parque arauco day colombia · parque arauco day colombia october 2017. 2 agenda • parque arauco...

Parque Arauco Day ColombiaOctober 2017

2

Agenda

• Parque Arauco Corporate Overview

• Parque Arauco Colombia Overview

•

Industry• Managing Parque La Colina• Organizational Improvements• Mixed Use Rationale for Malls• Parque Arboleda Overview

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Parque Arauco Corporate OverviewOctober 2017

CONTACTSSARAH INMON (HEAD OF INVESTOR RELATIONS) |

EDUARDO PEREZ MARCHANT (CORPORATE FINANCE MANAGER) |

CLAUDIO CHAMORRO (CFO) |TEL: (562) 22990510 | EMAIL: [email protected]

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Important Disclaimer

This document has been prepared by Parque Arauco for the purpose of providing general information about the Company.

The Company assumes no responsibility for, or makes any representation or warranty, express or implied, with respect to,

the accuracy, adequacy or completeness of the information contained herein. The Company expressly disclaims any liability

based on such information, errors therein or omissions therefrom.

This presentation includes certain statements, estimates and forecasts provided by the Company with respect to it’s anticipa-

ted future performance and involves significant elements or subjective judgment and analysis that may or may not prove to

be accurate or correct. There can be no assurance that these statements, estimates and forecasts will be attained and actual

outcomes and results may differ materially from what is estimated or forecast herein.

The information contained herein has been prepared to assist interested parties in making their own evaluation of the

company and does not purport to be all - inclusive or to contain all the information that a potential counterparty may desire.

In all cases, interested parties should conduct their own independent investigation and analysis of the Company. Interested

parties can only rely on the result of their own investigation and the representations and warranties made in any definitive

agreement that may be executed.

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INTRODUCTION

OUR OPERATIONS

INVESTMENT HIGHLIGHTS

FUTURE DEVELOPMENTS

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Parque AraucoOPERATIONAL METRICS BY COUNTRY

OPERATIONAL METRICS BY FORMAT

46.0% 60.6%

14.4%

10.3%

29. 1%39.6%Parque Arauco is the third largest shopping center operator in Chile and Peru, and the fourth largest in Colombia.

24% Foreign

investment funds

22% Local brokers

1% Local mutual funds

6% Others 26%

Controlling Group

5% Said Yarur Family

3% Abumohor Family

13%Local pension funds

DAILY TRADED VOLUME 2Q17: US$MM 2.9

85.6%

6.7%2.7%

5.0%

78.9%

6.4%4.0%

10.7%

Parque Arauco at a glance

Indicator/ Country CHILE PERU COLOMBIA TOTAL

Total GLA (m2)1 455,500 391,500 142,500 989,500

Owned GLA (m2) 418,685 276,750 124,050 818,485

Revenues LTM 2Q17 (US$MM)2 157 76 27 260

# of operations 25 19 3 47

MARKET CAP3

US$MM 2,263

SHAREHOLDER STRUCTURE (JUNE 2017)

Chile Peru Colombia

Regional Neighborhood Outlet Strip center

TOTAL GLA1

989,500 M2

TOTALREVENUES2

US$MM 260

TOTAL GLA1

989,500 M2

TOTAL REVENUES2

US$MM 260

Source: Parque Arauco. (1) Does not include Marina Arauco nor Mall Center Curicó.(2) Revenues from July 2016- June 2017. Exchange Rate: US$= 660.05

(3) Source: Bloomberg

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GLA(1) M2

In the last five years Parque Arauco has doubled GLA, revenues and EBITDA

1982 Parque Arauco Kennedy opens as first shopping center in Chile

1993 Arauco Maipu inaugurates in Santiago

1995 Parque Arauco S.A. IPO

1997 Inauguration of Marina Arauco in Viña del Mar, Chile

2006 Parque Arauco expands into Peru with the purchase of a 45% stake in MegaPlaza Norte in Lima

2008 Parque Arauco acquires Arauco Estación in Santiago, Chile

2010 Parque Arauco opens first mall in Colombia, Parque Arboleda in Pereira

2011 Capital increase for US$145 MM

2012 Parque Arauco enters outlet format in Chile by acquiring Arauco Premium Outlet Buenaventura

2014 Capital increase for US$182 MM

2015 Purchase of minority shareholders in Colombia and Peru

2016 Capital increase for US$100 MM2012 2013 2014 20162015 LTM

2Q17

559,700 693,100 728,500818,500 935,900

989, 500

+1.8x

EBITDA(1) US$ MM

99 113 130152 167

182

REVENUES(1) US$ MM

+1.8x

2012 2013 2014 20162015 LTM 2Q17

141 163 1191222 243

260

2012 2013 2014 20162015 LTM 2Q17

+1.8x

Source: Parque Arauco. Exchange Rate: US$= 660.05(1) Does not include Marina Arauco nor Mall Center Curicó.

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The spread over the cost of capital of our last projects is approximately 3%

Source: Parque Arauco

(1) Real cap rate is the yield on cost rate averaged by amount invested and considers the following properties: Arauco Express Calama, Arauco Express Ciudad Empresarial I, Arauco Express Colón, Arauco Express Huechuraba, Arauco Express Irarrázaval, Arauco Express Las Brujas, Arauco Express Luis Pasteur, Arauco Express Manuel Montt, Arauco Express Palmares, Arauco Premium Outlet Buenaventura, Arauco Premium Outlet Curauma, Arauco Premium Outlet San Pedro, Arauco Premium Outlet Coqumbo, Arauco Quilicura, MegaPlaza Chimbote, MegaPlaza Express Villa El Salvador, MegaPlaza Express Chincha, InOutlet Faucett, Viamix Chorrillos, Viamix Las Malvinas, InOutlet Premium Lurín, MegaPlaza Cañete, MegaPlaza Express Barranca, MegaPlaza Pisco, El Quinde Cajamarca, El Quinde Ica, Plaza Jesús María, Parque Caracolí.

(2) Weighted Average Cost of Capital

9%

REAL CAP RATE(1) REAL WACC (2) SPREAD OVER REAL WACC

6%

3%

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Parque Arauco’s value creation is proven by the fact that it has had one of the highest “Total Return” of the real estate sector in the last years

Total ReturnPa

rque

Ara

uco

GGP

Fala

bella

S&P

500

Igua

tem

i

Mac

eric

h

Uni

bail

Ham

mer

son

Mul

tipla

n

Fibr

a U

no

Klep

ierr

e

Sim

on

IPSA

Taub

man

Intu

BR M

alls

Allia

nsce

Cenc

osud

14%

7%8%

4%

12%

4%

7%

-1%

12%

6%

8%

-1%

11%

4%

7%

-6% -7%

Source: Bloomberg(1) Total return includes dividends as of july 31, 2017.

-6%

TOTAL RETURN1, LAST 5 YEARSANNUALIZED, LOCAL CURRENCY

TOTAL RETURN1, LAST 15 YEARSANNUALIZED, LOCAL CURRENCY

Taubman

Klepierre

Falabella

Hammerson

Macerich

Simon

GGP

Parque Arauco

IPSA

Intu

S&P 500

4%

18%18%

11%11%

9%7%7%

4%

2%-4%

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FIXED VS VARIABLE RENTAL REVENUES AS OF JUNE 30, 2017

CONTRACT LENGTH (BASED ON % OF REVENUES)

32%14%

14%

40% 100%

‹2 YEARS 2-3 YEARS 3-4 YEARS ›4 YEARS TOTAL

Our rental revenues are derived primarily from fixed contracts and are protected against inflation

40% of our contracts have a duration of more than 4 years and the average length is 6.0 years

14%Variable Revenues

86% Fixed Revenues

15% Other Revenues

Revenue type and contract duration

85% Rental Revenues

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CORPORATE PURPOSE

Purpose, Mission and Corporate Values

Our purpose is to create spaces that contribute to improving people’s lives.

MISSION

Our mission is to be leaders in developing and operating real estate assets, through profitable andsustainable growth that generates value for our stakeholders

PILLARS OF OUR CULTURE

Happiness

Excellence

STRATEGIC OBJECTIVES

Growth

Profitability

Sustainability

OUR VALUES

and the environment

Respectfor people

Opennessto change and innovation

Right option,Choose the

not the easiest one things

Makehappen

that inspiresan exceptional

Team

Createa work environment

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INTRODUCTION

OUR OPERATIONS


FUTURE DEVELOPMENTS

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Colombia

Perú

Chile

Chilean Portfolio

Chile GLA (m2) % OwnershipOwned GLA

(m2)Occupancy

Year of incorporation

Parque Arauco Kennedy 112,500 100% 112,500 96.8% 1982

Arauco Maipú 74,000 100% 74,000 99.2% 1993

Arauco Chillán 32,000 100% 32,000 99.9% 2007

Arauco Estación 66,500 83% 55,195 97.1% 2008

Arauco San Antonio 28,500 65% 18,388 95.7% 2009

Arauco Express1 33,000 53% 17,602 82.2% 2012

Arauco Premium Outlets2 47,000 100% 47,000 92.7% 2012

Arauco Quilicura 32,000 100% 32,000 100.0% 2013

Arauco Coronel 30,000 100% 30,000 93.5% 2017

Total Chile 455,500 92% 418,685 95.9%

Source: Parque Arauco(1) Arauco Express has 14 Stripcenters in Chile: 11 strip centers in Santiago, 1 in Viña del Mar, 1 in Calama, and 1 in Antofagasta.(2) Arauco Premium Outlet has four outlets located in Santiago, Concepción, Coquimbo and Curauma.

In Chile Parque Arauco has 7 regional shopping centers, 4 outlets and 14 strip centers. The average age of the portfolio is 16 years.

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Colombia

Perú

Chile

Peruvian Portfolio

In Peru in the company has 6 regional shopping centers and 9 neighborhood shopping centers, 2 outlets and 2 strip centers. The average age of the portfolio is 6 years.

Peru GLA (m2) % OwnershipOwned GLA

(m2)Occupancy


MegaPlaza Norte 111,500 50% 55,750 98.2% 2006

MegaPlaza Express Villa

Chorrillos 8,000 50% 4,000 96.5% 2009

Larcomar 26,500 100% 26,500 92.8% 2010

Parque Lambramani 29,500 100% 29,500 88.2% 2010

MegaPlaza Chimbote 28,000 50% 14,000 94.3% 2012

MegaPlaza Express Villa El Salvador 9,500 50% 4,750 96.4% 2012

MegaPlaza Express Chincha 9,000 50% 4,500 76.8% 2013

InOutlet and Viamix(2) 23,000 100% 23,000 76.1% 2013

MegaPlaza Cañete 16,500 50% 8,250 97.9% 2013

MegaPlaza Express Barranca 10,000 50% 5,000 98.7% 2013

MegaPlaza Pisco 14,500 50% 7,250 97.3% 2015

El Quinde Cajamarca 31,000 100% 31,000 80.8% 2015

El Quinde Ica 36,500 100% 36,500 96.5% 2015

Plaza Jesús María 14,500 100% 14,500 47.7% 2016

MegaPlaza Jaén 14,500 50% 7,250 82.8% 2016

MegaPlaza Huaral 9,000 50% 4,500 65.6% 2017

Total Peru 391,500 71% 276,250 90.2%

Source: Parque Arauco(1) Only partner in peru is Grupo Wiese, which includes MegaPlaza formats (50%).(2) InOutlet and Viamix includes two premium outlets in Lima and two strip centers in Lima.

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Colombia

Perú

Chile

Colombian Portfolio

Parque Arauco has 3 regional shopping centers in Colombia and the average age of the portfolio is 3 years

Colombia GLA (m2) % OwnershipOwned GLA

(m2)Occupancy


Parque Arboleda 41,000 55% 22,550 95.3% 2010

Parque Caracoli 38,500 100% 38,500 87.8% 2013

Parque La Colina 63,000 100% 63,000 88.1% 2016

Total Colombia 142,500 87% 124,050 90.1%


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INTRODUCTION

OUR OPERATIONS


FUTURE DEVELOPMENTS

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Our operations

PortfolioParque Arauco has 3 regional shopping centers in Colombia and the average age of the portfolio is 3 years

1.Consistent results in a

challenging macroeconomic environment

2.Stable and

diversified revenues

4.Solid corporate governance and increased concern with

sustainability

6.Important growth

opportunities

3.Strong commercial

relationships with local and global businesses

5.Conservative debt

structure and outstanding financial performance

Investment Highlights

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Consistent results in a challenging macroeconomic environment

Parque Arauco is positioned in countries with strong macroeconomic prospects

Positive but weaker macroeconomic outlook and attractive industry dynamics

2015

2.3%

2016

1.6%

2017f

1.7%

2015

3.3%

2016

3.9%

2017f

3.5%

2015

3.1%

2016

1.9%

2017f

2.3%

2014

7.4%

2015

6.0%

2016

4.9%

2014

8.2%

2015

4.9%

2016

7.6%

2014

5.9%

2015

7. 1%

2016

7.2%

2015

18.0

2016

18.2

2017f

18.4

2015

31. 1

2016

31.5

2017f

31.8

2015

48.2

2016

48.8

2017f

49.3

2015

23,682

2016

24,113

2017f

24,797

2015

12,389

2016

12,903

2017f

13,501

2015

13,833

2016

14, 103

2017f

14,609Av. Latam:

15,078

Av. Latam:41.7

Source: GDP Growth, Population and GDP Per Capita: International Monetary Fund. Retail Sales: Euromonitor.

GDP GROWTH

POPULATION (MILLIONS) GDP PER CAPITA, PPP

RETAIL SALES GROWTH

Chile Peru Colombia

Chile Peru Colombia Chile Peru Colombia

Chile Peru Colombia

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+8.3% +8.5% +9.9%+9.5%

Chile

Peru

Tenant sales1 Revenues1 NOI1,2

Colombia

(1) Chile in MMCLP, Peru in ThPEN and Colombia in MMCOP. (2) Not including overhead expenses (Corporate headquarters, regional Services Center, Chile Division, Peru Division and Colombia Division)

GLA1

983,814 1 ,077 , 18895,716 103,848 85,191 93,660

LTM 2Q16

420,500 455,500

LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17


Results have been positive in all three countries

+4.8% +3.9% +7.6% +12.3%

2,701 , 1072,807 ,789

230,717248,242

172,496193,714

373,500391 ,500

LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17

+80. 4% +49.9% +69.9% +89.3%

369,553554,027

42,68172,532

30,88658,468

79,000142,500

LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17 LTM 2Q16 LTM 2Q17

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Consistent Same Store Growth and a Healthy Occupancy Cost

2Q17

1 .7

4Q16

7 .2

3.7

2Q16 3Q16

4. 1

1Q17

2.6

2Q17

2.6

3Q16

6.2 7 .0

1Q172Q16

4.3

4Q16

2.7

2Q16

10.2%

2Q17

10.2%

58%Others

CHILE SAME STORE SALES / CHG. % CHILE SAME STORE RENT / CHG. % CHILE OCCUPANCY COST

42%Anchor Stores

1) Peru’s Same Store Sales and Same Store Rent in 4Q16 do not include Larcomar due to contingencies.

2Q17

0.2

4Q16

5.7

-2.4

2Q16 3Q16

9.2

1Q17

8.2

2Q17

-0.9

8.4

4Q16

5.5

2Q16 3Q16

5.3

1Q17

7 .6

70%Others

2Q16

11.8%

2Q17

13.9%

COLOMBIA SAME STORE SALES1 / CHG. % COLOMBIA SAME STORE RENT1 / CHG. % COLOMBIA OCCUPANCY COST

30%Anchor Stores

PERU SAME STORE SALES1 / CHG. % PERU SAME STORE RENT1 / CHG. % PERU OCCUPANCY COST

4. 2

2Q174Q16

2.0-1 . 1

2Q16 3Q16

1 .6

1Q17

0.4

2Q17

3.0

4Q16

5.8

-2.9

2Q16 3Q16

3.8

1Q17

4.641%Others

2Q16

7.6%

2Q17

7.5%

59%Anchor Stores


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Stable and diversified revenues

Parque Arauco diversifies its market risks at a country, format, and socio-economic level

5043 7 100

Medium to HighIncome: Includes ABC1

and C2 in Chile, A and B in Peru and 6, 5 and 4

in Colombia

Medium Income:Includes C3 and D in

Chile, C and D in Peru and 3 in Colombia

Medium to LowIncome: Includes

E in Chile and Peru and 2 and 1 in

Colombia

10.3%

29.1%

85.6%

6.7%2.7%

5.0%

COUNTRY LEVEL DIVERSIFICATION (%REVENUES)

SOCIO-ECONOMIC LEVEL DIVERSIFICATION (% REVENUES)

FORMAT LEVEL DIVERSIFICATION (% REVENUES)

Chile Peru Colombia Regional Neighborhood Outlet Strip center

60.6%

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Stable and diversified revenues

With a 39% market share in Chile, Parque Arauco is the outlet market leader in the countries where we operateOutlets currently in our portfolio

Keys to the Premium Outlet Format >>1 >> Location

Located near main cities

2 >> Brands Premium name-brands

3 >> Discounts More than 30% discount

ARAUCO PREMIUM OUTLET BUENAVENTURA, CHILE ARAUCO PREMIUM OUTLET CONCEPCIÓN, CHILE

INOUTLET PREMIUM OUTLET LURIN, PERÚINOUTLET FAUCETT, PERÚ

ARAUCO PREMIUM OUTLET CURAUMA, CHILE

ARAUCO PREMIUM OUTLET CURAUMA, CHILE

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Strong commercial relationships with local and global brands

Consolidated commercial relationships with well-known tenants

Anchor Stores

Non AnchorStores

>>

>>

Malls

11

4

10

5

12

Years as a client

35

16

3512

9

Total GLA (m2)

96.554

33.011

74.54848.050

6.058

Country

CHILEPERU

COLOMBIA

CHILEPERU

CHILEPERU

CHILEPERU

CHILEPERU

COLOMBIA

18 117.316CHILEPERU

COLOMBIA

4 188.934CHILEPERU

COLOMBIA

14 142.307CHILEPERU

COLOMBIASource: Parque Arauco

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Strong commercial relationships with local and global brands

Parque Arauco is supporting the globalization of several brands entering the Andean region


NEW TENANTS PARQUE ARAUCO KENNEDY IN THE LAST 5 YEARS:

80% of new GLA leased in Parque Arauco Kennedy over the last 5 years has been leased to international brands.

Many brands have opened their first store in Chile in Parque Arauco Kennedy during the last five years including Tiffany & Co., Dolce & Gabbana, Forever 21, Bath & Body Works, Tory Burch, Victoria’s Secret, Omega, Versace Collection, Vince Camuto, and BCBG.

International Local

NOMBRE GLA

FOREVER 21 1,639

TOP SHOP 464

UNDER ARMOUR 445

LOUIS VUITTON 420

GUCCI 406

BANANA REPUBLIC 363

AMERICAN EAGLE 351

AEROPOSTALE 342

DOLCE & GABBANA 316

BURBERRY 276

EMPORIO ARMANI 247

SALVATORE FERRAGAMO 241

TIFFANY & CO 219

EL VOLCAN 218

BOLD 214

NOMBRE GLA

ETIQUETA NEGRA 209

MICHAEL KORS 208

RALPH LAUREN 207

TORY BURCH 201

ERMENEGILDO ZEGNA 197

ENTEL 190

ARTE ISABEL ANINAT 161

VICTORIA´S SECRET 129

ETAM 123

MILK 117

CANELA HOME & DECOR 105

METRO CUADRADO 114

JUSTICE 104

BATH & BODY WORKS 103

OCTOBER 102

OTHERS 3,020

TOTAL 14,956

>>

INTERNATIONAL LOCAL

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Solid corporate governance and increased concern with sustainability

Parque Arauco has received important recognitions from local and international organizations

Workplace Recognition

Investor Relations Recognition

Management Recognition

Sustainability Recognition

Best Capital Markets Strategy:

Andes in 2016.

In 2016, Parque Arauco is part of the Dow Jones

Emerging Market Sustainability Index. We are the

first Latin American real estate company to be part

of this prestigious index.

Best Investor Relations

Department for Mid-Size

companies according to Santander

and Revista Capital in 2016.

Parque Arauco was recognized by

Great Place to Work in Chile and

Peru in 2016.


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Solid corporate governance and increased concern with sustainability

In the last years we have continued advancing our sustainability strategy


Environmental Management1.We established the baseline for energy, water, greenhouse gases (GHG) and residual consumption in Chile, Peru and Colombia. 2.We developed an environmental management model, which will be implemented in 2017. 3.We continued sustainably building projects in Colombia (Parque La Colina) and Peru (InOutlet Premium Lurin). 4.We began a study to identify and prioritize climate change risks in some of our assets and projects.

Social Management5.We worked on designing a community relationship strategy and policy applicable to all of operations. 6.We approved and implemented a corporate donation policy.7.More than 20 foundations or social organization had access to free space in our assets. 8.Our intellectual disability intern program had more than 40 participants. 9.We supported more than 340 small entrepreneurs, with more than 20 local and emerging entrepreneur fairs.

Corporate Governance10. We evaluated our corporate governance practices with an expert consultant in this matter. 11. We redefined our values, purpose, mision and long term strategy. 12.We strengthened our risk management team, which performed an exhaustive examination of this matter.13.We initiated a diagnostic with international experts in safety and security standards in our assets. 14.We continued being one of the best places to work, according to the ranking Great Place to Work.

Other Highlights15.We adhere to the United Nations Global Compact.16. We are the first Latin American Real Estate Company to enter into the Dow Jones Sustainability Emerging Markets Index.

2016 Highlights

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Conservative debt structure and outstanding financial performance

Parque Arauco's policy is to finance projects with 50% debt and 50% equity, and is comfortably within all its covenantsLIABILITIES / EQUITY

EBITDA/FINANCIAL EXPENSES NET FINANCIAL DEBT/EBITDA

|NET FINANCIAL DEBT / EQUITY

2012 2013 2014 20162015 2Q17

3.42x3.89x

3.37x 3.33x3.04x 3.12x

2012

2012

2013

2013

2014

2014

2016

2016

2015

2015

2Q17

2Q17

0.43x

3.85x

0.59x

5.00x

0.47x

4.25x

0.76x

5.87x

0.72xx

5.88x

0.79x

6.06x

> 2.50x

< 1.40x < 1.50x

2012 2013 2014 20162015 2Q17

0.78x0.89x 0.81x

1.14x 1.18x 1.16x

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JUNE 2017


The Company has a conservative debt structure

JUNE 2014

175

938

6498

3311

77

188

25-36months

13-24months

0-3months

49-60months

7-12months

11-20years

37-48months

4-6months

6-10years

21-35years

0

150

4

80

156300134

735

158

25-36months

13-24months

0-3months

49-60months

7-12months

11-20years

37-48months

4-6months

6-10years

21-35years

181

333

IMPROVEMENT IN LOCAL DEBT RATINGFitch: AA- Feller: AA- ICR:AA-

BBB- BBB BBB+ A- AA-A AAA+ AA+

Source: Parque Arauco(1) Does not include accrued interests and the exchange rate is at the close of June 30, 2017.

55% UF

66% UF

12% CLP 7% CLP

13% PEN 16% PEN

1 1% USD 10% COP

9% COP

7% Variable79%

Fixed 93% Fixed

21% Variable

DEC. 2016

SUMMARY OF DEBT BY CURRENCY

LIABILITY AMORTIZATION PROFILE AND DURATION1

SUMMARY OF DEBT RATES

JUNE 2017JUNE 2014

June 2014 (US$MM)Average Duration: 4.1 Years

June 2017 (US$MM)Average Duration: 7.0 Years

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The cost of debt has decreased importantly in the past 5 years

The cost of debt of Parque Arauco has decreased 160 points from 4.1% to 2.5%The spread five years ago had collateral agreements, while the current spread is

unsecured with no collateral.

Date: 12-12-2014Base: 1.66%Spread: 1.74%Duration: 14.3



Generic long-term bond issued by Parque Arauco in Chile

Source: Risk America

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Important growth opportunities

Parque Arauco has 0.9 million m2 and a 2% market participation in Latin American and a 8% market participation in the Andean Region.

Source: Prepared using information published by the International Council of Shopping Centers (ICSC)., Peruvian Shopping Center Council (ACCEP) and Parque Arauco analysis

BrazilGLA: 14.7 million de m2

32% of total

Latin AmericaGLA: 46.1 million m2 Andean Region

GLA: 11.9 million m2

25% of total

MexicoGLA: 17.4 million m2

38% of total

ArgentinaGLA: 2.1 million m2

5% of total

Indicator CHILE PERU COLOMBIA

Total GLA (th) 3,600 2,700 5,600

GLA Parque Arauco (th) 454 382 142

Market Share 13% 14% 3%

Rank #3 #3 #5

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Parque Arauco participates in markets with a growing retail market

2,500

2,000

1,500

1,000

500

-

OPENING PEAKING MATURING CLOSING

Chile

Mexico

Brazil

PeruColombia

(1) Source: International Council of Shopping Centers, World Bank, Parque Arauco analysis(2) Source: AT Kearney Global Retail Development Index 2016(3) Source: CBRE- How Global is the business of retail?. This report did not include Colombia.


RETAIL SALES PER CAPITA AND GLA PER 1,000 INHABITANTS1

AT KEARNEY GRDI WINDOW OF OPPORTUNITY2

GLA

per

1,0

00

hab

itant

s

Middle class is growing; consumers are willing to explores organized

formats; government is relaxing restrictions

Consumers seek organized formats and

greater exposure to global brands; retail

shopping districts are being developed; real

estate is affordable and available

Consumer spending has expanded significantly; desirable real estate is

more difficult to secure; local competition has

become more sofisticated

Consumes are more used to modern retail; discretionary spending is higher; competition

is fierce both from local and foreign retailers;

real estate is expensive and not readily available

RETAIL PRESENCE BY COUNTRY3 (% OF GLOBAL BRANDS IN COUNTRY)

39.5%

Mexico

21.0%

Chile Brazil

20.7%

Argentina

11.7%

Venezuela

10.2%

Peru

9.9%

United States

16,000

12,000

8,000

4000

Canada Australia UK Chile Mexico Colombia Peru Brazil Argentina

Reta

il Sa

les

Per

Capi

ta

51.5%

United States

57.5%

UK

Retail sales per capitaGLA per 1,000 habitants

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Parque Arauco's growth has come from greenfield projects and M&A


Total GLA

in 2006

194,74555,651

83,708 24,59591,625 27,676

80,242

132,85837,400

90,000

989,500

Total GLA

in 2007

Total GLA

in 2010

Total GLA

in 2014

Total GLA

in 2008

Total GLA

in 2011

Total GLA

in 2015

Total GLA

in 2009

Total GLA

in 2013

Total GLA

in 2012

New GLA

in 2016

Greenfields663,143 m2

M&A326,357 m2

Greenfield M&A

67%

33%

Total GLA

2Q2017

126,500

New GLA

in 2017

44,500


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INTRODUCTION

OUR OPERATIONS


FUTURE DEVELOPMENTS

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Future Developments2017 and onwards

New Projects Type Country FormatEstimated Opening

Date

Total GLA m2 % ownership

Owned GLA m2

Total Investment

Local Currency

Total Investment

USDMM

Parque Angamos Development Chile Neighborhood 2H18 11,000 55% 6,050 886,000 36

MegaPlaza Villa El Salvador II Development Peru Neighborhood 2H17 11,000 50% 5,500 36,000 11

Various Projects SCP Development Peru Neighborhood 2H18 19,500 100% 19,500 180,000 55

Viamix Colonial Development Peru Strip Center 2H17 3,000 100% 3,000 25,000 8

Arauco Premium Outlet Bogota Development Colombia Outlet 2H17 13,000 100% 13,000 78,000 26

Subtotal 57,500 47,050 136

Expansions Type Country FormatEstimated Opening

Date


Owned GLA m2

Total Investment

Local Currency

Total Investment

USDMM

Parque Arauco Kennedy Expansion2 Expansion Chile Regional / Hotel 2H21 11,000 100% 11,000 5,355,000 215

Parque Lambramani Renovation Renovation Peru Regional 3Q17 N/A 100% N/A 22,500 7

El Quinde Cajamarca Expansion Expansion Peru Regional 1H18 2,500 100% 2,500 40,000 12

Hotel Bucaramanga Expansion Colombia Hotel 3Q17 N/A 100% N/A 17,500 6

Subtotal 13,500 13,500 240

Projects Incorporated in 2017 Type Country FormatEstimated Opening

Date


Owned GLA m2

Total Investment

Local Currency

Total Investment

USDMM

Arauco Coronel Acquisition Chile Regional 1Q17 30,000 100% 30,000 1,520,000 61

MegaPlaza Express Huaral Development Peru Neighborhood 1Q17 9,000 50% 4,500 46,500 12

Subtotal 39,000 34,500 73

New Landbank 11

Total 110,000 95,050 460

Remaining to Invest 274

1) Projects in Chile in UF, in Peru in ThPEN and in Colombia in MCOP 2) Exchange rate as of June 30, 2017: 26,665 CLP/UF, 664.3 CLP/USD, 3,045 COP/USD, 3.3 PEN/USD.2) In addition to the 11,000 m2, this expansion includes a 401 room Hilton by Hilton Hotel and largest hotel convention center in Santiago.

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OPENING DATE: The shopping center opened on December 6, 2016.

COMMERCIALIZATION STATE: 88.1% of the GLA is open. H&M opened on May 6, 2017.

BRANDS:

Parque La Colina was inaugurated in December 2016

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We announced a new expansion of Parque Arauco Kennedy

PROJECT DETAILS:

Investment: 5,355,000 UF5-star hotel: Hilton by HiltonRooms: 401Convention center: 3,000 m2

Parking spots: 700Additional GLA: 11,000 m2

- The project will have the first five star Hilton Hotel in Chile, a convention center, as well as theincorporation of new stores and more parking.

- The five star Hilton hotel will have 401 rooms, two restaurants, three bars, two pools, a gym and an executive lounge. It will have the largest hotel convention center in the country, with the possibility of hosting over 2,800 people.

- The expansion will include a new flagship Falabella store with almost 25,000 m2 of GLA. This store will occupy the first four floors of the

HOTEL OPERATOR:

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LandbankName m2 % Ownership Total Cost (local currency) Total Cost (USD MM)

Quilicura 25,486 100% 78,000 3

Buenaventura 115,864 100% 455,000 18

Chicureo 47,614 100% 206,000 8

Los Andes 39,254 100% 117,000 5

Others in Chile 67,550 92% 522,000 21

Total Chile 295,768 98% 1,378,000 55

Parque El Golf - San Isidro 16,350 68% 127,590 40

Chimbote 42,657 100% 18,000 6

Talara 30,675 100% 9,400 3

Ica 12,643 100% 13,500 4

Chiclayo 6,609 100% 6,300 2

Pomalca Chiclayo 45,042 100% 6,565 2

Lambayeque- MegaPlaza 25,260 50% 18,900 6

San Juan de Lurigancho- MegaPlaza 80,000 50% 10,415 3

Others MegaPlaza 106,157 50% 85,685 26

Total Peru 365,393 70% 296,355 92

Neiva 49,537 100% 18,000 6

Valledupar 46,000 100% 30,000 10

Barranquilla 56,166 100% 76,000 26

Total Colombia 151,703 100% 124,000 42

Total 812,864 86% 189

1) Landbank in Chile in UF, in Peru in ThPEN and in Colombia in MCOP 2) Exchange rate as of June 30, 2017: 26,665 CLP/UF, 664.3 CLP/USD, 3,045 COP/USD, 3.3 PEN/USD.

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Glossary»Adjusted FFO Margin - AFFO / revenues

»AFFO -Adjusted Funds From Operations: Net Profit - Depreciation & Amortization - Other Income/expenses - Share of Profit (Loss) of Associates Accounted - Foreign Exchange Differences - Income (Loss) for indexed assets and liabilities - Gains (losses) from the difference between the previous book value and the fair value of financial assets - Deferred tax+ Associates accounted Adjusted FFO

»Controlling Adjusted FFO -AFFO attributable to the shareholders of the company

»Controlling FFO -FFO attributable to the shareholders of the company

»EBITDA - Earnings Before Income Tax Depreciation and Amortization: Revenues + Cost of Sales + Administration Expenses - Depreciation and Amortization EBITDA margin -EBITDA divided by revenues

»EPS -Earnings Per Share: Net income attributable to the equity holders of the company/weighted average number of shares outstanding

»FFO -Funds From Operations: Net Profit - Depreciation & Amortization - Share of Profit (Loss) of Associates Accounted + Associates Accounted FFO

»GLA -Gross Leasable Area. Equivalent to the sum of all

the areas available for lease

»Greenfield Projects - Organic development of new shopping centers

»Landbank -Land held by the company for future development

»LTM -Refers to information from the last twelve months

»Monthly Revenues/m2 -Monthly revenues divided by the occupied GLA for the period

»Monthly Sales/m2 -Monthly tenant sales divided by the occupied GLA for the period

»Neighborhood Mall -A shopping mall with a GLA between 6,000 and 20,000 m2

» Net income margin -Net profit / revenues

»NOI -Net Operating Income: Revenues + Cost of Sales + Administration Expenses - Depreciation & Amortization + Associates accounted NOI

»Occupancy -GLA paying rent divided by total GLA

»Occupancy cost -Minimum rent, plus variable rent, plus common expenses, plus a promotion fund that the

tenants pay Parque Arauco divided by the sales of the tenant.

»Owned GLA -Total GLA weighted by Parque Arauco’s interest in the mall

»Pipeline -Greenfield and expansion projects under development

»Premium Outlet - Shopping center located outside of the city offering name brand clothing and goods for a reduced price

»Regional Mall - A shopping mall with a GLA over 20,000 m2.

»SSR -Same Store Rent: Percentage change in rent collected from tenants that paid rent in both of the periods compared

»SSS -Same Store Sales: Percentage change in sales from tenants that reported sales in both of the periods compared

»Strip Center -A shopping center with a GLA less than 6,000 m2 Tenant Sales Tenant sales of the consolidated assets

»UF -Unidad de Fomento: A chilean currency unit indexed according to inflation on a daily basis.

Parque Arauco ColombiaOctober 2017

[2]

I. Introduction to Colombia

II. Parque Arauco Colombia

Agenda

Versión 16-10-2017 20:30

[3]



Agenda

4

Colombia has one of the largest GDPs in the region

US$, 2017 (F) (PPP)US$ Billion, 2017 (F) (PPP)

184

454

462

478

770

961

Venezuela

Colombia

Ecuador

Peru

Chile

Brazil 3.344

Argentina

2.532Mexico

Venezuela

10.782

14.263

Ecuador

Colombia 15.433

14.369

15.983Brazil

20.299

Argentina

Peru

Mexico

Chile

21.548

25.710

COLOMBIA HAS A LARGE GDP FOR REGIONAL STANDARDS AND A RELATIVELY SMALL PER CAPITA GDP

Source: World Economic Outlook, October 2016, International Monetary Fund (IMF)

5

Colombia will continue to have a leading growth in the region

Colombia

Mexico

Ecuador

Argentina

0,3

3,2

3,7

2,6

Chile 2,5

Brazil

2,4

1,6

Peru

20192017

2,3

3,6

3,0

2018

3,63,6

20212020

Source:, World Economic Outlook, April, 2017, International Monetary Fund (IMF)

Real GDP% Change ForecaseRead GDP% Change, Average 2017-2012

COLOMBIA HAS STRONG GROWTH GOING FORWARD COLOMBIA GDP GROWTH EXPECTATION

6

Colombia has a diversified economy

17,1%

23,1%

Transport and communicationsAgricultureElectricity, gas and water

Commerce

7,9%

Financial intermediation

Social and personal services

Manufacturing

6,7%

13,5%

Construction

Mining

8,2%

7,1%

12,4%

3,8%

Source: Colombian Central Bank

2016 GDP BREAKDOWN BY ECONOMIC ACTIVITY

7

diversified exports and imports

TOP 2016 EXPORTS (% OF TOTAL) TOP 2016 IMPORTS BY USE (% OF TOTAL)

Source: Central Bank of Colombia

Ferronickel

Petroleum and derivtives1,0%

7,7%

Coffee

14,8%

Carbon

33,2%

Mining

Industrial

5,8%

8,9%

Farming

28,5%

11,2%

Farming

Industrial

Non-durable goods

8,5%

13,3%7,8%

Transportation

3,9%

Durable Goods

Combustibles

32,9%

Industrial (Raw material)

3,1%Construction

18,9%

8

There are 5 cities in Colombia with over 1,000,000 people

Bucaramanga

City Population

1. Bogotá 8,000,000+

2. Medellín 2,500,000 +

3. Calí 2,400,000+

4. Barranquilla 1,200,000+

5. Cartagena 1,000,000+

6. Cúcuta 650,000+

7. Soledad 600,000+

8. Ibagué 550,000+

9. Soacha 525,000+

10. Bucaramanga 500,000+

11. Villavicencio 500,000+

12. Santa Marta 490,000+

13. Pereira 470,000+

BogotáPereira

Cartagena

Calí

Barranquilla

Cúcuta

Soledad

Ibagué

Soacha

Source: DANE

Medellín

9

Macroeconomic indicators are sending mixed signals

-40

-30

-20

-10

0

10

20

30

40

20152013 20172014 20162012 2018

CHALLENGING CONSUMER CONFIDENCE

Consumer confidence levels (DANE)

STABLE UNEMPLOYMENT RATES

Unemployment rates(DANE)

10,5

11,0

10,0

20182017

9,0

20162015201420132012

0,0

9,5

DECREASING INFLATION

Inflation % (DANE)

4

6

0

7

5

3

2017201420132012 20162015

DECREASING LONG TERM RATES

Colombia generic 10 year bond (Bloomberg)

7

0

6

8

9

20152013 20142012 20172016

10

Some consumption indicators are improving

DECREASING POVERTY RATES

Poverty headcount (% of population)

2015

28%

20142009

34%

2008

33% 31%

20132010 2012

37%42%

29%

40%

2011

IMPROVED BANKING PENETRATION

%Population with at least one financial product

64,9%62,2%71,5%67,2%

75,0%72,5%

20152010 2012 2013 20142011

A STEADY POPULATION GROWTH

1,0%

1,2%

0,9%1,1%

2010

1,1%

20142012 2013

1,0%

2011

1,1%0,9%

20092008 2015

Population growth %

GROWING URBAN POPULATION

2015

1,4%

2011

1,4%1,5%

201320102008

1,3%1,6% 1,5%

2009 2014

1,3%

2012

1,3%

Urban population growth %

Source: World Bank for poverty rates, population growth rates and Asobancaria for banking penetration.

11

CHILE

PERÚ

COLOMBIA

improving institutional frameworks

EASE OF DOING BUSINESS RANK (2016)

Mexico 47

Colombia 53

Peru 54

Chile 57

Argentina 116

Brazil 123

WEF GLOBAL COMPETITIVENESS DETAIL FOR COLOMBIA

01234567

Institutions

Infrastructure

Macroeconom

Health and

Higher

Goods marketefficiency

Labor marketefficiency

Financial

Technologicalreadiness

Market size

Businesssophistication

Innovation

WEF GLOBAL COMPETITIVENESS RANK (2016)

Chile 33

Mexico 51

Colombia 61

Peru 67

Brazil 81

Argentina 104

Score 1 (low) to 7 (high)

Source: Ease of Business, World Economic Forum

12

Shopping center sales have outpaced sector dynamics in Colombia

10.000

0

5.000

15.000

20142013

+11,6%

201620152011 2012

SHOPPING CENTER SALES (RADDAR/ ACE COLOMBIA) (THUSD)

50.000

40.000

30.000

20.000

10.000

0

70.000

60.000

20162013

+6,1%

20122011 20152014

RETAIL SALES (EUROMONITOR) (THUSD)

200.000

100.000

150.000

50.000

0

+3,9%

201520132011 201620142012

FINAL CONSUMPTION (COLOMBIAN CENTRAL BANK) (THUSD)

RETAIL AND MALL SALES AS % OF TOTAL FINAL CONSUMPTION

60,6% 60,3%

7,3%6,1%

33,3% 32,3%

2012

32,8%

2011

6,9%

59,8%

33,0% 33,6%

8,0%

60,4% 58,4%

2013

7,3%

2014 2016

35,0%

8,7%

56,3%

2015

Retail (ex mall)Mall OthersSource: Colombian Central Bank, Euromonitor, Raddar, ACE Colombia

13

Distribution of Colombian spend

HOW 100 COLOMBIAN PESOS ARE SPENT IN A SHOPPING CENTER

4,5% 5,2%

27,7%28,6%

7,5%8,6%

EducationHousing

7,3%

Eating outside

of the home

Entertainment& culture

Transport. & Comm.

Health

6,5%

38,4%

Clothing and shoes

OthersAnchor stores

39,0%

7,2%6,6%

0,1%

2,6% 3,0%3,7%

0,0%

3,6%

2017

2016

Source: Raddar

14

Colombian elections

• Presidential elections take place in May 2018• Latest Datexco voting intention survey results:

4,1%

20,1%

Germán Vargas Lleras

5,9%

16,5%

7,6%

12,1%

Gustavo Petro

Sergio Fajardo

11,2%

Juan Manuel Galan

Clara Lopez know

No Response

WHO WOULD YOU VOTE FOR IF THE ELECTIONS WERETOMORROW?

Simón Gaviria

4,3%

18,6%

13,1%

2,4%

Germán Vargas Lleras

3,3% 2,6%

Gustavo Petro

Francisco Santos

13,7%

Alejandro Ordoñez

Roy Barreras

Piedad Córdoba

WHICH CANDIDATE WOULD YOU NEVER VOTE FOR?

52,9%

Unemploy.

41,0%

Political corruption

Common crimes

Health National safety

Educational coverage

15,4% 12,8%

Education quality

11,5% 9,8%

EconomySafety Health coverage

39,4%

11,6% 10,1%20,0%

WHAT ARE THE THREE PROBLEMS THE NEXT PRESIDENTSHOULD SOLVE?

Source: Datexco

15

Peace agreement

• The agreement is to end the civil war with the FARC and create a stable and during peace for Colombia. The agreements are summarized as:

1. A new Colombian countryside: Comprehensive rural reform2. Political participation: A democratic opportunity to build peace3. End of the conflict: Agreement on the bilateral and definitive

ceasefire and cessation of hostilities and laying down of arms4. Solution to the problems of illicit drugs5. Agreement regarding the victims of the conflict:

Comprehensive system from truth, justice, reparation and non-repetition

6. Implementation and verification mechanisms

Source: Colombia Peace Organization

[16]



Agenda

17

CHILE

PERÚ

COLOMBIA

Purchase of Barranquilla

land

Purchase of

minority stake

Parque Caracolí opens in

Bucaramanga

History of Parque Arauco in Colombia

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Parque Arauco opens

office in Colombia

Parque Arboleda opens in Pereira

Parque La Colina opens in Bogotá

Agreementsigned with

Bancolombia

Purchase of Valledupar land

Purchase of La Colina

land

Purchase of Bucaramanga

land

Agreementsigned withMerheg´sfamily to developParque

Arboleda


18

Legal Structure

INVERSIONES INMOBILIARIASARAUCO ALAMEDA S.A.S.

INVERSIONES COLOMBIANASARAUCO S.A.S.

INMOBILIARIA LA COLINA ARAUCO S.A.S

INVERSIONES INMOBILIARIAS BUCARAMANGA ARAUCO S.A.S

EJE CONSTRUCCIONES S.A.S

100% 100%

6,0001632%

48,9998878%100%100%

PARQUE ARAUCO INTERNACIONAL S.A. PARQUE ARAUCO S.A.

99,9956392%


19

Organizational chart

Gerencia Legal

Gerencia de Administración y

Finanzas

Gerencia Inmobiliaria

Country ManagerJuan Pablo Romero

Subgerencia de Personas

Gerencia de Centros Comerciales

Gerencia Comercial


20

CHILE

PERÚ

COLOMBIA

Parque Arauco has three shopping centers in Colombia

BogotáPereira

Bucaramanga

Colombia GLA (m2) % OwnershipOwned GLA

(m2) OccupancyYear of incorporation

Parque Arboleda 41,000 55% 22,550 95.3% 2010

Parque Caracoli 38,500 100% 38,500 87.8% 2013

Parque La Colina 63,000 100% 63,000 88.1% 2016

Total Colombia 142,500 87% 124,050 90.1%


21

Parque Arboleda - Pereira

TENANTS SALES (MMCOP)REVENUES WITHOUTOVERHEAD (MMCOP)

NOI WITHOUT OVERHEAD(MMCOP)

GLA (M2) AND OCCUPANCY (%)

LTM 2Q16

33.000

LTM 2Q17

40.500 41.000

2016

40.500

2015 LTM 2Q17

218.743

2016

198.348 215.055

+10,3%

2015

+3,8%

LTM 2Q16

210.655 25.07924.373

20162015

21.636

LTM 2Q17

+15,9% +9,2%

22.959

LTM 2Q16

+23,0%

LTM 2Q17

16.27920.01919.436

2015 2016

+14,4%

LTM 2Q16

17.501

92,9%94,6% 95,3%95,6%

KEY METRICS

PARQUE ARBOLEDA

Opening: 2010

Location: Cra. 14 #5-20, Pereira

Anchor: Falabella

Type of mall: Regional

Total GLA: 41,000 m²

Owner: Parque Arauco (55%) and

Merheg´s family (45%)

Pereira


22

Parque Caracolí - Bucaramanga

TENANTS SALES (MMCOP)REVENUES WITHOUTOVERHEAD (MMCOP)

NOI WITHOUT OVERHEAD(MMCOP)

GLA (M2) AND OCCUPANCY (%)

38.500

LTM 2Q16

38.500

LTM 2Q17

20162015

38.500 38.500

158.898 158.129

LTM 2Q17

-0,5%

LTM 2Q16

+4,5%

2016

161.384

2015

151.378

LTM 2Q16

19.723

-0,3%

20.073

LTM 2Q17

2015

18.978 19.656

+3,6%

2016

12.801 13.385

LTM 2Q16

+1,5%+6,2%

LTM 2Q17

13.591

2016

13.909

2015

KEY METRICS

100,0%

87,8%88,4%87,3%

PARQUE CARACOLÍ

Opening: 2013

Location: Carrera 27 #29 145

Bucaramanga

Anchor: Falabella



Owner: Parque Arauco (100%)

Bucaramanga


23

Parque La Colina - Bogotá

SALES / M2 (MMCOP)REVENUES / M2 WITHOUT

OVERHEAD (MMCOP) NOI MARGINGLA (M2) AND

OCCUPANCY (%)

63.00063.000

2017 E

63.000

2Q171Q17 1Q17

663.194

2Q17

505.343

2Q17

94.093

1Q17

89.97590,8%

1Q17 2Q17

87,9%

KEY METRICS

90,0%88,1%77,7%

PARQUE LA COLINA

Opening: 2016

Location: Cra. 58d #146-51,

Bogotá

Anchor: Falabella




Bogotá


24

Revenue type and contract duration

16%

84%

Other Revenues

Rental Revenues

Fixed Revenues

Variable Revenues

97%

3%

47

9

21

23

< 2 years >4 years3-4 years2-3 years

FIXED VS VARIABLE RENTAL REVENUES COLOMBIA

As of June 30, 2017

CONTRACT LENGTH IN COLOMBIA

Based on % of revenues


25

CHILE

PERÚ

COLOMBIA

Parque GLA in Colombia has tripled since 2010

142.500

20172015

71.500

2014 20162013

143.000

71.500

+331,8%

33.000 33.000

20122011

33.000

71.500

2010

Parque Arboleda

Parque Caracolí

Parque La Colina

Total GLA


26

CHILE

PERÚ

COLOMBIA

The owned GLA has increased over 12x

Parque Caracolí

Parque Arboleda

Parque La Colina

Own GLA

0,2

0,1

140.000

120.000

100.000

0,9

0,0

60.000

0

80.000

0,4

0,8

0,7

0,6

0,5

0,340.000

20.000 9.999

2012

31.174

2013

31.174

2010

9.999

20162015

9.999

123.775

2011 2017

56.650

124.050

2014

Ownership %

We increased our ownership when we purchased minority participationin 2015

27

The GLA of Parque Arauco Colombia has increased fourfoldin the last five years

GLA (M²) TENANT SALES (MUSD)2

REVENUES (MUSD)1,2 NOI¹ (MMCOP)

(1) Not including overhead expenses (Corporate headquarters, regional Services Center and Colombia Division)(2) 1 USD= 2,921.72 COPSource: Parque Arauco

79.000

+80,4%

20162015 LTM 2Q2017

141.500

+331,8%

142.500

71.500

33.000

2013

33.000

71.500

20122011

71.500

2014 LTM 2Q16

190

113129120

10578

4943

LTM 2Q16

2012 2015

346%

LTM 2Q17

2016201420132011

+68,1%

25

1515141210

54

+69,9%

2016 LTM 2Q17

20122011 2013 2014

544%

2015 LTM 2Q16

20

1111109

84

3

+89,3%

LTM 2Q17

568%

20162015201420132011 2012 LTM 2Q16

28

The company has stable management indicators in Colombia

2Q16

90%

1Q15 3Q152Q15 1Q16

90% 93%93%

4Q15

89% 90% 90%

3Q16

92% 92%

2Q171Q17

85%

4Q16

OCCUPANCY (%)

0,2%

1Q16 4Q16

-1,1%

2Q16

1,6%

11,5%

4Q15

8,6%

5,3%

1Q173Q151Q15

4,5%

0,9%

2Q15

2,0%

3Q16

-0,5%

2Q17

SAME STORE SALES (CHG. %)

-0,9%

2Q17

5,3%

8,4%

4Q16 1Q17

7,6%

3Q16

11,2%

4Q15

5,5%

2Q161Q16

12,5%

1Q15

1,1%

3Q15

5,5%

2Q15

1,5%

SAME STORE RENT (CHG. %)

3Q16

12%

9%

1Q16 2Q16

15%

12%

1Q174Q162Q151Q15 3Q15

10%

12%14% 13%

12%

4Q15 2Q17

14%

OCCUPANCY COST (%)


29

Diversified assets and revenues

57

100

29

14

TotalMedium Income: 4 and 3 in Colombia

Medium to Low Income: 2 and 1 in Colombia

Medium to High Income: 6 and 5 in Colombia

Source: Parque Arauco. Based on socio-economic composition of community in which malls are located.

ASSET LEVEL DIVERSIFICATION (º/º REVENUES 2017E) REVENUE TYPE DIVERSIFICATION (º/º REVENUES)

SOCIO-ECONOMIC LEVEL DIVERSIFICATION (º/º REVENUES)

Variable Revenues

Fixed Revenues

Other Revenues

12%

Parking Revenues

3%2%

84%

Parque Arboleda

Parque Caracoli19%

Parque La Colina

22%

58%

30

Future growth will come from pipeline and landbank

Project Type Format Estimatedopening

date

Total GLA m2

% ownership

OwnedGLA m2

Total investment

local currency

Total investment

USDMM

Arauco Premium Outlet Bogotá

Develop. Outlet 2H17 13,000 100% 13,000 78,000 26

Hotel Bucaramanga

Expansion Hotel 3Q17 N/A 100% N/A 17,500 6

Total 13,000 100% 13,000 95,500 32

NEW PROJECTS

LANDBANK

Name M2 % ownership Total cost (local currency)

Total Cost (USDMM)

Neiva 49,537 100% 18,000 6

Valledupar 46,000 100% 30,000 10

Barranquilla 56,166 100% 76,000 26

Total Colombia 151,703 100% 124,000 42


31

CHILE

PERÚ

COLOMBIA

Project Arauco Premium Outlet Bogotá - Bogotá

Opening: 2H2017

Location: Sopó, Bogotá

Type of mall: Outlet


Total Investment: US$ 26 millones


Commercial %: 25% of contracts signed, 50% in negotiation

Bogotá

ARAUCO PREMIUM OUTLET BOGOTÁ


32

Brands signed in Arauco Premium Outlet Bogotá

33

CHILE

PERÚ

COLOMBIA

Bucaramanga Hotel Project

Opening: 3Q2017

Location: Bucaramanga

Type of project: Hotel

N° of rooms: 104

Hotel Brand: Sonesta

Total Investment: US$ 6 millones


PARQUE CARACOLÍBucaramanga


34

Bucaramanga Hotel


35

Landbank

Barranquilla

Neiva

Name: NeivaM2: 49,537% Ownership: 100%Total Cost: 6(MMUS$)

Valledupar

Name: ValleduparM2: 46,000% Ownership: 100%Total Cost: 10(MMUS$)

Name: BarranquillaM2: 56,166% Ownership: 100%Total Cost: 26(MMUS$)


Colombia’s Shopping Center IndustryOctober 2017

[2]

I. Competitive landscape

II. Sector dynamics

III. Rental vs. condominium

IV. eCommerce in Colombia

V. Globalization of Brands

Agenda

[3]


II. Sector dynamics




Agenda

4

Parque Arauco has almost one million m², a 2% market participation in Latin America and a 8% market participation in the Andean Region

#5

456 392 143

5

Parque Arauco is the fifth largest operator in Colombia with a 3% market participation

3,2%

2,8%2,8%

3,3%5,0%

79,8%

1,8%

1,3%

Parque Arauco

As ConstruccionesInmobiliaria Éxito

Terranum

Unico Outlet

Almacenes La 14

Others

Pactia

MARKET SHARE IN COLOMBIA

Terranum

Unico Outlet 169.000

145.000

161.000

Parque Arauco

255.000

142.500

As Construcciones

Inmobiliaria Éxito

Almacenes La 14

Pactia 64.000

93.000

TOP 7 MARKET SHARE BY GLA

Source: ACE Colombia, Parque Arauco analysis

(11 assets)

(7 assets)

(4 assets)

(5 assets)

(3 assets)

(1 assets)

(5 assets)

6

Parque Arauco has improved its market share in a fragmented market

2010 2011 2012 2013 2014 2015 2016

0,5

0,0

4,5

4,0

3,5

3,0

5,0

1,0

2,0

2,5

1,5

As Construcciones Pactia

Parque Arauco

Terranum

Unico Outlet Almacenes La 14

Inmobiliaria Éxito

HISTORICAL MARKET SHARE

Source: ACE Colombia, Parque Arauco analysis

7

In Colombia market share is diversified by type of mall

57,9%

14,5%

27,6%

36,7%

33,5%

29,8%

Medium ( 20,000-39,999)

Large (>40,000)

Small (5,000-19,999)

Source: ACE Colombia

NUMBER OF SHOPPING MALLS BY SIZE GLA BY TYPE OF MALL

Total # of shopping malls: 214

Total m2: 4,942,791

8

Colombia has international developers

Owner Parque Arauco Falabella Spectrum Grupo Roble

Country Chile Chile Guatemala El Salvador

Assets Parque Arboleda (Pereira)Parque Caracolí (Bucaramanga)Parque La Colina (Bogotá)

El Castillo (Cartagena)

Fontanar (Bogotá) MultiPlaza (Bogotá)

Projects Arauco PremiumOutlet Bogotá

ManizalesBarranquillaCalí

Medellín

GLA (m2)¹ 142,500 40,000 57,000 65,000

(1) Rental Model GLASource: ACE Colombia

Brand

9

well as strong local developers (part 1 of 2)

Owner Éxito Único Terranum (Estrategias Corporativas / Santo Domingo Family)

Assets Viva LauralesViva BarranquillaViva VillavicencioViva SincelejoViva La CejaViva WajiraViva Las PalmasViva FontibónViva BuenaventuraViva CaucasiaViva Barrancabermeja

Unico CaliUnico Dos QuebradasUnico BarranquillaUnico PastoUnico VillavicencioUnico YumboUnico Neiva

Plaza Central (Bogotá)Jardín Plaza (Calí)Atlantis Plaza (Bogotá)Ideo Medellín

Projects Viva EnvigadoViva Tunja

Ideo Cali

GLA (m2)¹ 255,000 169,000 161,000


Brand

10

well as strong local developers (part 2 of 2)

Owner As Construcciones Almacenes La 14 Pactia (Conconcreto / Grupo Argos)

Assets Buenavista BarranquillaBuenavista MonteriaBuenavista Santa MartaPanorama (Barranquilla)Americano (Barranquilla)

Calima Bogotá Gran Plaza SoledadGran Plaza PitalitoGran Plaza FlorenciaGran Plaza IpialesGran Plaza AntaresGran Plaza AlcaravánGran Plaza San AntonioGran Plaza del SolSan Pedro Plaza (Neiva)Guatapurí Plaza (Valledupar)

Projects Gran Plaza BosaGran Plaza El Ensueño

GLA (m2)¹ 145,000 93,000 64,000


Brand

[11]


II. Sector dynamics




Agenda

12

GLA in Colombia has been growing on average at 7% in the last 5 years

4.000

5.000

2.000

1.000

3.000

0

2013

+7%

201620152014

+7%

2011200920082007 20122010

214204198188166158152139133121

20162014

+7%

201220112010 2015

+6%

2013200920082007


161.500199.030

20142012

437.779

20132010

168.680

322.482

2016

216.372

2011 2015

383.599

2009

318.622

95.666

268.965

2007 2008 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

12%

8%

4%5%

6%5%

11%10%

13%

3%

EVOLUTION OF GLA IN COLOMBIA(TH M2)

NUMBERS OF SHOPPING CENTERS IN COLOMBIA(#)

ANNUAL VARIATION OF GLA (M2)

ANNUAL GROWTH RATE (% CHANGE)

13

Shopping center sales have outpaced retail sales in Colombia

10.000

0

15.000

5.000

2013 2015 20162014

+11,6%

20122011

2011 2012 2013 2014 2015 2016

10,8%

18,9%19,8%

11,5%13,9%

3,6%

80.000

60.000

20.000

0

40.000

2015 2016

+6,1%

20142011 20132012

2011 2012 2013 2014 2015 2016

5,6%7,1%

16,9%

7,2%5,9%4,6%

Source: ACE Colombia / Raddar- Shopping Centerr Sales, Euromonitor- Retail Sales

RETAIL SALES (EUROMONITOR) (THUSD)

SHOPPING CENTER SALES (RADDAR/ACE COLOMBIA) (THUSD)

RETAIL SALES GROWTH (% CHANGE)

SHOPPING CENTER SALES GROWTH (% CHANGE)

14

Rental model malls are gaining market share in Colombia

75 73 69 68 67 65 61

11 11 13 13 13 1313

14 17 18 19 20 22 26

2013 20162011 2015201420122010

Mixed Model

Rental Model

Condominium


Rental 553,321 698,015 778,021 910,887 1,007,585 1,145,744 1,469,668

Mixed 434,752 451,656 561,904 623,238 654,931 677,031 734,834

Condo. 2,964,218 2,997,357 2,982,415 3,260,016 3,375,411 3,385,153 3,448,067

Total 3,952,290 4,147,028 4,322,340 4,794,141 5,037,927 5,207,927 5,652,569

% OF GLA BY PROPERTY TYPE IN COLOMBIA

15

New malls opening are predominately rental model

6,0%

New development GLA

60,6%

33,4%

Rental Model

Mixed Model

Condominium


% NEW GLA IN COLOMBIA BY PROPERTY TYPE (% OF TOTAL GLA)

[16]


II. Sector dynamics




Agenda

17

Colombian shopping center industry is unique

• Sometimes operational standard (i.e. marketing efforts, cleaning and security, window display standard, etc.) is lower

• Operational standard (i.e. marketing efforts, cleaning and security, window display standard, etc.) is higher

Condominium Malls Rental Model Malls

Owner

Financing

Construction quality

Layout

Commercial Mix

Operational standard

Capex

Several owners buy stores; most of them are retailers, some of them are investors that sublease the store

• Single owner lease stores

• Construction is financed by pre-selling stores

• Construction is financed by issuing debt

• Sometimes construction materials and equipment are acquired thinking about short term

• Construction materials and equipment are acquired thinking about long term

• Sometimes layout is not optimum since construction companies minimize common areas in order to maximize area to be sold

• Layout is defined by single owner that think about the customer experience afterwards

• Sometimes commercial mix is not optimum since it is defined by maximizing money collected in selling process

• Commercial mix is defined by criteria of maximizing long term sales and revenues and tends to be optimum

• Sometimes agreeing on capex between 200 tenants can be challenging because of

Free Riders

• Single owner define capex (growth and/or maintenance capex) thinking about the long term


18

Case Study Pereira: Rental Sales vs. Condominium Sales

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011 2012 2013 2014 2015 2016

Condo. Mall 3

Condo. Mall 2Parque Arboleda

Condo. Mall 1

PEREIRA MALL SALES (USDMM)

Source: Raddar / Parque Arauco

[19]


II. Sector dynamics




Agenda

20

Colombia has one of the lowest ecommerce penetrationsin the region

4,7%

Argentina

1,6%

4,0%

2,5%

United States

2,6%

United Kingdom

Mexico ChileBrazil PeruColombia

10,5%

14,9%

1,1%

Source: ICSC, Euromonitor

INTERNET RETAIL AS % OF TOTAL RETAIL IN 2016

21

CHILE

PERÚ

COLOMBIA

Retail Sales in Colombia have grown 6% in the last 5 years

0

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

22,5%

3,2%

20,8%

3,2%

2018E

78,02,4

21,9%

+6,3%

3,3%

2020E2019E

1,3

7,2%

44,2%

2013

63,1

23,3%

1,1

2015

7,1%3,0%

2014

21,9%

72,51,6

2017E

31,9%

67,7

58,7

23,4%

0,9

3,2%

70,0

2016E

0,7

5,9%

55,30,5

69,8%

41,5%

52,849,9

2012

4,6%

0,3

54,8%

2011

0,2

5,6%16,9%

2021E

75,22,0

+3,6%

81,03,0

% Online Sales growth% Retail Sales growth Retail Sales (US$ billion)Online Sales (US$ billion)

Source: Internet Retailing in Colombia, Euromonitor

22

Retail eCommerce concentration in Colombia is low

0,4%

Online Retail

Retail

99,6%

Online Retail

Retail

98,4%

1,6%

96,4%

Online Retail

3,6%

Retail

2011 2016E 2021E

Source: Internet Retailing in Colombia, Euromonitor

RETAIL SALES IN COLOMBIA

[23]


II. Sector dynamics




Agenda

24

Colombia is still an underpenetrated market by global retailers

9%

Me

xico

19%

8%

Ch

ile

10%

14%

Pe

ru

Co

lom

bia

8%

Arg

en

tin

a

Bra

zil

Can

ada

UK

27%

32%

46%

USA

Source: Parque Arauco analysis Powers of Retailing by Deloitte

% OF TOP 100 LARGEST GLOBAL RETAILERS IN COUNTRY GLOBAL RETAILERS PRESENT IN COLOMBIA

25

La Colina has a higher penetration of global brandsthan its competitors in Bogotá

0

5

10

15

20

25

30

35

40

45

50 48%

Mall 5 Mall 6

12%

28%

23%

Mall 2

30%

Mall 1

12%

Mall 4

33%

Mall 3Parque La Colina

International Brand %

Source: Parque Arauco analysis of tenants in each mall

Parque La Colinadirect competitor

PENETRATION OF GLOBAL BRANDS IN BOGOTÁ MALLS (% OF TOTAL STORES)

26

Parque Arboleda has a higher penetration of global brandsthan its competitors

0

2

4

6

8

10

12

14

16

18

20

22

24

Mall 3

6%

Mall 2

9%

Mall 1

10%

23%

Parque Arboleda




27

Parque Caracolí has a higher penetration of global brandsthan its competitors

0

5

10

15

20

25

Mall 2

8%

15%

Mall 3

18%

Mall 1Parque Caracolí

25% International Brand %



Managing Parque La ColinaOctober 2017

[2]

I. Introduction Parque La Colina

II. Commercial mix

III. Parque La Colina teamresponsibilities

V. Parque La Colina marketing activities

VI. Sustainability at Parque La Colina

Agenda

Versión 16-10-2017 20:32

[3]


II. Commercial mix




Agenda

[4]

Parque La Colina


PARQUE LA COLINA

• Total investment of US$ 221 million

• 63,000 m2 of GLA

• 199 stores

• Opening date: December 2016

• 13,262 m2 of park

• 2,900 m2 of vertical gardens

• 3,000 parking spots

• 235 bicycle parking spots

• First openings of H&M, Crate & Barrel and Purificación García in Colombia

5

Mall is located by Avenida Boyacá, an important transportation road in Bogotá


6

Location and influence area


7

Influence area

41%

38%

3

4

5

18%

6

3%

6

2.584

5

1.803

1.195

43

2.133

Socio Economic Class Population HomesAverage Household

Income (USD)Clothing Spend

(USD)Recreational Spend

(USD)

3 197,027 62,999 1,195 251 117

4 117,720 50,707 1,803 481 187

5 62,857 25,853 2,133 563 223

6 13,022 4,113 2,584 721 299

HOMES BY SOCIOECONOMIC LEVEL AVERAGE INCOME BY HOME (USD)


8

Consumer profile

HOME SIZE

1 2 3 49.11% 17.3% 29.46% 28.8%

5+15.33%

SEX OF

HEAD OF HOUSEHOLD

M F40.97% 59.03%

SEX OF MAIN

SHOPPERM F

6.15% 93.85%

Soure: EGM Ola III 2016 M +25 NSE 456 Bogotá

9

Consumer profile


SHOPPING FREQUENCY IN

SHOPPING MALLS

OcassionalWeekly MonthlyBi-weekly 41.4%22.3% 17.1%13.4%

Yes No78.1% 21.8%

CARUSE

10

Consumer profile


Women’s

ClothesLingerie

Women’s

ShoesBooks

Men’s

Clothes

Children’s

Clothes

Children’s

Shoes

Men’s

Shoes

Technology Bathing

Suits

81.2% 56.8% 54.6% 51.7%

48.3%

21.4%

35.6%

16.8%

34.9%30.0%

PURCHASES IN THE

LAST

3 MONTHS

11

Local competition

• Local competition: 6 shopping centers are located in the North of Bogotá. Only three are within 4 km of Parque La Colina


12

Local competition

Type of Mall Rental Condo Condo Condo Condo Condo

Opening year 2005 2005 1977 1976 2006 2013

Socio-economictarget audience 3 and 4 2, 3 and 4 3, 4, and 5 3, 4, 5, and 6 3, 4 and 5 3, 4 and 5

Parking 590 1000 800 3200 3200 2400

GLA ( m2) 12,500 54,000 34,800 53,000 70,000 57,000

Total Stores 65 313 62 360 495 240

Anchors Carulla

Homecenter, Falabella and

Jumbo JumboFalabella and

ÉxitoFalabella and

JumboFalabella and

Jumbo


[13]


II. Commercial mix




Agenda

14

Commercial mix

1

2

5

5

16

17

25

28

Movie Theatre

Medium Sized Stores

Department Stores

Minor Stores

Small Sized Stores

Games

Restaurants

Food Court

GLA M² BY TYPE OF STORE BRANDS OPENING IN COLOMBIA IN PARQUE LA COLINA


15

First floor layout


16

Second floor layout


17

Third floor layout


18

La Colina has a higher penetration of global brands than itscompetitors in Bogotá

0

5

10

15

20

25

30

35

40

45

50 48%

Mall 5 Mall 6

12%

28%

23%

Mall 2

30%

Mall 1

12%

Mall 4

33%

Mall 3Parque La Colina




Direct competition

19

Brands in Parque La Colina


20

Brands in Parque La Colina


21


II. Commercial mix




Agenda

22

Strategic Plan Parque La Colina

• Parque La Colina is the meeting placefor women and their circle of friends andfamily in the North of Bogota, with aninnovative and modern construction. The

objective is to provide a uniqueand different experience, guaranteeingsatisfactory service for the stylish womenwho visit the mall.

• This mall has unique brands that womenand their social, family and work circleswill want to go to.


23

Target Consumer

Female

Socio-economic level 4 to 6

in the North of Bogotá

Over 25

Brand-conscious

Working

Wife, friend, coworker,

head of household

Stylish

24

Parque La Colina Strategic Pillars

Stra

teg

ic P

illar

s

1. Positioning & Client Loyalty

2. Visitor Experience

3. Optimized Commercial mix

4. Operational Excellence


25

Center Manager

• Responsible for the results and general performance of the mall, which is measured

different areas in the team.

• Natural leader of the team actively involved in the development of the Strategic Plan for each of the functional areas of the mall.

• Responsible for measuring and providing periodic feedback to the teams regarding the compliance of each of the stages of the strategic plan and goals.

• Should have their own leadership style that allows the team to be motivated and meet their objectives.


26

Center Manager Team

• Functional areas report to center manager: Different functional areas report to the Center Manager regarding the advances on the strategic plan.

Center Manager

Commercial Lead

Marketing Lead

Operations Lead

Administration and Finance

Lead


27

Commercial Lead

• Responsible for maintaining effective communication between the shopping center tenants and the team. This is the main contact for all tenats in the shopping center.

•

• Responsible for the common areas of the shopping center.

• Reports to the shopping center Committee and the Center Manager regarding direct management and to the Divisional Commercial Area regarding the strategic plan as well as revenue versus budget.

• Supports retailers in the shopping center to manage tenant sales.


28

Commercial Inputs

Center Manager

1° Commercial Input

Commercial results

2°Commercial Input

Current projects for tenants and kiosks

(next openings)


Potential interested clients 4°Commercial

Input

Special requests (discounts, remodels,

branding etc.)


Budget control

• The center manager should use this committee to make suggestions regarding the commercial mix.

• Responsible for revenues.• Challenges: tenants (window displays, other administrative challenges, etc.).


29

Commercial Lead

Head of Commercial:

The head of commercial is responsible for maintaining and improving the mall revenues. This is the main contact person for all the mall tenants.


30

Marketing Lead

• Responsible for implementing the annual marketing plan in the shopping center.

• Should ensure the proper implementation of events, sales and alliances which help position the mall.

• Responsible for generating necessary traffic so that the shopping center will have increased sales.

• Help in the management of tenant sales in the mall by accompanying the retailers in their implementation of a strategic plan.

• Responsible for client service, which results in managing incidents that occur in the shopping center. All incidents should be reported to the shopping center committee and dealt with according to the appropriate policy.

• Responsible for registering traffic and the types of clients that visit the mall, and communicating this to the team.


31

Marketing Inputs

Center Manager

1°Marketing Input

Current campaign progress

2°Marketing Input

Future marketing campaigns

3°Marketing Input

Newsletters

4°Marketing Input

Special project advancement

(Loyalty plan tenant support plan- etc.)

5°Marketing Input

Budget control

• The center manager should use this committee to make suggestions regarding the marketing plan.

• Marketing is responsible for traffic in mall.• Challenges: attracting the correct client.


32

Operations Lead

• Responsible for the proper functioning of the mall facilities, safety & security.

• Responsible for the implementation of maintenance plans (preventive and corrective).

• Responsible for the operation of shopping center services (security, cleaning, parking logistics, etc.).

• Responsible for monitoring special projects of new or current tenants.

• Responsible for the analysis, measurement and management of public services of the mall.

• Responsible for managing and keeping up mall permits.

• Responsible for maintaining excellent relationships with the authorities (police, fireman, Health Secretary, Environmental Agencies, Traffic Agencies, Local Government, etc.).


33

Operations Inputs

Center Manager

1° Operations Input

Capex execution


Execution of maintenance

plans


Various incidents


Budget control


Safety & Security

• The center manager should use this committee to make suggestions regarding operating measures, including capex.

• Operations is responsible for operational excellence.• Challenge: maintenance of mall.


34

Administration & Finance Lead

• Responsible for the billing and payment process for the entire mall.

• Responsible for managing the finance team and the timely reporting of tenant sales.

• Responsible for accuracy of mall info in SAP.

• Responsible for the reporting and analysis of sales, EBITDA trends, and CAPEX budget.

• Responsible for the general review and consolidation of the shopping center sales, revenues and expense annual budgets with input from all team members.


35

Administration & Finance Inputs

Center Manager

1° Adm & Fin. Input

Budget control


Collections


Monthly results: sales, EBITDA- KPIs

4°Adm & Fin. Input

Billing


Contract parametrization

SAP

• The center manager should use this committee to make suggestions regarding the administration and finance team.

• Admin. And finance is responsible for controlling the operation.• Challenges: meeting EBITDA budget (revenues and expense control).


[36]


II. Commercial mix




Agenda

37

Example marketing campaigns


38



39



[40]


II. Commercial mix




Agenda

41

Parque La Colina Sustainable Features


42

Social Management Plan at Parque La Colina

From the very beginning of the construction process, we required Constructora Colpatria to include a Social Management Plan to handle neighbors' observations and inquiries in a timely manner. The 31-month plan (April 2014 to December 2016) included a permanent liaison for social issues, responsible for managing areas like: • Coordinating and implementing the Social Management

Plan.• Participating on social, socio environmental and/or technical

committees. • Attending to and monitoring permits.• Maintaining an ongoing relationship with the different

project areas.• Preparing presentations for scheduled community meetings.• Overseeing the community service point.• Drafting and sending informational memos.• Training project personnel.• Responding to and resolving citizen observations and

inquiries.• Taking part in community activities.

The following are highlights of the Social Management Plan: Information Program: This program included presentations on the project's characteristics and scope to neighboring communities. The Social Management Plan and mitigation measures were also presented.

• Community Service Program: This program formalized communication mechanisms and ensured appropriate and timely resolution of the inquiry response process.

• Disclosure Program: This program included an inventory of the properties adjacent to the spaces to be intervened. This program aimed to assess objectively and on a case-by-case basis any inconveniences that the construction could cause for neighboring lots. It also included publication of the procedure for escalating complaints as well as the established community information channels and provided updates on project characteristics and progress.

• Construction Personnel Training Program: This program provided general information about the project to construction personnel in order to alignthe Social Management Plan, criteria and community service channels.


SOCIAL MANAGEMENT PLAN AT PARQUE LA COLINA

OrganizationalImprovementsOctober 2017

[2]Versión 10/16/2017 4:06 PM

I. Purpose, Mission and Values

II. Top Line Growth

III. Organizational Improvements

IV. Cost of Sales

V. Administration Expenses

VI. EBITDA Margin

VII. Conclusions

AGENDA

[3]


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

4

Purpose, Mission and Values

5


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

6

Revenues have grown importantly in all three countries

260233243

222191

163141

+13%+12%

LTM 2Q17

LTM 2Q16

20142012 2013 2015 2016

157145151

139124115104

20162015

+9%

LTM 2Q17

20132012 LTM 2Q16

+9%

2014

76737568

513632

+4%

LTM 2Q16

LTM 2Q17

+19%

201620152013 20142012

27

1517151612

5

20162012

+40%

LTM 2Q16

2014

+80,0%

LTM 2Q17

20152013

CONSOLIDATED REVENUES (USDM)¹¯² CHILE REVENUES (USDM) ¹¯²

PERU REVENUES (USDM) ² COLOMBIA REVENUES (USDM) ²

(1) 2012 numbers do not include Marina Arauco(2) Exchange rate as of June 30,2017 1USD= 660.05Source: Parque Arauco

7

Fixed, variable and parking revenues have contributed to consolidated revenue growth

260233243

222191

163132

2016

+12%

2014 2015

+14%

LTM 2Q17

LTM 2Q16

20132012

32293029

262520

2016

+10%

LTM 2Q17

LTM 2Q16

+10%

2014 201520132012

189168175159

138115

94

20132012

+12%+15%

LTM 2Q16

20162015 LTM 2Q17

2014

14 20 24 23 25

10

1110

898

77

38

2015

26

2016

5

LTM 2Q16

36

20142013

5533

553

2012

18

5

23

11%

LTM 2Q17

405

+17%

Energy OtherParking


CONSOLIDATED REVENUES (USDM)¹¯² FIXED REVENUES (USDM)

VARIABLE REVENUES (USDM) OTHER REVENUES (USDM)

8

Parque revenue stream is stable

71% 71% 73% 72% 72%

15% 15% 13% 13% 12%

7% 7% 8% 9% 10% 10% 10%

73%72%

12%13%

2%

LTM 2Q17

4%2%2%4%

20162015

4%

LTM 2Q16

4%2%

2014

3%4%

3%

2013

4%2%

2012

4%

Variable Rent Energy OthersParkingFixed Rent

CONSOLIDATED REVENUES


[9]


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

10

Sustainability


11

Safety and Security

Current state

evaluation

Understand future state

Transition plan

Implement changes

Maintain changes

First evaluation stage Second implementation stage

Safe

ty a

nd

Se

curi

ty C

ult

ure

at

Par

qu

e A

rau

co

People and process safety & security

analysisSite visit

Fundamental safety & security element

diagnosticVAC surveys

Change disposition interviews

Executive interviews

Divisional findings

presentation

Strategic alignment workshop

Diagnostic report

Implement critical safety & security

elements

6 months

Progress review

Today

Source: Parque Arauco / DuPont

12

Process and Center of Excelence

• We have identified 4 macro process• We have identified 341 process


13

Talent in Parque Arauco

• We have worked to improve the quality of professionals in our organization.


14

Share Services Center

• We have been incorporating talent to this area• We moved from a single team to 3 different ones

• Procurement and Payments• We have been working on procurement discipline• VIM improvements

• Billing• We have been reducing the number of billing cycles• We have been reducing manual billing• Country by country billing

• Treasury • Reducing payments with checks• Controlling payment rules.

• Now we are reviewing robotic process automatization• Reporting to divisions


15

Technology and Innovation

• Infrastructure• Wi Fi• Systems monitoring• Telephone system improvements (4 technologies)• Meeting rooms• Access systems• Clients counting systems

• Innovation / automatization• Partnership with Accenture

• ERP sophistication• Revenue management • Technology in Mall operations• Technology in Mall construction


16

Trade off

• Talent• Saftey & security• Improved quality

• Economies of scale• Standardized processes• Better controls

Higher cost

Lower cost


17


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

18

Consolidated gross margin is mainly flat in LTM 2Q17

23%21%

2012 2013

23%

2014

21%

LTM 2Q16

23%

2016

24%

LTM 2Q17

23%

2015

595457

5143

3430

LTM 2Q17

LTM 2Q16

+9%+15%

2016201420132012 2015

78,9% 76,6%76,5%76,9%77,3%79,2%

201620152014 LTM 2Q16

20132012

77,1%

LTM 2Q17

260233243222

191163

132

+14%

20142013 LTM 2Q16

2016

+12%

LTM 2Q17

20152012


CONSOLIDATED REVENUES (USDM)¹¯² COST OF SALES (USDM) ²

COST OF SALES (% REVENUES) GROSS MARGIN (%)

19

Chile

157145151139124115104

2012

+9%+8%

LTM 2Q17

LTM 2Q16

201620152013 2014

20,9%20,6%

201620152012

17,6%

LTM 2Q17

LTM 2Q16

21,4%20,5%

20142013

19,9%16,9%

34303129

251918

20132012 20152014 2016

+13%+14%

LTM 2Q17

LTM 2Q16

79,5%

2016

82,4%

LTM 2Q16

78,6%

LTM 2Q17

2013

83,1%

2012

79,1%80,1%

2015

79,4%

2014


CONSOLIDATED REVENUES (USDM)¹¯² COST OF SALES (USDM) ²


20

Peru

76737568

513632

+4%+19%

201620142013 20152012 LTM 2Q16

LTM 2Q17

25,3%

2015

25,6%

2016

25,2% 24,3%

20142013

28,7%

LTM 2Q16

2012

27,6%

LTM 2Q17

24,8%

19181917

1310

9

20142012 2013

+4%+16%

LTM 2Q16

2015 2016 LTM 2Q17

LTM 2Q17

75,7%

2016 LTM 2Q16

74,4%74,8%72,4%

20152012

74,7%71,3%

20142013

75,2%

CONSOLIDATED REVENUES (USDM)¹ COST OF SALES (USDM) ¹


(1) Exchange rate as of June 30,2017 1USD= 660.05Source: Parque Arauco

21

Colombia

27

1517151612

5

LTM 2Q16

2014

+80%+40%

20132012 20162015 LTM 2Q17

49,8%

2015

37,2% 38,1%42,0%

2012 2013 2016

33,9%40,8%

2014 LTM 2Q17

26,3%

LTM 2Q16

76666

43

2015

+18%

LTM 2Q17

LTM 2Q16

201620142013

+17%

2012

66,1%

2012

62,8%

2013

50,2%

LTM 2Q17

73,7%

LTM 2Q16

58,0%

2016

61,9%

2015

59,2%

2014

CONSOLIDATED REVENUES (USDM)¹ COST OF SALES (USDM) ¹



22

Cost of sales efficiency measures

• Bidding Process Improvement• Competitive bidding process• SLA definitions

• Standardized maintenance model across all three countries• Establish standardized maintenance model• First focus on vertical transportation, climate, and facility management

• Economies of scale • Opening of La Colina with same sized administration• Arauco Coronel is managed by Arauco Chillán team

• Professionalization of Shared Service Center• Improved roles, responsibilities and processes

• Energy efficiency projects• Renegotiation of energy contracts in Chile• Solar panels in Parque Lambramani


Maintenance, Cleaning and Security

Personnel

Energy

23

Cleaning and Security Service Level Agreements

Improvements in the third party provider contracting process:

Market Research in each country and inviting each of the main players in the market to the

biding process, especially those that operating in Shopping Centers and similar assets.

Bidding specifications oriented to receiving a service and not to cover predefined positions.

A Sustainability Survey for each applying company.

Guaranteed base salary review for the employees, to ensure this is above the minimum wage,

and that it is paid on a timely basis.

General labor conditions and benefit review.

Standard process for all three countries.

Multidisciplinary approach to decision making (Division, Regional Services, Corporate office).

Decision is based not just on cost, but as well as on rotation indicators and absences.

Commercial relationship is with both the country division as well as the Corporate office to find

strategic alliances and opportunities for improvement.

• Cleaning and Security third party employees amount to almost 2,000 people, which is closeto 4 times the number of employees of Parque Arauco.

• Contractual relationships with service providers was based on number of people, and noton the quality of the service. The few indicators that exist such as rotation and absencewere not appropriately weighted in the provider selection process.


24

Maintenance Strategy Project

• We are working with an external consultant to help us develop a best in class maintenancemodel.

Maintenance Model Methodology

• Define an agreed upon scalable maintenance model for all of

assets

Maintenance model for critical processes

• Maintenance model definition for critical processes

Infrastructure and Service org. structure

• Define an agreed upon scalable maintenance model for all of

assets

Improvement opportunity identification

• Improve reliability and quality of information related to asset maitenance

Source: Parque Arauco / Matrix

25

Energy costs have improved as a % of revenues

LTM 2Q17

9,6%

LTM 2Q16

10,4%

20162014

8,7%8,2%

2012

9,9% 10,1%

2015

9,1%

2013

25242422

171312

LTM 2Q16

LTM 2Q17

2014

+16%

2013 2016

+2%

20152012

10,3%

29,1%

Colombia

Peru

Chile60,6%

Chile

Peru

Colombia

29,6%

53,2%

17,3%

ENERGY COSTS (USDM)¹


ENERGY COSTS (% OF REVENUES)

REVENUES BY COUNTRY (%) ENERGY COSTS BY COUNTRY (%)

26

Corporate environmental management plan

Base line diagnostic

Identification of gaps and

opportunities

KPIs and goals

Evaluation and follow

up

Corporate environmental management procedures.Efficiency committees in Chile, Peru and Colombia.

1 2 3 4


27


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

28

Admin. Expenses have decreased importantly

260233243

222191

163141

2012

+12%

LTM 2Q16

+13%

LTM 2Q17

20162013 2014 2015

10,0%

2012

9,7%

2015

10,2%

2014

12,2%12,4%

2013

9,4%9,9%

LTM 2Q17

2016 LTM 2Q16

242324232320

15

+10%

LTM 2Q17

+7%

LTM 2Q16

201620132012 2014 2015

LTM 2Q17

87,8%

2015

89,8%

2016

90,3%

2014

90,6%

20132012

90,1%

LTM 2Q16

87,6%90,0%

(1) 2012 numbers do not include Marina Arauco(2) Exchange rate as of June 30,2017 1USD= 660.05

CONSOLIDATED REVENUES (USDM) 1,2 ADMINISTRATIVE EXPENSES (USDM) 1,2

ADMINISTRATIVE EXPENSES (% OF REVENUES) ADMINISTRATIVE EXPENSES MARGIN (% OF REV) 1,2,3

(3) Admin exp. margin= (revenues-SGA)/ revenuesSource: Parque Arauco

29

Chilean admin. expenses have improved over time

157145151139124115104

LTM 2Q17

+8%+9%

2015 LTM 2Q16

201620132012 2014

8,1% 7,8%

2016 LTM 2Q17

2015

8,7%7,8% 7,6%

LTM 2Q16

2014

10,6%

2013

10,8%

2012

121112111312

9

2012 20142013

+5%+6%

LTM 2Q17

2015 LTM 2Q16

2016

91,9% 92,2% 92,4%89,4%

2012 LTM 2Q16

LTM 2Q17

20152014

92,2%

2016

91,3% 89,2%

2013

CONSOLIDATED REVENUES (USDM) 1 ADMINISTRATIVE EXPENSES (USDM) 1

ADMINISTRATIVE EXPENSES (% OF REVENUES) ADMINISTRATIVE EXPENSES MARGIN (% OF REV) 1,2

(1) Exchange rate as of June 30,2017 1USD= 660.05(2) Admin exp. margin= (revenues-SGA)/ revenues Source: Parque Arauco

30

Admin. Expenses in Peru have increased less than the increase in revenues

76737568

51

3632

+19%

LTM 2Q16

LTM 2Q17

+4%

201520132012 2014 2016

15,0%13,4%

LTM 2Q16

12,6%

15,1%

20162013 2014 2015

13,2%

LTM 2Q17

2012

13,8%13,0%

101099

755

LTM 2Q17

2012

+15%

2016

+2%

201520142013 LTM 2Q16

87,4%86,2%

2014 2015

86,6%

2013

84,9%

2016

86,8%85,0%

2012 LTM 2Q17

87,0%

LTM 2Q16


ADMINISTRATIVE EXPENSES (% OF REVENUES) ADMINISTRATIVE EXPENSES MARGIN (% OF REV.) 1,2


31

27

1517151612

5

+80%

LTM 2Q17

LTM 2Q16

+40%

2012 20162014 20152013

LTM 2Q17

LTM 2Q16

13,3%

2016

10,1%

13,9%

2013 2015

26,6%

2012

13,9%

20,2%19,7%

2014

3

22

2

3

2

1

2012 LTM 2Q16

201620152014 LTM 2Q17

2013

+14%+38%

73,4%

20162015

86,1%79,8%

2013 2014

80,3%

2012 LTM 2Q17

89,9%

LTM 2Q16

86,7%86,1%


ADMINISTRATIVE EXPENSES (% OF REVENUES) ADMINISTRATIVE EXPENSES MARGIN (% OF REV.) 1,2

Admin. Expenses in Colombia have significantly improved with the opening of Parque La Colina


32

Professional fees have maintained stable

3,0%

LTM 2Q16

3,3%3,1%

2016

3,2%

2015

3,0%

3,7%

20132012 2014

2,7%

LTM 2Q17

87877

5

4

LTM 2Q17

+17% +7%

LTM 2Q16

2016201520142012 2013

Chile

29,1%

10,3%

Peru

60,6%

Colombia6,5%

Colombia

Peru 32,3%

Chile61,2%

PROFESSIONAL FEES (USDM) 1,2 PROFESSIONAL FEES (% OF REVENUES) 1

REVENUES BY COUNTRY (%) PROFESSIONAL FEES BY COUNTRY (%)

(1) 2012 numbers do not include Marina Arauco(2) Exchange rate as of June 30,2017 1USD= 660.05 Source: Parque Arauco

33

Insurance costs have gone down

1,6%

LTM 2Q17

2012

2,5%

20152014

2,3%2,5%

2,1%

1,8%

LTM 2Q16

2016

1,6%

2013

4445

443

2013 20152014

+4%-1%

2012 LTM 2Q16

2016 LTM 2Q17

Colombia

29,1%

10,3%

Chile

Peru

60,6%

Colombia

64,3%

17,9%

Peru 17,8%

Chile


INSURANCE COST (USDM) 1,2 INSURANCE COST (% OF REVENUES) 1

REVENUES BY COUNTRY (%) INSURANCE COST BY COUNTRY (%)

34

Improvements in Cost of Sales and Admin. Expenses has improved the EBITDA margin

260233243222

191163

141

+12%+13%

LTM 2Q17

LTM 2Q16

20142013 20162012 2015

0,25

0,15

0,00

0,20

2013 LTM 2Q16

201620152014 LTM 2Q17

2012

30 34 43 51 57 54 5915 20

2323 24 23 24

2012

45

+13%

83

LTM 2Q16

77

+8%

LTM 2Q17

74

2014

66

20152013 2016

81

54

LTM 2Q17

70,0%

LTM 2Q16

68,8%

2016

69,0%69,4%

2015

68,0%69,9%

2013

68,8%

20142012

COGS

SG&A


CONSOLIDATED REVENUES (USDM) 1,2 COST OF GOODS SOLD + ADMIN. EXPENSES (USDM) 1

COST OF GOODS SOLD + ADMIN. EXPENSES (% REVENUES) EBITDA MARGIN (% REVENUES)

35


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

36

Improvements in the Colombian and Peruvian EBITDA margins have improved the corporate EBITDA margin

70,0%69,0%

LTM 2Q17

2012 LTM 2Q16

2016

68,8%

2015

68,8%

2014

68,0%

2013

69,4%69,9%

2015 2016

50,0%46,4%

2014

43,9%

2013

46,9%

2012

24,1%

64,9%

LTM 2Q16

LTM 2Q17

45,7%

63,2%

2015

58,8%63,7%

2012 2016

63,5%60,2%

20142013

64,5%

LTM 2Q17

65,6%

LTM 2Q16

2016 LTM 2Q17

73,7%72,7%

2013

73,0%

LTM 2Q16

73,9%73,4%

201520142012

75,0%73,6%

CHILE EBITDA MARGIN PERU EBITDA MARGIN

COLOMBIA EBITDA MARGIN CORPORATE EBITDA MARGIN1

(1) 2012 numbers do not include Marina AraucoSource: Parque Arauco

37


II. Top Line Growth


IV. Cost of Sales


VI. EBITDA Margin

VII. Conclusions

Versión 10/16/2017 4:06 PM

AGENDA

38

Conclusions

• There is no silver bullet.• We have been able to implement an aggressive

improvement plan without affecting the efficiency of the company.


Mixed Use Rationale for MallsOctober 2017

[2]

I. Real Estate Types and Diversification

II. Growth opportunity analysis for Parque Arauco

III. Mixed use in Parque Arauco

IV. Parque Arboleda Office Tower

Agenda

3

% (US$ Billion)

In developed markets, like the USA, the real estate pie includesother type of real estate assets that are still small in Latin America

201

96

111

177

846

111

TotalSelf Storage

OfficesRetailIndustrial Hotel

55

Health Other

45

Residential

50

USA

• In the USA, the Real Estate Sector has a market cap of US$ 846 billion.

• In the USA there are two types of real estate that are not retail that make up 79% of the market, and which include offices, residential, health, hotel and industrial, among others.

• In Latin America, only 30% of the market is made up of real estate that is not retail.

13% 6% 7% 21% 13% 5% 11% 24%

x%Weight over total

Source: Green Street for size of USA market; Parque Arauco for Latin American market, from the main 17 real estate companies that trade in the region, including Parque Arauco.

LatinAmerica

24

17

4

Total

0

OthersResidential

1

Industrial Self Storage

Health

2

OfficesHotel Retail

0% 17% 3% 70% 9% 0% 0% 1%

MARKET CAP

4

Approximately a third of the real estate companies in the world are diversified

% of market cap(# of companies)

Source: FTSE Real Estate Global Index

5,0%

Industrial

Retail

10,7% HotelResidential

Self Storage

Diversified

Health

Offices

3,1%

13,0%

1,8%

6,7%

Industrial / Offices

3,9%

31,7%

24,2%

#192

#18

#19

#53

#25

#10

#60

#80

#6

TYPE OF REAL ESTATE COMPANIES IN THE FTSE REAL ESTATE GLOBAL INDEX

[5]





Agenda

6

Rationale for entering into new sectors

• Each property type has its own operational complexities and risk profile. Retail is on the complex side of the spectrum, and therefore we believe we can learn to manage other simpler property types

• In some property types that are too complex such as the lodging sector, operations are usually separatedfrom the landlord

• Some property types offer synergies to the Company's retail portfolio

• For example, hotel properties can drive traffic to the Company's malls

• Most property types have similar economic drivers than retail real estate

• One exception is lodging real estate, which has very different economics than retail real estate

• Parque Arauco has 58% and 19% of its total NOI in Santiago and Lima, respectively

• Strong knowledge in its core markets may provide the Company with strategic opportunities in otherproperty types

• Pursuing mixed-use projects is a way of improving the profitability of existing assets

• Mixed use projects also allow the company to develop projects in consolidated urban areas thatotherwise could not be developed only with retail real estate because they do not meet the requiredreturn rates

Source: Green Street Advisors

RATIONALE FOR ENTERING INTO NEW SECTORS

ClientSynergies

EconomicDrivers

MarketSpecialist

Vertical Growth

OperationComplexity

7

Operations

Residential

Industrial

Hotel

Retail

Offices

Self Storage

Health

Yes

Depends

No

Yes

Yes

Yes

Depends

• The operational complexity of each

type of real estate is different.

• Depending on the type of real estate,

the Company should decide whether

or not to externalize the operation.

• In hotel real estate, normally the

owner of the asset does not operate

the hotel.


THE COMPLEXITY AND OPERATIONAL RISK ARE DIFFERENT FOR EACH TYPE

OF REAL ESTATE

Type of Real Estate Does real estate company operate asset?

8

Residential

Industrial

Hotel

Offices

Self Storage

Health

• Client synergies: Some types of real

estate have synergies with retail real

estate.

• The types of real estate that have the

most synergies in terms of traffic are

hotel, health and offices.


Very HighMediumLowNon-existent High

Type of Real estate Final client amount of synergies

9

Residential

Industrial

Hotel

Offices

Self Storage

Health

P

P

O

P

P

P

• The majority of other types of real estate

have economic and financial drivers that

are similar to retail real estate.

• In general, other types of real estate have

similar drivers, especially if the operation is

externalized.

• An exception to this is hotel real estate

which has higher volatility due to the

shorter duration of contracts.


Type of Real Estate Similar drivers?

10

Implicit cap rate in other real estate transactions

7,3% 7,2%7,8%

Suburban Office

Neighborhood Malls

6,7%

4,5%

High Street Retail

Industrial

6,7%

Central Business District Office

Power Centers

Source: CBRE North America Cap Rate Survey 1H 2017.

AVERAGE STABILIZED PROPERTY ACQUISITION CAP RATES FOR 1H 2017 IN USA

11

Santiago¹: 53% del NOI de Parque Arauco

Lima¹: 18% del NOIde Parque Arauco

(1) Santiago represents 78% of Chile NOI, and Lima represents 65% of Peru NOI. Source: Parque Arauco

• Concentration: Parque Arauco is concentrated in Santiago and Lima, which makes us a in the cities, whichcould help with new types of real estate in these locations.

12

• Successful malls in developed countries are located in cities, not outside the

cities.

• These locations have expensive land and the return rates on retail projects can

not be built high enough to be profitable

• In order to have the return rates we require, and have successful malls, we must

build vertically.

• Mixed use is inevitable in older projects (Kennedy) and is necessary in new

projects.

Parque Arauco Kennedy- 1983 Parque Arauco Kennedy- 2016


13

Vertical Growth Example

• Parque Arauco Kennedy is surrounded by tall buildings• Residential Real Estate• Offices• Hotels

• Retail real estate only Works up to a certain height • Considering this, it is natural that Parque Arauco participate in mixed use.

Source: Green Street Advisors

• Mixed Use: If Parque Arauco wants to continue having malls in high density areas, it should have mixed use projects.

Parque Arauco Kennedy Mixed Use

[14]





Agenda

15

Parque Arauco already has examples of offices in our malls

Examples of offices developedby Parque Arauco:

Chile• Parque Arauco Kennedy

Colombia• Parque Arboleda• Parque Caracolí


16

Parque Arauco already has examples of clinics in our malls

Examples of clinics developed by Parque Arauco:

Chile• Parque Arauco Kennedy• Arauco Quilicura

Peru• MegaPlaza Norte


17

Parque Arauco already has examples of hotels in our malls

Examples of hotels developedby Parque Arauco:

Chile• Arauco San Antonio

Colombia• Parque Caracolí


[18]





Agenda

19

Office tower in Parque Arboleda

Year Parque Arboleda opened: 2010

Year Arboleda offices opened: 2012

Office space: 7,700 m2


20

Parque Arboleda Office Tenants


21

Office tower in Parque Arboleda

LTM 2Q17

94,2%79,2%

98,7%

LTM 2Q16

100,0%

201620152014

40,6%

8.583

LTM 2Q172014

6.556

LTM 2Q16

7.8588.342

+9.2%

20162015

7.405

+27.2%

2016 LTM 2Q17LTM 2Q16

8,7%7,9%8,1%

2015

6,9%

8,5%

2014

681678

LTM 2Q17

+49.3%

675

LTM 2Q16

630

2014

-1%

454

20162015

PARQUE ARBOLEDA OCCUPANCY PARQUE ARBOLEDA REVENUES (THUS) 1

OFFICE REVENUE (THUS) 1 OFFICE REVENUES / TOTAL REVENUES


Parque ArboledaOverviewOctober 2017

2

I. Introduction to Parque Arboleda

II. Historical figures

II. Target audience

Agenda

Versión 16-10-2017 20:38

3



II. Target audience

Agenda

4

Pereira

Pereira• Capital city of Risaralda• Located in foothills of Colombian coffee region• Medellín and Calí)

• Important city for commerce

Population• In 2007, when project was first analyzed, population had over 400,000 people• Was the sixth largest city in Colombia• Within 50 km of mall there are 1,000,000 people• Within 100km of mall there are 2,000,000 people


5

Strategic Rational for project

Parque Arboleda Project• First opportunity to develop in Colombia• Rental model will offer a growth model for smaller retailers• Project already has permits in place• Parque Arauco will have control (55%) through JV with the Merheg Family

Considerations• Rental model• No property taxes for 5 years• Project already validated by retailers

• 64% of GLA already negotiated• Investment of US$ 90 million (in 2010 dollars)


6

Location

Parque Arboleda

7

Socio-economic diversification


Parque Arboleda

Low

Low

Middle-Low

Middle

Middle-Upper

Upper

Socio-Economic Level

8

Market


Grocery stores and Homcenter

Existing shopping malls

Future expected shopping malls

Services

Airport

Unicentro

Homecenter and Alkosto

Grocery store Bus station

Éxito

Carrefour

Parque Arboleda

9



II. Target audience

Agenda

10

Historical figures

LTM 2Q17

LTM 2Q16

20132012 201620152014

50%

33% 33% 33% 33%

50%50%

2011

33%

41.000

2015

34.00040.500

34.00040.500

2014 LTM 2Q16

33.000 34.000

2011

34.000

LTM 2Q17

+19,1%+1,2%

201620132012

27,2%

30.124

0,8%

38.304

30.718

38.730

28.926 31.620 30.641

39.056

LTM 2Q16

201520122011 2013 LTM 2Q17

20162014

10.302 10.302

+116,2%

2015

22.275

LTM 2Q17

+1,2%

22.550

LTM 2Q16

2016

22.275

18.150

2014

9.999

20132012

10.302

2011

GLA (M2) OWNERSHIP (%)

OWNED GLA (M2) OCCUPIED GLA (M2)


11

Historical figures

98

87

765

4

+9%

20162014 LTM 2Q17

+116%

LTM 2Q16

2015201320122011

75727468

5953

4943

2016 LTM 2Q17

+3,8%+73,2%

LTM 2Q16

201420122011 2013 2015

LTM 2Q16

2011

80%

2015

85%

2012 2016

76%

2013

78%

2014

85%75%78% 80%

LTM 2Q17

76

76

554

3

LTM 2Q16

2013 LTM 2Q17

2015

+122,4%+14,4%

2016201420122011

TENANT SALES (USDM) 1 REVENUES (USDM) 1

EBITDA (USDM) 1 EBITDA MARGIN (% REVENUES)


12



II. Target audience

Agenda

13

Parque Target Audience

Female

Socio-economic

level 5

Married

Local

30-45 years old

Everyday woman

Decisive

Stylish

Parque Arboleda is the meeting point for the city, which is always innovative and modern with comfortable infrastructure, which has the objective to give the best experience, guarantee client satisfaction, both for the visitors and the brands in the mall, with communication that focuses on a stylish client. Parque Arbolea is an exclusive mall with fun activities for the whole family.

parque arauco day colombia · parque arauco day colombia october 2017. 2 agenda • parque arauco...

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