History and Corporate Profile

Corporate Profile

Founded in 1972, JHSF Participações S.A. is a holding company that invests in and manages shopping malls and luxury hotel and restaurant operations - notably under the Fasano brand - and develops residential real estate projects for high-income clients, the latter being its first developed business.

The decision-making process of JHSF’s Management is based on the balance between: (i) the strengthening of Operating Income; (ii) the streamlining of capital allocation; and (iii) initiatives to reduce the cost of equity and third-party capital. The combination of these measures contributes to the value creation we intend to deliver to our shareholder and other stakeholders.

JHSF maintains assets to be developed, with value creation potential, which will be implemented as long as market conditions and capital structure are appropriate.

The Company’s Management has invested, and will continue investing, in internal mechanisms and procedures related to integrity, audit and incentive to the reporting of irregularities, and the effective application of codes of ethics and conduct.

  1. Shopping Malls

Comprises (i) four shopping malls - Cidade Jardim ("SCJ"), Bela Vista ("SBV"), Ponta Negra ("SPN") and Catarina Fashion Outlet ("CFO"); (ii) shopping mall services - administration, parking and supply of energy and telecommunications; and (iii) high-end retail brands.

  1. Hotels & Restaurants

Hotel and restaurant operations under the Fasano brand, including seven hotels in operation and two already contracted (Trancoso and Miami), as well as 23 restaurants (São Paulo, Rio de Janeiro, Brasilia, Belo Horizonte and Salvador).

  1. Real Estate Development

Business division focused on selling the existing inventory and managing real estate receivables. We are currently considering the possibility of selectively resuming projects to be developed on the existing landbank in the surroundings of Parque Cidade Jardim and Residência Cidade Jardim, close to SCJ and targeted at high-income individuals.

  1. São Paulo Catarina Executive Airport (under development)

We want to provide infrastructure dedicated to executive aviation, runway, hangars, patios and hangars, for executive planes owners and operators that seek a safe and convenient facility for their operations, providing comfort that is not available now at commercial airports near our area of influence.

History

Operational Environment

Shopping Malls

According to the study conducted by the Brazilian Association of Shopping Centers (ABRASCE), 2017 ended with a total of 571 shopping malls, of which 55% are located in the Southeast region. For the year 2018 is planned the inauguration of 23 units.

The Shopping Visits index for 2017, when compared to 2016, increased by 5.4%. Revenue at the end of the 2017 period was R $ 167.7 billion, 6.2% higher than in 2016. In addition, approximately 12,939 new jobs were generated.

Hotels & Restaurants

For the period from January to November 2018, when compared to the same period in 2017, there is an increase in the three main indicators of the hotel industry: 6% in the occupation rate, 1.6% in the average daily rate and 7% , 6% in RevPAR, when analyzed the 391 hotels of the networks associated with InFOHB, responsible for 61,007 housing units (UHs).

Regarding the analysis by region, the occupancy rate registered increases in all of them, varying between 4.1% in the South and 18.7% in the North. For the average daily, only the South region expressed negative variation, with decrease of -0.7% in relation to 2017; the North showed no oscillation and the other regions oscillated positively: 1.6% in the Southeast, 3.1 in the Midwest and 5.1% in the Northeast. In RevPAR, positive variations in all regions: 3.4% in the South; 8% in the Southeast; 8.5% in the Midwest; 9.7% in the Northeast; and 18.8% in the North.

In the performance analysis by hotel category, positive results in all categories. In the occupancy rate, increases of 4.8% in the Economic, 7.7% in the Midscale and 5.5% in the Upscale. In the average daily, increases of 1.7% in the Economic, 1.4% in the Midscale and 1.5% in the Upscale. In RevPAR, increases of 6.6% in the Economic, 9.1% in the Midscale and 7% in the Upscale

Upscale Hotel Sector

The table below shows the average daily rate and occupancy rate of the four categories of hotel in November 2018:

November 2018 Upscale Midscale Economy
Average Daily Rate R$390.51 R$242.94 R$178.38
Occupancy Rate 62.38% 67.46% 63.05%

Source: inFOHB Ed. 136| November 2018 - Forum of Brazilian Hotel Operators

Hotels that focus on upscale customers, such as the Hotel Fasano, have Average Daily Rates and Occupancy Rates above the industry average for upscale hotels, as shown in the following table:

3Q18 Occupancy Rate RevPAR
Consolidated Fasano Operations 55.5% R$1,001.00

Source: JHSF

Real Estate Development

According to information from companies associated with Abrainc, real estate launches totaled 12,211 units in October 2018, totaling 102,326 units in the last 12 months - 29.4% higher than in the previous 12 months. Sales of new real estate, in turn, totaled 10,281 units in the last month, contributing to a total of 116,370 units sold in the last 12 months - a 5.3% increase over the previous 12 months.

In the partial balance of 2018, launches and sales of new properties totaled, respectively, 78,789 and 94,243 units. Compared to the same period of last year, these results represent a 33.0% increase in the number of launches and 4.7% in the volume of sales of new properties.

(*) Information available in Portuguese only

Last Update on January 16, 2019

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