penalties or interest related thereto) (“Taxes”) imposed or levied by or on behalf of theCayman Islands, the jurisdiction of incorporation of the Guarantors or any jurisdiction from or throughwhich payments are made or are deemed to be made or any political subdivision or authority of or insuch jurisdictions having the power to tax (such jurisdictions, “Taxing Jurisdictions”), unless suchwithholding or deduction is required by law. In that event, BR Malls Finance or the relevant Guarantor,as applicable, will pay to each holder such additional amounts as may be necessary in order that everynet payment made by BR Malls or any of the Guarantors, as applicable, on each note after deduction orwithholding for or on account of any present or future Tax imposed upon or as a result of such paymentwill not be less than the amount then due and payable on such note. The foregoing obligation to payadditional amounts, however, will not apply to or in respect of:

(i) any Tax which would not have been imposed but for the existence of any present or formerconnection between such holder (or a fiduciary, settlor, beneficiary, member or shareholder of theholder, if the holder is an estate, a trust, a partnership, a limited liability company or a corporation),on the one hand, and a Taxing Jurisdiction or any political subdivision or authority of or in aTaxing Jurisdiction, on the other hand (including, without limitation, such holder (or such fiduciary,settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof orhaving been engaged in a trade or business or present therein or having, or having had, a permanentestablishment therein), other than the mere receipt of such payment or the ownership or holding ofsuch note or such corresponding interest;

(ii) any Tax to the extent it would not have been so imposed but for the presentation by suchholder for payment on a date more than 30 days after the date on which such payment became dueand payable or the date on which payment thereof is duly provided for, whichever occurs later;

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(iii) any Tax to the extent that such tax, duty, assessment or other governmental charge wouldnot have been imposed but for the failure of such holder or the beneficial owner of such note tocomply with any certification, identification or other reporting requirements concerning thenationality, residence, identity or connection with the relevant Taxing Jurisdiction of the holder orthe beneficial owner of such note if (a) such compliance is required or imposed by law as aprecondition to exemption from all or a part of such tax, duty, assessment or other governmentalcharge and (b) at least 30 days prior to the date on which BR Malls Finance or any of theGuarantors, as applicable, will apply this clause (iii), BR Malls Finance or any of the Guarantors, asapplicable, will have notified all holders of notes that some or all holders or beneficial owners ofnotes will be required to comply with such requirement;

(iv) any estate, inheritance, gift, sales, capital gains, transfer, excise, personal property orsimilar Tax;

(v) any Tax which is payable other than by deduction or withholding from payments ofprincipal of or interest on the note;

(vi) any Tax required to be withheld by any paying agent from any payment of the principal of,or interest on the note, if such Tax results from the presentation of the note for payment and thepayment can be made without such withholding or deduction by the presentation of the note forpayment by at least one other paying agent;

(vii) any withholding or deduction that is imposed on a payment to an individual and that isrequired to be made pursuant to the European Council Directive 2003/48/EC or any other directiveimplementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 or any lawimplementing or complying with, or introduced in order to conform to such Directive; or

(viii) any combination of the above.

BR Malls Finance or any of the Guarantors, as applicable, will also pay any present or future stamp,court or documentary taxes or any other excise or property taxes, charges or similar levies which arise inany jurisdiction from the execution, delivery, registration or the making of payments in respect of thenotes or the guarantees, excluding any such taxes, charges or similar levies imposed by any jurisdictionoutside of Brazil or the Cayman Islands other than those resulting from, or required to be paid inconnection with, the enforcement of the notes or the guarantees following the occurrence of any Event ofDefault.

No additional amounts will be paid with respect to a payment on any note to a holder that is a fiduciary,partnership, or limited liability company or other than the sole beneficial owner of such payment to theextent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or limitedliability company or beneficial owner would not have been entitled to receive payment of the additionalamounts had the beneficiary, settlor, member or beneficial owner been the holder of the note.

BR Malls Finance or any of the Guarantors, as applicable, will provide the trustee with the officialacknowledgment of the relevant taxing authority (or, if such acknowledgment is not available, withoutunreasonable burden or expense, a certified copy thereof or, if such certified copy is not available, otherdocumentation satisfactory to the trustee) evidencing any payment of taxes in respect of which BR MallsFinance or any of the Guarantors, as applicable, has paid any additional amounts. Copies of suchdocumentation will be made available by the trustee to the holders of the notes or the paying agents, asapplicable, upon request therefor.

All references in this offering memorandum, the indenture or the notes to principal of, interest on or anyother amount payable in respect of the notes will include any additional amounts payable by BR MallsFinance in respect of such principal and such interest.

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Covenants

The indenture contains the following covenants:

Limitation on Liens

BR Malls Finance and each of the Guarantors will not, and Parent will not permit any Subsidiary to,create or suffer to exist any Lien (except for Permitted Liens) upon any of its property or assets nowowned or hereafter acquired by it, or any proceeds therefrom, or on any Capital Stock of Parent or anySubsidiary, securing any Debt unless contemporaneously therewith effective provision is made to securethe notes equally and ratably with such obligation for so long as such obligation is so secured.

Limitation on Transactions with Affiliates

Parent will not, and Parent will not permit any of its Subsidiaries to, enter into any transaction or seriesof related transactions (including any Investment or any purchase, sale, lease or exchange of any propertyor the rendering of any service) with or with respect to any Affiliate of Parent (other than a Subsidiary ofParent) (an “Affiliate Transaction”) unless such Affiliate Transaction is as favorable to Parent or suchSubsidiary as terms that would be obtainable at the time for a comparable transaction or series of relatedtransactions in arm’s-length dealings with an unrelated third person, provided that the foregoinglimitation will not apply to:

(a) Affiliate Transactions with or among Parent and any of its Subsidiaries;

(b) fees and compensation paid to, and any indemnity provided on behalf of, officers, directors,employees, consultants or agents of Parent or any Subsidiary as determined in good faith by Parent’sBoard of Directors;

(c) Affiliate Transactions undertaken pursuant to any contractual obligations or rights inexistence on the Issue Date and any amendment, modification or replacement of such agreement (solong as such amendment, modification or replacement is not materially more disadvantageous to theholders of the notes, taken as a whole, than the original agreement as in effect on the Issue Date);and

(d) loans and advances to officers, directors and employees of Parent or any Subsidiary in theordinary course of business in an aggregate principal amount not exceeding US$1.0 million at anytime.

Limitation on Consolidation, Merger or Transfer of Assets

Neither Parent nor BR Malls Finance, nor will Parent permit any of the other Guarantors to, consolidatewith or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any person,unless:

(1) the resulting, surviving or transferee person or persons (if not Parent, BR Malls Finance orsuch Guarantor) will be a person or persons organized and existing under the laws of the CaymanIslands or Brazil, or any other country the laws of which would not permit the resulting, survivingor transferee person or persons to avoid the obligations of BR Malls Finance or any of theGuarantors, as applicable, under the notes and the indenture, and such person or persons expresslyassume, by a supplemental indenture to the indenture, executed and delivered to the trustee, in thecase of BR Malls Finance, all the obligations of BR Malls Finance under the notes and the indentureand, in the case of such Guarantor, all the obligations of such Guarantor, as applicable, under theindenture;

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(2) the resulting, surviving or transferee person or persons (if not Parent, BR Malls Finance orsuch Guarantor), if not organized and existing under the laws of the Cayman Islands or Brazil,undertakes, in such supplemental indenture, to pay such additional amounts in respect of principaland interest as may be necessary in order that every net payment made in respect of the notes afterdeduction or withholding for or on account of any present or future Tax imposed by the country inwhich the transferee is organized or any political subdivision or taxing authority thereof or thereinwill not be less than the amount of principal and interest then due and payable on the notes, subjectto the same exceptions set forth under clauses (i) through (viii) under “Additional Amounts” butadding references to the country in which the transferee is organized to the existing references insuch clauses to a Taxing Jurisdiction and the transferee shall have the right to a tax redemption asdescribed above under “—Tax Redemption,” treating the country in which the transferee isorganized as a Taxing Jurisdiction and changing the “date of the Indenture” in clause (i) under“—Tax Redemption” to the “date of the supplemental indenture”;

(3) immediately prior to such transaction and immediately after giving effect to suchtransaction, no Default or Event of Default will have occurred and be continuing; and

(4) BR Malls Finance will have delivered to the trustee an officers’ certificate and an opinion oflegal counsel of recognized standing, each stating that such consolidation, merger, conveyance,transfer or lease and such supplemental indenture, if any, comply with the indenture.

The trustee will accept such certificate and opinion as sufficient evidence of the satisfaction of theconditions precedent set forth in this covenant, in which event it will be conclusive and binding on theholders.

Additional Note Guarantees

If, after the Issue Date, Parent, BR Malls Finance or any Subsidiary acquires or creates anotherSignificant Subsidiary (other than any Significant Subsidiary resulting from any merger, consolidation orother reorganization involving Subsidiaries existing on the Issue Date), Parent or BR Malls Finance willcause such Significant Subsidiary to:

(1) execute and deliver to the trustee (a) a supplemental indenture in form and substancesatisfactory to the trustee pursuant to which such Significant Subsidiary shall unconditionallyguarantee all of BR Malls Finance’s obligations under the notes and the indenture and (b) a notationof guarantee in respect of its guarantee; and

(2) deliver to the trustee one or more opinions of counsel that such supplemental indenture(a) has been duly authorized, executed and delivered by such Significant Subsidiary and(b) constitutes a valid and legally binding obligation of such Significant Subsidiary in accordancewith its terms.

Notwithstanding the foregoing, such Significant Subsidiary will not be required to guarantee BR MallsFinance’s obligations under the notes and the indenture if the provision of such a guarantee result in abreach or default of an agreement binding on such Significant Subsidiary (other than an agreemententered into for the purpose of avoiding the obligation to enter into a guarantee) that may not beamended or otherwise modified using commercially reasonable efforts to avoid such breach or default.

Conduct of Business

Parent and its Subsidiaries, taken as a whole, will remain primarily engaged in Permitted Businesses.

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Reporting Requirements

Parent will provide or make available to the trustee the following reports (and will also provide thetrustee with electronic versions or, in lieu thereof upon request by the trustee, sufficient copies of thefollowing reports referred to in clauses (1) through (3) below for distribution, at its expense, to allholders of notes):

(1) an English language version of its annual audited consolidated financial statements preparedin accordance with Brazilian GAAP promptly upon such financial statements becoming available butnot later than 120 days after the close of its fiscal year;

(2) an English language version of its unaudited quarterly financial statements prepared inaccordance with Brazilian GAAP (including, as supplementary information, an unaudited condensedconsolidated balance sheet and an unaudited condensed consolidated statement of operations, ineach case, prepared in accordance with Brazilian GAAP), promptly upon such financial statementsbecoming available but not later than 60 days after the close of each fiscal quarter (other than thelast fiscal quarter of its fiscal year);

(3) simultaneously with the delivery of each set of financial statements referred to in clauses(1) and (2) above, an officers’ certificate stating whether a Default or Event of Default exists on thedate of such certificate and, if a Default or Event of Default exists, setting forth the details thereofand the action which BR Malls Finance is taking or proposes to take with respect thereto;

(4) without duplication, English language versions or summaries of such other reports ornotices as may be filed or submitted by (and promptly after filing or submission by) BR MallsFinance or any of the Guarantors (including Parent) with (a) the CVM, (b) the Luxembourg StockExchange or any other stock exchange on which the notes may be listed or (c) the SEC (in each case,to the extent that any such report or notice is generally available to its security holders or the publicin Brazil or elsewhere and, in the case of clause (c), is filed, submitted or posted pursuant to Rule12g3-2(b) under, or Section 13 or 15(d) of, the Exchange Act, or otherwise); and

(5) upon any director or executive officer of BR Malls Finance becoming aware of the existenceof a Default or Event of Default, an officers’ certificate setting forth the details thereof and theaction which BR Malls Finance is taking or proposes to take with respect thereto.

Delivery of the above reports to the trustee is for informational purposes only and the trustee’s access to,or receipt of, such reports will not constitute constructive notice of any information contained therein ordeterminable from information contained therein, including BR Malls Finance’s and each of theGuarantors’ compliance with any of its covenants in the indenture (as to which the trustee is entitled torely exclusively on officers’ certificates).

In addition, at any time when BR Malls Finance is not subject to Section 13 or 15(d) of the Exchange Actor is exempt from the reporting requirements thereunder pursuant to Rule 12g3-2(b) of the ExchangeAct, BR Malls Finance will make available, upon request, to the trustee the information requiredpursuant to Rule 144A(d)(4) under the Securities Act.

Events of Default

An “Event of Default” occurs if:

(1) BR Malls Finance defaults in any payment of interest (including any related additionalamounts) on any note when the same becomes due and payable, and such default continues for aperiod of 30 days;

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(2) BR Malls Finance defaults in the payment of the principal (including any related additionalamounts) of any note when the same becomes due and payable upon redemption or otherwise;

(3) BR Malls Finance or any of the Guarantors fails to comply with any of its covenants oragreements in the notes or the indenture (other than those referred to in (1) and (2) above), and suchfailure continues for 60 days after the notice specified below;

(4) BR Malls Finance, any of the Guarantors or any Significant Subsidiary defaults under anymortgage, indenture or instrument under which there may be issued or by which there may besecured or evidenced any Debt for money borrowed by BR Malls Finance, any such Guarantor orany such Significant Subsidiary (or the payment of which is guaranteed by BR Malls Finance, anysuch Guarantor or any such Significant Subsidiary) whether such Debt or guarantee now exists, or iscreated after the date of the indenture, which default (a) is caused by failure to pay principal of orpremium, if any, or interest on such Debt after giving effect to any grace period provided in suchDebt on the date of such default (“Payment Default”) or (b) results in the acceleration of such Debtprior to its express maturity and, in each case, the principal amount of any such Debt, together withthe principal amount of any other such Debt under which there has been a Payment Default or thematurity of which has been so accelerated, totals US$20 million (or the equivalent thereof at thetime of determination) or more in the aggregate;

(5) one or more final judgments or decrees for the payment of money of US$20 million (or theequivalent thereof at the time of determination) or more in the aggregate are rendered against BRMalls Finance, any of the Guarantors or any Significant Subsidiary and are not paid (whether in fullor in installments in accordance with the terms of the judgment) or otherwise discharged and, in thecase of each such judgment or decree, either (a) an enforcement proceeding has been commenced byany creditor upon such judgment or decree and is not dismissed within 30 days followingcommencement of such enforcement proceedings or (b) there is a period of 60 days following suchjudgment during which such judgment or decree is not discharged, waived or the execution thereofstayed;

(6) certain events of bankruptcy or insolvency of BR Malls Finance, any of the Guarantors orany Significant Subsidiary; or

(7) any guarantee of the notes ceases to be in full force and effect (other than in accordancewith the terms of the notes) or any of the Guarantors denies or disaffirms its obligations under itsguarantee of the notes.

A Default under clause (3) above will not constitute an Event of Default until the trustee or the holdersof at least 25% in principal amount of the notes outstanding notify BR Malls Finance and theGuarantors of the Default and BR Malls Finance or a Guarantor, as the case may be, does not cure suchDefault within the time specified after receipt of such notice.

The trustee is not to be charged with knowledge of any Default or Event of Default or knowledge of anycure of any Default or Event of Default unless either (i) an attorney, authorized officer or agent of thetrustee with direct responsibility for the indenture has actual knowledge of such Default or Event ofDefault or (ii) written notice of such Default or Event of Default has been given to the trustee by BRMalls Finance or any holder.

If an Event of Default (other than an Event of Default specified in clause (6) above) occurs and iscontinuing, the trustee or the holders of not less than 25% in principal amount of the notes thenoutstanding may declare all unpaid principal of and accrued interest on all notes to be due and payableimmediately, by a notice in writing to BR Malls Finance, and upon any such declaration such amounts

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will become due and payable immediately. If an Event of Default specified in clause (6) above occurs andis continuing, then the principal of and accrued interest on all notes will become and be immediately dueand payable without any declaration or other act on the part of the trustee or any holder.

Subject to the provisions of the indenture relating to the duties of the trustee in case an Event of Defaultoccurs and is continuing, the trustee will be under no obligation to exercise any of its rights or powersunder the indenture at the request or direction of any of the holders, unless such holders have offered tothe trustee indemnity reasonably satisfactory to the trustee. Subject to such provision for theindemnification of the trustee, the holders of a majority in aggregate principal amount of the outstandingnotes will have the right to direct the time, method and place of conducting any proceeding for anyremedy available to the trustee or exercising any trust or power conferred on the trustee.

Defeasance

BR Malls Finance or any of the Guarantors may at any time terminate all of its obligations with respectto the notes (“defeasance”), except for certain obligations, including those regarding any trust establishedfor a defeasance and obligations to register the transfer or exchange of the notes, to replace mutilated,destroyed, lost or stolen notes and to maintain agencies in respect of notes. BR Malls Finance or any ofthe Guarantors may at any time terminate its obligations under certain covenants set forth in theindenture, and any omission to comply with such obligations will not constitute a Default or an Event ofDefault with respect to the notes issued under the indenture (“covenant defeasance”). In order to exerciseeither defeasance or covenant defeasance, BR Malls Finance or any of the Guarantors must irrevocablydeposit in trust, for the benefit of the holders of the notes, with the trustee money or U.S. governmentobligations, or a combination thereof, in such amounts as will be sufficient, in the opinion of aninternationally recognized firm of independent public accountants expressed in a written certificatedelivered to the trustee, without consideration of any reinvestment, to pay the principal of, and intereston the notes to redemption or maturity and comply with certain other conditions, including the deliveryof an opinion of counsel as to certain U.S. tax matters.

Amendment, Supplement, Waiver

Subject to certain exceptions, the indenture may be amended or supplemented with the consent of theholders of at least a majority in principal amount of the notes then outstanding, and any past Default orEvent of Default or compliance with any provision may be waived with the consent of the holders of atleast a majority in principal amount of the notes then outstanding. However, without the consent of eachholder of an outstanding note affected thereby, no amendment or waiver may:

(1) reduce the rate of or extend the time for payment of interest on any note;

(2) reduce the principal of any note;

(3) reduce the amount payable upon redemption of any note or change the time at which anynote may be redeemed;

(4) change the currency for payment of principal of, or interest on, any note;

(5) impair the right to institute suit for the enforcement of any right to payment on or withrespect to any note;

(6) waive certain payment defaults with respect to the notes;

(7) reduce the principal amount of notes whose holders must consent to any amendment orwaiver; or

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(8) make any change in the amendment or waiver provisions which require each holder’sconsent.

The holders of the notes will receive prior notice as described under “—Notices” of any proposedamendment to the notes or the indenture or any waiver described in the preceding paragraph. After anamendment or waiver described in the preceding paragraph becomes effective, BR Malls Finance isrequired to mail to the holders a notice briefly describing such amendment or waiver. However, thefailure to give such notice to all holders of the notes, or any defect therein, will not impair or affect thevalidity of the amendment or waiver.

The consent of the holders of the notes is not necessary to approve the particular form of any proposedamendment or waiver. It is sufficient if such consent approves the substance of the proposed amendmentor waiver.

BR Malls Finance, the Guarantors and the trustee may, without the consent or vote of any holder of thenotes, amend or supplement the indenture or the notes for the following purposes to:

(1) cure any ambiguity, omission, defect or inconsistency;

(2) comply with the covenant described under “—Limitation on Consolidation, Merger orTransfer of Assets”;

(3) add guarantees or collateral with respect to the notes or to confirm and evidence the release,termination or discharge of any guarantee of or liens securing the notes when such release,termination or discharge is permitted by the indenture;

(4) add to the covenants of BR Malls Finance or any of the Guarantors for the benefit ofholders of the notes;

(5) surrender any right conferred upon BR Malls Finance or any of the Guarantors;

(6) evidence and provide for the acceptance of an appointment by a successor trustee;

(7) comply with any requirements of the SEC in connection with any qualification of theindenture under the U.S. Trust Indenture Act of 1939, as amended;

(8) provide for the issuance of Additional Notes; or

(9) make any other change that does not materially and adversely affect the rights of any holderof the notes, or to conform the indenture to this “Description of the Notes.”

Notices

For so long as notes in global form are outstanding, notices to be given to holders will be given to thedepositary, in accordance with its applicable policies as in effect from time to time. If notes are issued incertificated form, notices to be given to holders will be deemed to have been given upon the mailing byfirst class mail, postage prepaid, of such notices to holders of the notes at their registered addresses asthey appear in the trustee’s records. For so long as the notes are listed on the Euro MTF market of theLuxembourg Stock Exchange and it is required by the rules of the Luxembourg Stock Exchange,publication of such notices to the holders of the notes in English in a leading newspaper having generalcirculation in Luxembourg (which is expected to be the d’Wort) or, to the extent and in the mannerpermitted by such rules, posted on the official website of the Luxembourg Stock Exchange.

Trustee

Deutsche Bank Trust Company Americas is the trustee under the indenture and will be the custodian forDTC.

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The indenture contains provisions for the indemnification of the trustee and for its relief fromresponsibility. The obligations of the trustee to any holder are subject to such immunities and rights asare set forth in the indenture.

Except during the continuance of an Event of Default, the trustee needs to perform only those duties thatare specifically set forth in the indenture and no others, and no implied covenants or obligations will beread into the indenture against the trustee. In case an Event of Default has occurred and is continuing,the trustee shall exercise those rights and powers vested in it by the indenture, and use the same degree ofcare and skill in their exercise, as a prudent man would exercise or use under the circumstances in theconduct of his own affairs. No provision of the indenture will require the trustee to expend or risk itsown funds or otherwise incur any financial liability in the performance of its duties thereunder, or in theexercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability orexpense.

BR Malls Finance and its affiliates may from time to time enter into normal banking and trusteerelationships with the trustee and its affiliates.

Governing Law and Submission to Jurisdiction

The notes and the indenture will be governed by the laws of the State of New York.

Each of the parties to the indenture will submit to the jurisdiction of the U.S. federal and New York Statecourts located in the Borough of Manhattan, City and State of New York for purposes of all legal actionsand proceedings instituted in connection with the notes and the indenture. BR Malls Finance and each ofthe Guarantors has appointed National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501,New York, New York 10001, as its authorized agent upon which process may be served in any suchaction.

Currency Indemnity

U.S. dollars are the sole currency of account and payment for all sums payable by BR Malls Finance orany of the Guarantors under or in connection with the notes, including damages. Any amount receivedor recovered in a currency other than U.S. dollars (whether as a result of, or of the enforcement of, ajudgment or order of a court of any jurisdiction, in the winding-up or dissolution of BR Malls Finance,any of the Guarantors or otherwise) by any holder of a note in respect of any sum expressed to be due toit from BR Malls Finance or any of the Guarantors will only constitute a discharge to BR Malls Financeor such Guarantor, as the case may be, to the extent of the U.S. dollar amount which the recipient is ableto purchase with the amount so received or recovered in that other currency on the date of that receipt orrecovery (or, if it is not practicable to make that purchase on that date, on the first date on which it ispracticable to do so). If that U.S. dollar amount is less than the U.S. dollar amount expressed to be due tothe recipient under any note, BR Malls Finance and each of the Guarantors will jointly and severallyindemnify such holder against any loss sustained by it as a result; and if the amount of U.S. dollars sopurchased is greater than the sum originally due to such holder, such holder will, by accepting a note, bedeemed to have agreed to repay such excess. In any event, BR Malls Finance and each of the Guarantorswill jointly and severally indemnify the recipient against the cost of making any such purchase.

For the purposes of the preceding paragraph, it will be sufficient for the holder of a note to certify in asatisfactory manner (indicating the sources of information used) that it would have suffered a loss had anactual purchase of U.S. dollars been made with the amount so received in that other currency on the date

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of receipt or recovery (or, if a purchase of U.S. dollars on such date had not been practicable, on the firstdate on which it would have been practicable, it being required that the need for a change of date becertified in the manner mentioned above). These indemnities constitute a separate and independentobligation from the other obligations of BR Malls Finance, will give rise to a separate and independentcause of action, will apply irrespective of any indulgence granted by any holder of a note and willcontinue in full force and effect despite any other judgment, order, claim or proof for a liquidatedamount in respect of any sum due under any note.

Certain Definitions

The following is a summary of certain defined terms used in the indenture. Reference is made to theindenture for the full definition of all such terms as well as other capitalized terms used herein for whichno definition is provided.

“Affiliate” means, with respect to any specified person, (a) any other person which, directly or indirectly,is in control of, is controlled by or is under common control with such specified person or (b) any otherperson who is a director or officer (i) of such specified person, (ii) of any subsidiary of such specifiedperson or (iii) of any person described in clause (a) above. For purposes of this definition, control of aperson means the power, direct or indirect, to direct or cause the direction of the management andpolicies of such person whether by contract or otherwise and the terms “controlling” and “controlled”have meanings correlative to the foregoing.

“Board of Directors” means, as to any person, the board of directors, management committee or similargoverning body of such person or any duly authorized committee thereof.

“Brazil” means the Federative Republic of Brazil.

“Brazilian GAAP” means accounting practices prescribed by Brazilian Corporation Law, the rules andregulations issued by the CVM, and the accounting standards issued by the Brazilian Institute ofIndependent Accountants (Instituto dos Auditores Independentes do Brasil), in each case as in effectfrom time to time.

“Business Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on whichbanking institutions or trust companies are authorized or obligated by law to close in The City of NewYork or São Paulo, Brazil.

“Capital Lease Obligations” means, with respect to any person, any obligation which is required to beclassified and accounted for as a capital lease on the face of a balance sheet of such person prepared inaccordance with Brazilian GAAP; the amount of such obligation will be the capitalized amount thereof,determined in accordance with Brazilian GAAP; and the Stated Maturity thereof will be the date of thelast payment of rent or any other amount due under such lease prior to the first date upon which suchlease may be terminated by the lessee without payment of a penalty.

“Capital Stock” means, with respect to any person, any and all shares of stock, interests, rights topurchase, warrants, options, participations or other equivalents of or interests in (however designated,whether voting or non-voting), such person’s equity including any preferred stock, but excluding anydebt securities convertible into or exchangeable for such equity.

“Change of Control” means the occurrence of any of the following events:

(1) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of theExchange Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as

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Description of the Notes

defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clausethat person or group shall be deemed to have “beneficial ownership” of all securities that any suchperson or group has the right to acquire, whether such right is exercisable immediately or only afterthe passage of time), directly or indirectly, of Voting Stock (as defined below), directly or indirectly,in the aggregate of more than 50% of the total voting power of the Voting Stock of Parent or BRMalls Finance; or

(2) (a) the sale, transfer, assignment, lease, conveyance or other disposition, directly orindirectly, of all or substantially all of the assets of the Parent and its Subsidiaries are sold orotherwise transferred to any person other than a Wholly-owned Subsidiary or one or morePermitted Holders or (b) Parent or BR Malls Finance consolidates or merges with or into anotherperson or any person consolidates or merges with or into Parent or BR Malls Finance, in either caseunder this clause (2), in one transaction or a series of related transactions in which immediately afterthe consummation thereof persons owning Voting Stock representing in the aggregate a majority ofthe total voting power of the Voting Stock of Parent or BR Malls Finance immediately prior to suchconsummation do not own Voting Stock representing a majority of the total voting power of theVoting Stock of Parent or BR Malls Finance or the surviving or transferee person.

For purposes of this definition the Permitted Holders or any other person or group will be deemed tobeneficially own any Voting Stock of a corporation held by any other corporation (the “parentcorporation”) so long as the Permitted Holders or such other person or group, as the case may be,beneficially own, directly or indirectly, in the aggregate at least 50% of the voting power of the VotingStock of the parent corporation.

“Change of Control Offer” has the meaning set forth under “Repurchase upon Change of Control.”

“Change of Control Payment” has the meaning set forth under “Repurchase upon Change of Control.”

“Change of Control Payment Date” has the meaning set forth under “Repurchase upon Change ofControl.”

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a RatingDecline.

“CVM” means the Brazilian Securities Commission, or Comissão de Valores Mobiliários.

“Debt” means, with respect to any person, without duplication:

(a) the principal of and premium, if any, in respect of (i) indebtedness of such person for moneyborrowed and (ii) indebtedness evidenced by notes, debentures, bonds or other similar instrumentsfor the payment of which such person is responsible or liable;

(b) all Capital Lease Obligations of such person;

(c) all obligations of such person issued or assumed as the deferred purchase price of property,all conditional sale obligations of such person and all obligations of such person under any titleretention agreement (but excluding trade accounts payable or other short-term obligations tosuppliers payable within 180 days, in each case arising in the ordinary course of business);

(d) all obligations of such person for the reimbursement of any obligor on any letter of credit,banker’s acceptance or similar credit transaction (other than obligations with respect to letters ofcredit securing obligations (other than obligations described in clauses (a) through (c) above) entered

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Description of the Notes

into in the ordinary course of business of such person to the extent such letters of credit are notdrawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenthBusiness Day following receipt by such person of a demand for reimbursement following paymenton the letter of credit);

(e) all Hedging Obligations of such persons;

(f) all obligations of the type referred to in clauses (a) through (d) of other persons and alldividends of other persons for the payment of which, in either case, such person is responsible orliable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any guarantee(other than obligations of other persons that are customers or suppliers of such person for whichsuch person is or becomes so responsible or liable in the ordinary course of business to (but only to)the extent that such person does not, or is not required to, make payment in respect thereof);

(g) all obligations of the type referred to in clauses (a) through (e) of other persons secured byany Lien on any property or asset of such person (whether or not such obligation is assumed by suchperson), the amount of such obligation being deemed to be the lesser of the value of such propertyor assets or the amount of the obligation so secured; and

(h) any other obligations of such person which are required to be, or are in such person’sfinancial statements, recorded or treated as debt under Brazilian GAAP.

“Default” means any event which is, or after notice or passage of time or both would be, an Event ofDefault.

“Fitch” means Fitch Ratings Ltd. and its successors and assigns.

“guarantee” means any obligation, contingent or otherwise, of any person directly or indirectlyguaranteeing any Debt or other obligation of any person and any obligation, direct or indirect,contingent or otherwise, of such person (a) to purchase or pay (or advance or supply funds for thepurchase or payment of) such Debt or other obligation of such person (whether arising by virtue ofpartnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services,to take-or pay, or to maintain financial statement conditions or otherwise) or (b) entered into forpurposes of assuring in any other manner the obligee of such Debt or other obligation of the paymentthereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however,that the term “guarantee” will not include endorsements for collection or deposit in the ordinary courseof business. The term “guarantee” used as a verb has a corresponding meaning.

“Guarantors” means (a) each of Parent, ECISA Engenharia Comércio e Indústria S.A., ECISAParticipações S.A. and Grauna Holding Participações S.A. and (b) and each other person that is requiredto become a Guarantor by the terms of the indenture after the Issue Date.

“Hedging Obligations” means, with respect to any person, the obligations of such person pursuant toany interest rate swap agreement, foreign currency exchange agreement, interest rate collar agreement,option or futures contract or other similar agreement or arrangement designed to protect such personagainst changes in interest rates or foreign exchange rates.

“holder” means the person in whose name a note is registered in the register.

“Investment” means, with respect to any person, any loan or advance to, any acquisition of CapitalStock, equity interest, obligation or other security of, or capital contribution to or other investment in,such person.

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Description of the Notes

“Issue Date” means the first date of issuance of notes under the Indenture.

“Lien” means any mortgage, pledge, security interest, conditional sale or other title retention agreementor other similar lien.

“ Moody’s” means Moody’s Investors Service, Inc. and its successors and assigns.

“Parent” means BR Malls Participações S.A. or any successor thereto including by way of merger,consolidation, liquidation, dissolution or winding up.

“Permitted Business” means the businesses engaged in by Parent and its Subsidiaries on the Issue Date asdescribed in this offering memorandum and businesses that are reasonably related thereto or reasonableextensions thereof.

“Permitted Holders” means any or all of the following: (1) any director or executive officer of the Parenton the Issue Date; (2) any immediate family member of any of the individuals named in clause (1); (3) theestate or any guardian, custodian or other legal representative of any individual named in or any trustestablished solely for the benefit of any one or more individuals named in clauses (1) through (2); (4) EIBrazil Investments, LLC, EI Brazil Investments III, LLC, Private Equity Partners A, LLC, Private EquityPartners B, LLC, Dyl Empreendimentos e Participações S.A. and any Affiliate thereof; and (5) any Personin which all of the equity interests are owned, directly or indirectly, by any one or more of the personsnamed in clauses (1) through (4).

“Permitted Liens” means: (a) any Lien existing on the Issue Date; (b) any landlord’s, workmen’s,carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other Liens arising in the ordinarycourse of business (excluding, for the avoidance of doubt, Liens in connection with any Debt); (c) anyLien on any property or assets (including Capital Stock of any person) securing Debt incurred solely forpurposes of financing the acquisition, construction, improvement or expansion of such property or assetsafter the date of the indenture; provided that (i) the aggregate principal amount of Debt secured by theLiens will not exceed (but may be less than) the cost (i.e., purchase price) of the property or assets soacquired, constructed or improved and (ii) the Lien is incurred before, or within 180 days after thecompletion of, such acquisition, construction, improvement or expansion and does not encumber anyother property or assets of BR Malls Finance, Parent or any Subsidiary; and provided, further, that to theextent that the property or asset acquired is Capital Stock, the Lien also may encumber other property orassets of the person so acquired; (d) any Lien securing Debt for the purpose of financing all or part ofcost of the acquisition, construction, development or expansion of a part of or consisting of a shoppingmall or other project; provided that the Liens in respect of such Debt are limited to assets (includingCapital Stock of the project entity) and/or any current and future revenues of such project; and provided,further, that the Lien is incurred before, or within 180 days after the completion of, that acquisition,construction or development and does not apply to any other property or assets of Parent or anySubsidiary; (e) any Lien in favor of Parent or any of its Subsidiaries; (f) any Lien on any property existingthereon at the time of acquisition of such property and not created in connection with such acquisition;(g) any Lien securing an extension, renewal or refunding of Debt secured by any Lien referred to in (a),(c), (d), (e) or (f) above; provided that such new Lien is limited to the property which was subject to theprior Lien immediately before such extension, renewal or refunding and provided further that theprincipal amount of Debt secured by the prior Lien immediately before such extension, renewal orrefunding is not increased; (h) (i) any inchoate Lien for taxes, assessments or governmental charges orlevies not yet due (including any relevant extensions), (ii) any Lien arising or incurred in connection withjudgments or assessments under circumstances not constituting an Event of Default or (iii) any Lien inthe form of a tax or other statutory Lien or any other Lien arising by operation of law; provided that anysuch Lien will be discharged within 90 days after the date it is created or arises (unless contested in good

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Description of the Notes

faith); (i) Liens arising in connection with Receivables Transactions; provided that the aggregate principalamount of Debt incurred that is secured by receivables that will fall due in any calendar year shall notexceed 50% of Parent’s consolidated gross revenues for the immediately preceding calendar year; or(j) any other Lien on the assets of Parent or of any of its Subsidiaries; provided that on the date of thecreation or assumption of such Lien, the Debt secured by such Lien, together with all of Parent’s Debtsecured by any Lien under this clause (j), will have an aggregate principal amount outstanding of nogreater than 15% of Parent’s total consolidated assets as set forth in the consolidated financialstatements for its most recent fiscal quarter.

“person” means any individual, corporation, partnership, joint venture, trust, unincorporatedorganization or government or any agency, department or political subdivision thereof.

“Rating Agency” means any one of Moody’s, S&P or Fitch.

“Rating Decline” shall be deemed to have occurred if within ninety (90) days of a Change of Control,one of the Rating Agencies assigns a rating to the notes that is lower than the applicable rating of thenotes (domestically or internationally) immediately preceding the public announcement of anarrangement that results in a Change of Control; provided that such Rating Decline is in whole or in partin connection with a Change in Control.

“Receivables Transaction” means any securitization, factoring, discounting or similar financingtransaction or series of transactions that may be entered into by Parent or any of its Subsidiaries in theordinary course of business pursuant to which Parent or any of its Subsidiaries may sell, convey orotherwise transfer to any person, or may grant a security interest in, any receivables (whether nowexisting or arising in the future) of Parent or any of its Subsidiaries, and any assets related thereto,including all collateral securing such receivables, all contracts and all guarantees or other obligations inrespect of such receivables, the proceeds of such receivables and other assets which are customarilytransferred, or in respect of which security interests are customarily granted, in connection withsecuritization, factoring or discounting involving receivables.

“S&P” means Standard & Poor’s Ratings Services and its successors and assigns.

“Significant Subsidiary” means any Subsidiary of Parent which at the time of determination either (i) hadassets which, as of the date of Parent’s most recent quarterly consolidated balance sheet, constituted atleast 20% of Parent’s total assets on a consolidated basis as of such date, or (ii) had revenues for the12-month period ending on the date of Parent’s most recent quarterly consolidated statement of incomewhich constituted at least 20% of Parent’s total revenues on a consolidated basis for such period.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixeddate on which the principal of such security is due and payable, including pursuant to any mandatoryredemption provision (but excluding any provision providing for the repurchase of such security at theoption of the holder thereof upon the happening of any contingency unless such contingency hasoccurred).

“Subsidiary” means any corporation, association, partnership or other business entity of which morethan 50% of the total voting power of shares of Capital Stock or other interests (including partnershipinterests) entitled (without regard to the occurrence of any contingency) to vote in the election ofdirectors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by(a) Parent, (b) Parent and one or more Subsidiaries or (c) one or more Subsidiaries.

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Description of the Notes

“Voting Stock” with respect to any person, means securities of any class of Capital Stock of such personentitling the holders thereof (whether at all times or only so long as no senior class of stock has votingpower by reason of any contingency) to vote in the election of members of the Board of Directors (orequivalent governing body) of such person.

“Wholly-owned Subsidiary” means a Subsidiary all of the Capital Stock of which (other than directors’qualifying shares) is owned by Parent or another Wholly-owned Subsidiary.

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Form of the notes

Notes sold in offshore transactions in reliance on Regulation S will be represented by a permanent globalnote or notes in fully registered form without interest coupons (the “Regulation S Global Note”) and willbe registered in the name of a nominee of DTC and deposited with a custodian for DTC. Notes sold inreliance on Rule 144A will be represented by a permanent global note or notes in fully registered formwithout interest coupons (the “Restricted Global Note” and, together with the Regulation S GlobalNote, the “global notes”) and will be deposited with a custodian for DTC and registered in the name of anominee of DTC.

The notes will be subject to certain restrictions on transfer as described in “Notice to Investors.” On orprior to the 40th day after the later of the commencement of the offering and the closing date of thisoffering, a beneficial interest in the Regulation S Global Note may be transferred to a person who takesdelivery in the form of an interest in the Restricted Global Note only upon receipt by the principal payingagent of a written certification from the transferor (in the form provided in the indenture) to the effectthat such transfer is being made to a person whom the transferor reasonably believes to be a “qualifiedinstitutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule144A and in accordance with any applicable securities laws of any state of the United States or any otherjurisdiction (a “Restricted Global Note Certificate”). After such 40th day, this certification requirementwill no longer apply to such transfers. Beneficial interests in the Restricted Global Note may betransferred to a person who takes delivery in the form of an interest in the Regulation S Global Note,whether before, on or after such 40th day, only upon receipt by the principal paying agent of a writtencertification from the transferor (in the form provided in the indenture) to the effect that such transfer isbeing made in accordance with Rule 903 or Rule 904 of Regulation S or Rule 144 under the SecuritiesAct (a “Regulation S Global Note Certificate”). Any beneficial interest in one of the global notes that istransferred to a person who takes delivery in the form of an interest in the other global note will, upontransfer, cease to be an interest in such global note and become an interest in the other global note and,accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable tobeneficial interests in such other global note for as long as it remains an interest.

Except in the limited circumstances described under “—Global Notes,” owners of the beneficial interestsin global notes will not be entitled to receive physical delivery of individual definitive notes. The notesare not issuable in bearer form.

Global Notes

Upon the issuance of the Regulation S Global Note and the Restricted Global Note, DTC will credit, onits internal system, the respective principal amount of the individual beneficial interests represented bysuch global note to the accounts of persons who have accounts with DTC. Such accounts initially will bedesignated by or on behalf of the initial purchasers. Ownership of beneficial interests in a global notewill be limited to persons who have accounts with DTC (“DTC Participants”) or persons who holdinterests through DTC Participants. Ownership of beneficial interests in the global notes will be shownon, and the transfer of that ownership will be effected only through, records maintained by DTC or itsnominee (with respect to interests of DTC Participants) and the records of DTC Participants (withrespect to interests of persons other than DTC Participants).

So long as DTC, or its nominee, is the registered owner or holder of a global note, DTC or suchnominee, as the case may be, will be considered the sole owner or holder of the notes represented by suchglobal note for all purposes under the indenture and the notes. Unless DTC notifies BR Malls Finance that

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Form of the Notes

it is unwilling or unable to continue as depositary for a global note, or ceases to be a “clearing agency”registered under the Exchange Act, or any of the notes becomes immediately due and payable inaccordance with “Description of Notes—Events of Default,” owners of beneficial interests in a global notewill not be entitled to have any portions of such global note registered in their names, will not receive orbe entitled to receive physical delivery of notes in individual definitive form and will not be considered theowners or holders of the global note (or any notes represented thereby) under the indenture or the notes.In addition, no beneficial owner of an interest in a global note will be able to transfer that interest exceptin accordance with DTC’s applicable procedures (in addition to those under the indenture referred toherein and, if applicable, those of Euroclear and Clearstream Luxembourg).

Investors may hold interests in the Regulation S Global Note through Euroclear or ClearstreamLuxembourg, if they are participants in such systems. Euroclear and Clearstream Luxembourg will holdinterests in the Regulation S Global Note on behalf of their account holders through customers’ securitiesaccounts in their respective names on the books of their respective depositaries, which, in turn, will holdsuch interests in the Regulation S Global Note in customers’ securities accounts in the depositaries’names on the books of DTC. Investors may hold their interests in the Restricted Global Note directlythrough DTC, if they are DTC Participants, or indirectly through organizations which are DTCParticipants.

Payments of the principal of and interest on global notes will be made to DTC or its nominee as theregistered owner thereof. Neither BR Malls Finance nor any initial purchaser will have any responsibilityor liability for any aspect of the records relating to or payments made on account of beneficial ownershipinterests in the global notes or for maintaining, supervising or reviewing any records relating to suchbeneficial ownership interests.

BR Malls Finance anticipates that DTC or its nominee, upon receipt of any payment of principal orinterest in respect of a global note representing any notes held by its nominee, will immediately creditDTC Participants’ accounts with payments in amounts proportionate to their respective beneficialinterests in the principal amount of such global note as shown on the records of DTC or its nominee. BRMalls Finance also expects that payments by DTC Participants to owners of beneficial interests in suchglobal note held through such DTC Participants will be governed by standing instructions and customarypractices, as is now the case with securities held for the accounts of customers registered in the names ofnominees for such customers. Such payments will be the responsibility of such DTC Participants.

Transfers between DTC Participants will be effected in accordance with DTC’s procedures, and will besettled in same-day funds. The laws of some jurisdictions require that certain persons take physicaldelivery of securities in definitive form. Consequently, the ability to transfer beneficial interests in aglobal note to such persons may be limited. Because DTC can only act on behalf of DTC Participants,who in turn act on behalf of indirect participants and certain banks, the ability of a person having abeneficial interest in a global note to pledge such interest to persons or entities that do not participate inthe DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of aphysical individual definitive certificate in respect of such interest. Transfers between accountholders inEuroclear and Clearstream Luxembourg will be effected in the ordinary way in accordance with theirrespective rules and operating procedures.

Subject to compliance with the transfer restrictions available to the notes described above, cross-markettransfers between DTC participants, on the one hand, and directly or indirectly through Euroclear orClearstream Luxembourg account holders, on the other hand, will be effected in DTC in accordance with

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Form of the Notes

DTC rules on behalf of Euroclear or Clearstream Luxembourg, as the case may be, by its respectivedepositary; however, such crossmarket transactions will require delivery of instructions to Euroclear orClearstream Luxembourg, as the case may be, by the counterparty in such system in accordance with itsrules and procedures and within its established deadlines. Euroclear or Clearstream Luxembourg, as thecase may be, will, if the transaction meets its settlement requirements, deliver instructions to itsrespective depositary to take action to effect final settlement on its behalf by delivering or receivinginterests in the Regulation S Global Note in DTC, and making or receiving payment in accordance withnormal procedures for same day funds settlement applicable to DTC. Euroclear and ClearstreamLuxembourg account holders may not deliver instructions directly to the depositaries for Euroclear orClearstream Luxembourg.

Because of time zone differences, the securities account of a Euroclear or Clearstream Luxembourgaccount holder purchasing an interest in a global note from a DTC Participant will be credited during thesecurities settlement processing day (which must be a business day for Euroclear or ClearstreamLuxembourg, as the case may be) immediately following the DTC settlement date and such credit of anytransactions in interests in a global note settled during such processing day will be reported to therelevant Euroclear or Clearstream Luxembourg accountholder on such day. Cash received in Euroclearor Clearstream Luxembourg as a result of sales of interests in a global note by or through a Euroclear orClearstream Luxembourg account holder to a DTC Participant will be received for value on the DTCsettlement date but will be available in the relevant Euroclear or Clearstream Luxembourg cash accountonly as of the business day following settlement in DTC.

DTC has advised that it will take any action permitted to be taken by holder of notes (including thepresentation of notes for exchange as described below) only at the direction of one or more DTCParticipants to whose account or accounts with DTC interests in the global notes are credited and only inrespect of such portion of the aggregate principal amount of the notes as to which such DTC Participantor DTC Participants has or have given such direction. However, in the limited circumstances describedabove, DTC will exchange the global notes for individual definitive notes (in the case of notesrepresented by the Restricted Global Note, bearing a restrictive legend), which will be distributed to itsparticipants. Holders of indirect interests in the global notes through DTC Participants have no directrights to enforce such interests while the notes are in global form.

The giving of notices and other communications by DTC to DTC Participants, by DTC Participants topersons who hold accounts with them and by such persons to holders of beneficial interests in a globalnote will be governed by arrangements between them, subject to any statutory or regulatoryrequirements as may exist from time to time.

DTC has advised as follows: DTC is a limited purpose trust company organized under the laws of theState of New York, a member of the Federal Reserve System, a “clearing corporation” within themeaning of the Uniform Commercial Code and a “Clearing Agency” registered pursuant to theprovisions of Section 17A of the Exchange Act. DTC was created to hold securities for DTC Participantsand to facilitate the clearance and settlement of securities transactions between DTC Participants throughelectronic book-entry changes in accounts of DTC Participants, thereby eliminating the need for physicalmovement of certificates. DTC Participants include security brokers and dealers, banks, trust companiesand clearing corporations and may include certain other organizations. Indirect access to the DTC systemis available to others such as banks, brokers, dealers and trust companies that clear through or maintaina custodial relationship with a DTC Participant, either directly or indirectly (“indirect participants”).

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Form of the Notes

Although DTC, Euroclear and Clearstream Luxembourg have agreed to the foregoing procedures inorder to facilitate transfers of interests in the Regulation S Global Note and in the Restricted GlobalNote among participants and accountholders of DTC, Clearstream Luxembourg and Euroclear, they areunder no obligation to perform or continue to perform such procedures, and such procedures may bediscontinued at any time. Neither BR Malls Finance nor the trustee will have any responsibility for theperformance of DTC, Euroclear or Clearstream Luxembourg or their respective participants, indirectparticipants or accountholders of their respective obligations under the rules and procedures governingtheir operations.

Individual Definitive Notes

If (i) DTC or any successor to DTC is at any time unwilling or unable to continue as a depositary for thereasons described in “—Global Notes” and a successor depositary is not appointed by BR Malls Financewithin 90 days or (ii) any of the notes has become immediately due and payable in accordance with“Description of Notes—Events of Default,” BR Malls Finance will issue individual definitive notes inregistered form in exchange for the Regulation S Global Note and the Restricted Global Note, as the casemay be. Upon receipt of such notice from DTC or the paying agent, as the case may be, BR MallsFinance will use its best efforts to make arrangements with DTC for the exchange of interests in theglobal notes for individual definitive notes and cause the requested individual definitive notes to beexecuted and delivered to the registrar in sufficient quantities and authenticated by the registrar fordelivery to holders. Persons exchanging interests in a global note for individual definitive notes will berequired to provide the registrar with (a) written instruction and other information required by BR MallsFinance and the registrar to complete, execute and deliver such individual definitive notes and (b) in thecase of an exchange of an interest in a Restricted Global Note, certification that such interest is not beingtransferred or is being transferred only in compliance with Rule 144A under the Securities Act. In allcases, individual definitive notes delivered in exchange for any global note or beneficial interests thereinwill be registered in the names, and issued in any approved denominations, requested by DTC.

In the case of individual definitive notes issued in exchange for the Restricted Global Note, suchindividual definitive notes will bear, and be subject to, the legend described in “Notice to investors”(unless BR Malls Finance determines otherwise in accordance with applicable law). The holder of arestricted individual definitive note may transfer such note, subject to compliance with the provisions ofsuch legend, as provided in “Description of Notes.” Upon the transfer, exchange or replacement of notesbearing the legend, or upon specific request for removal of the legend on a note, BR Malls Finance willdeliver only notes that bear such legend, or will refuse to remove such legend, as the case may be, unlessthere is delivered to BR Malls Finance such satisfactory evidence, which may include an opinion ofcounsel, as may reasonably be required by BR Malls Finance that neither the legend nor the restrictionson transfer set forth therein are required to ensure compliance with the provisions of the Securities Act.Before any individual definitive note may be transferred to a person who takes delivery in the form of aninterest in any global note, the transferor will be required to provide the principal paying agent with aRestricted Global Note Certificate or a Regulation S Global Note Certificate, as the case may be.

Individual definitive notes will not be eligible for clearing and settlement through Euroclear, ClearstreamLuxembourg or DTC.

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TaxationThe following discussion summarizes certain Brazilian, Cayman and U.S. federal income taxconsiderations that may be relevant to the ownership and disposition of the notes. This summary doesnot describe all of the tax considerations that may be relevant to you or your situation, particularly ifyou are subject to special tax rules. You should consult your tax advisors about the tax consequences ofinvesting in and holding the notes, including the relevance to your particular situation of theconsiderations discussed below, as well as of state, local and other tax laws.

Brazilian Taxation

The following discussion summarizes the main Brazilian tax consequences of the acquisition, ownershipand disposition of the notes by an individual, entity, trust or organization that is not resident ordomiciled in Brazil for purposes of Brazilian taxation (“Non-Resident Holder”). The followingdiscussion does not address all of the Brazilian tax considerations applicable to any particularNon-Resident Holder. Therefore, each Non-Resident Holder should consult his/her/its own tax advisorconcerning the Brazilian tax consequences in respect of the notes.

Payments on the notes made by BR Malls International Finance and gains on the notes

Generally, a holder that is a Non-Resident Holder is taxed in Brazil only when income is derived fromBrazilian sources or gains are realized on the disposition of assets located in Brazil. Therefore, based onthe fact that BR Malls International Finance is considered for tax purposes as domiciled abroad, anyincome (including interest and original issue discount, if any) paid by BR Malls International Finance inrespect of the notes issued by it in favor of a Non-Resident Holder is not currently subject to withholdingor deduction in respect of Brazilian income tax or any other taxes, duties, assessments or governmentalcharges in Brazil, provided that such payments are made with funds held by BR Malls InternationalFinance outside of Brazil.

Capital gains generated outside Brazil as a result of a transaction between two non-residents of Brazilwith assets located in Brazil are subject to tax in Brazil, according to article 26 of Law No. 10,833,enacted on December 29, 2003. Based on the fact that the notes are issued abroad and, thus, the noteswill not fall within the definition of assets located in Brazil for purposes of Law No. 10,833, gains on thesale or other disposition of the notes made outside Brazil by a Non-Resident Holder are not subject toBrazilian taxes. Notwithstanding, considering the general scope of this legislation and the absence ofjudicial guidance in respect thereof, we cannot assure prospective investors that such interpretation ofthis law will prevail in the courts of Brazil.

In case the notes are deemed to be located in Brazil, gains recognized by a Non-Resident Holder from thesale or other disposition of the notes may be subject to income tax in Brazil at a maximum rate of 25% ifsuch Non-Resident Holder is located in a tax haven jurisdiction (i.e., countries which do not impose anyincome tax or which impose it at a maximum rate lower than 20% or where the laws impose restrictionson the disclosure of ownership of securities), unless a lower rate is provided for in an applicable taxtreaty between Brazil and the country where the Non-Resident Holder has its domicile.

Payments on the notes made by the guarantors

If, by any chance, any Guarantor which is considered resident or domiciled in Brazil (“BrazilianGuarantor”)—such as BR Malls—is required make any payment as a guarantor in connection with thenotes to a Non-Resident Holder, Brazilian tax authorities may attempt to impose withholding

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income at a maximum rate of 25%, being the rate variable depending on the nature of the payment andthe location of the respective Non-Resident Holder. In this circumstance, other income tax rate may beprovided for in any applicable tax treaty between Brazil and the country of the beneficiary.

All fund transfers in connection with financial transactions in Brazil are subject to the temporarycontribution on financial transactions, or the CPMF, which is levied at a rate of 0.38% of any bankaccount withdrawals. The CPMF burden is incurred by the Brazilian payor. The CPMF expires onDecember 31, 2007, although the Brazilian government may extend it to transform the CPMF into apermanent tax. Pursuant to Decree No. 4,494/2002, conversion into Brazilian currency of proceedsreceived by a Brazilian entity and the conversion into foreign currency of proceeds in reais are subject totaxation of foreign exchange transactions, or the IOF/Câmbio. Except for limited circumstances, the IOF/Câmbio is 0%, although the Brazilian government may increase this rate up to 25%, but only withrespect to future transactions.

In the event a Brazilian Guarantor is required to make any payment as a guarantor in connection withthe notes to a Non-Resident Holder, the Brazilian Guarantor would be required to pay such additionalamounts as may be necessary to ensure that the net amounts receivable by the Non-Resident Holder afterwithholding for taxes will equal the amounts that would have been payable in the absence of suchwithholding.

THE ABOVE DESCRIPTION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OFALL TAX CONSEQUENCES RELATING TO THE OWNERSHIP OF NOTES. PROSPECTIVEPURCHASERS OF THE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNINGTHE TAX CONSEQUENCES OF THEIR PARTICULAR SITUATIONS.

U.S. FEDERAL INCOME TAX CONSIDERATIONS

This disclosure is limited to the U.S. federal income tax issues addressed herein. Additional issues mayexist that are not addressed in this disclosure and that could affect the U.S. federal income tax treatmentof the notes. This tax disclosure was written in connection with the promotion or marketing by theCompany of the notes, and it cannot be used by any taxpayer for the purpose of avoiding penalties thatmay be asserted against the holder under the Internal Revenue Code of 1986, as amended (the “Code”).Taxpayers should seek advice based on their particular circumstances from an independent tax adviser.

The following is a description of certain U.S. federal income tax consequences that may be relevant to theacquisition, ownership and disposition of the notes by U.S. Holders described below. This descriptionaddresses only the U.S. federal income tax considerations applicable to U.S. Holders that purchase notespursuant to this offering and that will hold the notes as capital assets (generally, assets held forinvestment). This description does not address tax considerations applicable to holders that may besubject to special tax rules, including:

➤ certain financial institutions;

➤ insurance companies;

➤ real estate investment trusts or regulated investment companies;

➤ dealers or traders in securities or currencies;

➤ tax-exempt entities;

➤ persons that will hold the notes as part of a “hedging” or “conversion” transaction or as a positionin a “straddle” for U.S. federal income tax purposes;

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➤ persons that have a “functional currency” other than the U.S. dollar; or

➤ partnerships or other entities classified as partnerships for U.S. federal income tax purposes.

This description is based on the Code, existing, proposed and temporary U.S. Treasury Regulations andjudicial and administrative interpretations thereof, in each case as available on the date hereof. U.S. taxlaws and the interpretation thereof are subject to change, which change could apply retroactively andcould affect the tax consequences described below.

For purposes of this description, a “U.S. Holder” is a beneficial owner of the notes for U.S. federalincome tax purposes that is:

➤ a citizen or individual resident of the United States;

➤ a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) createdor organized in or under the laws of the United States or any state thereof, including the District ofColumbia; or

➤ an estate or trust the income of which is subject to U.S. federal income taxation regardless of itssource.

The U.S. federal income tax treatment of a partner in a partnership (including any entity classified as apartnership for U.S. federal income tax purposes) that holds notes will depend on the status of thepartner and the activities of the partnership. Prospective purchasers that are partnerships and partners insuch partnerships should consult their tax advisers concerning the U.S. federal income tax consequencesto them of the acquisition, ownership and disposition of the notes by the partnership.

This discussion does not address U.S. state, local and non-U.S. tax consequences. You should consultyour tax adviser with respect to the U.S. federal, state, local and foreign tax consequences of acquiring,owning or disposing of the notes, in your particular circumstances.

U.S. Tax Characterization of the Notes

The Company believes that the notes are likely to be treated as equity in the Issuer for U.S. federalincome tax purposes, and, to the extent required to do so, intends to treat the notes as equity in theIssuer for U.S. federal income tax purposes. However, no assurance can be given that the U.S. InternalRevenue Service (the “IRS”) will not assert that the notes should be treated as indebtedness for U.S.federal income tax purposes. If the notes were treated as indebtedness for U.S. federal income taxpurposes, the timing and character of income, gain and loss recognized by you could differ from thedescription herein. The following discussion assumes treatment of the notes as equity for U.S. federalincome tax purposes. As a result of this assumption, the following discussion treats each payment underthe notes that is referred to in this offering memorandum as “interest” (including additional amounts, ifany) as a distribution by the Issuer with respect to an equity interest, and each reference in the followingdiscussion to dividends refers to any such payment under the notes.

Distributions

Subject to the discussion below under “Passive Foreign Investment Company Rules,” distributionsreceived by you will constitute foreign source dividend income to the extent of the Issuer’s current oraccumulated earnings and profits as determined under U.S. federal income tax principles. Distributionswill not be eligible for the dividends-received deduction generally allowed to corporate U.S. Holders.

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Under current law, certain dividends received by non-corporate U.S. investors on shares of certain non-U.S. corporations may be subject to U.S. federal income tax at lower rates than other types of ordinaryincome if certain conditions are met. However, because the notes are not tradable on an establishedsecurities market in the United States and there is no income tax treaty between the Cayman Islands andthe United States, we do not expect that those conditions will be met.

To the extent, if any, that the amount of any distribution by the Issuer exceeds the Issuer’s current andaccumulated earnings and profits as determined under U.S. federal income tax principles, it will betreated first as a tax-free return of capital to the extent of your adjusted tax basis in the notes, and to theextent it exceeds the adjusted tax basis, it will be treated as capital gain. Potential purchasers shouldnote, however, that the Issuer will not maintain calculations of its earnings and profits under U.S. federalincome tax principles and therefore you should expect that the entire amount of a distribution willgenerally be reported as dividend income to you.

Treatment of distributions received by you as foreign source income, as discussed above, may be relevantin calculating your foreign tax credit for U.S. federal income tax purposes. The limitation on foreigntaxes eligible for credit is calculated separately with respect to specific classes of income. The rulesgoverning foreign tax credits are complex, and you should consult your tax adviser regarding theavailability of foreign tax credits in your particular circumstances.

Sale or Exchange of the Notes

You generally will recognize taxable gain or loss on the sale, exchange or other disposition of the notesequal to the difference between the amount realized on the sale or exchange and your adjusted tax basisin the notes. Subject to the discussion below under “Passive Foreign Investment Company Rules,” thisgain or loss will be capital gain or loss. The deductibility of capital losses is subject to limitations.

Gain or loss, if any, recognized generally will be treated as U.S. source income or loss for U.S. foreign taxcredit purposes. Consequently, you may not be able to use the credit arising from any Brazilian taximposed on the disposition of a note as described above under “Taxation—Brazilian Taxation” unlessyou have other foreign source income in the appropriate foreign tax credit category. Alternatively,instead of claiming a credit, you may, at your election, deduct otherwise creditable Brazilian taxes incomputing your taxable income, subject to generally applicable limitations under U.S. law. You shouldconsult your tax adviser with respect to your ability to credit or deduct any taxes imposed on capitalgains by Brazil.

Passive Foreign Investment Company Rules

A non-U.S. corporation will be considered a passive foreign investment company (“PFIC”) for U.S.federal income tax purposes for any taxable year in which (i) 75% or more of its gross income is“passive income” under the PFIC rules, or (ii) 50% or more of the average value of its assets produce (orare held for the production of) “passive income.” If the corporation owns, directly or indirectly, at least25%, by value, of the shares of another corporation (a “25% Subsidiary”), it will be treated as if it holdsdirectly its proportionate share of the assets of such other corporation and receives directly itsproportionate share of the income of such other corporation. “Passive income” generally includesinterest, dividends, rents, royalties and certain gains. However, certain rental income derived in the activeconduct of a trade or business (“active rental income”) and certain interest and dividends received fromrelated parties is not considered “passive income.”

The Issuer may make loans to, or other investments in, the Company and its subsidiaries or make otherinvestments with the proceeds of this offering in each case that may give rise to “passive income” forPFIC purposes.

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Accordingly, the Issuer may be a PFIC for the current taxable year and for future taxable years. TheIssuer does not intend to assess its PFIC status for any year. If a U.S. Holder owns or is deemed to ownan equity interest in a PFIC, certain, possibly material, adverse consequences would result for suchholder. In particular, adverse U.S. federal income tax rules would generally apply upon any dispositionof, and the receipt of certain distributions in respect of, such note. In general, gain recognized on a saleor other disposition (including a pledge) of the note would be allocated ratably over your holding periodfor the notes. The amounts allocated to the taxable year of the sale or other exchange and to any yearbefore the Issuer became a PFIC would be taxed as ordinary income. The amount allocated to each othertaxable year would be subject to tax at the highest tax rate in effect for individuals or corporations, asappropriate, for such other taxable year and an interest charge would be imposed on the amountallocated to such taxable year. Further, any distributions (“excess distributions”) in respect of the notesin excess of 125 percent of the average of the annual distributions on the notes received by you duringthe preceding three years or your holding period, whichever is shorter, would be subject to taxation asdescribed above. The rules described above would continue to apply to you even if the Issuer is not aPFIC in the year in which you sell or receive a distribution in respect of, the notes.

The Issuer does not intend to provide you information that would enable you to make a “qualifiedelecting fund” election in respect of the Issuer. In addition, an election to mark the notes to marketannually to mitigate negative PFIC consequences may not be available, among other reasons because it isunlikely that the notes will be considered “regularly traded” on a “qualified exchange” within themeaning of the relevant rules. You should consult your tax adviser with respect to the availability of anyelections which may help to mitigate the tax consequences resulting from the Issuer’s PFIC status.

Special rules would apply to determine the foreign tax credit with respect to withholding taxes imposedon distributions on notes if the Issuer were a PFIC. If you own notes during any year in which the Issueris a PFIC, you must file Internal Revenue Service Form 8621 with respect to the Issuer.

You should consult your tax adviser with respect to the possibility that the Issuer may be treated as aPFIC and the tax consequences thereof.

Backup Withholding and Information Reporting

Payment of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholdingunless (i) you are a corporation or other exempt recipient or (ii) in the case of backup withholding, youprovide a correct taxpayer identification number and certify that you are not subject to backupwithholding. Backup withholding is not an additional tax. Any amounts withheld under the backupwithholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability,provided the required information is furnished to the IRS.

CAYMAN ISLANDS TAXATION CONSIDERATIONS

The following discussion of certain Cayman Islands income tax consequences of an investment in thenotes is based on the advice of Maples and Calder as to Cayman Islands law. The discussion is a generalsummary of present law, which is subject to prospective and retroactive change. It is not intended as taxadvice, does not consider any investor’s particular circumstances, and does not consider taxconsequences other than those arising under Cayman Islands law.

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The following is a general summary of Cayman Islands taxation in relation to the notes.

UNDER EXISTING CAYMAN ISLANDS LAWS:

(i) Payments of interest and principal on the notes will not be subject to taxation in the CaymanIslands and no withholding will be required on the payment of interest and principal or a dividendor capital to any holder of the notes nor will gains derived from the disposal of the notes be subjectto Cayman Islands income or corporation tax. The Cayman Islands currently have no income,corporation or capital gains tax and no estate duty, inheritance tax or gift tax.

(ii) No stamp duty is payable in respect of the issue of the notes. An instrument of transfer in respectof a note is stampable if executed in or brought into the Cayman Islands.

BR Malls International Finance has been incorporated under the laws of the Cayman Islands as anexempted company and, as such, has applied for and expects to obtain an undertaking from theGovernor in Cabinet of the Cayman Islands in the following form:

“The Tax Concessions Law1999 Revision

Undertaking as to Tax Concessions”

In accordance with the provision of Section 6 of The Tax Concession Law (1999 Revision), the Governorin Cabinet undertakes with:

BR Malls International Finance Limited “the Company”

(a) that no law which is hereafter enacted in the Islands imposing any tax to be levied on profits,income, gains or appreciations shall apply to the Company or its operations; and

(b) in addition, that no tax to be levied on profits, income, gains or appreciations or which is in thenature of estate duty or inheritance tax shall be payable:

(i) on or in respect of the shares, debentures or other obligations of the Company; or

(ii) by way of the withholding in whole or part, of any relevant payment as defined inSection 6(3) of the Tax Concessions Law (1999 Revision).

These concessions shall be for a period of twenty years from the date of issue of the certificate.

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Plan of distributionCitigroup Global Markets Limited and UBS Securities LLC are acting as initial purchasers for theoffering of the notes. Subject to the terms and conditions stated in the purchase agreement datedNovember 5, 2007, the initial purchasers have agreed to purchase, and BR Malls Finance has agreed tosell to the initial purchasers, the entire aggregate principal amount of the notes.

We have been advised that the initial purchasers propose to resell the notes at the issue price set forth onthe cover page of this offering memorandum within the United States to Qualified Institutional Buyers(as defined in Rule 144A) in reliance on Rule 144A and outside the United States in offshore transactionsin reliance on Regulation S. See “Transfer Restrictions.” The prices at which the notes are offered may bechanged at any time without notice. The initial purchasers have sold a portion of the notes to or throughprivate banks and such private banks will receive compensation in the form of discounts, concessions orcommissions from the initial purchasers.

The notes have not been registered under the Securities Act or any state securities laws and may not beoffered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined inRegulation S) except in transactions exempt from, or not subject to the registration requirements of theSecurities Act. See “Transfer Restrictions.”

Accordingly, in connection with sales outside the United States, the initial purchasers have agreed that,except as permitted by the purchase agreement and set forth in the “Transfer Restrictions,” it will notoffer or sell the notes within the United States or to, or for the account or benefit of, U.S. persons: (i) aspart of its distribution at any time or (ii) otherwise until 40 days after the later of the commencement ofthe offering and the closing date, and it will have sent to each dealer to which it sells notes during the40-day restricted period a confirmation or other notice setting forth the restrictions on offers and sales ofthe notes within the United States or to, or for the account or benefit of, U.S. persons.

In addition, until 40 days after the commencement of this offering, an offer or sale of notes within theUnited States by a dealer that is not participating in this offering may violate the registrationrequirements of the Securities Act if that offer or sale is made otherwise than in accordance with Rule144A.

There is no established trading market for the notes. We intend to apply to list the notes on the EuroMTF, the alternative market of the Luxembourg Stock Exchange. The notes are expected to be eligiblefor trading in The PORTALSM Market, the Financial Industry Regulatory Authority’s screen-basedautomated market for trading of securities eligible for resale under Rule 144A. However, we cannotassure you that the prices at which the notes will sell in the market after this offering will not be lowerthan the initial offering price or that an active trading market for the notes will develop and continueafter this offering. The initial purchasers have advised us that they currently intend to make a market inthe notes. However, the initial purchasers are not obligated to do so and they may discontinue anymarket-making activities with respect to the notes at any time without notice. In addition, market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act.Accordingly, we cannot assure you as to the liquidity of the trading market for the notes.

In connection with the offering, the initial purchasers may purchase and sell notes in the open market.These transactions may include over-allotment, covering transactions and stabilizing transactions. Over-allotment involves sales of notes in excess of the principal amount of notes to be purchased by the initialpurchasers in this offering, which creates a short position for the initial purchasers. Covering transactionsinvolve purchases of the notes in the open market after the distribution has been completed in order tocover short positions. Stabilizing transactions consist of certain bids or purchases of notes made for the

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purpose of preventing or retarding a decline in the market price of the notes while the offering is inprogress. Any of these activities may have the effect of preventing or retarding a decline in the marketprice of the notes. It may also cause the price of the notes to be higher than the price that otherwisewould exist in the open market in the absence of these transactions. The initial purchasers may conductthese transactions in the over-the-counter market or otherwise. If the initial purchasers commence any ofthese transactions, they may discontinue them at any time.

In relation to each Relevant Member State, each initial purchaser has represented and agreed that witheffect from and including the Relevant Implementation Date, it has not made and will not make an offerof notes to the public in that Relevant Member State, except that it may, with effect from and includingthe Relevant Implementation Date, make an offer of notes to the public in that Relevant Member State:

(a) in (or in Germany, where the offer starts within) the period beginning on the date of publication of aprospectus in relation to those notes which has been approved by the competent authority in thatRelevant Member State or, where appropriate, approved in another Relevant Member State andnotified to the competent authority in that Relevant Member State, all in accordance with theProspectus Directive and ending on the date which is 12 months after the date of such publication;

(b) at any time to legal entities which are authorized or regulated to operate in the financial markets or,if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(c) at any time to any legal entity which has two or more of (I) an average of at least 250 employeesduring the last financial year; (2) a total balance sheet of more than 43,000,000 and (3) an annualnet turnover of more than 50,000,000, as shown in its last annual or consolidated accounts; or

(d) at any time in any other circumstances which do not require the publication by the Issuer of aprospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of notes to the public” in relation to anynotes in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the notes to be offered so as to enable an investor todecide to purchase or subscribe the notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State and the expression “ProspectusDirective” means Directive 2003/71/EC and includes any relevant implementing measure in eachRelevant Member State.

Each initial purchaser has represented and agreed that:

(a) in relation to notes which have a maturity of one year or more and which arc to be admitted to theOfficial List, during the period up to but excluding the date on which Directive 2003/71/EC/theProspectus Directive is implemented in the United Kingdom (the “Implementation Date”), it has notoffered or sold and will not offer or sell any notes to persons in the United Kingdom prior toadmission of such notes to listing in accordance with Part VI of the FSMA except to persons whoseordinary activities involve them in acquiring, holding, managing or disposing of investments (asprincipal or agent) for the purposes of their businesses or otherwise in circumstances which have notresulted and will not result in an offer to the public in the United Kingdom within the meaning ofthe Public Offers of Securities Regulations 1995 (as amended) or the FSMA;

(b) in relation to notes which have a maturity of one year or more and which are not to be admitted tothe Official List, during the period up to but excluding the Implementation Date, it has not offeredor sold and will not offer or sell any such notes to persons in the United Kingdom except to personswhose ordinary activities involve them in acquiring, holding, managing or disposing of investments

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(as principal or agent) for the purposes of their businesses or otherwise in circumstances which havenot resulted and will not result in an offer to the public in the United Kingdom within the meaningof the Public Offers of Securities Regulations 1995 (as amended);

(c) in relation to any notes which have a maturity of less than one year, (i) it is a person whose ordinaryactivities involve it in acquiring, holding, managing or disposing of investments (as principal oragent) for the purposes of its business and (ii) it has not offered or sold and will not offer or sell anynotes other than to persons whose ordinary activities involve them in acquiring, holding, managingor disposing of investments (as principal or as agent) for the purposes of their businesses or who it isreasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) forthe purposes of their businesses where the issue of the notes would otherwise constitute acontravention of Section 19 of the FSMA by the Issuer;

(d) it has only communicated or caused to be communicated and will only communicate or cause to becommunicated an invitation or inducement to engage in investment activity (within the meaning ofSection 21 of the FSMA) received by it in connection with the issue or sale of any notes incircumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantors;and

(e) it has complied and will comply with all applicable provisions of the FSMA with respect to anythingdone by it in relation to any notes in, from or otherwise involving the United Kingdom.

We have agreed to indemnify the initial purchasers against certain liabilities, including liabilities underthe Securities Act, or to contribute to payments that the initial purchasers may be required to makebecause of any of those liabilities.

The initial purchasers have provided and, in the future, may provide, investment banking services toaffiliates of the issuer for which they have received customary fees and commissions.

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Transfer restrictionsThe notes have not been registered under the Securities Act and may not be offered or sold within theUnited States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from,on in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, thenotes and guarantees are being offered and sold only:

(1) to qualified institutional buyers in compliance with Rule 144A under the Securities Act; or

(2) outside the United States to persons other than U.S. persons, in offshore transaction incompliance with Regulation S under the Securities Act.

The terms “United States,” “U.S. persons,” and “offshore transaction” used in this section have themeanings given to them under Regulation S. The term “qualified institutional buyer” used in this sectionhas the meaning given to it under Rule 144A.

Each purchaser of the notes offered (the “Restricted Notes”) will be deemed to have represented andagreed as follows (terms used in this paragraph that are defined in Rule 144A or Regulation S under theSecurities Act are used herein as defined therein):

(1) The purchaser is either: (A) a qualified institutional buyer and is aware that the sale to it is beingmade in reliance on Rule 144A and such qualified institutional buyer is acquiring such notes for itsown account or for the account of another qualified institutional buyer; or (B) not a U.S. person (asdefined in Regulation S under the Securities Act), and is purchasing the notes in accordance withRegulation S under the Securities Act. The purchaser acknowledges that the seller may be relying onthe exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A or otherexemptions under the Securities Act.

(2) The purchaser understands that the notes are being offered in a transaction not involving anypublic offering in the United States within the meaning of the Securities Act, that the notes have notbeen registered under the Securities Act or any U.S. securities laws and that (A) the notes may bereoffered, resold, pledged or otherwise transferred only (1) (a) to a person who the purchaserreasonably believes is a qualified institutional buyer in a transaction meeting the requirements ofRule 144A, (b) in a transaction meeting the requirements of Rule 144 under the Securities Act, ifavailable, (c) outside the United States to a person that is not a U.S. person (as defined in RegulationS under the Securities Act) in an offshore transaction meeting the requirements of Regulation Sunder the Securities Act, (d) to an “accredited investor” within the meaning of Rule 501(a) (1), (2),(3) or (7) under the Securities Act (an “Institutional Accredited Investor”) that is purchasing at least$250,000 of notes for its own account or for the account of an Institutional Accredited Investor(and based upon an opinion of counsel if we so request) or (e) pursuant to another availableexemption under the Securities Act, (2) to us or any of our subsidiaries or (3) under an effectiveregistration statement and, in each case, in compliance with any applicable securities laws of anyState of the United States or any other applicable jurisdiction and (B) the purchaser will, and eachsubsequent holder is required to, notify any later purchaser from it of the resale restrictionsdescribed in (A) above. If any resale or other transfer of any note is proposed to be made underclause (1) (d) above while these transfer restrictions are in force then the transferor shall deliver aletter from the transferee to us and the Trustee, as the case may be, which shall provide, amongother things, that the transferee is an Institutional Accredited Investor and that it is acquiring thenotes for investment purposes and not for distribution in violation of the Securities Act.

(3) The purchaser confirms that (A) the purchaser has requisite knowledge and experience infinancial and business matters so that it is capable of evaluating the merits and risks of purchasing

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notes, and the purchaser and any accounts for which it is acting are each able to bear the economicrisks of its or their investment, including a complete loss of the investment, (B) the purchaser is notacquiring notes with a view to any distribution of the notes in a transaction that would violate theSecurities Act or the securities laws of any State of the United States or another applicablejurisdiction; provided that the disposition of its property and the property of any accounts for whichthe purchaser is acting as fiduciary shall remain at all times within its control and (C) the purchaserhas received a copy of this offering memorandum and acknowledges that the purchaser has hadaccess to the financial and other information, and has been afforded the opportunity to askquestions of our representatives and receive answers to those questions, as it deemed necessary inconnection with its decision to purchase notes.

(4) The purchaser acknowledges that we and the initial purchasers and others will rely upon thetruth and accuracy of the foregoing acknowledgments, representations and agreements and agreesthat, if any of the foregoing acknowledgments, representations or agreements deemed to have beenmade by it are no longer accurate, it shall promptly notify BR Malls Finance, the guarantors of thenotes and the initial purchasers. If such purchaser is acquiring any notes as a fiduciary or agent forone or more investor accounts, such purchaser represents that it has sole investment discretion withrespect to each such account and that it has full power to make the foregoing acknowledgements,representations and agreements on behalf of each such account.

(5) If it is a purchaser in a sale that occurs outside the United States within the meaning ofRegulation S, it acknowledges that until the expiration of the “40-day distribution complianceperiod” within the meaning of Rule 903 of Regulation S, any offer or sale of the notes shall not bemade by it to a U.S. person or for the account or benefit of a U.S. person within the meaning of Rule902(k) of the Securities Act.

(6) The purchaser understands that the Restricted Notes will, until the expiration of the applicableholding period with respect to the Restricted Notes set forth in Rule 144(k) of the Securities Act,unless otherwise agreed by us and the holder thereof, bear a legend substantially to the followingeffect (the “Restricted Notes Legend”):

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTIONEXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BEREOFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCHREGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASEROF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BERELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THESECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS OR ANYSUBSIDIARY THAT (A) THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OROTHERWISE TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLERREASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED INRULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THEREQUIREMENTS OF RULE 144A, (II) IN A TRANSACTION MEETING THEREQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, (III)OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON IN ANOFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THESECURITIES ACT, (IV) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OFRULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN “INSTITUTIONALACCREDITED INVESTOR”) THAT IS PURCHASING AT LEAST $250,000 OF NOTES FOR

188

Transfer restrictions

ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITEDINVESTOR (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SOREQUEST), (V) PURSUANT TO ANOTHER AVAILABLE EXEMPTION UNDER THESECURITIES ACT, (VI) TO THE ISSUER OR ANY SUBSIDIARY OF THE ISSUER OR (VII)PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIESACT, IN EACH OF CASES (I) THROUGH (VII) IN ACCORDANCE WITH ANYAPPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONSREFERRED TO IN (A) ABOVE.

Each purchaser of the notes offered in reliance on Regulation S will be deemed to have represented andagreed that it is not a U.S. person and is purchasing such notes in an offshore transaction (as such termsare defined in Regulation S) pursuant to Regulation S and understands that such notes will, unlessotherwise agreed by us and the holder thereof, bear a legend substantially to the following effect (the“Regulation S Legend”):

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTIONORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOTBE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT ORBENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTIONFROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALLAPPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGSGIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

Restricted Notes may be exchanged for notes not bearing the Restricted Notes Legend but bearing theRegulation S Legend upon certification by the transferor in the form set forth in the Indenture that thetransfer of any such Restricted Notes has been made in accordance with Rule 904 under the SecuritiesAct.

Each purchaser of the notes will be deemed to have represented and agreed as follows:

(1) Either: (A) the purchaser is not a Plan (which term includes (i) an “employee benefit plan” asdefined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended(“ERISA”) that is subject to ERISA, (ii) a “plan” as described in section 4975(e)( 1) of the Code thatis subject to Section 4975 of the Code, or to provisions under applicable Federal, state, local,non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, orSimilar Laws, and (iii) an entity whose underlying assets are considered to include “plan assets”within the meaning of Section 3(42) of ERISA and Department of Labor Regulation, 29 C.F.R.Section 2510.3-101 of such plans) and it is not purchasing the notes on behalf of, or with the “planassets” of, any Plan; or (B) the purchaser’s purchase, and holding and subsequent disposition of thenotes either (i) are not and will not be a prohibited transaction under ERISA or the Code and areand will be otherwise permissible under all applicable Similar Laws or (ii) are and will remainentitled to exemptive relief from the prohibited transaction provisions of ERISA and the Code inaccordance with one or more available statutory, class or individual prohibited transactionexemptions, all the conditions of which are satisfied, and are and will be otherwise permissibleunder all applicable Similar Laws; and

(2) The purchaser will not transfer the notes to any person or entity, unless such person or entitycould itself truthfully make the foregoing representations and covenants.

189

Enforcement of judgmentsCayman IslandsWe have been advised by our Cayman Islands legal counsel, Maples and Calder, that there is nostatutory enforcement in the Cayman Islands of judgments obtained in New York or Brazil. However,the courts of the Cayman Islands, will recognize a foreign judgment as the basis for a claim at commonlaw in the Cayman Islands, provided such judgment is rendered by a competent foreign court, imposeson the judgment debtor a liability to pay a liquidated sum for which the judgment has been rendered, isfinal, is not in respect of taxes, a fine or penalty and was not obtained in a manner and is not of a kind ofenforcement of which is contrary to public policy of the Cayman Islands.

BrazilWe and the other guarantors are corporations (sociedade por ações) incorporated under the laws ofBrazil. All of our and the other guarantors’ assets are located outside the United States. All of our and theother guarantors’ directors, officers and certain of our and the other guarantors’ advisors named in thisoffering memorandum reside in Brazil. As a result, you may not be able to effect service of process uponus, the other guarantors or these other persons within the United States or to enforce U.S. courtjudgments against us, the other guarantors or these other persons to the extent that such actions arepredicated upon civil liability provisions of the federal securities laws of the United States.

Our Brazilian counsel, Machado, Meyer, Sendacz and Opice Advogados, has advised that finalconclusive judgments of United States courts for civil liabilities based upon the federal securities laws ofthe United States may be, subject to the requirements described below, enforced in Brazil. A judgment forthe payment of money against us, the other guarantors or the persons described above obtained outsideBrazil would be enforceable in Brazil without reconsideration of the merits, upon confirmation of thatjudgment by the Brazilian Superior Court of Justice (Superior Tribunal de Justiça), or STJ. Suchconfirmation would occur if the foreign judgment:➤ fulfills all formalities required for its enforceability under the laws of the jurisdiction where such

foreign judgment is granted;➤ is issued by a competent court after due service of process on us or sufficient evidence of our absence

has been given as required under applicable law;➤ is final and, therefore, not subject to appeal;➤ is authenticated by a Brazilian consular office with jurisdiction over the location where the foreign

judgment is issued and is accompanied by a sworn translation into Portuguese; and➤ is not contrary to Brazilian national sovereignty, public policy or public morality.

There can be no certainty that the confirmation will be obtained, that the process described above will beconducted in a timely manner or that Brazilian courts will enforce a judgment for violation of the UnitedStates securities laws with respect to the notes offered by this offering memorandum.

Our Brazilian counsel has further advised us that (i) original actions based on the federal securities lawsof the United States may be brought in Brazilian courts and that, subject to applicable law, Braziliancourts may enforce civil liabilities in such actions against us and the other guarantors, our and the otherguarantors’ directors and executive officers, and the advisors named in this offering memorandum; and(ii) the ability of a judgment creditor or the other persons named above to satisfy a judgment byattaching certain assets of ours and the other guarantors is limited by provisions of Brazilian law, giventhat assets are located in Brazil.

A plaintiff (whether or not Brazilian) residing outside Brazil during the course of litigation in Brazil mustprovide a bond to guarantee court costs and legal fees if the plaintiff owns no real property in Brazil thatcould secure such payment. The bond must have a value sufficient to satisfy the payment of court feesand defendant’s attorney fees, as determined by a Brazilian judge. This requirement does not apply to theenforcement of foreign judgments that have been duly confirmed by the STJ.

190

Legal matters

Machado, Meyer, Sendacz and Opice Advogados and Davis Polk & Wardwell will pass on certainBrazilian and U.S. legal matters, respectively, for us. Pinheiro Guimarães Advogados and Skadden, Arps,Slate, Meagher & Flom LLP will pass on certain Brazilian and U.S. legal matters, respectively, for theinitial purchasers.

191

Independent auditors

Our combined consolidated financial statements as of and for the years ended December 31, 2004, 2005and 2006 have been audited by PricewaterhouseCoopers Auditores Independentes in accordance withauditing standards applicable in Brazil, as stated in their reports included elsewhere in this offeringmemorandum. Our consolidated interim financial information as of June 30, 2007 and for the six-monthperiods ended June 30, 2006 (combined) and 2007 is also included in this offering memorandum.

192

Index to financial statements

Unaudited Interim Financial InformationConsolidated Balance Sheet as of June 30, 2007.............................................................................. F-2Consolidated Statements of Income for the Six Months Ended June 30, 2006 (combined) and

2007 ............................................................................................................................................ F-4Balance Sheet as of June 30, 2007 ................................................................................................... F-5Statements of Income for the Six Months Ended June 30, 2007....................................................... F-6Notes to the Financial Statements.................................................................................................... F-7Audited Financial StatementsReport of Independent Auditors ...................................................................................................... F-29Balance Sheets as of December 31, 2006, 2005 and 2004................................................................ F-30Statements of Income for the Years Ended December 31, 2006, 2005 and 2004.............................. F-31Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2006, 2005 and

2004 ............................................................................................................................................ F-32Statements of Changes in Financial Position for the Years Ended December 31, 2006, 2005 and

2004 ............................................................................................................................................ F-33Notes to the Financial Statements.................................................................................................... F-34

F-1

BR Malls Participações S.A.

Consolidated Balance Sheetat June 30 and March 31, 2007Expressed in thousands of reais

ConsolidatedJune 30,

2007March 31,

2007

Asset

Current assetsCash and cash equivalents ............................................................................. 5,594 8,254Marketable Securities (Note 4) ...................................................................... 512,014 52,048Accounts receivable (Note 5) ......................................................................... 27,059 17,207Recoverable taxes (Note 6)............................................................................ 6,577 9,377Deferred income taxes and social contribution (Note 7) ................................ 6,790 7,086Advances to condominium ............................................................................ 10,843 2,582Other............................................................................................................. 5,037 15,390

573,914 111,944

Non-current assetsAccounts receivable (Note 5) ......................................................................... 1,976 470Deposits and bonds ....................................................................................... 1,961 1,692Deferred Taxes Asset (Note 10)..................................................................... 81,046 34,830Marketable Securities (Note 4) ...................................................................... 14,552 14,552Other............................................................................................................. 4

99,539 51,544

Fixed assets

Investments (Note 9)

Good Will .............................................................................................. 285,947 331,991Other ..................................................................................................... 2,839 2,341

Property, plant and equipment (Note 11) ...................................................... 498,972 332,435Deferred charges............................................................................................ 2,754 485

790,512 667,252

1,463,965 830,740

The accompanying notes are an integral part of these financial statements.

F-2

BR Malls Participações S.A.

Consolidated Balance Sheet — (Continued)at June 30 and March 31, 2007Expressed in thousands of reais

ConsolidatedJune 30,

2007March 31,

2007

Liabilities and stockholders’ equity

Current liabilitiesLoans and financings (Note 12)..................................................................... 8,146 12,211Suppliers........................................................................................................ 1,133 1,179Taxes and contributions payable (Note 13) ................................................... 36,353 40,062Taxes and contributions—installments (Note 14) .......................................... 4,097 2,482Payroll and related charges ............................................................................ 2,775 772Dividends payable ......................................................................................... — —Liability on acquisition of shopping mall (Note 15)....................................... 18,909 23,733Other............................................................................................................. 4,830 5,751

76,243 86,190

Long-term liabilitiesLoans and financings (Note 12)..................................................................... 161,994 174,323Taxes and contributions—installments (Note 14) .......................................... 17,978 8,230Legal withholdings ........................................................................................ — —Liability on acquisition of shopping mall (Note 15)....................................... 34,098 26,141Provision for contingencies (Note 16) ............................................................ 8,767 7,794Advances of future capital increase ................................................................ 3,375 —Other............................................................................................................. 8,390 10,446

234,602 226,934

Deferred income ................................................................................................... 877 —

Minority interest................................................................................................... 2,932 2,881

Stockholders’ equity (Note 17)Capital .......................................................................................................... 1,174,844 517,725Capital reserve............................................................................................... 126 126Retained earnings .......................................................................................... (25,659) (3,116)

1,149,311 514,735

1,463,965 830,740

The accompanying notes are an integral part of these financial statements.

F-3

BR Malls Participações S.A.

Consolidated Statements of IncomeSix-month period ended June 30, 2007 and 2006Expressed in thousands of reais

2nd Quarter2007

Six-monthperiod endedJune 30, 2007

Six-monthperiod endedJune 30, 2006

(consolidated) (combined)

Rent and services revenue (Note 18) ........................................... 43,824 76,818 40,144(-) Taxes and contributions ......................................................... (2,602) (4,572) (2,910)

Net revenue ................................................................................ 41,222 72,246 37,234

Cost of rent and services (Note 19) ............................................. (9,526) (16,596) (12,192)

Gross profit ............................................................................... 31,696 55,650 25,042

Operating expensesCommercial expenses........................................................... (412) (1,187) (711)General and administrative expenses

(Note 20) ......................................................................... (8,697) (15,390) (3,425)Board of directors’ and administrative council’s fees ............Depreciation and amortization............................................. (12,088) (21,312) (254)Legal and tax expenses ........................................................ (2,926) (3,241) (94)

(24,123) (41,130) (4,485)

Financial results, net (Note 21) ................................................... (23,336) (30,737) (1,096)

Equity result ............................................................................... 1,505 1,505 —

Operating income ...................................................................... (14,258) (14,712) 19,462

Non-operating income (expenses), net......................................... 189 229 (81)Income before income taxes and employee profit sharing ........... (14,069) (14,483) 19,380

Income tax and social contribution ............................................. (1,571) (5,157) (5,802)Deferred income tax.................................................................... 731 —

Income before employee profit sharing ....................................... (15,640) (18,909) 13,578

Employee profit sharingMinority interest ......................................................................... 107 (74) (250)

Net income for the year ............................................................. (15,533) (18,983) 13,328

The accompanying notes are an integral part of these financial statements.

F-4

BR Malls Participações S.A.

Balance Sheet (Holding Company Only)at June 30 and March 31, 2007Expressed in thousands of reais

June 30,2007

March 31,2007

AssetCurrent assets

Cash and cash equivalents............................................................................... 88 1,104Marketable Securities...................................................................................... 493,181 —Accounts receivable ........................................................................................ 10 —Recoverable taxes ........................................................................................... 457 —Advances ........................................................................................................ 60 —

493,796 1,104

Non-current assetsAdvances for future capital increase................................................................ 116,933 —

116,933 —

Fixed assetsInvestments

Good Will................................................................................................ 192,650 259,972Other....................................................................................................... 343,806 253,519

Property, plant and equipment........................................................................ 2,131 2,035Deferred charges ............................................................................................. 778 55

539,365 515,581

1,150,094 516,685

Liabilities and stockholders’ equity

Current liabilitiesSuppliers ......................................................................................................... 260 321Taxes and contributions payable..................................................................... 174 —Payroll and related charges ............................................................................. 100 —Other .............................................................................................................. 180 1,629

714 1,950

Long-term liabilitiesOther .............................................................................................................. 69 —

69 —

Stockholders’ equityCapital............................................................................................................ 1,174,844 517,725Capital reserve ................................................................................................ 126 126Retained earnings ........................................................................................... (25,659) (3,116)

1,149,311 514,735

1,150,094 516,685

The accompanying notes are an integral part of these financial statements.

F-5

BR Malls Participações S.A.

Statements of Income (Holding Company Only)Six-month period ended June 30, 2007Expressed in thousands of reais

2nd Quarter2007

Six-monthperiod endedJune 30, 2007

Rent and services revenue ............................................................................. 50 50(-) Taxes and contributions ........................................................................... (4) (4)

Net revenue................................................................................................... 46 46

Cost of rent and services ............................................................................... 44 44

Gross profit .................................................................................................. 90 90

Operating expensesCommercial expenses............................................................................. (796) (796)General and administrative expenses...................................................... (2,289) (2,668)Board of directors’ and administrative council’s fees ..............................Depreciation and amortization............................................................... (5,985) (12,653)Legal and tax expenses........................................................................... (327) (330)

(9,397) (16,447)

Financial results, net ..................................................................................... (17,334) (17,336)

Equity result.................................................................................................. 11,143 14,744

Operating income ........................................................................................ (15,498) (18,949)

Non-operating income (expenses), net........................................................... 1Income before income taxes and employee profit sharing ............................. (15,498) (18,948)

Income tax and social contribution ............................................................... (35) (35)Net income for the year ................................................................................ (15,533) (18,983)

The accompanying notes are an integral part of these financial statements.

F-6

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATIONat June 30, 2007Expressed in thousands of reais

1 Operations

BR Malls Participações S.A. and its subsidiaries and joint subsidiaries (hereafter referred to as “theCompany”), which are part of the Quarterly Information have as their principal activities:(i) participation and management of shopping malls, (ii) participation in other companies that operate inthe real estate area, as stockholder or quotaholder, and (iii) promotion and management of real estateventures of any nature, of their own or of third parties.

On December 31, 2006, through a corporate restructuring, the Company became the owner of all theshares of Ecisa Engenharia S.A. (“Ecisa Engenharia”) and Ecisa Participações S.A. (“EcisaParticipações”), and used shares of the Company as payment for the shares acquired. This transactionrepresented the conclusion of the corporate restructuring process which had as its main purpose theintegration of the participation and management of shopping malls, through the unification of the capitalstructure, optimization of investments and cost reductions.

On March 31, 2007 the Company had participations in 11 shopping malls in different regions of Brazil:Norte Shopping (Rio de Janeiro), Shopping Iguatemi Caxias (Rio Grande do Sul), Shopping Villa Lobos(Sao Paulo), Shopping Del Rey (Minas Gerais), Shopping Independência (Minas Gerais), Shopping Recife(Pernambuco), Shopping Campo Grande (Mato Grosso do Sul), Goiânia Shopping (Goiás), ShoppingEstação (Paraná), Shopping Pantanal (Mato Grosso) and Araguaia Shopping (Goiás).

In the second quarter, the Company acquired participations in Shopping ABC (SP), Amazonas ShoppingCenter (AM), Shopping Center Iguatemi Belém (PA), Shopping Curitiba (PR), Shopping Center IguatemiMaceió (AL), Shopping Center Piracicaba (SP), and Natal Shopping (RN). On June 30, 2007, it had atotal of 18 participations in shopping malls.

F-7

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

The investments are as follows:

Corporate participation:

Holding - %

June 302007

SubsidiariesEcisa Engenharia S.A....................................................................................................... 100.00Ecisa Participações S.A. ................................................................................................... 100.00

Indirect subsidiaries (through Ecisa Engenharia S.A. and Ecisa Participações S.A.)Empresa Gerenciadora de Empreendimentos e Participações (“Egec”)............................. 100.00Egec Par II Participações Ltda. (“Egec Par II”)................................................................. 100.00Nattca 2006 Participações S.A. (“Nattca”)...................................................................... 100.00Dacom Gestão Comercial Ltda. (“Dacom G”)................................................................. 100.00Dacom Desenvolvimento e Avaliação Comercial de Shopping Centers Ltda.

(“Dacom D”)............................................................................................................... 100.00SPE Indianápolis Participações S.A. (“SPE Indianápolis”)................................................ 100.00Empresa Patrimonial Industrial IV S.A. (“EPI”)............................................................... 100.00Deico Desenvolvimento Imobiliário Ltda. (“Deico”) ....................................................... 99.99SDR Empreendimentos Imobiliários (“SDR”).................................................................. 99.80Empresa Cogeradora de Energia Ltda. (“Emce”) ............................................................. 99.80Campo Grande Parking Ltda. (“Campo Grande Parking”).............................................. 60.22GS Shopping.................................................................................................................... 65.50

Joint subsidiariesAdministradora Shopping Center Recife Ltda. (“ASCR”)................................................ 32.46Recife Parking Ltda. (“Recife Parking”) .......................................................................... 32.46Recife Locadora de Equipamentos para Autogeração Ltda. ............................................. 32.46Villa Lobos Parking Ltda. (“Villa Lobos Parking”).......................................................... 26.85SPE Mônaco Participações S.A. ....................................................................................... 50.00

Associated companySociedade Independência Imóveis (“SISA”)...................................................................... 8.00

F-8

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

Participations in Shopping Centers:

Holding - %

June 302007

Norte Shopping—Initial Phase and first expansion ................................................................. 51.00Norte Shopping—Second expansion ....................................................................................... 100.00Norte Shopping—Business Centre .......................................................................................... 100.00Norte Shopping—Parking place.............................................................................................. 63.90Shopping Iguatemi Caxias ...................................................................................................... 45.50Shopping Villa Lobos ............................................................................................................. 26.85Shopping Del Rey ................................................................................................................... 65.00Shopping Independência ......................................................................................................... 8.00Shopping Recife—Initial Phase ............................................................................................... 30.83Shopping Recife—Expansion.................................................................................................. 32.46Shopping Campo Grande ....................................................................................................... 65.50Shopping Campo Grande—Expansion.................................................................................... 64.00Goiânia Shopping ................................................................................................................... 45.6Shopping Estação ................................................................................................................... 100.00Pantanal Shopping.................................................................................................................. 10.00Araguaia Shopping ................................................................................................................. 50.00Natal Shopping....................................................................................................................... 45.00Shopping ABC........................................................................................................................ 0.68Shopping Curitiba .................................................................................................................. 35.00Shopping Center Iguatemi Belém ............................................................................................ 12.23Shopping Center Iguatemi Maceió .......................................................................................... 33.89Shopping Center Piracicaba .................................................................................................... 11.50Amazonas Shopping Center .................................................................................................... 17.16

(a) Antecedents to the corporate restructuring

(i) BR Malls

BR Malls Participações S.A., previously called Itatira Participações S.A., was formed on May 26, 2004with the partial spin-off of Cabinda Participações S.A. and its principal activity is to invest inconsortiums in Brazil or abroad that permits its involvement in the management of the companies inwhich it invests.

At the end of 2006, BR Malls acquired the share control of Ecisa Engenharia and Ecisa Participações,through specific purpose holdings created exclusively for this end, Licia Participações (“Licia”) and DylParticipações (“DylPar”). See more detailed information in Note 2—“Corporate Restructuring”.

F-9

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

(ii) Ecisa Engenharia and Ecisa Participações

Ecisa Engenharia was formed in 1949, as a joint stock company, and began its activities in the civilconstruction industry. During the first 30 years it dedicated itself mainly in the activities of buildingroads, viaducts, highways, tunnels, subways, bridges, dams, ports, foundations, home and commercialbuildings, hospitals and schools. With the growth of shopping malls in Brazil at the beginning of the80’s, Ecisa Engenharia started to focus its activities on this sector.

In October, 2005, part of Ecisa Engenharia’s operations was transferred to Ecisa Participações through asplit operation, as this company had predominantly the same operations as Ecisa Engenharia.

(iii) Egec, Dacom G and Dacom D

At the end of the 90’s, Ecisa Engenharia’s activities for the managment of shopping malls and thecommercialization of shops and spaces were transferred to companies formed for this specific objective,for which were created EGEC and Dacom for the rendering of services to shopping malls owned by EcisaEngenharia and shopping malls owned by third parties. On October 10, 2006, Ecisa Engenhariareacquired shareholding control of EGEC, Dacom G and Dacom D, and Ecisa Participações acquired, atthe same time, the remaining minority participation.

(iv) Other companies

Egec Par II, GS

The purpose of this company is the realization of real estate ventures, mainly shopping malls. Egec Par IIhas a 65.5% equity holding in GS Shopping which, in turn, holds a 59.1% real estate participation inShopping Center Goiânia.

Nattca

The purpose of this company is the realization of real estate ventures, mainly shopping malls, andparticipation in the capital stock of other companies. Nattca 2006 holds a 100% real estate participationin Shopping Estação, located in Curitiba.

SPE Indianápolis

The purpose of this company is, among others, the exploration and development of shopping malls, andthe participation in the capital stock of other companies. SPE Indianápolis has a 78.648% equity holdingin Cuiabá Participações S.A., which, in turn, holds 43.8% of Pantanal Plaza’s capital stock. This lastcompany has a 29% real estate participation in Pantanal Shopping. Consolidating these equity holdings,SPE Indianápolis holds indirectly approximately 10% of Pantanal Shopping.

SPE Indianápolis also holds debentures issued by Maia e Borba S.A., which are remunerated at 50% ofAraguaia Shopping’s net result.

F-10

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

EPI

The purpose of this company is, among others, the exploration and development of shopping malls, andthe participation in the capital stock of other companies. EPI has the following real estate participations:11.5% in Shopping Center Piracicaba, 12.2% in Shopping Center, Iguatemi Belém, 17.2% in AmazonasShopping Center, and 33.89% in Shopping Center Iguatemi Maceió.

Deico

Deico is a service provider that acts in the management of shopping malls, as well as in thecommercialization of shops and spaces in BR Malls' and third parties' shopping malls.

SDR

The purpose of this company is the realization of real estate ventures, mainly shopping malls, andparticipation in the capital of other companies. SDR has a 30% real estate participation in Shopping DelRey.

Emce

The purpose of this company is the rental of equipment that facilitates the co-generation of electricenergy, and its main client is NorteShopping.

Campo Grande Parking

The purpose of this company is the exploration of rotative parking at Shopping Campo Grande.

SPE Mônaco

BR Malls holds 50% of SPE Mônaco’s capital, a company whose purpose is, among others, theexploration, economic planning, development, commercialization, administration, management, andimplementation of shopping malls, and parking areas. SPE Mônaco holds 90% of Natal Shopping.ANCAR S.A. holds the remaining 50% of SPE Mônaco's capital.

ASCR

The company renders management services related to the operations of Shopping Recife.

Recife Parking and Recife Locadora

The purpose of these companies is the exploration of rotative parking activities at Shopping Recife.

Villa Lobos Parking

The purpose of this company is the exploration of rotative parking at Shopping Villa Lobos.

F-11

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

SISA

The purpose of this company is the organization, implantation and management of assets and propertiesand of ventures in the commercial area, mainly shopping malls. SISA holds 100% of the real estateparticipation of Shopping Independência.

2 Corporate restructuring

On November 13, 2006, Licia subscribed shares issued to increase the capital of Ecisa Engenharia and ofEcisa Participações, representing 28.8% of the capital of Ecisa Engenharia and of Ecisa Participações. Atthe time, all the BR Malls' shares were held by Grupo GP (through Private Equity Partners A, LLC andPrivate Equity Partners B, LLC) and by Equity International, and started to have an indirect participationin Ecisa Engenharia and in Ecisa Participações.

On December 20, 2006, Licia acquired all the shares issued by Dylpar, which, in turn, had aparticipation of 26.2% in Ecisa Engenharia's and of Ecisa Participações' capital.

Due to operations realized in the context of a corporate restructuring implemented at the end ofDecember 2006, Licia and Dylpar were split and afterwards incorporated by Ecisa Engenharia and byEcisa Participações, so that BR Malls started to hold directly 55% of the capital of Ecisa Engenharia andof Ecisa Participações.

On December 29, 2006, all the shares issued by Ecisa Engenharia and by Ecisa Participações (except forthose held by BR Malls) were incorporated by BR Malls, converting: (i) Ecisa Engenharia and EcisaParticipações into integral subsidiaries of BR Malls and (ii) the previous shareholders of Ecisa Engenhariaand of Ecisa Participações into shareholders of BR Malls.

3 Summary of the Principal Accounting Practices

The accounting practices and the quarterly information were prepared in conformity with accountingpractices adopted in Brazil, based on Brazilian Corporate Law and on the standards and instructions ofthe Brazilian Securities Commission (CVM).

(a) Use of estimates

For the preparation of the financial statements, it is necessary to use estimates to account for certainassets, liabilities and other transactions. The Company's quarterly information include, therefore,estimates related to the determination of the useful life of fixed assets, provisions necessary forcontingent liabilities, determination of provisions for income tax and others. Since they are estimates, it isnormal that variations could occur on the effective realization or liquidation of the corresponding assetsand liabilities provided for.

F-12

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

(b) Calculation of the results

The accrual basis is used to determine the results of operations. Receipts and expenses arise substantiallyfrom the exploration of shopping malls. The Company recognizes on a proportional basis itsparticipation in the rents paid and corresponding costs passed on by the joint owners, based on theparticipation percentage it has in these ventures.

The income arises from three main activities: (i) ownership of shopping malls, through the rental ofshops and spaces in the Mall and Merchandising and the exploration of parking spaces, (ii) rendering ofmanagement and consulting services for shopping malls realized by an EGEC subsidiary and(iii) rendering of services for the commercialization of shops and spaces of Mall and Merchandising,through the DACOM and Deico subsidiaries. The main source of income arises from a proportionalparticipation in the results generated by the shopping malls.

(c) Cash and cash equivalents and financial investments

The financial investments are stated at the amount invested, plus the contracted and pro rata recognizedremuneration until the balance sheet date, not exceeding their market value.

(d) Accounts receivable

These include the rents receivable, as well as the management and assignment fees of the shopkeepers ofthe shopping malls. These are recorded at historical amounts, reduced by the respective provisions fordoubtful receivables. Management considers the provision sufficient to cover possible losses, havingadopted the criteria to provision for substantially all receivables overdue for more than one year.

(e) Investments

The investments in associated and subsidiary companies are accounted for on the equity method. Theinvestments in the subsidiaries are totally consolidated.

Other investments are recorded at cost of acquisition, reduced, if applicable, by a provision foradjustment to realizable amounts.

The goodwill calculated on the acquisition of the investments in Ecisa Engenharia and EcisaParticipações and in the acquisitions by these companies of investments in EGEC, Dacom D, Dacom G,Egec Par II, Deico, EPI and Cuiabá (Through SPE Indianápolis) is based on the future profitability ofthese companies and are being amortized on a linear basis (See Note 9).

(f) Property, plant and equipment

Are recorded at cost less the respective accumulated depreciation. Depreciation is calculated on thestraight-line basis at annual rates considered compatible with the useful and economic life of the assets aslisted in Note 11. The financial charges related to third party loans used for investments in fixed assetsare included in the property, plant and equipment account.

F-13

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

(g) Other receivables, current and long-term

These are recorded at cost or realization amounts, including, when applicable, accrued earnings.

(h) Loans and financings

These are recorded based on the applicable monetary and exchange variations incurred up to the end ofthe period.

(i) Income tax and social contribution

These are calculated monthly based on the taxable profit, except for certain subsidiaries and jointsubsidiaries, whose taxes are calculated based on the presumed profit.

The social contribution is calculated at the rate of 9% on the income adjusted according to theprovisions of current law. The provision for income tax is recorded at the gross amount, applying thebase rate of 15%, plus an additional of 10%.

For the companies that opted for the presumed profit method, the calculation basis for income tax iscalculated at the rate of 32% on the income arising from rents and the rendering of services and 100%on the financial income; the social contribution on the net profit is calculated at the rate of 32% on grossrevenue, on which the nominal rates are applied.

(j) Other liabilities, current and long-term

These are recorded at their known or estimated amounts, including, when applicable, the respectivecharges and monetary or exchange variations.

4 Financial Investments (Parent Company and Consolidated)

These investments correspond to operations with first-class national financial institutions in bank depositcertificates, investment funds and fixed income operations based on debentures, remunerated, mainly, bythe Interbank Deposit Certificate—CDI variation, at normal market rates and conditions, and for whichthere is no fine or other restrictions for their immediate liquidation, as follows:

Parent Company

Investment Rate InstitutionJune 30

2007

Fixed Income (i).................................................. Banco UBS Pactual S/A 493,181

Current............................................................... 493,181

F-14

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

Consolidated

Investment Rate InstitutionJune 30

2007March 31

2007

Fixed Income (i) ................. Banco UBS Pactual S/A 495,740 —100%to 100.5% CDI Bradesco Leasing 711 5,431

100.5% CDI Unibanco Leasing 14,210 32,700100.3% CDI Santander Leasing 529 3,077

99.5% and 100.3%CDI Itaú Leasing 506 10,840

Unibanco Grand Cayman 193 —Others 125 —

Debentures (ii) ................... Maia e Borba S.A. 14,552 14,552

526,566 66,600

Current .............................. 512,014 52,048Long-term.......................... 14,552 14,552

526,566 66,600

(i) The investment managed by Banco UBS Pactual S.A. refers to an exclusive investment fund, withinvestments in government securities, bank deposit certificates and first-class financial institutions.

(ii) The debentures refer to the participation in Shopping Araguaia.

5 Accounts receivable (consolidated)June 30

2007March 31

2007

Rents .......................................................................................................................... 20,182 18,123Rendering of accounts CPI (i) ..................................................................................... 3,853 2,949Assignment rate (ii)..................................................................................................... 9,024 4,247Promissory notes ........................................................................................................ 487 309Others ........................................................................................................................ 5,630 938

39,176 26,566Provision for doubtful accounts receivable.................................................................. (10,141) (8,889)

29,035 17,677

Current....................................................................................................................... 27,059 17,207Long-term .................................................................................................................. 1,976 470

29,035 17,677

(i) Represent the accounts receivable from Condomínios Pró Indiviso (“CPI”), formed by the amountsrelated to rents already received by the joint owner (shopping) but not yet passed on to the jointowners. This transfer by the joint owners is net of the amounts paid by the joint ownership relatedto its operating expenses and investments, when applicable.

(footnotes continued on following page)

F-15

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

(ii) Represents the accounts receivable related to the assignment of rights to use the shops and otherspaces in the shopping malls by the shopkeepers.

The balance of accounts receivable by maturity on June 30, 2007 was as follows:

June 302007

Falling due................................................................................................................................... 4,257Due up to 60 days ....................................................................................................................... 21,430Due up to 90 days ....................................................................................................................... 3,983Due up to 180 days ..................................................................................................................... 677Due up to 360 days ..................................................................................................................... 1,526Due for more than 360 days ........................................................................................................ 7,303

39,176

6 Recoverable Taxes (Consolidated)June 30

2007March 31

2007

Prepaid IR and CSSL .................................................................................................... 134 4,803PIS, COFINS and other taxes ....................................................................................... 1,149 4,066IRPJ and CSLL recoverable .......................................................................................... 5,294 508

6,577 9,377

7 Deferred Income Tax and Social Contribution (Consolidated)

Represents the deferred income tax and social contribution related to certain taxes payable mentioned inNote 10.

8 Advance for Future Capital Increase (Parent Company)

BR Malls had, on June 30, 2007, an advance for future capital increase amounting to R$116,933 fromits subsidiary Ecisa Engenharia. The Company intends to pay up this amount over a period of one year.

F-16

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

9 InvestmentsParent company

Total

Investment Premium AmortizationJune 30

2007March 31

2007

Ecisa Engenharia (i) .......................................... 124,317 104,652 (5,233) 223,736 228,667Ecisa Participações (ii) ...................................... 194,588 100,648 (7,417) 287,819 284,824SPE Mônaco Participações S.A.......................... 24,901 — — 24,901 —

343,806 205,300 (12,650) 536,456 513,491

Consolidated

Total

Investment Premium AmortizationJune 30

2007March 31

2007

Ecisa Engenharia (i) .......................................... — 104,652 (5,233) 99,419 107,268Ecisa Participações (ii) ...................................... — 100,648 (7,417) 93,231 152,259EGEC (iii) ......................................................... — 34,165 (1,708) 32,457 33,311Dacom D (iv) .................................................... — 19,597 (980) 18,617 19,107Dacom G (v) ..................................................... — 1,389 (69) 1,320 1,354Egec Par II (vi) .................................................. — 2,374 (165) 2,209 2,374Deico (vii) ......................................................... — 5,562 (278) 5,284 5,562EPI (viii) ........................................................... — 22,137 (369) 21,768 —Cuiabá Participações (ix) .................................. 1,606 10,424 (392) 11,638 10,310SISA (x) ............................................................ 2,825 — — 2,825 2,341Others .............................................................. 17 — — 17 446

4,448 300,948 (16,611) 288,785 334,332

The premium amount is based on the expectation of future profitability of the acquired companies. Allthe amortization terms are of 10 years, except for the premium of EGEC Par II, whose term is 9 years.

(i) The Company has 885,087 common shares, which represents 100% of this company’s capital.(ii) The Company has 885,087 common shares, which represents 100% of this company’s capital. The

increase in the balance during the quarter is due to the increase in the share premium reserverecorded during the period (See Note 10).

(iii) The Company has, through its subsidiaries, 150,000 common shares, which represents 100% ofthis company’s capital.

(iv) The Company has, through its subsidiaries, 1,000 common shares, which represents 100% of thiscompany’s capital.

(v) The Company has, through its subsidiaries, 1,000 common shares, which represents 100% of thiscompany’s capital.

(footnotes continued on following page)

F-17

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

(vi) The Company has, through its subsidiaries, 5,430,078 common shares, which represents 100% ofthis company’s capital.

(vii) The Company has, through its subsidiaries, 99,999 common shares, which represents 99.99% ofthis company’s capital.

(viii) The Company has, through its subsidiaries, 9,951 common shares, which represents 100% of thiscompany’s capital.

(ix) The Company has, through its subsidiaries, 26,000,100 common shares, which represents 100% ofthis company’s capital.

(x) The Company has, through its subsidiaries, 256 common shares, which represents 8% of thiscompany’s capital.

10 Deferred Tax Credits (Consolidated)

As mentioned in Note 1(a), in October and November 2006, Grupo GP and Equity Internationalacquired a stockholding in Ecisa Engenharia and Ecisa Participações. These acquisitions were effectedthrough two companies with holding characteristics (Licia and Dylpar) and generated a premium initiallyrecorded in these holdings. In December, 2006 these holdings were incorporated by the operatingcompanies Ecisa Engenharia and Ecisa Participações.

Under the terms of CVM Instructions No. 349 and 319, the premium incorporated in Ecisa Engenhariawas reduced by 66%, with a counter entry in the Capital Reserve of this company, so as to reflect onlythe tax benefit that will be generated by the premium amortization. On June 30, 2007, the balanceamounted to R$32,562.

The premium related to Ecisa Participações until the quarter ended March 31, 2007 was fully providedfor, since this company is under the presumed profit taxation method. This tax regime was changed totaxable profit as of the second quarter of 2007. This fact occasioned the reversal of the provision, and anamount of R$47,916 was recorded with the counter entry in the Capital Reserve of this company, inorder to reflect only the tax benefit that will be generated by the premium amortization. On June 30,2007, the balance amounted to R$80,978.

F-18

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

11 Property, Plant and Equipment (Consolidated)

Depreciationrate -%

Historiccost

Accumulateddepreciation

June 302007

March 312007

Land ............................................................... 58,450 58,450 53,191Buidings and improvements (ii) ....................... 4(i) 497,589 (74,973) 422,616 206,697Machines and equipment ................................ 15 5,968 (4,553) 1,415 10Furniture and utensils ..................................... 10 1,883 (795) 1,088 348Installations .................................................... 10 4,052 (636) 3,416 315Equipment for data processing ........................ 20 2,299 (1,346) 953 291Other .............................................................. 20 1,111 (477) 634 250

571,352 (82,780) 488,572 261,102Purchase of equipment .................................... — —Works in progress (iii)..................................... 10,400 71,333

Total ............................................................... 498,972 332,435

(i) For the properties of the shopping malls acquired up to December 31, 2006, the Company adopteddifferent depreciation rates, in accordance with the reports of experts approved by the NationalInstitute of Technology (INT). The rate presented corresponds to the weighted average calculatedfor the period.

(ii) The increase in the balance of the improvements in the quarter refers mainly to the acquisition ofparticipations in Shoppings Curitiba, Amazonas, Maceió, Belém, Piracicaba and Natal.

(iii) The works in progress on March 31, 2007 and June 30, 2007 refer mainly to the expansion of NorteShopping.

F-19

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

12 Loans and Financings (Consolidated)

Interest rateJune 30

2007March 31

2007

Financings—local currencyItaú ......................................................................... IGPM + 9.75% p.a. 2,848 6,767Banco ABC do Brasil S.A......................................... CDI + 0.38% p.a. — 1,817Unibanco................................................................. IGPM + 9.7% p.a. 3,945 974Banco do Nordeste do Brasil ................................... 11.5% p.a. 466 148

7,259 9,706

Financings—foreign currencySafra N. Bank of New York .................................... 12.25% p.a. 887 1,890Citibank.................................................................. 12% p.a. — 615

887 2,505

Current ................................................................... 8,146 12,211

Financings—local currencyUnibanco (maturity—2019) .................................... IGPM + 9.7% p.a. 69,162 70,153Itaú (maturity—2019) ............................................. IGPM + 9.75% p.a. 70,223 64,338Banco ABC do Brasil S.A......................................... CDI + 0.38% p.m. — 15,662Banco do Nordeste do Brasil ................................... 11.9% p.a. 3,349 3,666

142,734 153,819Financings—foreign currencyCitibank (maturity—2008)...................................... 12% p.a. 19,260 20,504

Other ...................................................................... 161,994 174,323

Guarantees:

‰ Promissory notes, fiduciary assignment of rights and mortgage on the property fraction.

The loans and financings in foreign currency are restated by the US dollar variation.

The non-current loans and financings have the following terms:

June 302007

March 312007

2008 (as of June 30) ................................................................................ 29,606 45,5332009........................................................................................................ 20,221 38,8362010........................................................................................................ 18,520 26,6422011........................................................................................................ 16,154 26,570From 2012 on ......................................................................................... 77,493 36,742

161,994 174,323

F-20

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

13 Liabilities for Acquisitions (Consolidated)

The amounts of R$18,911 in current liabilities (March 31, 2007—R$23,733) and R$34,097 in long-termliabilities (March 31, 2007—R$26,141), refer to: (i) obligations assumed by SDR EmpreendimentosImobiliários S.A. relating to the purchase of 30% of Shopping Del Rey, located in Belo Horizonte. TheCompany paid R$38,500, of which R$7,700 was a downpayment and the remaining amount is payablein 48 monthly consecutive installments, restated by the INPC, and with 0.6434% interest per month(R$27,792 on June 30, 2007), (ii) obligations assumed by GS Shopping relating to the purchase of partof the properties and improvements of Goiânia Shopping. The price paid was R$22,600, of whichR$4,500 was a downpayment and the remaining amount is payable in 48 monthly consecutiveinstallments (R$6,305 on June 30, 2007) and, (iii) obligations assumed by GS Shopping and InvestMallParticipações relating to the purchase of part of the properties and improvements of Goiânia Shopping, atransaction amounting to R$13,014 on June 30, 2007, with R$600 as the downpayment and theremaining amount is payable in 12 monthly consecutive installments, (iv) obligations assumed by EPIrelating to the purchase of 6.8% of Shopping Amazonas, a transaction amounting to R$7,267, withR$1,353 as the downpayment and the remaining amount is payable in 3 monthly consecutiveinstallments payable up to August 15, 2007 (R$3,207 on June 30, 2007), (v) obligation assumed on theacquisition of Deico, amount relative to the second installment (R$2,690 on June 30, 2007).

14 Taxes and Contributions Payable (Consolidated)

June 302007

March 312007

PIS and COFINS (i).................................................................................... 18,488 13,821Provision for IRPJ/CSLL (ii)....................................................................... 11,958 19,341Social contributions (iii) ............................................................................. 5,490 5,301Others........................................................................................................ 417 1,599

36,353 40,062

(i) Refer to the contributions to the Employees’ Profit Participation Program—PIS and the Tax forSocial Security Financing—COFINS payable, incident on the income arising from rents and on otheractivities of the group, and also to cumulative COFINS on the income from rents for the period afterJanuary, 2004.

(ii) Refers to the taxes incident on the results of the Group and to deferral of taxes on exchangevariation expenses for the year 2003 (R$7,439).

(iii) Refer substantially to social contributions on the contracting of corporate entities.

F-21

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

15 Taxes and Contributions—Installments (Consolidated)

June 302007

March 312007

Income tax (i) ............................................................................................ 629 629Social contribution (i) ................................................................................ 231 231COFINS (ii) ............................................................................................... 1,622 1,622IPTU (iii).................................................................................................... 1,615 —

Current ...................................................................................................... 4,097 2,482

Income tax (i) ............................................................................................ 1,358 1,469Social contribution (i) ................................................................................ 498 539COFINS (ii) ............................................................................................... 5,810 6,222IPTU (iii).................................................................................................... 10,312 —

Long-term .................................................................................................. 17,978 8,230

22,075 10,712

(i) Ecisa Engenharia Comércio e Indústria S.A. joined the Fiscal Debts Installment Payment Program in2005 for Income Tax and Social Contribution and is paying amounts due in 60 installments up toJune 30, 2010.

(ii) Ecisa Engenharia Comércio e Indústria S.A. obtained the payment, in 60 installments, of part of theamount due relating to COFINS, for the period after introduction, by Act No 10.833/03, of thenon-cumulative regime, which terminates on February 28, 2012. The charges incident on bothinstallment payments is based on the Long-Term Interest Rate—TJLP.

(iii) Municipal Real Estate Tax—IPTU of Shopping Estação

On acquiring Shopping Estação, Nattca became responsible for paying an IPTU debt with theMunicipality of Curitiba amounting to R$11,297, restated until June 30, 2007. This debt was dividedinto installments to be paid by Nattca up to 2014, which are being paid since February, 2007. Theamount of the installments was adjusted with a counter entry to the cost of acquisition of the shopping.

16 Provision for Contingencies (Consolidated)

June 302007

March 312007

Tax (i) ........................................................................................................ 8,767 6,954Civel ........................................................................................................... — 840

8,767 7,794

(i) This substantially relates to COFINS on rents for the period from May 2001 to January 2004.

The Company is exposed to tax, labor and civil contingencies, which are classified as probable, possibleor remote according to the risk of loss. The contingencies which are considered as of probable loss bymanagement and the legal external and internal advisors are provided for.

F-22

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

17 Stockholders' Equity (parent company)

(a) Capital

On June 30, 2007, the capital amounted to R$1,174,844, divided into 143,966,139 common, allnominal with no par value.

The Company is authorized to increase capital up to 176,000,000 shares, common or preferred,independently of changes in the by-laws, based on a resolution of the Administrative Council.

The capital at June 30, 2007 is held as follows:

June 30, 2007

Stockholders Shares

Totalcapital

(%)

EI Brazil Investments, LLC ................................................................. 27,500,000 19.10Private Equity Partners A, LLC........................................................... 25,913,390 18.00Private Equity Partners B, LLC........................................................... 1,586,610 1.10Richard Paul Matheson ...................................................................... 19,790,039 13.75Dyl Empreendimentos e Participações S.A. ......................................... 19,790,038 13.75Leonardo Matheson Drummond ........................................................ 2,000,029 1.39Hugo Matheson Drummond .............................................................. 2,000,029 1.39Antonio Wadih Arbex ........................................................................ 1,419,860 0.99Carlos Medeiros ................................................................................. 158,228 0.10Other ................................................................................................. 43,807,916 30.43

Total .................................................................................................. 143,966,139 100.00

In the second quarter of 2007, the Initial Public Offer—IPO of the Company’s shares was concluded, andcapital was increased by R$657,119.

(b) Dividends

The by-laws assure the shareholders a minimum dividend which corresponds to 25% of net profit,determined each year, adjusted in accordance with the effective law.

18 Operating Income (consolidated)

June 302007

Rents ........................................................................................................................... 49,475Assignment charge....................................................................................................... 6,196Parking........................................................................................................................ 9,445Transfer charge............................................................................................................ 202Services provided ......................................................................................................... 11,245Other........................................................................................................................... 255

76,818

F-23

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

Composition of the revenue per shopping mall:

June 302007

Norte Shopping ........................................................................................................... 18,377Shopping Center Recife ............................................................................................... 11,176Shopping Estação ........................................................................................................ 7,779Shopping Del Rey ........................................................................................................ 7,025Shopping Campo Grande............................................................................................. 5,428Shopping Goiânia ........................................................................................................ 4,590Shopping Caxias do Sul ............................................................................................... 1,842Shopping Maceió......................................................................................................... 1,021Other........................................................................................................................... 5,702Services provided ......................................................................................................... 13,878

76,818

19 Operating Costs (Consolidated)

June 302007

Personnel ..................................................................................................................... 2,719Services provided ......................................................................................................... 3,149Condominium costs ..................................................................................................... 3,183Funds for promotion costs ........................................................................................... 767Financial costs ............................................................................................................. 198Tax costs ..................................................................................................................... 337Commercial costs ........................................................................................................ 231Depreciation and amortization .................................................................................... 4,358Other costs .................................................................................................................. 1,654

16,596

Composition of costs per shopping mall:

June 302007

Norte Shopping ........................................................................................................... 3,579Shopping Center Recife ............................................................................................... 2,017Shopping Estação ........................................................................................................ 863Shopping Del Rey ........................................................................................................ 1,540Shopping Campo Grande............................................................................................. 1,728Shopping Villa Lobos .................................................................................................. 1,821Shopping Goiânia ........................................................................................................ 813Shopping Caxias do Sul ............................................................................................... 464Shopping Maceió......................................................................................................... 246Others ......................................................................................................................... 1,089Services provided ......................................................................................................... 2,436

16,596

F-24

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

20 Administrative Expenses (Consolidated)June 30

2007

Personnel ..................................................................................................................... 6,949Services provided ......................................................................................................... 4,218Services provided—IPO (i) ........................................................................................... 2,446Materials for use and consumption.............................................................................. 135Services provided—concessionaries.............................................................................. 196Other administrative expenses ..................................................................................... 1,446

15,390

(i) Services provided- IPO refers to the administrative expenses arising from the distribution of theGlobal Shares Offer.

21 Financial Result (Consolidated and Parent Company)June 30, 2007

Parentcompany Consolidated

Financial investments .......................................................................... 11,964 12,801Charges on loans and financings ......................................................... (3,500) (23,831)Hedge operations ................................................................................ — 385Exchange variation.............................................................................. 262 2,676Brokerage fee—IPO (i) ........................................................................ (26,064) (26,064)Monetary variation and others ............................................................ 2 3,296

(17,336) (30,737)

(i) The brokerage fee refers to expenses arising from the distribution of the Global Shares Offer

22 Financial Instruments

On June 30, 2007, the Company had interest rates swap transactions relating to the loan from Unibanco(See Note 12), whose purpose is to exchange the original loan rate (fixed rate—13.7% p.a.) for avariable rate (IGPM plus 9.7% p.a.). On that date, the Company did not have any other operationsinvolving derivative financial instruments.

23 Insurance

The Company mantains a risk management program whose purpose is to delimit the risks, and search inthe market covers compatible with its size and its operations. The covers were contracted for theamounts indicated below, and management considers them sufficient to cover possible losses, taking intoconsideration the nature of its activity, the risks involved in its operations and the guidance of itsinsurance advisors.

F-25

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

The main insurance policies with third-parties on June 30, 2007 are as follows:

TypeAmountInsured

Nominated risks ..................................................................................................... 175,550Loss of profits......................................................................................................... 259,883Civil responsibilities................................................................................................ 220,600Fire ......................................................................................................................... 1,108,562

24 Stock Option Plan

Within the ambit of the Option Plan approved at the Board of Directors Meeting held on February 9,2007, is the First Stock Option Plan (“1st Program”), which grants options to the main executives of theCompany (“1st Program Options”). The chart below presents the total of shares subject to the 1st

Program:

Beneficiary

Total of sharessubject tocall optioncontracts

Exercise priceby share(restated

annually byIGP-M FGV

plus aspread of 3%)

Members of Management........................................................... 3,401,899 R$6.32

The options of the 1st Program can be exercised as from January 1st, 2008, as follows: (i) 2,373,418shares in four annual lots of approximately 25% of the total; and (ii) 1,028,481 shares in five annual lotsof approximately 20% of the total. If any executive leaves the company during the exercise term of the1st Program Options, all the options whose exercise term has not yet terminated will automaticallyexpire.

The 2nd Option Plan Program was approved at the Board of Directors Meeting held on May 29, 2007.The beneficiaries of this program are the professional members of management indicated by the Board.

The chart below presents the total shares subject to the 2nd Program:

Beneficiary

Total of sharessubject to call

optioncontracts

Exercise priceby share(restated

annually byIGP-M FGV

plus aspread of 3%)

Members of Management and the Employees Indicated by theBoard...................................................................................... 1,800,000 R$15.00

The option must be exercised by the beneficiary over a period of up to 5 years, starting in 2008, and theexercise must occur on April 5 of each year or on the subsequent first working day, in 5 equal annuallots, each one equivalent to 20% of the total of the option granted (the Annual Lots).

F-26

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

25 Subsequent Events

After June 30, 2007, the Company took part in the following acquisition processes:

(a) Graúna

Company founded by the stockholders of Tamboré S.A, with the purpose of holding 100% of thenotional fractions and improvements that comprise the Shopping Center Tamboré. Graúna’s shares weresubject to the contract for purchase and sale of control entered into on July, 1st 2007 with Egec Par II. Itcarries out activities such as: management of its own properties; shopping mall operations; parkingoperations; rental of properties; and holdings in non-financial companies, corporations, private limitedcompanies or co-limited partnerships, as stockholder or partner. Graúna’s capital stock, which is totallysubscribed and paid-up, amounts to R$36,621,598, represented by 36,621,598 shares, all common,nominal and with no par value.

(b) Fashion Mall, Ilha Plaza, Niterói Plaza and Rio Plaza

The holdings in the shoppings Fashion Mall (82.4%), Ilha Plaza (82.50%), Niterói Plaza (100%) andRio Plaza (100%) were purchased on July 16, 2007. The Company‘s participations in these ventureswere realized through the acquisition of shares or quotas of companies that hold notional fractions insuch enterprises, and in the case of Rio Plaza Shopping, the company acquired owns the rights to operatethis venture for 50 years. Although such acquisitions had been realized on July 16, 2007, effectivetransfer of these companies’ shares or quotas will take place, as applicable, on July 3, 2007, so that theCompany will only have the right to the shopping malls’ results as from that date.

(c) Minas Shopping and Big Shopping

On July 3, 2007, BR Malls purchased, through its subsidiary SPE Indianápolis Participações S.A., thetotality of quotas that constitute the Exímia Comercial e Empreendimentos Ltda’s capital stock, acompany whose assets include participations in Big Shopping (13%) and in Minas Shopping (0.98%).

(d) Top Shopping

On June 22, 2007, BR Malls entered into an agreement for the share purchase relating to 35% of thenotional fractions and improvements that comprise Top Shopping, and also to 35% of notional fractionsof the land intended for future expansion of the shopping, an area with 12,348 m². The execution of thefinal Deed of Purchase and Sale should take place within a period of 120 days as of that date.

(e) Issue of Debentures

On July, 26 2007, the Brazilian Securities Commission (CVM) authorized the Company to issuedebentures totaling R$320 million. The securities will be issued in two series. The first, amounting toR$50 million, will have maturities on June 15, 2014 and will pay interest of 0.5% above the InterbankDeposit Rate. The second, amounting to R$270 million, will have maturities on July 15, 2016 and willpay interest of 7.9% above the Amplified Consumer Price Index—IPCA.

F-27

BR Malls Participações S.A.

NOTES TO QUARTERLY INFORMATION — (Continued)at June 30, 2007Expressed in thousands of reais

(f) Loan contracts

On August 1, the Company entered into a bridge-loan amounting to R$550 million with the financialinstitutions Itaú BBA, UBS Pactual and Citibank, with the purpose of financing the purchase of holdingsin Fashion Mall, Ilha Plaza, Niterói Plaza and Rio Plaza. This loan was initially contracted for a 360-dayrepayment term. The interest on this loan is subject to variable interest rates as follows: (i) Itaú IBBA -0.49% per month, representing 5.885 per year; (ii) UBS Pactual - 0.51145% per month, representing6.1741 per year; and (iii) Citibank - 0.5233% per month until January 28, 2008, representing 6.28% peryear, and 0.54% per month thereafter, representing 6.48% per year. The Company, at its discretion,may request the repayment term to be extended for five years.

* * *

F-28

BR Malls Participações S.A.

Report of Independent Auditors

To the Board of Directors and StockholdersBR Malls Participações S.A.

1 We have audited the accompanying combined consolidated balance sheets of BR Malls ParticipaçõesS.A. and its subsidiaries as of December 31, 2006, 2005 and 2004 and the related combinedconsolidated statements of income, of changes in stockholders’ equity and of changes in financialposition for the years then ended. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements.

2 We conducted our audits in accordance with approved Brazilian auditing standards, which requirethat we perform the audit to obtain reasonable assurance about whether the financial statements arefairly presented in all material respects. Accordingly, our work included, among other procedures:(a) planning our audit taking into consideration the significance of balances, the volume oftransactions and the accounting and internal control systems of the Companies, (b) examining, on atest basis, evidence and records supporting the amounts and disclosures in the financial statementsand (c) assessing the accounting practices used and significant estimates made by management, aswell as the overall financial statement presentation.

3 In our opinion, the combined consolidated financial statements present fairly, in all materialrespects, the combined consolidated financial position of BR Malls Participações S.A. and itssubsidiaries at December 31, 2006, 2005 and 2004 and the combined consolidated results of itsoperations, the combined consolidated changes in stockholders’ equity and the combinedconsolidated changes in its financial position for the years then ended, in conformity withaccounting practices adopted in Brazil.

4 The combined consolidated financial statements mentioned above were prepared based on thepremise that the corporate restructuring of the companies that comprise the BR Malls ParticipaçõesS.A. group, completed on December 29, 2006, as mentioned in Note 1(b) to the FinancialStatements, had occurred as of December 31, 2003.

Rio de Janeiro, February 12, 2007

PricewaterhouseCoopersAuditores IndependentesCRC 2SP000160/O-5 “F” RJ

Marcos Donizete PanassolContador CRC 1SP155975/O-8 “S” RJ

F-29

BR Malls Participações S.A.

Consolidated Balance Sheet at December 31, 2006 andCombined Consolidated Balance Sheetsat December 31, 2005 and 2004Expressed in thousands of reais

Consolidated

2006 2005 2004

AssetCurrent assets

Cash and cash equivalents ......................................................................................................... 6,576 3,458 3,446Marketable Securities (Note 4) .................................................................................................. 105,640 15,677 10,070Accounts receivable (Note 5) ..................................................................................................... 17,532 13,698 12,692Recoverable taxes (Note 6) ........................................................................................................ 3,761 712 7,895Deferred income taxes and social contribution (Note 7)............................................................ 9,430 7,444 4,924Advances to condominium......................................................................................................... 2,977 2,081 1,607Other ......................................................................................................................................... 4,044 256 613

149,960 43,326 41,247

Non-current assetsAccounts receivable (Note 5) ..................................................................................................... 2,130 865 759Deposits and bonds.................................................................................................................... 1,353 187 7Tax credits (Note 8)................................................................................................................... 35,072 — —Other ......................................................................................................................................... 2,008 5 335

40,563 1,057 1,101

Fixed assetsInvestments (Note 9)

Good Will........................................................................................................................... 321,878Other .................................................................................................................................. 2,341 9 9

Property, plant and equipment (Note 10) .................................................................................. 166,036 85,104 83,370Deferred charges (Note 11)........................................................................................................ 472 833 1,170

490,727 85,946 84,549

681,250 130,329 126,897

Liabilities and stockholders’ equityCurrent liabilities

Loans and financings (Note 12)................................................................................................. 25,188 11,235 6,333Suppliers .................................................................................................................................... 2,699 510 321Taxes and contributions payable (Note 13)............................................................................... 45,722 28,213 24,473Taxes and contributions - installments (Note 14) ...................................................................... 861 3,427 0Payroll and related charges ........................................................................................................ 302 258 97Dividends payable...................................................................................................................... 842 5,202 3,493Liability on acquisition of shopping mall (Note 15) .................................................................. 8,216 — —Other ......................................................................................................................................... 2,605 1,670 866

86,435 50,515 35,583

Long-term liabilitiesLoans and financings (Note 12)................................................................................................. 39,342 26,643 42,550Taxes and contributions—installments (Note 14)...................................................................... 2,153Legal withholdings..................................................................................................................... 1,673Liability on acquisition of shopping mall (Note 15) .................................................................. 21,716Provision for contingencies (Note 16)........................................................................................ 7,676 6,244 5,532Other ......................................................................................................................................... 4,471 4,449 4,211

77,031 37,336 52,293

Minority interest........................................................................................................................ 406 19 119

Stockholders’ equity (Note 17)Capital ...................................................................................................................................... 516,918 26 1Capital reserve ........................................................................................................................... 126 — —Retained earnings ...................................................................................................................... 334 — —

517,378 26 1

Net worth of incorporated companies .............................................................................................. 42,433 38,901

681,250 130,329 126,897

The accompanying notes are an integral part of these combined consolidated financial statements.

F-30

BR Malls Participações S.A.

Combined Consolidated Statements of IncomeYears ended December 31, 2006, 2005 and 2004Expressed in thousands of reais

Consolidated

2006 2005 2004

Gross revenue from rent and services (Note 18) .......................................... 93,449 82,172 71,796(-) Taxes and contributions ......................................................................... (7,498) (8,759) (6,112)

Net revenue................................................................................................. 85,951 73,413 65,684

Cost of rent and services (Note 19) ............................................................. (19,609) (25,756) (24,910)

Gross profit................................................................................................. 66,342 47,657 40,774

Operating expense (income)Marketing expenses ............................................................................. (1,849) (2,427) (5,175)General and administrative expenses (Note 20).................................... (10,576) (7,464) (5,605)Board of directors’ and executive committee’s fees ............................... (566) (514) (447)Depreciation and amortization............................................................. (3,878) (430) (277)Legal and tax expenses......................................................................... (6,101) (2,152) (3,490)

(22,970) (12,987) (14,994)

Financial income (expense) (Note 21) ......................................................... (2,061) (3,794) (5,919)

Operating income........................................................................................ 41,311 30,876 19,861

Non-operating income (expense) ................................................................. (652) (125) 1,124Income before income taxes, employee profit sharing and minority

interest .................................................................................................... 40,659 30,751 20,985

Income tax and social contribution ............................................................. (9,525) (8,597) (7,317)Income before employee profit sharing and minority interest ...................... 31,134 22,154 13,668

Employee profit sharing .............................................................................. — (127) (121)

Minority interest ......................................................................................... (786) (703) (606)

Net income ................................................................................................. 30,348 21,324 12,941

The accompanying notes are an integral part of these combined consolidated financial statements.

F-31

BR Malls Participações S.A.

Combined Consolidated Statements of Changes in Stockholders' EquityYears ended December 31Expressed in thousands of reais

CapitalCapitalreserve

Retainedearnings

BR Mallstotal

Net worthincorporatedCompanies Total

Capital Contribution on May 26, 2004... 1 — — 1 — 1Capital increase....................................... — — — — 31,693 31,693Payment of interest on capital ................. — — — — (5,733) (5,733)Net Income for the year .......................... — — — — 12,941 12,941

Balances at December 31, 2004 .............. 1 — — 1 38,901 38,902

Capital increase....................................... 25 — — 25 — 25Payment of dividends and interest on

capital ................................................. — — — — (9,779) (9,779)Treasury stock ........................................ — — — — (4,663) (4,663)Capital decrease ...................................... — — — — (3,350) (3,350)Net Income for the year .......................... — — — — 21,324 21,324

Balances at December 31, 2005 .............. 26 — — 26 42,433 42,459

Capital increase....................................... 516,892 — — 516,892 — 516,892Capital reserve ........................................ — 126 — 126 — 126Net Income for the year before

incorporation ...................................... — — — — 30,014 30,014Payment of dividends .............................. — — — — (48,740) (48,740)Incorporation of net worth ..................... — — — — (23,707) (23,707)Net Income for the year after

incorporation ...................................... — — 334 334 — 334

Balances at December 31, 2006 .............. 516,918 126 334 517,378 — 517,378

The accompanying notes are an integral part of these combined consolidated financial statements.

F-32

BR Malls Participações S.A.

Combined Consolidated Statements of Changes in Financial PositionYears ended December 31Expressed in thousands of reais

Consolidated

2006 2005 2004

Financial resources provided byOperations

Net income for the year................................................................. 30,348 21,324 12,941Expenses not affecting working capital

Depreciation and amortization............................................... 10,379 7,208 8,218Minority interest .................................................................... 786 703 606

Financial resources provided by operations.................................................. 41,513 29,235 21,765

From stockholdersCapital increase............................................................................. 516,892 25 31,693

From third partiesIncrease in financings .................................................................... 12,699 — —Increase in other liabilities ............................................................. 26,996 — 9,409Decrease in other assets ................................................................. — 44 2,719Increase in minority interest .......................................................... 387 — 119Fixed assets written-off ................................................................. 2,555 687 430Decrease in deferred charges.......................................................... 361 337 1,071

Total funds provided ................................................................................... 601,403 30,328 67,206

Financial resources used forCapital decrease ................................................................................... — 3,350 —Payment of dividends and interest on capital ........................................ 48,740 9,779 5,733Acquisition of treasury stock ................................................................ — 4,663 —Acquisition of property, plant and equipment ...................................... 94,526 9,338 12,001Net worth of incorporated companies .................................................. 23,707 — 27,012Acquisition of investments, net of recognized tax credit........................ 324,210 — —Decrease in financings .......................................................................... — 15,907 25,832Decrease in other liabilities ................................................................... — 44 —Decrease in minority interest ................................................................ — 100 —Increase in other assets ......................................................................... 39,506 — —

Total use of funds........................................................................................ 530,689 43,181 70,578

Increase (decrease) in net working capital .................................................... 70,714 (12,853) (3,372)

Variation in net working capital:Current assets

At the beginning of the year .......................................................... 43,326 41,247 29,605At the end of year.......................................................................... 149,960 43,326 41,247

106,634 2,079 11,642

Current liabilities:At the beginning of the year .......................................................... 50,515 35,583 20,569At the end of year.......................................................................... 86,435 50,515 35,583

35,920 14,932 15,014

Increase (decrease) in net working capital .................................................... 70,714 (12,853) (3,372)

The accompanying notes are an integral part of these combined consolidated financial statements.

F-33

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTSat December 31, 2006, 2005 and 2004Expressed in thousands of reais

1 The Company and its Operations

BR Malls Participações S.A. and its subsidiaries and jointly controlled subsidiaries (hereafter the“Company”), which are included in the combined consolidated financial statements have as theirprincipal activities: (i) ownership of shopping malls, through leasing stores and other merchandisingspaces and parking lot fees; (ii) management and consulting services for shopping malls; and (iii) leasingand merchandising services for stores and common spaces in shopping malls.

On December 31, 2006 the Company had equity holdings in 7 shopping malls in different parts of Brazil:NorteShopping (Rio de Janeiro), Shopping Iguatemi Caxias (Rio Grande do Sul), Shopping Villa Lobos(São Paulo), Shopping Del Rey (Minas Gerais), Shopping Independência (Minas Gerais), Shopping Recife(Pernambuco), Shopping Campo Grande (Mato Grosso do Sul).

On December 31, 2006, through an exchange of shares in a corporate restructuring, the Companybecame the owner of all the shares of Ecisa Engenharia S.A. (“Ecisa Engenharia”) and EcisaParticipações S.A. (“Ecisa Participações”). This transaction represented the conclusion of the corporaterestructuring process whose main purpose is to integrate the ownership and management of shoppingmalls, through the unification of the capital structure, optimization of investments and decreasing ofoperating costs.

The Company’s investments are as follows:

Corporate participation:

Holding - %

2006 2005 2004

(*) (*)

SubsidiariesEcisa Engenharia S.A. .............................................................................. 100.00 100.00 100.00Ecisa Participações S.A. ........................................................................... 100.00 100.00 —Empresa Gerenciadora de Empreendimentos e Participações

(“EGEC”) ............................................................................................ 100.00 — —Dacom Gestão Comercial Ltda (“Dacom G”).......................................... 100.00 — —Dacom Desenvolvimento e Avaliação Comercial de Shopping Centers

Ltda. (“Dacom D”).............................................................................. 100.00 — —SDR Empreendimentos Imobiliários (“SDR”).......................................... 99.80 — —Empresa Cogeradora de Energia Ltda (“EMCE”) .................................... 99.80 99.80 99.80Campo Grande Parking Ltda (“Campo Grande Parking”)....................... 60.22 60.22 60.22

Jointly controlled subsidiariesAdministradora Shopping Center Recife Ltda. (“ASCR”) ........................ 32.46 32.46 —Recife Parking Ltda (“Recife Parking”) ................................................... 32.46 32.46 —Villa Lobos Parking Ltda (“Villa Lobos Parking”)................................... 26.85 26.85 26.85

Associated companySociedade Independência Imóveis (“SISA”).............................................. 8.00 — —

(*) These Holdings are pro-forma, since such investments were incorporated only in 2006 (see Note1(b)).

F-34

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

Participation in shopping malls:

Holding - %

2006 2005 2004

(*) (*)

NorteShopping—Initial phase and first expansion....................... 51.00 51.00 51.00NorteShopping—Second expansion ............................................ 100.00 — —NorteShopping—Business Center................................................ 100.00 100.00 100.00Shopping Iguatemi Caxias........................................................... 45.50 45.50 45.50Shopping Villa Lobos.................................................................. 26.85 26.85 26.85Shopping Del Rey ....................................................................... 65.00 35.00 35.00Shopping Independência.............................................................. 8.00 — —Shopping Recife—Initial Phase.................................................... 30.83 30.83 30.83Shopping Recife—Expansion ...................................................... 32.46 32.46 32.46Shopping Campo Grande ............................................................ 65.50 65.50 65.50Shopping Campo Grande—Expansion ........................................ 64.00 64.00 64.00

(*) Holdings for these periods are related to the companies Ecisa Engenharia and Ecisa Participações.

(a) Prior to the corporate restructuring

(i) BR Malls

BR Malls Participações S.A., previously called Itatira Participações S.A., was formed on May 26, 2004,by the partial spin-off of Cabinda Participações S.A. and had as its principal activity the investment inconsortiums, in Brazil and abroad, that allow the Company to be involved in the management of thecompanies in which it invests.

At the end of 2006, BR Malls acquired the share control of Ecisa Engenharia and Ecisa Participações,through special purpose holdings created exclusively for this end, Licia Participações (“Licia”) and DylParticipações (“DylPar”). Refer to item (b) “Corporate Restructuring” for more details.

(ii) Ecisa Engenharia and Ecisa Participações

Ecisa Engenharia was formed in 1949, as a joint stock company, and it began its activities in the civilconstruction industry. During the first 30 years of its life, the Company’s principal activities includedbuilding roads, viaducts, highways, tunnels, subways, bridges, dams, harbors, foundations, home andcommercial buildings, hospitals and schools. With the growth of the shopping mall industry in Brazil atthe beginning of the 1980s, Ecisa Engenharia started to focus its activities on this segment.

In October 2005, part of Ecisa Engenharia’s operations was transferred to Ecisa Participações through aspin-off; this company has predominantly the same operations as Ecisa Engenharia.

(iii) EGEC, Dacom G and Dacom D

At the end of the 90’s, Ecisa Engenharia’s activities in the management of shopping malls and thecommercialization of shops and spaces were transferred to companies formed with the same objective,

F-35

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

EGEC and Dacom, which were created to render services to shopping malls owned by Ecisa Engenhariaand shopping malls owned by third parties. On October 10, 2006, Ecisa Engenharia reacquired the sharecontrol of EGEC, Dacom G and Dacom D, and Ecisa Participações acquired, at the same time, theremaining minority interest.

(iv) Other companies

SDR

The principal activity of the company is the realization of real estate ventures, mainly shopping malls,and participation in the capital stock of other companies. SDR holds a 30% real estate participation inShopping Del Rey.

EMCE

The principal activity of this company is the leasing of equipment that facilitates the co-generation ofelectricity, and its main client is NorteShopping.

Campo Grande Parking

The principal activity of this company is the exploration of parking space at Shopping Campo Grande.

ASCR

The company renders management services related to the operations of Shopping Recife.

Recife Parking

The principal activity of this company is the exploration of parking space at Shopping Recife.

Villa Lobos Parking

The principal activity of this company is the exploration of parking space at Shopping Villa Lobos.

SISA

The principal activity of this company is the organization, incorporation and management of commercialassets and commercial ventures, mainly shopping malls. SISA holds 100% of the real estate participationof Shopping Independência.

(b) Corporate restructuring

On November 13, 2006, Licia subscribed shares issued to increase the capital stock of Ecisa Engenhariaand of Ecisa Participações, representing 28.8% of the capital stock of Ecisa Engenharia and of EcisaParticipações. At the time, all of BR Malls’ shares were held by Grupo GP (through Private EquityPartners A, LLC and Private Equity Partners B, LLC) and by Equity International, which had an indirectparticipation in Ecisa Engenharia and in Ecisa Participações.

F-36

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

On December 20, 2006, Licia acquired all the shares issued by Dylpar, which, in turn, owned astockholding of 26.2% in Ecisa Engenharia’s and in Ecisa Participações’ capital.

As a result of the corporate restructuring implemented at the end of December, 2006, Licia and Dylparwere split and subsequently incorporated by Ecisa Engenharia and by Ecisa Participações, resulting in BRMalls having a direct holding of 55% (fifty five per cent) of the capital stock of Ecisa Engenharia andEcisa Participações.

On December 29, 2006, all the shares issued by Ecisa Engenharia and by Ecisa Participações (except forthe ones owned by BR Malls) were incorporated by BR Malls, resulting in: (i) Ecisa Engenharia and EcisaParticipações becoming integral subsidiaries of BR Malls and (ii) the previous shareholders of EcisaEngenharia and of Ecisa Participações becoming shareholders of BR Malls.

(c) Presentation of the consolidated financial statements

The combined consolidated financial statements were prepared so as to reflect the financial position andoperating results of the Company, based on the premise that the “Company” existed since January 1,2004 as the restructuring that took place in 2006 included companies who had operations since thatdate. Therefore, the consolidated financial statements are called “combined”.

The combined consolidated financial statements should not be taken as a base for purposes of dividendcalculation or for any other corporate purpose, except for providing comparative information on theCompany’s operating performance. These combined consolidated financial statements were prepared soas to provide information related to historical data of the Company based on the current equity structureand in connection with the initial public offering (“IPO”) of the Company’s shares.

Financial statement information of the wholly-owned and jointly controlled subsidiaries comprising theincorporated net assets is as follows:

2005 2004

Holding-% Equity

Holdingvalue Equity

Holdingvalue

Jointly Controlled SubsidiariesRecife Parking ............................................................ 32.46 444 144 — —ASCR—Adm Shopping Center Recife ......................... 32.46 87 28 — —Villa-Lobos Parking.................................................... 26.85 338 91 (86) (23)

869 263 (86) (23)

SubsidiariesEcisa Engenharia ........................................................ 100.00 7,226 7,226 37,834 37,834Ecisa Participações...................................................... 100.00 34,200 34,200 — —SDR Empreend Imobiliários ....................................... 99.80Emce Cogeradora de Energia ...................................... 99.80 720 718 912 911Campo Grande Parking .............................................. 60.22 44 26 295 179

42,190 42,170 39,041 38,924

Net worth of incorporated companies................................ 43,059 42,433 38,955 38,901

In December 2006, the net worth of these companies was incorporated into BR Malls.

F-37

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

2 Presentation of the Combined Consolidated Financial Statements

The combined consolidated financial statements were prepared in accordance with the accountingpractices adopted in Brazil, according to Corporate Law (Law No. 6,404, including its subsequentchanges), rules and instructions of the Brazilian Securities Commission (“CVM”), technicalpronouncements issued by the Brazilian Institute of Independent Auditors (“IBRACON”) and theresolutions of the Brazilian Federal Accounting Council (“CFC”).

3 Summary of the Principal Accounting Practices

(a) Use of estimates

In the preparation of its combined consolidated financial statements, the Company uses estimates toaccount for certain assets, liabilities and other transactions. Therefore, the Company’s combinedconsolidated financial statements include estimates related to the determination of the useful life ofproperty, plant and equipment, provisions for contingent liabilities, provision for income tax and others.Since these are estimates, variations might occur when the corresponding assets are realized and liabilitiesliquidated.

(b) Results for the year

The accrual basis of accounting is used to determine the results for the year. Revenues and expenses arisesubstantially from the exploration of shopping malls. The Company recognizes on a proportional basisits participation in rent revenue and corresponding costs incurred by the shopping malls, based on theCompany’s holdings in these ventures.

The Company’s revenue arise from three main activities: (i) lease of shops and spaces in the shoppingmalls, merchandising and exploration of parking spaces, (ii) rendering of management and consultingservices performed by an EGEC and (iii) rendering of services for the commercialization of shops andspaces and merchandising performed by DACOM. The main source of income for the Company arisesfrom its proportional participation in the income generated by the shopping malls.

(c) Cash and cash equivalents and marketable securities

These are stated at amounts invested, plus the contractual and pro rata recognized remunerationrecognized up to the balance sheet date, not exceeding its fair market value.

(d) Accounts receivable

These include the rents receivable, as well as the management and concession fees. These are stated attheir historical value, reduced by the corresponding provision for bad debts. Company managementconsiders the provision sufficient to cover possible losses, and adopted as a criteria the provision ofsubstantially all amounts receivable that are overdue for more than one year.

F-38

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

(e) Investments

The investment in associate company is accounted for by the equity method. The investments in jointlycontrolled companies are consolidated in proportion to the Company’s holding in these companies. Theinvestments in subsidiaries are fully consolidated.

Other investments are stated at their cost of acquisition, reduced, if applicable, by the provision for theadjustment to their realizable value.

The goodwill assessed on the acquisition of the Company’s holdings in Ecisa Engenharia and EcisaParticipações and in the acquisition by these companies of holdings in EGEC, Dacom D and Dacom G, isbased on the future profitability of these companies and is being amortized on a linear basis over aperiod of ten years (See Note 9).

(f) Property, plant and equipment

These are valued at cost less accumulated depreciation. Depreciation is calculated on a straight-line basisat annual rates considered compatible with the useful and economic life of the assets as disclosed inNote10. The interest expense related to third party loans related to investments in fixed assets arecapitalized.

(g) Deferred charges

These are stated at cost less accumulated amortization. The amortization is calculated on a straight-linebasis based on the rates mentioned in Note 11.

(h) Other current assets and long-term receivables

These are stated at cost or realizable values, including, when applicable, accrued earnings.

(i) Loans and financing

These are stated at amounts owed, including, when applicable, interest and monetary and exchangevariations up to the balance sheet date.

(j) Income tax and social contribution

These are computed and recorded on a monthly basis under the annual taxable profit method, except forcertain subsidiaries and jointly controlled subsidiaries, whose taxes are calculated based on assumedprofit.

Social contribution is calculated at a rate of 9% on the income adjusted according to the provisions ofthe effective law. The provision for income tax is recorded based on the gross amount and a base rate of15%, plus an additional 10%.

For companies under the assumed profit method, income tax is calculated at a rate of 32% over theincome arising from rents and the rendering of services and 100% over financial income; socialcontribution is calculated at a rate of 32% over gross revenue, based on nominal rates.

F-39

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

(k) Other liabilities, current liabilities and long-term liabilities

These are stated at their known or estimated amounts, including, when applicable, the respective chargesand monetary or exchange variations.

(l) Consolidation of the financial statements

The combined consolidated balance sheets include the financial statements of BR Malls ParticipaçõesS.A. and the financial statements of its subsidiaries and jointly controlled subsidiaries.

The combined consolidated financial statements were prepared in accordance with the consolidationcriteria prescribed by CVM Instruction No. 247/96, which includes the elimination of intercompanyassets and liabilities as well as the results of intercompany transactions and investments, and therecognition of minority interest in the stockholders equity and results of operations of the subsidiaries.

For jointly controlled subsidiaries, where the control and management of the companies is shared withother stockholders, the consolidation comprises the assets, liabilities and results of operationsproportionally to the Company’s participation in the capital stock of the respective companies.

Financial statement information of the wholly-owned and jointly controlled subsidiaries is summarizedbelow.

Wholly-owned and jointly controlled subsidiaries at December 31, 2004:

Villa-LobosParking

EcisaEngenharia

EmceCogeradorade energia

Campo GrandeParking

Assets

Current assets ............................................................ 234 40,796 195 192Non-current assets ..................................................... — 766 7 328Fixed assets ................................................................ — 84,426 868 —

Total .......................................................................... 234 125,988 1,070 520

Liabilities and stockholder’s equity

Current liabilities ....................................................... 320 49,715 158 225Long-term liabilities ................................................... — 38,439 — —Stockholders’ equity ................................................... (86) 37,834 912 295

Total .......................................................................... 234 125,988 1,070 520

Net revenue................................................................ 7,674 59,966 543 3,256Costs.......................................................................... (2,477) (22,489) (441) (1,325)Operating expenses .................................................... (259) (14,838) (7) (58)Financial income (expense)......................................... 5 (6,395) (18) 10Non-operating income (expense) ................................ — 1,124 — —Income taxes .............................................................. (890) (6,069) (158) (367)Employee profit sharing ............................................. — (121) — —

Net income (loss) for the year .................................... 4,053 11,178 (81) 1,516

F-40

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

Wholly-owned and jointly controlled subsidiaries at December 31, 2005:

RecifeParking

ASCRAdm, ShoppingCenter Recife

Villa-LobosParking

EcisaEngenharia

EcisaParticipações

EmceCogeradorade energia

Campo GrandeParking

Assets

Current assets ......... 977 108 731 27,843 14,308 341 286Non-current

assets .................. — — — 767 285 6 —Fixed assets ............ — — — 56,663 28,810 447 —

Total ...................... 977 108 731 85,273 43,403 794 286

Liabilities andstockholders’equity

Current liabilities.... 533 21 393 51,406 4,755 74 242Long-term

liabilities ............. — — — 26,641 4,448 — —Stockholders’

equity.................. 444 87 338 7,226 34,200 720 44

Total ...................... 977 108 731 85,273 43,403 794 286

Net revenue ............ 8,987 958 8,286 52,868 11,232 194 3,665Costs ...................... (2,752) — (2,570) (20,075) (2,210) (435) (1,453)Operating

expenses.............. (1,311) (4) (200) (11,290) (1,376) (5) (39)Financial income

(expense)............. 23 (2) — (5,235) (151) — 12Non-operating

income (expense) — — — (124) — — —Income taxes .......... (1,055) (92) (970) (4,630) (1,274) (66) (416)Employee profit

sharing................ — — — (127) — — —

Net income (loss)for the year ......... 3,892 860 4,546 11,387 6,215 (312) 1,769

F-41

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

Wholly-owned and jointly controlled subsidiaries at December 31, 2006:

RecifeParking

ASCRAdm. ShoppingCenter Recife

Villa-LobosParking

EcisaEngenharia

EcisaParticipações

EGEC -Gerenc

EmpreendComerciais (*)

DACOM -Desenv.

AvaliaçãoShopping (*)

DACOM -Gestão

Comercial(*)

SDR -Empreend

Imobiliários

EmceCogeradorade energia

CampoGrandeParking

AssetsCurrent assets ................. 1,268 110 762 95,540 78,360 1,625 127 15 1,176 217 354Non-current assets .......... — — — 45,245 1,134 495 — — — 6 318Fixed assets ..................... — — — 89,867 95,643 142 3 12 38,152 25 5

Total............................... 1,268 110 762 230,647 175,137 2,262 130 27 39,328 248 677

Liabilities andstockholders’ equity

Current liabilities ............ 665 22 374 64,528 33,833 5,142 5,704 40 12,826 122 250Long-term liabilities ........ — — — 44,749 4,583 — — — 27,088 — —Stockholders’ equity........ 603 88 388 121,370 136,721 (2,880) (5,574) (13) (586) 126 427

Total............................... 1,268 110 762 230,647 175,137 2,262 130 27 39,328 248 677

Net revenue .................... 9,524 1,037 9,181 30,229 39,806 1,947 1,460 126 2,210 349 3,930Costs............................... — — — (10,037) (7,428) (806) (244) (23) (638) (433) —Operating expenses ......... (3,499) (9) (2,544) (9,405) (5,312) (227) (74) (73) (1,255) (6) (1,117)Financial income

(expense) ..................... 20 (28) (2,042) 1,203 (1) (2) (1) (566) 12Non-operating income

(expense) ..................... — — (767) (2) 4 — (63) — 4 — (397)Income taxes ................... (1,121) (100) (1,069) (1,339) (4,897) (321) (233) (10) — — (452)Employee profit

sharing ........................ — — — — — — — — — — —

Net income (loss) for theyear ............................. 4,924 928 4,773 7,404 23,296 592 844 19 (245) (90) 1,976

(*) Data regarding the period after the acquisition (October 10, 2006).

F-42

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

4 Marketable securities

These correspond to the operations with class-A national financial institutions, in certificate of depositand fixed income operations based on debentures and are remunerated based on the CDI variation, atnormal market rates and conditions, and for which there is no fine or any other restriction in case of saleof the securities:

Investment Rate Institution 2006 2005 2004

CDB ........................................ 99% CDI Banco Itaú 5,361 4,879Banco Bradesco 10,316 5,191

Fixed income (*)...................... 99.5% e 100.3%CDI Itaú Leasing 13,375 — —

134.88 CDI Bradesco Leasing 8,008 — —100.5% CDI Unibanco Leasing 12,688 — —100.3% CDI Santander Leasing 12,690 — —

99.5% e 100.3%CDI Itaú Leasing 13,368 — —

134.88 CDI Bradesco Leasing 13,658 — —100.5% CDI Unibanco Leasing 19,200 — —100.3% CDI Santander Leasing 12,653 — —

Total ....................................... 105,640 15,677 10,070

(*) Operations based on debentures.

5 Accounts Receivable

2006 2005 2004

Rents........................................................................................... 17,198 15,344 13,509CPI (i) ......................................................................................... 2,973 2,591 1,996Concession fee (ii) ....................................................................... 4,187 2,943 2,919Promissory notes......................................................................... 481 394 613Others......................................................................................... 1,874 46 —Provision for bad debts ............................................................... (7,051) (6,755) (5,586)

Current ....................................................................................... 17,532 13,698 12,692Non-current ................................................................................ 2,130 865 759

19,662 14,563 13,451

(i) Represent accounts receivable from Condomínios Pró Indiviso (“CPI”), comprising amounts relatedto rents received but not yet transferred to the joint owners. This transfer is made net of the amountspaid related to the shopping mall’s operating expenses and investments, when applicable.

(ii) Represent accounts receivable related to concession fees to use shops and other spaces in theshopping malls by the shopkeepers.

F-43

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

6 Recoverable Taxes2006 2005 2004

Prepaid income tax and social contribution ......................................... 3,416 603 7,589PIS, COFINS and other taxes............................................................... 147 48 148Income tax withheld at source IRRF.................................................... 198 61 158

3,761 712 7,895

7 Deferred Income Tax and Social Contribution

Represents the deferred income tax and social contribution related to certain taxes payable mentioned inNote 13.

8 Tax Credits

As mentioned in Note 1(b), in October and November 2006, Grupo GP and Equity Internationalacquired stockholdings in Ecisa Engenharia and Ecisa Participações. These acquisitions were performedthrough two holding companies (Licia and Dylpar) and generated goodwill initially recorded in theseholding companies. In December, 2006 these holding companies were incorporated by the operatingcompanies Ecisa Engenharia and Ecisa Participações.

As prescribed by CVM Instructions No. 349 and 319, the goodwill incorporated in Ecisa Engenharia wasreduced by 66%, with the counter entry in the Capital Reserve account of this company, so as to reflectonly the tax benefit that will be generated by the goodwill amortization. The goodwill related to EcisaParticipações was totally provided for, since this company is under the assumed profit method. The taxcredit balance relates solely to the tax benefit resulting from the goodwill incorporated in EcisaEngenharia.

9 Investments

(a) Goodwill2006

Ecisa Engenharia ....................................................................................................... 103,153Ecisa Participações..................................................................................................... 163,574EGEC ........................................................................................................................ 34,165Dacom G................................................................................................................... 1,389Dacom D................................................................................................................... 19,597

321,878

The goodwill amount is supported by the expectation of future profitability of the acquired companiesand is being amortized over a period of ten years. In the year ended December 31, 2006, the recognizedamortization amounted to R$3,633.

(b) Other investments

Represents the investment in “Sociedade Independente S.A.” (“SISA”), which corresponds to an 8%interest in the capital of the aforementioned company.

F-44

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

10 Property, Plant and EquipmentDepreciation

rate - % 2006 2005 2004

Land .................................................................................... 21,692 21,337 21,223Buildings .............................................................................. 4 a 20(*) 157,419 117,744 12,541Machinery and equipment.................................................... 15 336 938 1,144Furniture and utensils .......................................................... 10 713 672 652Facilities............................................................................... 10 550 550 550Data processing equipment .................................................. 20 1,170 1,125 1,401Other ................................................................................... 1,710 1,088 1,981

183,590 143,454 139,492Accumulated depreciation .................................................... (71,379) (65,796) (60,085)

Construction in progress (i).................................................. 56,825 7,446 3,963

Total .................................................................................... 166,036 85,104 83,370

(*) For the real estate property of the shopping malls, the Company adopted different depreciationrates, based on appraisals approved by the National Institute of Technology (INT).

(i) Construction in progress at December 31, 2006 represents mainly the investments in the expansionof NorteShopping.

11 Deferred ChargesAmortization

Rate 2006 2005 2004

Pre-operating expenses ...................................................................... 20% perannum -p.a. 59 26 240

Rights for the operation of parking lots............................................. 4% p.a. 584 584 584Improvements in real estate property of third parties......................... 17.65% p.a. 570 570 570

Accumulated amortization................................................................. (741) (347) (224)

Total ................................................................................................. 472 833 1,170

F-45

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

12 Loans and FinancingInterest rate 2006 2005 2004

Financing—Brazilian reaisBanco ABC Brasil S/A (a) ................................................ CDI + 0.42% p.a. 22,181 6,681 —Banco Bradesco S/A......................................................... TJLP + 5.5% p.a. — — 428Banco do Nordeste do Brasil ........................................... 14% p.a. 51 — —

22,232 6,681 428

Financing—U.S. dollarSafra N. Bank of New York ............................................ 12.250% p.a. 2,956 4, 554 5,905

Current ........................................................................... 25,188 11,235 6,333

Financing—Brazilian reaisBanco do Estado do Rio Grande do Sul........................... TJLP + 5.5% p.a. — 127 865Banco do Nordeste do Brasil ........................................... 14% p.a. 3,510 — —Banco ABC do Brasil S/A (a) ........................................... CDI + 0.38% 14,452 — 5,333BNDES............................................................................ TJLP + 5.5% p.a. — — 2,259

17,962 127 8,457

Financing—U.S. dollarCitibank (b)..................................................................... 12% p.a. 21,380 23,408 26,544Safra N. Bank of New York ............................................ 12.250% p.a. — 3,108 7,549

21,380 26,516 34,093

Long-term ....................................................................... 39,342 26,643 42,550

Guarantees:

Š Promissory notes, fiduciary assignment of rights and real estate mortgage.

The loans and financings in foreign currency are restated by the U.S. dollar variation.

The financing with Banco ABC Brasil S.A. is being used in the expansion of the ventures, the mostrelevant of which is the expansion of NorteShopping (Rio de Janeiro).

The long-term loans and financings are due as follows:

2006

2008............................................................................................................................ 23,9552009............................................................................................................................ 10,8222010............................................................................................................................ 2,7702011............................................................................................................................ 1,795

39,342

F-46

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

13 Taxes and Contributions Payable2006 2005 2004

COFINS on rents (i) .................................................................... 23,274 17,707 10,583Income tax and social contribution on deferred exchange

variations (ii) ........................................................................... 5,093 6,603 5,885ISS (iii) ........................................................................................ 2,609 0 0Labor taxes (iv)........................................................................... 10,786 3,764 2,332Other .......................................................................................... 3,960 139 5,673

45,722 28,213 24,473

(i) Ecisa filed a suit against the Federal Treasury aimed at the non payment of COFINS on leaserevenues, reimbursement of the amounts paid and concession of anticipated legal protection tosuspend the collection of such tax. The law suit is based on the understanding of theunconstitutionality of Law No. 9,718/98 and on the interpretation that the lease activity falls underthe rendering of services concept. In February, 2004, due to the advent of the non-cumulativemethod established by Law No. 10,833/03, a new calculation base for the aforementioned tax wasestablished and the Company maintained the procedure of not paying the tax. The amounts not paidare restated by the SELIC rate and legal charges and the amounts that are related to the periodbetween May 2001 and January 2004 (under the effect of Law No. Lei 9.718/98) and the amountsjudicially deposited are recorded as a provision for contingencies in long-term liabilities (SeeNote 16).

(ii) Relates to the deferment of taxation on exchange rate variations in fiscal year 2003(iii) Represent differences in the ISS rate on the services rendered in certain cities, and the amounts are

increased by legal charges.(iv) Represents, substantially, social contributions over services rendered by third-party companies. The

increase in 2006 is a result of the acquisition of EGEC and DACOM.

14 Taxes and Contributions—Installments

Ecisa Engenharia Comércio e Indústria S.A. joined the Fiscal Debit Installment Program in 2005, relatedto Income Tax and Social Contribution and the corresponding amounts are due in 60 installments, asfollows:

2006 2005

Income tax ...................................................................................................... 630 2,507Social contribution .......................................................................................... 231 920

Current liabilities ............................................................................................ 861 3,427

Income tax ...................................................................................................... 1,575 —Social contribution .......................................................................................... 578 —

Long-term liabilities ........................................................................................ 2,153 —

3,014 3,427

At December 31, 2006, there were 42 installments of R$52.5 and R$19.3 for Income Tax and SocialContribution, respectively.

F-47

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

15 Liability on Acquisition of Shopping Malls

The amounts of R$21,716 in long-term liabilities and R$8,216 in current liabilities represent theliabilities recorded by SDR Empreendimentos Imobiliários S.A. relating to the purchase of 30% ofShopping Del Rey, located in Belo Horizonte. The Company paid R$38,500, of which R$7,700 as adownpayment and the remaining amount in 48 monthly and consecutive installments, restated by theINPC and accruing interest at a rate of 0.6434% per month (p.m.). On December 31, 2006, theCompany had 46 installments outstanding.

16 Provision for Contingencies2006 2005 2004

Tax (i)............................................................................................... 6,836 6,244 5,532Civil .................................................................................................. 840 — —

7,676 6,244 5,532

(i) Represents COFINS on rents substantially related to the period from May 2001 to January 2004(See Note 13).

The Company is subjected to fiscal, labor and civil contingencies, which are classified as “probable”,“possible” or “remote” according to their risk of loss to the Company. The contingencies which areconsidered as a probable loss by the Company’s management and the external and internal legal advisorsare provisioned.

At December 31, 2006, the Company had contingencies classified as possible losses amounting toR$49,381 which were not provisioned for.

17 Stockholders’ Equity

(a) Capital stock

At the Extraordinary General Meeting held on November 30, 2005, approval was given for theconversion of 167 preferred shares issued by the Company and owned by the shareholder EmergingMarkets Capital Investiments LCC into common shares, all nominative and with no par value and acapital increase using credits from the Advance for Future Capital Increases, amounting to R$25, uponthe issuance of 25,092 shares of which 12,546 were common shares and 12,546 were preferred shares,all registered and with no par value.

As a result, the capital became R$26, represented by 26,092 shares, of which 13,046 are common sharesand 13,046 preferred shares, all nominal and with no par value, divided among the shareholders of theCompany in the same proportion of their stockholding.

On October 10, 2006, the shareholders approved (i) a change in the by-laws, creating Class A and ClassC preferred shares, (ii) an increase in capital stock of R$31, with the issuance of 31,080 shares, of which15,540 were common shares and 15,540 were preferred shares, (iii) conversion of 167 common sharesinto 167 Class A preferred shares, (iv) conversion of 399 preferred shares into 399 Class A preferred

F-48

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

shares, (v) conversion of 116 common shares into 116 Class B preferred shares, (vi) conversion of 28,187preferred shares into 28,187 Class B preferred shares and (vii) repayment of all Class A preferred shares(566 Class A preferred shares).

On November 13, 2006, the shareholders approved (i) an increase in capital stock of R$192,974, withthe issuance of 192,973,612 common shares, (ii) conversion of 28,300 common shares into 28,300 ClassB preferred shares, (iii) repayment of all Class B preferred shares (56,603) and (iv) a change in theby-laws, establishing that capital stock should be formed exclusively of common shares.

On November 20, 2006, the shareholders approved the increase in capital of R$175,391, with theissuance of 175,390,511 common shares.

On December 29, 2006, due to the incorporation of shares issued by Ecisa Engenharia and EcisaParticipações, capital stock was increased by R$148,496, upon the issuance of 301,388,831 commonshares.

On December 31, 2006, the capital stock of the Company amounted to R$516,918, divided into669,752,958 common shares, all nominal with no par value.

The Company is authorized to increase its capital up to 5,000,000,000 shares, common or preferred,without changing its by-laws, based on resolutions of the Board of Directors. The Company’s capital, atDecember 31, 2006, is as follows:

December 31, 2006

Shares

Capitalstock

total (%)

EI Brazil Investments, LLC ................................................................ 184,182,062 27.5%Private Equity Partners A, LLC.......................................................... 173,555,695 13.75%Private Equity Partners B, LLC.......................................................... 10,626,367 13.75%Richard Paul Matheson ..................................................................... 132,544,374 19.79%Dyl Empreendimentos e Participações S.A. ........................................ 132,544,374 19.79%Leonandro Matheson Drumond ........................................................ 13,395,261 2.00%Hugo Matheson Drumond ................................................................ 13,395,261 2.00%Antonio Wadih Arbex ....................................................................... 9,509,561 1.42%Other................................................................................................. 3 —

Total ................................................................................................. 669,752,958 100%

(b) Dividends

The by-laws of the Company guarantee the shareholders a minimum dividend which corresponds to 25%of net profit, determined each year, adjusted in accordance with the effective law. The amounts shown inthe balance sheet related to the years ended December 31, 2005 and 2004 refer to the amounts proposedat the end of each year and the balance at December 31, 2006 relates to the amounts not yet paid.

F-49

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

18 Operating Revenue2006 2005 2004

Rents........................................................................................... 67,494 62,526 57,900Assignment charge ...................................................................... 4,975 4,009 1,834Parking ....................................................................................... 16,415 15,067 11,364Transfer fee................................................................................. 331 306 158Services provided ........................................................................ 4,234 264 540

Total ........................................................................................... 93,449 82,172 71,796

Operating revenue per shopping mall:

2006 2005 2004

Norteshopping ............................................................................ 29,189 28,708 25,784Shopping Recife .......................................................................... 21,424 19,760 16,709Shopping Campo Grande ............................................................ 13,239 12,807 11,097Shopping Villa Lobos.................................................................. 11,213 10,223 8,935Shopping Del Rey ....................................................................... 10,194 6,902 5,737Shopping Center Iguatemi Cuxas do Sul...................................... 3,907 3,508 2,994Services ....................................................................................... 4,234 264 540Other .......................................................................................... 49 — —

Total ........................................................................................... 93,449 82,172 71,796

19 Operating Costs2006 2005 2004

Payroll costs................................................................................ 670 1,060 861Services provided—corporate entities .......................................... 6,619 7,426 5,580Condominium costs .................................................................... 2,222 4,464 4,098Promotional funds costs .............................................................. 1,808 3,240 3,232Commercial costs ........................................................................ 216 925 1,141Depreciation and amortization.................................................... 6,501 6,778 7,941Other .......................................................................................... 1,573 1,683 2,057

Total ........................................................................................... 19,609 25,756 24,910

Operating costs per shopping mall:

2006 2005 2004

Norteshopping ............................................................................ 6,654 10,076 9,597Shopping Recife .......................................................................... 3,222 4,209 3,694Shopping Campo Grande ............................................................ 3,021 3,775 3,997Shopping Villa Lobos.................................................................. 2,315 3,439 4,471Shopping Del Rey ....................................................................... 2,011 1,419 1,316Shopping Center Iguatemi Cuxas do Sul...................................... 1,103 1,429 1,371Other .......................................................................................... 1,283 1,409 463

Total ........................................................................................... 19,609 25,756 24,909

F-50

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

20 General and Administrative Expenses2006 2005 2004

Payroll expenses.............................................................................. 2,393 1,647 1,424Services provided—corporate entities .............................................. 4,206 3,152 2,869Services provided—concessionaire................................................... 144 109 111Materials for use and consumption ................................................. 712 335 128Rent ................................................................................................ 509 374 328Other .............................................................................................. 2,612 1,847 745

10,576 7,464 5,605

21 Financial Results2006 2005 2004

Financial income ........................................................................... 3,328 2,394 1,045Interest on loans and financings..................................................... (6,761) (6,309) (8,082)Exchange variation........................................................................ 2,388 4,365 3,366Hedge operation............................................................................ — (1,587) —Monetary variation and other........................................................ (1,016) (4,931) (2,248)

Financial results, net...................................................................... (2,061) (3,794) (5,919)

22 Financial Instruments

At December, 31, 2006, 2005 and 2004, the Company did not have any outstanding derivativeinstruments. However, during the fiscal year 2005, the Company had operations with derivatives (Swap—CDI X US$) to cover the exchange exposure on loans indexed to the U.S. dollar, as shown in Note 21,which resulted in a loss of R$1,587 for the year.

23 Risk Management

(a) Credit risk

The Company’s operations comprise the management of shopping malls (ventures) and rent of shopswhich are the object of the venture. Lease contracts are governed by the lease laws and regulations. TheCompany has a diversified portfolio of clients and monitors outstanding balances so as to minimize lossthrough default.

(b) Price risk

The Company’s income is directly dependent on its ability to lease available spaces in its ventures.Adverse conditions can reduce the lease levels, as well as restrict the possibility of a price increase. Thefollowing facts, among others, can affect revenue:

Š Recession periods and increases in vacancies in leasable spaces in the ventures.

Š Negative perception by the tenant/lessee regarding security, convenience and attractiveness of the areawhere the ventures are located.

Š Increase in the tax burden affecting the Company’s operations.

Management periodically monitors these risks so as to minimize the impacts on the business.

F-51

BR Malls Participações S.A.

NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)at December 31, 2006, 2005 and 2004Expressed in thousands of reais

24 Subsequent Events

(a) On January 2, 2007, the Company acquired all outstanding shares of EGEC PAR II, the holdingcompany of GS Shopping Center S.A., that holds 56% of the Goiânia Shopping, for R$7,804.

(b) On January 18, 2007, the Company liquidated in advance a portion of the outstanding loans withABC S.A. bank amounting to R$19,144.

25 Insurance

The Company maintains a policy to monitor the risks inherent to its operations. As a result, theCompany has insurance contracts in effect to cover operational risks, civil responsibility etc. TheCompany’s management believes that the amounts are enough to cover possible losses.

* * *

F-52

PRINCIPAL EXECUTIVE OFFICES OF

BR MALLS FINANCE LIMITEDPraia de Botafogo 501, Torre Corcovado, Suite 702 (part)

22250-040 Rio de Janeiro – Rio de JaneiroBrazil

BR MALLS PARTICIPAÇÕES S.A.Praia de Botafogo 501, Torre Corcovado, Suite 702 (part)

22250-040 Rio de Janeiro – Rio de JaneiroBrazil

TRUSTEE, TRANSFER AGENT, REGISTRAR AND PRINCIPAL PAYING AGENTDeutsche Bank Trust Company Americas

60 Wall Street, 27th FloorNew York, NY 10005

USA

LUXEMBOURG LISTING AGENTDeutsche Bank Luxembourg S.A.

2 bd. Konrad AdenauerTrust and Securities Ops-CTAS

L-1115 Luxembourg

LEGAL ADVISORS

To BR Malls International Finance Limited and the Guarantorsas to United States Law

Davis Polk & Wardwell450 Lexington Avenue

New York, New York 10017USA

To the Initial Purchasersas to United States Law

Skadden, Arps, Slate, Meagher & Flom LLPFour Times Square

New York, NY 10036USA

To BR Malls International Finance Limited and the Guarantorsas to Brazilian Law

Machado, Meyer, Sendacze Opice AdvogadosAv. Brigadeiro Faria Lima, 3,144 11th Floor

01451-000 São Paulo – SPBrazil

To the Initial Purchasersas to Brazilian Law

Pinheiro Guimarães – AdvogadosAv. Paulista 1842

24º floor 01310-923São Paulo – SP

Brazil

To BR Malls International Finance Limited and the Guarantorsas to Cayman Islands Law

Maples & CalderUgland House, P.O. Box 309GT

South Church StreetGeorge Town, Grand Cayman

Cayman Islands

INDEPENDENT PUBLIC ACCOUNTANTSTo BR Malls Participações S.A.

PriceWaterhouse CoopersAv. Francisco Matarazzo, 1400

05001-903 – São Paulo, SPBrazil

U.S.$175,000,000

BR MALLS PARTICIPAÇÕES S.A.

9.750% Perpetual Notes

OFFERING MEMORANDUM

Citi UBS Investment Bank

November 5, 2007