Hello ladies and gentlemen. Good morning. Welcome to LOG Commercial Properties video conference third quarter 2021. We have with us today Mr. Sérgio Fischer, CEO, and André Vitória, CFO and Chief Investor Relations Officer. We inform you that the pres entation is being recorded and translated simultaneously. Translation is available upon clicking on the button Interpretation. If you are keeping up in English, you can mute the original audio clicking on Mute Original Audio. During the presentation of the company, all participants will have their microphones disabled. Right after, we'll have the Q&A session. In order to ask questions, click on Q&A, type in your name and your company. Upon being announced, a request to activate your microphone will be presented, and then you activate your microphone and you can ask your question. Declarations that may be made here related to business, operational goals and others, as well as financial objectives, are projections of the company and may not happen. Political, macroeconomic and other operational factors may affect the company's future and lead to results that differ materially from those expressed in such future considerations. In order to open the video conference of the results of the third quarter of 2021, Mr. Sérgio Fischer. Good morning, everyone. Thank you for participating in the video conference of the third quarter, 2021. We have observed a growing demand for quality infrastructure in large consumption centers. In the third quarter of 2021, we have two new BTS contracts for a relevant e-commerce player. The first 33,000 sq m of GLA in Ceará, and the second in Pernambuco with 74,000 sq m. During this year, we have had five BTS contracts totalizing 313,000 sq m of GLA. Our team has had records. We have had 665,000 sq m of gross absorption and high volume and pre-lease. Confirming this good moment of the company and the excellent quality of our assets we have by the end of the year, a forecast of only 2.67% vacancy. We are pleased with the results of the company. The retail, especially e-commerce, has gone through a process of expansion. This positive scenario is reflected in our operations with 62% of the portfolio with activities related directly or indirectly. We believe it will be ongoing with expressive growth for logistics warehouses, especially for LOG that has high standard assets around important consumer regions in Brazil. The increased demand for quality warehouses has brought a new reality. Comparing to the third quarter of 2021 to last year, our rental prices, our lease prices have had contract adjustments of 1.3 above the inflation. Considering operating portfolio, our plan 1.5 follows the expected pace. We delivered four assets totaling 114,000 sq m of GLA in the third quarter of 2021. In three different states with 85% pre-lease, we are going to almost double fold the assets by next year. We have quite more than 300,000 people in our construction sites. That is 1,300. We continue to have land negotiations and now already have on hand almost 90% of the land bank needed for the completion of all. By 1.5, we have achieved 18 cities in 16 states. We are in almost every region of the country. 60% of the population of Brazil in a radius of 100 km. Thank you, Sérgio. We focus on growth, generation of value in active greenfield. In the quarter we had BRL 67.4 million of generated value, accruing BRL 218.5 million. This generation of value is and will be continued to be recognized. Our results continue to be expressed. In the third Q of 2021, we have achieved a net revenue of BRL 94.7 million. 43% greater than the third quarter of 2020. EBITDA in this quarter was BRL 96.1 million. 57% growth compared to last year. The revenue keeps growing and defaults are near zero, in the order of 1.7%. Our balance sheet is very healthy. Our cash flow is BRL 1.1 billion. With BRL 3.5 billion in assets with properties for investments. We captured BRL 450 million in debt, that after swap resulted in a cost of CDI plus 1.3% without our assets. Our cost of debt is low. CDI plus 1.6%, and the net debt represents 7.5%. Our ESG continues going stronger with the educational and professionalizing programs, and we plan on expanding that. I would like to start now the Q&A session. Thank you. We remind you that in order to ask questions, click on Q&A, type in your name and the name of your company. Upon being announced, a request to activate your microphone will appear on the screen, and then you must activate your microphone in order to be able to ask your question. Pedro Lobato from Bradesco BBI. Pedro, we'll open your audio so that you can ask your question. Pedro, floor is yours. Good morning, Sérgio and André. Thank you for the opportunity to ask questions. We have two questions. First, the dynamics of leasing. How are you dealing with the repassing of inflation comparing old and new contracts? Competition-wise, have you felt professionalization of places in the area or in the southeast of Brazil that areas that weren't competitors in the past? Have you been looking into those areas out of your typical region? This is Sérgio Fischer. Thank you for the question. Let's start with the competition. We have seen players that are more robust, and we see them checking one or another market. We see that nothing strong and nothing that would concern us. Competition, especially out of the southeast, is very little. We like to mention that the competition is where we get our clients from as well because we are in a good position, and in the short term, we don't see that changing. The major players are trying to implement one or a project or another randomly. What we have seen in the last 12 months is that the dynamics of prices are very positive. Not only the price fixation of new contracts that we have had the capacity to pass on to move on to a new stage nationally, that is, and we have existing clients that we have been able to show numbers, share numbers, and just lease over 1.3, 13% in the inflation we have been able to repass area in kind. 2020-2021, that is. We keep on going strong, and we see the force in that sector, and there is a very strong room for us to keep on expanding in the short term. Thank you. Thank you for your answer. Our next question is by Mr. Elvis Credendio, BTG Pactual. Elvis, floor is yours. Good morning, Sérgio. Good morning, André. I have two questions here next to my recycling. With this scenario with higher interest rates, cap rates may be higher. I would like to understand, how is the appetite of the company to recycle assets? Even with lower margins, if that's the case, do you think you will end up recycling less than forecast? My second question is the growth plan of the company. You have 1.5 million sq m. That is a macro scenario and more challenging, and recycling and the cost of debts is likely higher. How would that be in terms of the plan of growth in terms of speed? Do you think you would revise the speed at which you plan on delivering results over the next year or not? Thank you, Elvis. This is Sérgio. The two questions are interconnected. We are still delivering the quality. We don't see the scenario changing. It's a quality. We have had quality in terms of ROI. We believe that there is the possibility for us to take that even further up. The costs of construction are stabilized in a very high level, and there may be a reduction in those costs, especially when it comes to the price of steel. This dynamic of prices that we have mentioned, we plan on even improving, but not in this semester. We have been able to deliver quality, and we don't plan on changing that. In terms of recycling, independent of the funnel of this growth, we want to maintain that. We are going to maintain, and we understand that this macro scenario, these interest rates in the order of two digits. We'll have a reduction in spreads. Cap rates may go slightly above and have a reduction in margin. We are very comfortable that the transactions that we have had recently, nearly BRL 500,000, the gross margin is BRL 544,000. If we were to bring a little more cap rate and lessen the spread, we would still be above 30%, which is still a very good level. Our appetite doesn't change, hasn't changed. We understand that there is a sense in what we are planning. We want to keep on having assets of high quality. We have been contacted by even competitors. Our appetite is not different, is no different from before. There has been an adaptation, but we have had the search from funds in the real estate area. We are going to increase at a certain point. We have had demands that are ongoing. While it remains like that, we are going to keep the plan for growth with the necessary caution, that is. Great. Thank you, Sérgio. Our next question comes from Alex Ferraz from Itaú BBA. Alex, your audio will be open so that you can ask your question. Please, floor is yours. Good morning, Sérgio, André. Thank you for the presentations. BTS, you mentioned here that they are warehouses with tech specifications that are state-of-the-art. How do you see the cost of the square meter, the portfolio and lease as well, within the portfolio? How do these warehouses compare to the average in the portfolio? When you have a lot to deliver, you will end up forcing the vacancy in certain directions. This growth, in other words, is stabilized, is more sales of assets, or you had other points of that came from the portfolio. This is Sérgio. Stabilized vacancy, it was very marginal. This movement where we had historic record from the company. Anything below 5% is still very strong. We are always having new clients. Clients, some clients leave because their operations move on to different places. That's why there is vacancies. 2.1%-2.7%, we understand as a normal movement in the market and in our type of business, so it's not concerning. There is a use that's very strong. Below 5, we are still satisfied. BTS-wise, they are very specific with a specification that is very typical of them. We put to you that this is an investment done out of the United States. This is the first one with that type of specification, and this is a CapEx that is much higher than the square meters. The important part here is that we are, with these two contracts, with a target of more than 11%, that we consider super positive with that. I think that would respond to your question. Thank you, Sérgio. The next question comes from Raul Grego Lemos from Eleven Financial Research. Raul, we'll open your audio so that you can ask your question. Please, Raul, floor is yours. Good morning, Sérgio. The strategy of the company with the growth and comparing the demand for BTS or for pre-leasings, doesn't it affect the long-term plan of the company in terms of adjustments of the price of leasings and rentals? Even with contracts, if they are going to be reviewed, we are going to see more contracts of long-term with in comparison to traditional contracts. Sérgio here. You're right. That's very important. We like this strategy of retail. Because of that dynamic, we can pass on the price and adjust as we see fit. We are going to continue with the retail strategy with that type of project. These opportunities, BTS, we are not going to stop looking at them, but they are never gonna go above 50%, which is the ceiling within the plans of the company. We are going to speculate. We understand a dynamic of a demand that is higher, a client that is much more ample. Two strategies, but more focused on this strategy, plan that I mentioned. Thank you. It's to understand whether there will be a difference, a change, or whether it's a complementary action, so and so that we understand what kind of changes may be on the way. Another question. With the increase of costs of CDI, for instance, Selic in the indicator, if you are being able to raise rental and maintaining spread and cost. Sérgio again. Yields, that's it. We have been able to keep yield around 12%. Even with this pressure, we have a bias that's positive now. We have stabilized on a high level, and we can have that balanced out in the medium term. Spread is very strong, price fixation is better and better, and that is affecting the yield. BTS, that's what you commented. They are complementary. They complement with each other. BTS may be more interest for third parties. We can have recycling more focused on BTS and maintaining all the while our portfolio as it is in the company. Thank you. Have a great day. The next question is from Andre Mazzini, Citi. Citi, Andre. Andre, the floor is yours. Hi, Sergio. Andre. Thank you for the call. This last point that Sergio mentioned, BTS has more liquidity for other players, considering that the Selic rate is going up. Let's see, the IGP-M is going up. We know that the office in São Paulo was having some interesting changes. It's not only a real estate market, it's more than that. Would you have a portfolio outside the axis Rio-São Paulo? BTS is another portfolio. Do you think—Do you consider buying and going into these different portfolios, expanding to that? Do you think having structures outside this area and going outside the axis Rio-São Paulo? If my question was clear, I would like you to talk further about BTS contracts. They are longer than the conventional ones. When we look at Chile and the United States of America, they reach up to 30 years. The average in Brazil is 10 years. There is room for going up in terms of BTS with shorter contracts and modular limits, thresholds even. Sérgio Fischer again. With regards to the liquidity of assets that I mentioned earlier, it is a matter of fact that we have had conversations with additional players, all very excited with the matter of BTS. These clients that we have are very strong ones. Independently of the region, we know that it is important, but we have had Pernambuco and Ceará, for instance, that have been very strong areas, and people understand that that's a good field. Eventually, occasionally, we'll have steps. We will tread into these different areas. BTS, BRL 270 million was a good number. We'll keep on looking at those points, and we'll have transactions in that level. BTS periods and deadlines and terms, 10-15 years is what we have seen. The chance of that, those clients actually quitting altogether, at the end of the period is very slim. It's a lot of investment, it's a lot of employment generation. Three, we have clients with three shifts with more than 2,000 people employed. So it's a win-win situation. But in terms of dynamics of markets, it has been between 10%-12%. Thank you. Our next question comes from Aline Caldeira from Bank of America. Aline, I will open your audio for you to ask your question. Aline, floor is yours. Good morning. Congratulations on the results. Thank you for giving me the room here. I think my question is about the regions. Next year will be very important in terms of delivery and what you are seeing mostly is out of the Rio-São Paulo axis. Can you give us an idea of what you still have to deliver, and to deliver not only by the end of this year, but next year? Are you seeing leasing having the rental prices going up? Is there an area that stands out among the others or not? Well, rentals. We like to show numbers that I think are interesting at LOG. If we take 2021, 665,000 sq m of leased area for two existing clients. In any region of Brazil. Those are our very base. It has been nationwide. There isn't much disparity between regions. We understand that there are areas that much more active than others and affect prices, but it has been very linear. One or another case that from time to time kind of changes the trend. Next year, we'll have a very strong delivery, more than 400,000 sq m, a little more out of this 400,000 sq m in the fourth quarter. In the next three, four months, we'll have deliveries in the north, south, northeast. It's very linear. There will not be outstanding regions. I would like to focus on pre-lease, pre-leasing. We opened that number with all this delivery that we had, 113,000 sq m of GLA that have been pre-leased. It's a very strong number. We have a curve here that is probably going to stabilize the asset to 90% of leasings accomplished. It’s a totally different reality. It shows the strength of our sector currently. When we look ahead, we look into the future, we have deliveries of a certain volume for the early months of next year within UBL. This is a moment that is unique, and we'll be delivering a lot of things in 2022 and a lot of things pre-leased. It was a very clear question. Thank you and answer. The next question comes from Alex Andre from Sara Invest. Alex, we'll open your audio so that you can ask your question. You can proceed. Alex, floor is yours. Good morning. Good morning, all. The pressur e of costs on enterprises and construction and the margin concerning the costs, how they have been affected. This is Sérgio. Our costs increased in the order of 30%. Metal structures are mo re than one-third of our raw material, and it has been increased in terms of prices. Positively, we have been able to pass on the price to maintain stability. On a positive note, we don't see a negative bias in that sense. We see the possibility to increase that yield once we understand that very soon we'll have a drop in the cost of the steel and dynamics have been ongoing. This is what we have as information so far. Costs have grown, but I think we in the mid term, we can even improve these prices. Thank you. The next question is from Fanny Oreng, from Santander. Fanny, the audio is yours. Floor is yours. Please, go on. Good morning. My question is, you have a e-commerce basis of clients, very large, most of the ones in Brazil. We know there is a constant demand, ongoing for solutions, last mile. I know there is a lot of space, room to grow in the warehouse market, but there is a point that may impair your expansion in the market. Last mile, how do you see that? Thank you, Fanny. Last mile, we know of that quite well. We hear from our clients. Each client has a different type of operation. Amazon is one, Mercado Livre is a different one. They have their own ways. We consider our whole portfolio, not only operational but development as well, as a capacity to serve 15 km from the center of that populational region, with Mercado Livre, for instance, and we haven't had a problem. We see that we have last mile in our whole project, but there are operations that are very central. We have studied many projects in that sense. We know that we have seen a lot of difficult situations. We have a leasing rental price very much higher than the average. We're not going into that now. Our clients are not requiring that at this point. We are keeping with our model of business, and so therefore, the last mile is explained within this context. The Q&A session is adjourned. Mr. Sérgio Fischer, please share your final considerations with us. Thank you all for the call. I would like to bring a point to light here. Delivery, we will have as a linear question. We have delivered 113,000 sq m. In the next quarters, we'll have a lot of delivery. The vacancy of the company altogether is to grow. That is not a point of concern. We see a demand that is stronger and stronger, and that is mapped out. 85% pre-leasing is very positive. That's why we like to point out the vacancy that is at a very stable level. In the next quarters, we'll have, it's likely, an increase in vacancies. As long as we are below 5% or 4%, we are satisfied, and we'll have a change in the portfolio of the company in the next quarters. We are very excited for 2022 to arrive, despite all the challenges that we see ahead of us. Operationally, our business is doing well, and we are going to deliver a lot in the future. Thank you all and till next time. The video conference of results of LOG is hereby adjourned. If you have doubts, please contact re@logcp.com.br. Have a great day.