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Shares in Brazil mall operators soar as Multiplan figures, BofA survey point to recovery

Published 01/12/2022, 03:07 PM
Updated 01/12/2022, 03:10 PM
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By Gabriel Araujo

SAO PAULO (Reuters) - Shares in Brazilian shopping mall operators soared on Wednesday as Multiplan reported figures above pre-pandemic levels for the fourth quarter of 2021 and a Bank of America (NYSE:BAC) survey pointed to expectations of a solid recovery in the sector.

Multiplan said in its operational preview that quarterly same store rent jumped 41.4% from the same period of 2019, while same store sales rose 10.3%.

Sales were up 8.1% when compared with the last quarter of 2019, before the COVID-19 pandemic struck in Brazil, supported by a strong performance during the holiday season.

"December was a major highlight, as sales reached 110.1% of the sales seen in the same period of 2019 ... In the fourth quarter, sales were above 2019 levels for the first time in the year, totaling 5.6 billion reais ($1.01 billion)," Multiplan said.

Multiplan's figures were backed by a Bank of America survey showing a K-shaped recovery in the sector, with 92% of Brazilian consumers back at the malls, although visiting less often, it said.

BofA also noted that high-income consumers are spending more than before, while low-income individuals reduced spending on a tight budget.

The survey of 1,000 Brazilian consumers during Christmas suggested online shopping habits acquired during the pandemic might be sticky but not deterrent to mall visits, BofA said.

"Our findings support our expectations for a continued solid recovery in 4Q results. With a faster recovery in sales, malls focused on the high-end consumer are more likely to be able to charge higher rents (above pre-COVID) this year," it said.

Mall operators were among the biggest gainers on Brazil's stock index Bovespa on Wednesday.

Shares in Multiplan soared 6.7% to 18.10 reais in late afternoon, while rival Iguatemi jumped 7.8% and BR Malls rose 5.8%. The Bovespa was up 1.7%.

($1 = 5.5678 reais)

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