#107 Log CORPORATE PRESENTATION March/2019 commercial properties#2/DISCLAIMER Log commercial properties • This presentation may contain certain forwardHooking statements and information relating to LOG Commercial Properties e Participações S.A. ("LOG" or "Company"). The words like "believe," "anticipate," "expect," "envisages," "will likely result," or any other words or phrases of similar meaning. Although we believe that these forward-looking statements are based on reasonable assumptions, these statements are subject to various risks and uncertainties, and are made taking into account the information that LOG currently has access to. LOG does not undertake to update this presentation by means of new information and/or future events. LOG is not responsible for operations or investment decisions taken based on the information contained in this presentation. • This presentation does not constitute an offer, or invitation, or solicitation of an offer to purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. • The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal surveys, market research, publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications. LOG does not make any representation as to the accuracy of such information. 2#3SECTION 1 - About Us Log commercial properties HOS#4LOG COMMERCIAL PROPERTIES OWNERSHIP BREAKDOWN Shareholder Composition Menin Family 35.4% Free Float Brazil - Individuals 27.3% Foreigners 29.8% Free Float 64.6% Log co properties Brazil - Corporation and Funds 42.9% LOGG3 NOVO MERCADO First pure warehouses company listed on the Brazilian Stock Exchange. A member of the Novo Mercado, a higher index of corporate. governance in the Brazilian stock market. Participant in the Ibovespa Index, the most important indicator of the average performance of the shares traded on B3. Average daily trading volume at B3 of R$8.7 million² in 2019. Notes 1 Date Base of Ownership Breakdown: December 28, 2018 2 Period of 01/02/2019/01/02 to 03/21/2019 - 54 trading sessions 4#5LOG: BUSINESS MODEL DIFERENTIATED High growth platform with limited execution risk Company's Growth Plan (i) development of low-risk add-on projects; and (ii) increase company's flexibility to develop attractive new projects Accelerated Growth of the Next Years of Land Already Purchased • • Attractive Add-on Opportunities: additional GLA of 116 thousand sq.m with low risk in the next 4 years Landbank of 496 thousand sq.m already in house (@ Log's stake) GLA approved of projects that are not in operation or under construction of approximately 265 thousand sq.m (% LOG) One-Stop-Shop in the Warehouse Segment . Combination of a diversified client base, geographic diversification, construction DNA and flexibility to attend various needs Construction know-how enabling lower costs and higher returns. • Last mile approach in large cities of Brazil . Solid Operation Platform Coupled with a Low Cost DNA RR AM PA MA AC RO Total Potential GLA of 1,535¹ thousand sq.m . • • 46 high quality assets, totaling a Potential GLA of 1,535 thousand sq.m 5.91% Vacancy rate (vs. national vacancy average of 20,0%)¹ Standardized construction methods with lower construction cost Attractive Market Environment Total of 46 Assets, 39 warehouses and 7 retail Currently present in 26 cities and 9 states • Brazil still a underpenetrated market with relevant growth opportunity • Favorable macroeconomic conditions in Brazil E-commerce: Key lever to boost demand for warehouses LOG's differentiated business model, which is comprised by a unique risk profile, results in above average returns for the company when compared to the market MT MS RS PR Note: As of: Dec/18 TO DF GO PI Log commercial properties RN CE PB PE AL SE BA MG ES SP RJ SC BA CE SP 24% 2% 6% ES 9% GO 9% RJ 12% MG PR 26% 11% 5#6LOG ASSETS 01 02 Goiânia/GO Fortaleza/CE G2 Rio de Janeiro/RJ Log commercial properties Itatiaia/RJ Betim/MG Sumaré/SP 6#7SUCCESSFUL TRACK-RECORD Outstanding development expertise and financing capabilities that translates in a solid platform First warehouse outside MG is delivered (Jundiaí-SP) Capital injection of R$ 250 mm into LOG by Starwood Company changes its name to LOG Commercial Properties e Participações S.A. LOG Sumaré and LOG Hortolândia were Delivered, totaling a GLA of 86 th sq.m Company starts its operations in Northeast, South and RJ Capital Injection of R$ 128 mm into Log by FIP Multisetorial Bradesco The company reached the mark of 589 th sq.m of delivered GLA T The company managed to lease a total GLA of 151 th sq.m The company managed to lease a total GLA of 110 th sq.m Capital injection of R$250 mm into Log by current shareholders LOG signs its largest contract, with approx. 32 th sq.m of GLA allocated to just one client Capital injection of R$ 308 mm into Log by current shareholders Log commercial properties The company managed to lease a total GLA of 3721 th sq.m in 2018 Beginning of LOG trading on B3 in Novo Mercado - ticker LOGG3 Leased area per year 63 177 132 231 (th sq.m) 91 2011 Consider new leases + renovation 253 413 T 151 110 184 246 Accumulated Delivered GLA (th sq.m) 589 682 752 654 622 ШИ 2012 2013 2014 2015 2016 2017 2018 7#8VALUE CREATION RETURN AND GROWTH Growth 2019 In Jan/19, 16 thousand sq.m of GLA were delivered, reaching 768 thousand sq.m of Delivered GLA by LOG. Additional 130 thousand sq.m of GLA under construction, 68% leased, totalizing 898 thousand sq.m of Delivered GLA at the end of 2019. Only with GLA under construction, growth will be 19%, with estimated YoC of 12.1%. thousand sq.m of 130 GLA under construction Yield on Cost 12.1% estimated GLA under construction Log commercial properties > New debts Funding in 4Q18 and 1Q19 of R$ 348 million at the weighted average cost of 114% of CDI for maturity between 5 and 10 years. Average Cost of 7.3% Debt per year on debts of 4Q18 and 1Q19. Additional growth with strong market, more capital and further alternatives Capital Increase With better capital structure, focus on additional growth based on LOG's assets portfolio R$100 million in Capital Increase in 1Q19 8#9HIGH VALUE CREATION The combination of increasing retums on the operation and the lower funding cost provide better spreads for the business YoC x Cost of Debt YoC (real) Cost of Debt (nominal) I 2015 2016 2017 2018 T Log commercial Spread Increase 9#10Illustrative Scenario Increasing and exponential return of Free cash in the projects The compound of real gains above inflation in projects with the cost of low debt generates increasing retums from cash on cash Assumptions Size (sq. m GLA): 40,000 Investiment (R$ thousand): 52,000 Equity (40%; R$ thousand): 20,800 Price Increase above inflation Debt (60%; R$ thousand): 31,200 Rent (R$/sq. m/month): 15 Occupation: Debt Cost: 100% 7.5% p.y. Debt costs at low and constant levels Inflation (per year): 4.0% p.y. Real Growth (base case): 1.0% p.y. Real Growth (best case): 5.0% p.y. Conservative leverage. The higher the leverage, the higher the return Cash generation grows exponentially, generating funding for growth 63.9% 57.7% 52.0% 46.8% 42.0% 37.6% Cash on Cash 33.6% 29.9% 26.5% 42% 40% 37% 35% 33% 31% 29% 27% 25% 23% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 I Cash on cash (base case) Cash on cash (best case) Notes: cash on cash reflects the free cash generated by the operation (revenue - vacancy - financial cost), disconsidering taxes, in relation to the invested equity Year 7 Year 8 Year 9 Year 10 com properties 10#11DIFFERENTIATED RETURN Unique combination of high retums on operational portfolio and strong growth perspectives Results Leverage Log commercial properties Average Market Return Diversified Client Base / Flexibility Risk Diversification Geographic Diversification Low Cost DNA / Scale Average LOG Return MARKET Lower Vacancy Rates Flexibility to Attend Various Needs Low Concentration per Industry Low Concentration per Customer Present in Locations the Competition is Not Standardized Construction Methods Quick Reallocation of Clients Strategically Located in Active Commercial Routes Lower Construction Costs Efficient Operations Brings Costs Savings to the Customers Ability to Meet Some Client's Needs in Different Locations Significant Gains of Scale 100 commercial properties 11#12ILLUSTRATIVE SCENARIO VALUE CREATION LOG DEVELOPMENT Capex Land and Construction Funding Breakdown Rent Value Total Cost 100 Yield on Cost 14% At 8% Cap Rate 175 62 (Debt) Equity Value Creation Gain on Equity Desinvestment Recycle Allocated Capital Funding for devolopment cycle Construction 75 Total 100 Final Project 1 2.8x 40 (Equity) 60 (Debt) 60 (Debt) 113 (Equity) 113 (Equity) Project 2 Inicial Investment Land 15 25 (Equity) 25 40 (Equity) (Equity) 14 (Equity) 40 (Equity) 40 (Equity) Project 3 40 (Equity) Assuming real interest rates at 4% for one year (while there is no rent) Log commercial properties Virtuous cycle Cheap production, value added and sale Invest. R$ 1,300 - R$ 1,500 / GLA Recycle R$ 2,300 - R$ 3,000 / GLA 12#13HIGHLIGHTS FINANCIAL PERFORMANCE Net Oper. Revenues Increase of 5.4% R$104.8 MILLION Adjusted EBITDA Increase of 8.5% R$86.6 MILLION Log commercial properties Loan to Value Líquido Increase of 2.0 b.p. 32% Net Debt Increase of 9.6% R$783.6 MILLION Adjusted FFO Increase of 42.6% R$52.4 MILLION 52,374 2018 2017 36,717 86,610 2018 2017 79,823 2018 104,827 2018 2017 99,494 32% Dec/18 2017 30% OPERATIONAL PERFORMANCE Gross Absorption² Increase of 15.1% 372.1 th sq.m of GLA OGLA Delivered Accumulated Increase of 10.4% 752.2 th sq.m of GLA Portfolio Increase of 1.8% 1.5 million sq.m of GLA Stabilized Vacancy Warehouse Decrease of 2.8 b.p. 5.9% 1,534,817 Dec/2018 5.9% 2017 1,507,148 Dec/2017 752,239 2018 2017 681,616 2018 372,107 2018 2017 315,916 8.7% As of Dec/2018 New leases + renovations 783,604 Dec/17 715,075 13#14SECTION 2 - Warehouse Market Log commercial properties HOS#15BRAZILIAN WAREHOUSES MARKET The Brazilian industrial condominium market is highly concentrated in the southeast region and very low quality. However, there is increasing demand in other regions, such as the Northeast and the Midwest. Inventory by region 20171 7% 9% 3% 1% Brazil Warehouses inventory 2017² 9.1% 80% Southeast South Northeast North Midwest Log commercial properties High Standard Warehouse Obsolete Warehouse 90.9% 100% of LOG warehouses are classified in category A. Only 9.1% of Brazilian warehouses are classified in this category. Highly concentrated warehouse market in Brazilian southeast. Inventory, Net Absorption and Vacancy - Brazilian Market Class A³ 25% 25% 18% 17% 18% 20% Inventory (th sq.m) 8,494 9,735 10,849 Net absorption(th sq.m) 12,472 13,226 13,646 1,158 1,113 811 279 428 1,020 Vacancy Brazilian Market¹ 2013 2014 2015 2016 2017 Source: Colliers International (2017 - lastest version of inventory by region available) | CBRE Report of Warehouse Market (2017 - lastest version of Brazil Warehouses Inventory by region available) | ³Colliers International 2018 15#16Value Creation E-COMMERCE Inicio Noticias Balanços Dafiti Group cresce 22,1% em Q4 2017 Dafiti Group cresce 22,1% em Q4 2017 Por Redação E-Commerce News - 11/04/2018 E-Commerce News Tudo sobre comércio eletrónico E Storage and last mile Market Place 11/03/2019 19:28 Log COM properties Compra on-line é canal preferido por 74% dos brasileiros, diz estudo ECONÔMICO Valor → E-COMMERCE ← Faturamento no e-commerce pode crescer 16% em 2019, diz ABComm Diana Cheng-18/01/2019-15:10 MONEY TIMES ↑↓ Distribution, logistics and reverse logistics Magazine Luiza lucra 29% mais no 3º trimestre com crescimento de vendas puxado por e-commerce Vendas totais da empresa somaram R$ 4,6 bilhões entre julho e setembro. GI Direct purchases and omnichannel 16#17E-COMMERCE Key lever to boost demand for warehouses commercial properties E-commerce sales growth Volume and growth of online sales in Brazil - R$ bn 28% 24.3% 17.6% 15.4% 9.9% 11.7% 14.4% 15.6% 7.5% Necessity of more space for logistics operations A research published by Duke Realty concluded that a $ 1.0 billion increase in E-commerce sales results in additional storage requirement of 100 th sq.m LOG's platform already established for growth of demand Geographic Footprint LOG CP RR 84,7 CAGR13-21: 14.4% 73,3 64,1 57,4 48,8 41,3 44,4 35,8 28,8 2013 2014 2015 2016 2017 2018 2019 2020 2021 Accum. growth from the 54% Brazilian online sales from 2013-2016 Source: NAOIP, Duke Realty, Forrester, E-bit and E-marketer * Updated August/2018 (lastest data available). AM PA RN MA CE PB +USD1bi ☑ +100 th PE RO TO AL in sales sq.m required SE BA MT GO MG According to NAOIP surveys, sales using an e- commerce platform require storage space three times larger than the traditional model MS ES SP RJ PR RS R$40bn Expected accum. growth from the Brazilian online sales from 2016-2021 12.4% Expected yearly average growth from the Brazilian online sales from 2017-2021 R$85bn Expected market size from the Brazilian online market in 2021. 17#18SECTION 3 - Business Model Log commercial properties HOS#19BUSINESS MODEL 1 • • NATIONWIDE FOOTPRINT Prime location Presence in 26 cities and 9 states. Potential portfolio of 1.5 million sq.m. Strategic location, close to major national urban centers. NATIONWIDE FOOTPRINT 4 • PORTFOLIO RISK Diverse customer base and low risk Low concentration in revenue, whether from customers or industry. Quality portfolio with leading players in their segments. BUILDING DNA High Return B ow Risk DIVERSIFIED PORTFOLIO FLEXIBILITY Log commercial properties 2 LOW COST Expertise in project management Construction speed by experienced team. Standardization of projects allows greater productivity gains. Scale gains in the purchase of materials. 3 COMMERCIAL STRATEGY Ability to attend all types of demand • • Size of occupancy by flexible modules. Customer relationship increases the concept of "one-stop-shop". . Fast Lease up. 19 12#20NATIONWIDE FOOTPRINT Geographic diversification with presence in regions with less competition and high demand for high quality assets. 752 th sq.m of Delivered GLA AM AC RO State GO GLA (sq.m) 67,712 State RR MT AP State CE GLA (sq.m) 47,573 State SE Log commercial properties 783 th sq.m of GLA to be built Rio de Janeiro Minas Gerais Cities 3 Cities 6 RJ MG GLA (sq.m) 60,821 GLA (sq.m) 472,310 PA MA RN CE GLA (sq.m) 8,364 Ceará Paraná PB PI PE Cities 1 Cities 2 State BA AL TO CE PR SE GLA (sq.m) 17,725 GLA (sq.m) 51,674 GLA (sq.m) 56,701 BA GO MS MG SP GLA (sq.m) 188,440 State PR SC PR RS GLA (sq.m) 81,020 As of Dec/2018 MG ES State State State ES GLA (sq.m) 67,542 RJ GLA (sq.m) 93,482 SP GLA (sq.m) 180,295 Goiás Cities 1 SP GO GLA (sq.m) 10,548 São Paulo Cities 3 GLA (sq.m) 107,296 Sergipe Cities 1 SE GLA (sq.m) 23,228 20 20#21HIGHLY EFFICIENT DEVELOPMENT CYCLE Standardized construction methods combined with strict cost controls enable the Company to have lower-than-average construction costs Efficient Construction Process Ensuring Competitive Costs Log commercial Short and efficient construction cycle Optimized production Seasoned process execution team ($) More than 700 th sq.m of GLA delivered Engineering innovation and standardization Own Engineering and management teams (independent of MRV) Significant gains of scale 21#22• • Client 1 Warehouse 5 • FLEXIBILITY MODULAR WAREHOUSES LOG GAIOLLI/SP LOG modular warehouse allows better business negotiation and faster absorption Capacity to attend any customer need Business risk reduction due to the pulverized customer base LOG FORTALEZA/CE Warehouse 4 Client 2 Warehouse 3 Client 3 Warehouse 2 Client 1 Client 6 dient 4 Warehouse 1 Client 7 Client 6 LOG CONTAGEM II/MG Client 1 RUA DR JOSE AMERICO CANÇADO BAHA Warehouse 1 Client 7 Warehouse 2 Client 8 Client 2 RUA JONAS BARCELOS CORREIA Client 3 Client 9 Client 4 Client 10 Client 5 Warehouse 1 Client 1 Warehouse 2 Client 1] Client 6 Warehouse 3 LOG LONDRINA/PR Warehouse 2 Client 2 --Client 3 Client 4 -Client 5 Client 1 Warehouse 1 Log commercial properties 22#23QUALITY AND FLEXIBILITY Top diversified client base, with low concentration both per client and per industry segment Top Diversified Client Base per Size Large multinational companies Large national and multinational companies Large local and FIAT DIAGEO Mondelēz Johnson & Johnson JSL Entender para Atender DHL International LUXOTTICA MARTINS SISTEMA INTEGRADO MARTINS magazineluiza FEMSA Nviavarejo logistic transportation companies As of Dec/18 itambé PATRUS Transportes Urgentes SUPERMERCADOS BH Correios 3corações • Few opportunities to grow Low demand Geographic concentration • Low return • Many opportunities to grow • High demand • Geographic diversification Log commercial properties e Average leased GLA of 4,200 sq.m by tenant Largest client accounts for 5.1% of total revenues • Low delinquency rates (0.65% over the last twelve months) High profitability (2018 Adjusted EBITDA margin of 82.6%) • Low vacancy rates (5.9% as of Dec/18) Average of 2.0 months for relocation of warehouses with distracted in 2018. High return • 22% in contracts indexed to IPCA and 78% to IGPM There is no other company with national presence that could serve each group of the pyramid, providing quality products and high return 23#24BUSINESS CYCLE Dynamics of price resumption Phases > Log commercial properties PHASE 1 Log properties Reduction of spare capacity (increase of the occupation of assets) PHASE 2 Log properties Reduction of the pressure by discount and grace period by the market PHASE 3 Log properties Return to inflation indexation of contracts PHASE 4 Log properties Lease spread + Beginning of lease spread With a high occupation rate of its assets and a favorable economic scenario, LOG is in the beginning of achieving positive lease spread on its contracts. Time 24#25PORTFOLIO LOG Our total potential portfolio reaches 26 cities and 9 states in Brazil Log commercial properties 752.239 sq.m of GLA in operation, 49% of the LOG's potential portfolio 265 th sq.m of GLA already approved, that we can begin to build as soon as LOG identifies demand Of 265 th sq.m of approved GLA which 116 th sq.m are of developments that have the infrastructure of the entire project built, leading to faster construction curves Potential Portfolio (%LOG GLA) 1,317,566 1,358,914 1,276,100 1,573,983 1,507,148 2% 1,534,817 2% 4% 8% 5% 8% 3% 4% 98% 98% Warehouse 96% 95% Retail 89% 89% Office Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18 CE SE 1% 1% GO Delivered GLA (%LOG) RJ 21% 4% 412,655 1% 589,184 621,968 2% 2% 3% 3% 3% 654,546 681,617 752,239 GLA Approved (%LOG) PR MG 18% 56% Warehouse 99% 98% 98% Retail 97% 97% 97% Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18 25 25#26SECTION 4 - Appendix Log commercial properties HOS#27APPENDIX THE EVOLUTION IN THE LOGISTIC MARKET Despite rental price per sq.m higher than obsolete warehouses, the operational efficiency of LOG brings cost savings for customers LOG has an efficient business model Log commercial properties 50.00m Obsolete Warehouses 8.00m Competition 20.00m Efficiency in Numbers - LOG vs. Obsolete Warehouse Rental Price per sq.m. No of Pallet Racking per 1000 sq.m. Pallets Capacity per 1000 sq.m. Cost per Pallet LOG 12.00m LOG is able to store almost twice more apllets positions per sq.m, when compared to obsolete warehouses Log 22.50m 44.45m Despite the rental price per sq.m. of LOG being 30% higher than obsolete warehouses, due to higher storage capacity per sq.m, the cost per pallet stored is 20% below obsolete warehouses Obsolete Warehouse LOG Obsolete Warehouse LOG R$ 15.00 R$ 17.11 6 8 sq.m. required for 864 Pallets Rental cost for 864 Pallets 1,734.4 1,000.0 R$ 26.01 R$ 17.11 480 864 R$ 31.25 R$ 19.80 Higher Efficiency and Lower Cost 27#28APPENDIX MEXICO WAREHOUSE MARKET MEXICO Mexican 2017 GDP: USD 1,15 trillion Territory: 1,964,000 th sq.m BRAZIL Log commercial properties Brazilian 2017 GDP: USD 2,056 trillion Territory: 8,516,000 th sq.m Largest country in Latin America Largest Latin American Class A market, with 65 millions sq.m of GLA, of which 20 millions are in the logistics segment. Mexico Warehouse's Demand by Industry Class A Market of Brazil in all segments reached 13 million sq.m of GLA; 34% Source: Market Report CBRE 5% 8% 22% 31% Real Estate ■Logistics ■Manufacturing Automotive Others If in 5 years the brazilian market wants to match the Mexican warehouses logistic market, will be required an aproximate total investiment of R$10 billion, with annual deliveries of 1,4 million of sq.m GLA (about R$ 2 billion per year). Assumptions: R$ 1,400 average cost of construction per GLA, without land cost. Mexico's market without growth. 28 20#29APPENDIX LOGISTICS INDUSTRY IN BRAZIL - INVESTMENT The high representativeness of road transport and the continental dimension of the country require an ever larger, efficient and better distribution of warehouse throughout the country. Log commercial properties Domestic cargo handling (in billions of TKUS) 1,130 1,064 1,021 936 LLLL 278 341 204 58 1 298 307 162 187 190 49 49 54 1 1 1 2010 2012 2014 2016 Ductwork Air 12.0 5.9 Expected Logistics Investment 2018 - R$ billion Public 5.86 4.7 Private 1.01 0.47 32.9 6.1 4.79 0.91 4.27 0.5 1.99 0.5 Road Railway Air Ports Waterway ■Road Railway Waterway 63% of the total cargo transportation in Brazil in 2016 was carried out by highways In 2017, approximately 77% of the total government resources allocated to the transportation sector were invested in highways. In 2018, the government will invest 67% of the transportation budget on roads. If we consider private investment as well, 46% of the funds will go to the roads. Sources: Confederação Nacional das Indústrias (CNI), Confederação Nacional dos Transportes (CNT) and Magazine Valor Setorial_Oct/17 29 22#30APPENDIX TRANSPORTATION SECTOR The transportation sector has already shown signs of recovery in 2017. The trend is for even greater growth in 2018. Toll Road Traffic of Heavy Vehicles - Brazil (Thousand) Truck Licenses in Brazil - Monthly Average 430,428 2.5% 431,003 154,576 426,536 137,055 420,165 416,830 2013 2014 2015 2016 7.6% 2017 2013 0.2% 71,651 50,559 51,941 2014 2015 Accumulated Variation of the Brazilian GDP and the GDP of the transportation sector, Brazil 11.2% 2016 2017 4.3% 3.7% 2.6% 2.0% 7.5% 1.5% 5.1% 0.1% 4.0% 3.0% 1.9% 1.5% 1.0% 2.5% 0.5% -3.8% -3.6% -4.4% 2008 2009 2010 2011 2012 2013 Brazilian GDP -6.6% -7.1% 2014 2015 2016 2017E 2018E Trasnportation, Storage and Mail GDP Source: IBGE, CNT e ABCR Log commercial properties 30 30#31APPENDIX BUSINESS MODEL 1 HIGHLY EFFICIENT DEVELOPMENT CYCLE Log's knowledge in land identification and acquisition, construction and facility management ensures the success and edge of the Company's business model 000 1st Month Demand Identification -Significant Value Creation- 18th Month 27th Month 28th Month 29th Month Land Acquisition and Permit Issuance Construction Project Delivery Asset Manegement ■Identification of clients to define the profitability Multidisciplinary staff responsible for the analysis ■Internal committee responsible for decision- making ■Due diligence ■Mapping of possible restrictions ■ Obtainment of all the licenses and approvals for the project ■Building process highly standardized, mechanized and arranged in modules ■Utilization of metal structure and concrete columns ■ Costs control and optimization ■Fast execution ■Highly qualified commercial team managing a large network of brokers ■Specialized brokers in company's operating market ☐ Costs control ■Standardization of our suppliers ■Managers periodic evaluations Log commercial properties 31#32APPENDIX BUSINESS MODEL - "ONE-STOP SHOP" AND "LAST MILE" Business model that makes it possible to attract from clients with national coverage to regional clients The One-Stop Shop model co properties Flexible Portfolio of Assets Capable of Serving Various Clients Needs. Diversified Tenant Base, Guaranteeing the Ability to Serve Clients in Multiple Business Stages in More Than One Asset. 26% 74% FIAT Pague DIAGEO Menos MARTINS 3coracoes Johmen-Johnson GJSL Mondelēz International FEMSA Correios PATRUS Nviavarejo LUXOTTICA PROFARMA BH itambé livraria cultura magazineluiza Last Mile Model Traditional Model Adopted by Property Owners The Last Mile Model 74% of LOG Properties' delivered / under construction warehouses count with recurring clients, which have more than one contract. Our warehouses are built within the large Brazilian urban centers. The goal is to increase e-commerce clients, who demand agility and efficiency in deliveries. Better suited for clients that sell smaller lighter products and want to deliver their products as quick as possible to the client. Assets with Recurring Clients 32 32#33APPENDIX-BUSINESS MODEL QUALITY AND FLEXIBILITY Diverse customer base with low concentration, both by customer and by industrial segment Portfolio by warehouses sector Renters (in GLA sq.m) - Dec/18 Consumer Goods 16.9% Food and Baverage Pharmacist Logistics Documents Clothing Automotive and acessories Domestic utilities Others 16.5% 14.3% 8.8% 7.9% 5.8% 4.8% 4.8% 4.0% Beauty 3.8% E-commerce 3.1% Construction 2.5% Packing 1.4% Logistic Operator 1.2% Transportation 0.9% Animal Products 0.8% Energy/Telecon 0.8% Refrigerated Products 0.6% IT 0.4% Industry 0.3% Oil, gas and fuel 0.3% Retail 0.2% Modular Warehouse Flexibility Diversified client base Variety of industry Risk dilution Log commercial properties 333#34APPENDIX-BUSINESS MODEL CLIENTS AND VACANCY Focusing on modular strategy differentiates LOG from its competitors, LOG has better negotiating conditions with its customers, resulting in operational excellence and low vacancy rates Physical Vacancy - Warehouse Log commercial properties High performance also in the most competitive markets 24.5% 20.2% 25.0% 25.0% 20.0% 18.0% 17.0% 18.0% 13.5% 13.5% 8.7% 5.9% Dec/13 Dec/14 Dec/15 Dec/16 Dec/17 Dec/18 Vacancy - LOG CP Brazilian Market¹ Largest Client Share/Gross Revenue % and Average GLA/Contract - Thousand GLA 8.7% 8.5% 7.5% 7.2% 7.1% 7.0% 6.9% 4.03 4.10 3.95 3.85 3.87 3.92 3.96 5.2% 4.20 5.1% 4.20 dec/16 mar/17 jun/17 sep/17 dec/17 mar/18 Biggest Client share jun/18 sep/18 dec/18 Average GLA/Contract Delivered GLA: 512,227 sq.m % of Delivered GLA: 69.7% Vacancy Rate (LOG): 7.4% Vacancy Region: 27% Source: Colliers International (2017 - last version of vacancy by region available) 34#35APPENDIX-BUSINESS MODEL CONTRACT TERM Current contracts with an average of 80 months, with strong clauses to protect Company's operations Contracts - Main Rental Agreement Clauses Log commercial properties Contracts - Maturity Breakdown Dec/18 - by Revenue (Months) Contract Term Contract term varying mainly from 2 to 10 years Built-to-suit contracts (opportunistic situations) 0-12 Break-up fee All typical contracts include a break-up fee for early termination equivalent to 1-3 monthly rents per remaining year of contract Notice period of 30 to 180 days 13-24 Guarantor Contracts with private entities are backed by a guarantor, bank letter or insurance Inflation Adjusted Rental rate is adjusted by inflation IGP-M, IPCA, or INPC index Periodicity: annual adjustment Pre-emptive Rights Expenses and Costs Tenants resign to their pre-emptive rights to acquire the module in the event of a sale of the warehouse to a third party All expenses related to the operation of the asset are incurred by the tenants (triple net) Tenants must pay for the property insurance obtained by the company 25-36 37-48 8.1% More than 48 18.6% 22.8% 25.4% 25.0% 35 55#36APPENDIX ADD ONS PROJECTS Projects with high retum over the complementary investment (CAPEX) Asset: LOG Hypothetical - R$ thousand Marginal Investment First Stage Add ons A GLA 35,000 35,000 Land 25,000 Galpão 30,000 30,000 Infraestrutura 15,000 Total 70,000 30,000 B LTC 60% 60% C Debt 42,000 18,000 D = C*B Revenue 7,140 7,140 E A*R$17*12 EBITDA 6,426 6,426 F = E*G EBITDA Margin 90% 90% G Net Debt/EBITDA - X 6.5 2.8 H = D/F 1 Premise: For 100% leased at the price of R$17.00 per sq.m of GLA.. Opportunistic expansions in land already developed with infrastructure in place -57% Log commercial properties Expansion Additional Warehouses Warehouses Executed 60% of total costs 00 INFRASTRUCTURE -15% of total costs Executed Log Log LAND-25% od total costs commercial. properties Executed 00 Demands lower investments per sq.m for the additional warehouse Higher yield on cost are expected due to the lower marginal CAPEX LOG has 116,000 sq.m of GLA to be developed in projects whose land and infrastructure have already been paid, resulting in a faster FFO growth than the achieved. This will be the focus of LOG in the next 24 months. 36 36#37APPENDIX PIB - PARQUE INDUSTRIAL DE BETIM Located in the Belo Horizonte Metropolitan Area, the Parque Industrial de Betim (PIB) offers an unique model of allotment of industrial plots in a total area of over 6 million sq.m. Log commercial properties PIB - Loteamento Betim at a Glance PIB - Loteamento Betim is an allotment of industrial plots that brings together differentiated project It is the only project of the Company destined to the development of industrial lots for sale to attend the demand of industrial allotments in Brazil • The project consists of lots for sale in a total area of over 6 million sq.m. with over 2.1 million sq.m. of potential GLA It is strategically located in Betim (MG), the logistics and industrial center of Belo Horizonte, between the BR381 and BR 262 roadways 10.9% of the total area already sold. • PSV of R$278.3 million (100%). MG-060 TO Geographic Overview MO-050 Betim Client Overra Pen FIAT Distributor Suppliers Reference market players will anchor the Industrial Park and leverage its selling potential by bringing other companies of their value chain 37#38APPENDIX ORGANIZATIONAL STRUCTURE Multi-disciplinary execution team with strong sector expertise commercial properties ■ Holds an undergraduate degree in civil engineering from the Federal University of Minas Gerais (2003) and a postgraduate specialization degree in project management from the Dom Cabral Foundation (2004) ■ Worked as production/sales engineering at GASMIG from 2003 to 2005, as planning manager at Camargo Corrêa from 2005 to 2008, and as planning and control manager at Fidens Engenharia S.A. from 2008 to 2013 Joined LOG Commercial Properties in 2013 as Production Director ■ Worked at MRV from 1997 through 2004, in the Engineering and Supply department, then became Vice President at MIC an industrial and residential company in Florida, USA ■ Bachelor in Civil Engineering from UFMG (2002) and graduate degree in Finance from Fundação Dom Cabral in 2004 Sérgio Fischer Chief Executive Officer ■ In 2010 joined MRV as Investor Relations Executive Manager and moved to Log in 2011 ■ From 2002 to 2007 worked for Ernst & Young Brazil and from 2007 to 2009 worked for Ernst & Young London Bachelor in Economics from PUC-MG (2002) and Accounting from Fundação Mineira de Educação e Cultura (2007) - Worked as an auditor at Ernst & Young Brasil (2003-2007), with capital markets at Banco Itaú BBA (2007-2009), with corporate finance at Solvi Participações S.A. (2009-2010), with financial planning at Bloom Energy (California, EUA - 2012-2014) and with business and stategy at Fialho Salles Advogados (2014-2018) Bachelor in Business Administration from UFMG (2004), postgraduate from Fundação Dom Cabral (2007) and master in Business from Tuck School of Business at Dartmouth (EUA 2012) Production Márcio Vieira Production Director Felipe Gonçalves Chief Financial Officer Luciana Zanini Investor Relations and Financial Planning Director Supply Finance and Controllership Real Estate Development Complementary Projects Commercial Operations Marketing Construction Budget and Control Shared Services Center Legal Investor Relations Financial Planning Statutory Directors 38 88#39APPENDIX BOARD OF DIRECTORS Members Log commercial properties Manuel de Sousa Independent Board Member Leonardo Corrêa Board Member Marcos Cabaleiro Vice Chairman Managing Director responsável pela área de finanças Managing Director responsible for the corporate finance area of BESI Brasil from 2001 to 2006 and Associate and Vice President of M&A at J.P. Morgan between 1995 to 2001 in New York and São Paulo, currently responsible for 2B Capital (Bradesco Group) Graduated in Business Administration from the Catholic University of Portugal in 1988, and earned an MBA from Columbia Business School in 1995 ■ Former Partner at Banco Pactual (2000- 2003) and former Partner at Perfin Administração de Recursos (2003-2006) ■ Former Treasury Manager at Lloyds Bank (1982-1990) and Treasurer at JPMorgan (1990-2000) ■Bachelor in Economics from UFMG (1980) and post-graduate degree in Finance from FGV (1986) ■ More than 35 years of experience in the real estate sector ■ Bachelor in Law from Milton Campos Law School (1981 Log commercial properties Ryan Hawley Independent Board Member ■ Holds a Bachelor's degree in Economics from Berkeley University (CA) and a Master's degree from London School of Economics Barry Sternlicht Independent Board Member ■ Chairman and founder of Starwood Capital Group Responsible, for 20 years, for the organization of more than 400 investment transactions totaling more than US$ 40 billion in assets ■ Holds a Bachelor's degree from Brown University and an MBA from Harvard Business School Marcelo Patrus Board Member ■ Shareholder and CEO of Patrus Transportes Urgentes, a leading logistics company in Brazil with more than 1,700 employees and fleet of 2,100 vehicles covering 9 states in the Southern, Southeastern and Northeastern regions of Brazil More than 25 years of experience in the logistics sector, having acted as member of several industry associations ■Bachelor's degree in Business Administration (1985) and Accounting (1987) from Universidade Católica de Minas Gerais (PUC Rubens Menin Chairman One of the founding partners of MRV Bachelor in Civil Engineering from UFMG (1978) 39#40APPENDIX FINANCIALS HIGHLIGHTS Net Revenues (R$ mm) 27.7 7.2 89.3 68.0 Adjusted EBITDA & Adjusted EBITDA Margin (R$ mm; %) 104.8 80.1% 73.5% 80.7% 80.2% 82.6% 99.5 96.8 59.9% 92.9 46.2% 13.9% 16.6 1.0 50.0 41.3 86.6 78.1 79.8 74.4 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 Adjusted¹ FFO & Adjusted FFO Margin (R$ mm and %) 112.5% Adjusted EBITDA Adjusted' Net Income & Adjusted Net Margin (R$ mm and %) 91.7% 2018 Adjusted EBITDA Margin 50.8 54.9% 56.9% 32.9% 33.9% 36.3% 36.9% 50.0% 52.4 49.7% 31.0% 32.9% 27.5% 33.7% 36.1% 36.7% 52.1 35.1 36.7 31.5 اس اننساء 8.6 6.6 22.4 15.2 8.1 2011 2012 2013 2014 2015 2016 2017 2018 Adjusted FFO Adjusted FFO Margin Note: 'In 2013, for the calculation of Adjusted EBITDA/FFO Margin used only to rental revenue. Excluding the effect of R$ 43.9 million from the sale of land Log commercial properties 2011 2012 2013 2014 2015 2016 2017 2018 Adjusted Net Income 40 Adjusted Net Margin#41APPENDIX FINANCIALS HIGHLIGHTS Net Debt & Net Debt / Adjusted EBITDA 45.2x 45.2 Financial Leverage (Net Debt / Liquid State) Log commercial properties (%) 29.2x 19.1x 14.9x 12.7x 10.8x 9.0x 9.0x 615.7 484.6 957.1 947.7 842.1 783.6 715.1 10.6% 108.3% 83.2% 65.8% 63.4% 47.5% 35.4% 36.3% 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018 Net Debt Net Debt / Adjusted EBITDA Capex Investment Property (R$ mm) (R$ mm) 274.7 379.2 383.7 276.8 70.3 63.2 46.4 174.1 1,246.6 974.4 582.3 2,397.7 2,298.8 2,485.3 2,190.8 2,174.4 2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018 41#42APPENDIX FINANCIAL HIGHLIGHTS Availabilities & Debt Maturity Schedule - (R$ million) Dec/31/2018 255.5 156.7 175.5 156.2 134.7 93.6 Index Debt-% 12/31/2018 Log commercial properties 20% 42% 39% 37% 80% 47.7 58% 61% 63% 29.4 20.1 19.2 8.4 Cash and 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2015 2016 2017 2018 Marketable Loan to Value Securities 39% 38% 30% 30% 32% 32% 30% 27% 27% 30% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Gross LTV Net LTV LTV Gross: Gross Debt/Investment Properties Fair Value LTV Net: Net Debt/Investment Properties Fair Value 42#43APPENDIX CONSOLIDATED FINANCIAL STATEMENT Balance Sheet - Dec/2018 ASSETS CURRENT ASSETS Log commercial properties Chg.% 31-Dec-18 30-Sep-18 31-Dec-17 Dec-18 x Sep-18 Chg.% Dec-18 x Dec-17 LIABILITIES & SHAREHOLDER'S EQUITY Chg.% Chg.% 31-Dec-18 30-Sep-18 31-Dec-17 Dec-18 x Dec-18 x Sep-18 Dec-17 CURRENT LIABILITIES Cash and cash equivalents 150,488 35,535 Marketable securities 1,997 1,463 Accounts receivable 27,429 25,722 2,815 209,591 22,321 323.5% 5245.9% 36.5% -99.0% Accounts Payable 12,663 Loans and financing 94,891 6.6% 22.9% Salaries, payroll taxes and benefits 3,110 11,963 122,119 3,284 4,867 218,944 2,993 5.9% -22.3% -5.3% 160.2% -56.7% 3.9% Recoverable taxes 7,997 8,334 8.646 -4.0% -7.5% Taxes and contributions 4,831 3,917 3,869 23.3% 24.9% Deferred selling expenses 3,374 2,847 2,248 18.5% 50.1% Advances from customers - Swap 19,337 27,232 38,749 -29.0% -50.1% Other assets 2,603 1,312 441 Total current assets 193,888 75,213 246,062 98.4% 157.8% 490.2% Payable Dividends 10,328 3,554 0.0% 190.6% -21.2% Other liabilities 4,739 Total current liabilities 149,899 3,708 172,223 2,951 27.8% 60.6% 275,927 -13.0% -45.7% NON-CURRENT ASSETS Marketable securities 4,224 Trade accounts receivable 18,017 Deferred selling expenses 4,215 Recoverable taxes Deferred taxes 4,240 20,977 4,108 44,095 41,172 126,289 121,207 114,556 2,553 13,662 4,021 -0.4% -14.1% 65.5% 31.9% NON-CURRENT LIABILITIES 2.6% 4.8% Loans and financing 845,422 37,809 7.1% 16.6% Advances from Customers - Swap 640,981 1 4.2% 10.2% Deferred taxes 63,343 59,008 711,090 1,033 61,057 31.9% -100.0% 7.3% 18.9% -100.0% 3.7% Other assets Investment in subsidiaries and jointly Investment property 1,565 1,466 1,313 342,794 349,410 254,751 2,485,297 2,406,627 2,397,662 6.8% 19.2% Others -1.9% 3.3% 34.6% Total Non-current liabilities 3.7% Total Liabilities 4,610 913,375 1,063,274 5,523 4,744 705,513 777,924 877,736 1,053,851 -16.5% -2.8% 29.5% 17.4% 21.1% 0.9% Property and equipment Total non-current assets 2,460 3,029,009 1,315 1,414 2,950,522 2,827,741 87.1% 2.7% 74.0% 7.1% SHAREHOLDER'S EQUITY Equity atributable to the shareholder's of the company Non-controlling interest Total Shareholder's Equity 2,147,269 2,147,807 2,019,796 0.0% 6.3% 12,354 192 156 6334.4% 7819.2% 2,159,623 2,147,999 2,019,952 0.5% 6.9% TOTAL ASSET S 3,222,897 3,025,735 3,073,803 6.5% -1.6% TOTAL LIABILITIES & SHAREHOLDER'S EQUITY 3,222,897 3,025,735 3,073,803 6.5% -1.6% 43#44APPENDIX CONSOLIDATED FINANCIAL STATEMENT Income Statement-Dec/2018 INCOME STATEMENT Var.% Var.% Var.% 4Q18 3Q18 4Q17 2018 2017 4Q18 x 3Q18 4Q18 x 4Q17 2018 x 2017 NET OPERATING REVENUES GROSS PROFIT OPERATING EXPENSES Selling expenses General & Administrative expenses Other operatin expenses, net 28,189 26,228 25,718 7.5% 9.6% 104,827 99,494 5.4% 28,189 26,228 25,718 7.5% (5,941) (5,342) (11,831) 11.2% (1,916) (2,081) (2,474) Investment Property Fair Value Variation Equity in subsidiaries and JV's OPERATING INCOME BEFORE FINACIAL RESULTS (3,420) (2,983) (2,784) (343) (1,411) (1,264) 3,426 185 1,540 (3,688) 948 (6,849) 22,248 20,886 13,887 -7.9% 14.6% -75.7% 1751.9% -489.0% 6.5% 9.6% 104,827 99,494 -49.8% (21,381) (27,580) -22.6% (8,492) (10,188) 22.8% (12,201) (10,727) -72.9% 122.5% -46.2% (1,152) (4,123) 60.2% 83,446 71,914 5.4% -22.5% -16.6% 13.7% (3,636) (5,329) -31.8% 4,100 2,787 47.1% -72.1% 16.0% FINANCIAL RESULTS (10,134) (10,353) (10,537) -2.1% -3.8% (38,812) (47,774) -18.8% Financial expenses (11,717) (12,078) (11,610) -3.0% 0.9% (45,785) (58,209) -21.3% Financial income 1,583 1,725 1,073 -8.2% 47.5% 6,973 10,435 -33.2% INCOME LOSS BEFORE INCOME TAX AND SOCIAL CONTRIBUTION 12,114 10,533 3,350 15.0% 261.6% 44,634 24,140 84.9% INCOME TAX AND SOCIAL CONTRIBUTION Current Deferred 1,097 219 9,770 (2,079) (1,293) (1,734) 3,176 1,512 11,504 13,211 10,752 13,120 400.9% 60.8% 110.1% 22.9% -88.8% 2,453 13,273 19.9% (6,559) (6,177) -72.4% 9,012 19,450 0.7% 47,087 37,413 -81.5% 6.2% -53.7% 25.9% NET INCOME/LOSS PROFIT/LOSS ATRIBUTABLE TO Shareholder's of the company Non-controlling interests Log commercial properties 9,618 10,749 3,593 13,122 3 (2) -10.5% 119666.7% -26.7% -179750.0% 43,486 37,411 3,601 2 16.2% 179950.0% 44#45APPENDIX CONSOLIDATED FINANCIAL STATEMENT Cash Flow-Dec/2018 CASH FLOW STATEMENT 2018 2017 Chg.% 201818 x 2017 Log commercial properties CASH FLOWS FROM OPERATING ACTIVITIES Net income 47.087 37.413 25,9% Adjustments to reconcile profit to net cash used in operating activities 32.368 36.305 -10,8% Decrease (increase) in operating assets (7.253) (1.630) 345,0% Increase (decrease) in operating liabilities 7.500 9.728 -22,9% Income tax and social contribution paid Land sale receiving Dividends received from subsidiaries (6.148) (5.645) 8,9% 5.203 -100,0% 3.150 1.257 150,6% 76.704 82.631 -7,2% Net cash provided in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Decrease (Increase) of investments Marketable Securities Proceeds from land purchase cancellation Acquisition of investment property Other (77) (10.733) -99,3% 208.739 (101.150) -306,4% 2.411 2.410 0,0% (175.423) (50.597) 246,7% (1.060) (4.301) -75,4% 34.590 (164.371) -121,0% Net cash used (provided) in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from loans and debentures, net Payment of loans Interest paid 394.477 273.186 44,4% (383.483) (334.396) 14,7% Contributions from shareholders (73.088) (100.773) 93.554 218.467 -27,5% -57,2% Contributions from noncontrolling shareholders (3.554) (8.466) -58,0% Expenses with issuance of shares (3.998) -100,0% (Payment) receipt of derivative (124) 0,0% Dividend payments 8.597 Net cash used by financing activities 36.379 27 44.047 31740,7% -17,4% INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, NET 55.006 (37.693) -245,9% CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 57.821 2.815 40.508 2.815 -93,1% 45 1954,0%#46/CONTACTS Felipe Enck Gonçalves CFO and Investor Relations Director Luciana Zanini Rocha Investor Relations and Financial Planning Director Isabela Saede Gazire Investor Relations Analyst Tel.: +55 (31) 3615-8400 E-mail: [email protected] https:ri.logcp.com.br 46 46 Log commercial properties