By Brazil Stock Guide – Log Commercial Properties e Participações S.A. (B3: LOGG3) reported the highest quarterly net income in its history in the first quarter of 2026, as Brazil’s logistics warehouse market remained tight and the company advanced a R$1.02 billion asset-sale transaction aimed at recycling capital into new developments.
Net income reached R$134.0 million, up 55.2% from a year earlier, while earnings per share rose 54.6% to R$1.53. Net revenue rose 19.4% year over year to R$66.1 million, while Ebitda increased 53.2% to R$185.1 million.
Leasing Ebitda totaled R$56.2 million, with an 85% margin, and development Ebitda climbed 76.3% to R$128.9 million, reflecting stronger activity in new projects and continued operating discipline.
The quarter was marked by the completion of definitive documents tied to what Log described as the largest transaction in its history. The deal involves the sale of 11 stabilized operating assets totaling about 333,000 square meters of gross leasable area to a new real estate investment fund, ITAÚ LOG CP Fundo de Investimento Imobiliário, or ILCP11.
The public offering totals R$1.02 billion and has a firm placement guarantee from Itaú BBA. About 80% of the proceeds are expected to be received in cash, strengthening Log’s liquidity position, while the remaining 20% will be converted into fund quotas, preserving exposure to the portfolio’s future performance.
The company said the sale price is close to net asset value and implies an estimated gross margin of 33%. Log will also act as real estate adviser to the fund, receiving compensation equivalent to 0.50% of assets under management, while continuing to manage condominium operations for the assets.
Operating performance remained strong. Log delivered 65,500 square meters of gross leasable area in the quarter, in Campo Grande and Cariacica, with 100% of the delivered space pre-leased. Gross absorption reached 185,800 square meters, while stabilized vacancy stood at 1.10%, below the 1.55% reported a year earlier.
Average rent rose 13% over the past 12 months to R$23.84 per square meter. Same Client Rent increased 2.79%, marking the 15th consecutive quarter of growth above inflation.
Log cited e-commerce expansion, obsolescence in existing logistics assets and limited supply in premium locations as factors supporting occupancy and rental prices across Brazil’s Class A logistics warehouse market.
Service revenue also accelerated. Net service revenue reached R$8.3 million in the quarter, up 93.7% from the first quarter of 2025, with a gross margin above 70%. About 40% of that revenue came from complementary services, including energy intermediation, insurance and solutions offered through Log Shop.
Log Adm ended the quarter with 2.9 million square meters of gross leasable area under management, including 1.9 million square meters in third-party assets. The company said it already has R$35.8 million in contracted gross service revenue for 2026, before additional service revenue expected from the new real estate fund.
Adjusted net debt stood at 1.8 times last-12-month Ebitda at the end of the quarter. Log said that, after the expected proceeds from the ILCP11 asset sale, leverage would fall on a pro forma basis to 0.3 times, the lowest level in five years.
The company expects to receive about R$800 million in the second quarter related to the transaction. It also approved R$31.8 million in quarterly dividends, equivalent to 25% of adjusted net income for the period. The payout corresponds to R$0.364 per share and is scheduled for June 30, 2026.
Leave a Reply