Squarestone Brasil Limited, the Anglo-Brazilian real estate development and investment firm, announced that it has, through its wholly owned subsidiary SB Brast Participacoes S.A., signed agreements with a leading Brazilian investment bank and a US private equity real estate group to fund and develop to completion Golden Square Shopping Mall.

James Morse, Chief Executive of Squarestone Brasil, commented that Squarestone Brasil is delighted to have two such strong partners working together with us in Brazil. Morse said he believes these agreements will help the firm deliver on its strategy and ambitions to be a leading developer and manager of Brazilian shopping malls.

Squarestone Brasil will pay a total consideration of R$95.2m to acquire the remaining 50 per cent of Golden Square that it does not already own and to settle the outstanding amount owed by Squarestone Brasil for its original 50 per cent acquisition. Squarestone Brasil will make an initial payment of R$60m, R$40m of which will come from its own cash reserves with the remaining R$20m from a Bond advance. The balance of the total consideration is deferred until the opening of the mall.

Importantly however, the investment also provides Squarestone Brasil with the funds to construct the project to full completion. Construction of the 31,000 sq m net leasable area (NLA) scheme is expected to begin in the next three weeks and Golden Square is expected to open by Q3 2012.

Golden Square shopping mall is a flagship development for Squarestone Brasil, opening up an entirely new growing 'A' and 'B' class consumer market for Squarestone Brasil to access. Upon completion, Golden Square will be a 31,000 sq m NLA mall on three levels, designed and built to international shopping mall standards combined with the local culture, tastes and fashions of Brazil that is intended to deliver the optimal tailored retailing experience targeting the ABC region of Sao Paulo.

Golden Square's goal is to redefine the local retail experience based on international standards, hosting both domestic and international retailers under one roof and presenting a distinctive retail offer that currently does not exist in this part of greater Sao Paulo.

Additionally, under an option agreement signed with Squarestone Brasil, the Bondholders have the right to buy 49 per cent of the management company of Squarestone Brasil, Squarestone Brasil Administracao E Participacoes S.A., subject to conversion of the Bond into equity of SB Brast and also providing 50 per cent of the required equity for the funding of three additional malls.

1st April 2011