Brookfield Property Partners L.P.

Sector: Real estate investment trusts (REITs) Countries of operation: The US and 29 other countries Key categories: Core office space, core retail space and limited partnership (LP) investments Annual Metrics [caption id="attachment_136329" align="aligncenter" width="700"] Fiscal year ends December 31
*Trailing 12 months ended June 30, 2021[/caption]   Summary Brookfield Property Partners L.P. is one of the world’s leading owners and operators of commercial real estate, with over $111 billion in total assets. It was created from a spin-off from Brookfield Asset Management (BAM) in 2013 and is BAM’s primary vehicle for investing in the real estate sector. Headquartered in Hamilton, Bermuda, it has a diversified real estate portfolio and operates on a global scale with a presence in 30 countries. Brookfield Property Partners operates in four segments: Core Office, Core Retail, Corporate and LP Investments. As of June 30, 2021, the company’s Core Office portfolio has 143 premier properties, covering 98 million square feet, and its Core Retail portfolio includes 119 best-in-class malls and urban retail properties, spanning 117 million square feet in total. Its LP Investments portfolio comprises equity invested in Brookfield-sponsored real estate opportunity funds, targeting high-quality assets with operational upsides across various real estate sectors—including hospitality, logistics, multifamily, manufactured housing, office, retail, student housing and triple net lease. On July 26, 2021, BAM completed the privatization of Brookfield Property Partners, through the acquisition of all its LP units and Brookfield Office Properties Exchange’s exchangeable LP units. Company Analysis Coresight Research insight: Since 2020, pandemic-driven disruptions have adversely affected Brookfield Property Partners’ finances and consolidated performance. While we expect that the company’s high-quality stabilized properties and associated cash flows will remain in demand from investors, in the short term, the company may face setbacks in recycling its capital. Nevertheless, its self-funding business model, caused by its stabilized portfolio and flexible balance sheet, allows for financial independence—the company does not have to access capital markets to fund its growth. The company’s Core Office portfolio generated $131 million in funds from operations (FFO) in its latest quarter, ended June 30, 2021, rising by almost 14% from $115 million in the comparable period 2020. Growth was driven by the impact of foreign currency exchange, an increase in net operating income (NOI) and condominium sales in a London residential tower. In its Core Retail sector, FFO decreased to $103 million during its second quarter, dropping below the $147 million recorded in the comparable period last year. The decrease was caused by tenant vacancies and rent abatements amid the pandemic. FFO in the company’s LP investment rose by $51 million for the same quarter, driven by the rise in Brookfield’s hospitality portfolio earnings. In its Corporate segment, FFO was at a loss of $130 million in its latest quarter, compared to a loss of $81 million in the same quarter of the last fiscal year.

Tailwinds	Headwinds
Highly diversified business by geography and real-estate type Global operating platforms provide competitive advantage, allowing efficient allocation of capital around the world Strong and flexible balance sheet to fund continuous growth Strong operating excellence with an experienced workforce of 24,400	Complete or partial closure of any properties resulting from government or tenant action Risk of sudden change in economic conditions due to the pandemic Prolonged re-leasing timelines and potential delays in lease-up of vacant spaces, caused by slowdown in economic activity Change in consumer behavior leading to negative consumer discretionary spending, impacting tenants’ businesses

  Strategy Brookfield aims to maintain its position as a leading global owner and operator of high-quality real estate. Below, we detail the company’s three key focus areas, as per its annual report for fiscal 2020 (ended December 31, 2020): 1. Grow on a global scale

• Invest globally through various operating entities based around the world
• Build strong local relationships and partnerships across regions
• Make use of its 24,400 operating employees around the globe

2. Capitalize on access to large-scale capital

• Capitalize on unique access to BAM funds and other Brookfield entities
• Recycle capital for re-investment in new opportunities
• Stabilize cash flows on Core Office and Core Retail portfolios
• Use strong relationships with investment houses and banks for better rates on raising new capital

3. Continue to develop operating expertise

• Develop best-in-class properties at a discount to asset valuations
• Optimize tenant relationships through higher occupancy, longer lease terms and premium rents, resulting in improved revenues in each market
• Acquire add-on assets and entities that can be integrated into existing assets to improve overall asset value and returns
• Revalue investment properties to reflect initiatives that increase property level cash flows, change the asset’s risk profile and reflect changes in market conditions or the portfolio premiums realized upon an asset’s sale

[caption id="attachment_136331" align="aligncenter" width="700"] Source: 2020 Annual Report[/caption]   Company Developments

Date	Development
6, 2021	Brookfield Property Partners sells four retail assets in the US to an unknown buyer for approximately $73 million.
August 5, 2021	Brookfield Property Partners files Form 15 with the Securities and Exchange Commission (SEC) to complete its delisting.
July 26, 2021	Brookfield Asset Management completes the privatization of Brookfield Property Partners, acquiring its LP units and Brookfield Office Properties Exchange L.P.’s exchangeable LP units.
May 7, 2021	Brookfield Property Partners sells Forever 21, Inc., to an unknown buyer acquires for $63 million.
May 7, 2021	Brookfield Property Partners sells a 50% stake in Bay Adelaide Centre North Office Development to an unknown buyer for approximately $580 million.
April 15, 2021	Brookfield India Real Estate Trust appoints Saurabh Jain as Company Secretary.
January 4, 2021	Brookfield Asset Management and Institutional Partners propose the acquisition of 100% of Brookfield Property Partners’ units.
December 7, 2021	Brookfield Property Partners and Simon Property Group complete the acquisition of all retail and operating assets of JCPenney.
November 6, 2020	Brookfield Property Partners announces the appointment of Michael Warren to the Board.
September 29, 2020	Brookfield India Real Estate Trust files for an initial public offering (IPO).
September 11, 2020	Brookfield Property Partners announces a share repurchase program for 31,602,923 limited partnership units, representing 7.35% of issued share capital.
September 2, 2020	Brookfield Property Partners completes the repurchase of 35,500,000 shares, representing 8.1% for $426 million under the buyback announced on July 2, 2020.
August 10, 2020	Brookfield Property Partners and Brookfield Premier Real Estate Partners Pooling LLC sell a 50% stake in One Blue Slip and an unknown stake in Andorra, respectively, to an unknown buyer.
June 10, 2020	Brookfield Property Partners files a shelf registration, which enables it to can register to issue new shares up to two years before filing an IPO. The registration will speed up its IPO process should it decide to file in the future.
March 6, 2020	Brookfield Property Partners completes the acquisition of InterContinental Buckhead Atlanta Hotel and Sofitel Washington DC Lafayette Square from Pebblebrook Hotel Trust for $260 million.

Source: S&P Capital IQ

  Management Team

• Brian William Kingston—CEO and Senior Managing Partner
• Bryan Kenneth Davis—CFO and Managing Partner of Rest Estate
• William Mitchell Powell—COO and Senior Managing Partner of Real Estate
• Lowell G. Baron—Chief Investment Officer and Managing Partner of Real Estate
• Matthew P. Cherry—Senior Vice President, Investor Relations

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Source: Company reports/S&P Capital IQ