photo of Fernando de pena

Letter from the CEO

Mallplaza's operating performance during 3Q23 was outstanding and we are proud to say so. Our results are following a positive trend, which is evidence that we are successfully executing our business vision.

The company has reaffirmed that our customers are at the center of our business. We are committed to understanding them and promptly fulfilling their requirements, which has helped us to develop one of the best urban center portfolios in the region. We have 25 strategically located plazas in 16 cities in the region, and the best value proposals are our ten Tier A Mallplaza urban centers. These centers are leaders in their markets, with exceptional visitor flows, growth potential and productivity These ten urban centers produce 64% of the company's EBITDA.

Our third quarter results are encouraging We have achieved sustained growth in visitor flow at 70 million visits, an increase of 5% over the same quarter last year. Our business partners’ sales were CLP 1,116 million, an increase of 0.2% over 3Q22 and they are performing well in all three countries. For example, according to the CNC, in the Metropolitan Region of Chile, retail sales fell on average by 12% in the last 3 quarters, while our commercial partners performed 11 percentage points above this. Occupancy costs continue to be healthy at 11.5% and operating revenue was CLP 110,409 million, an increase of 17% over the third quarter of last year. This positive performance goes hand in hand with an improvement in operating efficiency, measured as EBITDA over operating revenue, which was 79.4% during this quarter and similar to the company's pre pandemic efficiency. EBITDA was CLP 87,663 million, an increase of 18% year on year Finally, FFO grew to CLP 69,699 million or 17.2% compared to 3Q22 with a margin over operating revenue of 61.6%.

One of our main objectives this year is to consolidate the sustained pace of store openings across the region, especially for brands that are valued by visitors and new in their respective markets. We are achieving this objective. Strategic alliances with stores such as IKEA, H&M, Decathlon and Dollarcity have been essential. For example, the first IKEA store in Colombia opened its doors in Mallplaza NQS ( with more than 26,000 m2 of floor space, together with brands such as H&M, Arturo Calle and Ktronix We strengthened the commercial proposal of this urban center and increased visitor flow by 50% during October, as well as sales in the Gastronomy and Retail segment, which elevated NQS to a Tier A urban center. We also opened the first Decathlon store in northern Chile at Mallplaza La Serena and an H&M store in Mallplaza Alameda and Mallplaza Calama. In Peru, we opened high interest stores such as Dollarcity and Hiper Asia in Mallplaza Trujillo and Home Asia in Mallplaza Comas, Lima. These store openings across the region have increased the occupancy of our urban centers and the third quarter closed at 95.3%.

I would also like to mention our ability to optimize the company's commercial proposals through our strategy of converting large stores to new retail proposals. These are innovative entertainment areas providing a wide range of services that generate daily traffic to our urban centers. Over the last four years we have converted approximately 115,000 m2 across the region. Some examples are replacing the La Polar and Falabella stores in Mallplaza Alameda with a new H&M store, reducing the La Polar store in Mallplaza Sur to incorporate a new Asian Multiformat proposal, and Falabella leaving this urban center to make way for H&M in 2024 together with expanding the Civil Registry office and Autoplaza.

Growth at Mallplaza is in our DNA and we will continue to develop greenfield projects, such as our fifth urban center in Colombia at Mallplaza Cali, which we expect to open in the first half of 2024. We also have a brownfield strategy which represents 50% of the company's total forecast growth in square meters. This will ensure that we can develop our Tier A urban centers. For example, Mallplaza Vespucio is a leading urban center in the southeastern Santiago, which has grown from 24,000 m2 to 174,000 m2 and is currently developing its Lifestyle proposal. This is an outdoor area covering 21,600 m2 that will provide a new urban and leisure experience in the open air, combined with a powerful fashion mix and several convenience stores. Finally, growth in Chile is fueled by our land bank of 137,565 m2 with tremendous development potential and the capacity to build 278,708 m2 on this land, which would more than double our potential gross leasable area.

We are undoubtedly challenged and motivated by the fact that Mallplaza has become the preferred destination for millions of people in the region. We are wholly committed to our customers, to connect with them and understand their many requirements, to provide them with a high value, renewed and differentiated proposal. At Mallplaza our focus is on you.

Fernando de Peña Iver
Chief Executive Officer of Plaza S.A.

* Result Delivery Report 3Q2023