São Paulo Daily Brief for Thursday, February 12, 2026
3 Key Points
This is part of The Rio Times’ daily coverage of São Paulo business and economic developments.
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Net income of R$ 78.7 million ($15M) in 4Q25, down 21.4% year-on-year, as a 34.4% surge in average monthly CDI rates drove significantly higher financial expenses — even as the company cut its effective debt spread to a record low of CDI+1.15%.
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EBITDA grew 3.9% to R$ 148.1 million ($28M) while net revenue rose 16.6% to R$ 65.2 million ($13M). Full-year 2025 delivered net income of R$ 363.5 million ($70M), up 5.6% and within guidance of R$ 350–450 million, with EBITDA surging 22% to R$ 602 million ($116M).
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Log announced a binding agreement to sell 12 operational assets with 340,200 sqm of gross leasable area for R$ 1.05 billion ($202M) — its largest asset recycling deal ever — to fund the next wave of development projects with higher returns.
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\nHeadline Numbers
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Log Commercial Properties closed the fourth quarter of 2025 with net income of R$ 78.68 million ($15M), a 21.4% decline from the same period in 2024. The year-on-year drop was driven almost entirely by higher interest costs, as the average monthly CDI rate in Q4 was 34.36% above the prior year’s level.
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EBITDA rose 3.9% to R$ 148.1 million ($28M), while net revenue grew 16.6% to R$ 65.22 million ($13M) — slightly below the LSEG analyst consensus estimate of R$ 67.40 million ($13M). The operational performance remained healthy; it was the financial result line that compressed the bottom line.
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For full-year 2025, net income totaled R$ 363.5 million ($70M), up 5.6% and landing within the company’s guidance range of R$ 350–450 million ($67–87M). Earnings per share advanced 2.8% to R$ 4.06. Annual EBITDA surged 22% to R$ 602 million ($116M), underscoring the strength of the underlying logistics warehouse business even as higher rates weighed on the profit line.
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\nKey Figures
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| Metric | 4Q25 | Y/Y Chg |
| Net Income | R$ 78.7M ($15M) | –21.4% |
| Net Revenue | R$ 65.2M ($13M) | +16.6% |
| EBITDA | R$ 148.1M ($28M) | +3.9% |
| Effective Debt Cost | CDI + 1.15% | vs CDI + 1.71% |
| EPS (FY2025) | R$ 4.06 | +2.8% |
| FY2025 Net Income | R$ 363.5M ($70M) | +5.6% |
| FY2025 EBITDA | R$ 602M ($116M) | +22.0% |
| Asset Sale (12 assets) | R$ 1.05B ($202M) | 340.2k sqm ABL |
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\nWhat Drove the Quarter
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The Selic Squeeze
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The 21.4% net income decline is almost entirely a story of financing costs. The average monthly CDI rate in Q4 was 34.4% higher than a year earlier, mechanically inflating the interest expense on Log’s floating-rate debt. As CFO Rafael Saliba acknowledged: “With the Selic higher, we ended up with elevated expenses.”
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Critically, the company partially offset the rate headwind by aggressively managing its spread. After prepaying R$ 300 million ($58M) in debentures in October, the consolidated effective debt cost fell to CDI+1.15% — down from CDI+1.71% a year earlier and a new all-time low for the company. The spread compression demonstrates active liability management, even if the absolute CDI level overwhelmed the improvement at the net income line.
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Operational Strength
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Beneath the interest rate noise, the logistics warehouse business performed well. Net revenue grew 16.6% on the continued ramp-up of recently delivered warehouse space, and EBITDA expanded 3.9%. The full-year EBITDA growth of 22% — reaching R$ 602 million ($116M) — shows the operating business compounding at a healthy rate. The gap between strong EBITDA growth and modest net income growth is the clearest illustration of how high rates are temporarily compressing the equity return on an otherwise robust asset portfolio.
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\nThe R$ 1.05 Billion Asset Recycling Deal
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Log announced a binding agreement to sell 12 operational assets comprising 340,200 square meters of gross leasable area (ABL) for R$ 1.05 billion ($202M). When completed, this will be the largest single asset sale in the company’s history — surpassing even the record R$ 1.5 billion in cumulative asset sales achieved across all of 2024.
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The transaction will be structured through an investment vehicle, with Log retaining commercial management, property administration, and condominium services for the assets. This retain-and-manage model preserves the recurring fee income and client relationships even as the capital is released.
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CFO Saliba framed the strategic logic clearly: “The objective of this transaction is to unlock the value generation potential we have, to fund investments in new development projects. At the same time, it allows capital reallocation — shifting from stabilized performing assets into development, where we earn higher returns.” The message is that Log views its mature, leased warehouse portfolio as a currency to be recycled into greenfield development at superior yields.
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\nManagement Signals
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CFO Rafael Saliba on funding strategy: “The company, as part of its investment plan, finances itself with equity that comes from asset recycling, and we also raise financing in the market. We’re at our lowest historical spread.” The CDI+1.15% effective cost validates this claim.
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On the Selic outlook: “With this prospect of the Selic falling this year, we’re already seeing improved liquidity in our assets and even a prospect of prices improving somewhat. Our portfolio allows us to work with a very favorable return expectation on new projects.” This signals management expects the rate cycle to shift in their favor in 2026.
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The payout policy is a point of investor attention. Log previously committed to a 50% dividend payout but reduced it to the statutory minimum of 25% to preserve capital for the development pipeline. In 2024, the company distributed R$ 220 million ($42M) in dividends and executed R$ 313 million ($60M) in share buybacks. The trailing 12-month dividend yield stands at approximately 14.4%, though this figure is inflated by the 2024 payout level and is unlikely to be repeated at the lower payout ratio.
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\nWhat the Street Is Saying
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Analyst sentiment is mixed. Of eight analysts tracked by TradingView, the consensus rating is Neutral, reflecting the tension between strong operational fundamentals and the valuation premium relative to real estate peers. Price targets range from R$ 22 to R$ 35, with the JPMorgan recently upgrading from Underweight to Neutral with a R$ 28 target, citing the expected Selic easing cycle as a catalyst.
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At R$ 27.80, LOGG3 trades at a trailing P/E of 6.4x — a significant discount to its historical average of approximately 12x — suggesting the market is pricing in the rate headwind and payout reduction rather than the underlying EBITDA growth. The stock has rallied roughly 52% over the past twelve months. JPMorgan has flagged the elevated P/FFO of approximately 32.5x for 2026 as a concern relative to the broader real estate sector average of 8–10x, though this reflects the higher-growth development model rather than a pure income REIT.
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\nWhat to Watch Next
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The Selic trajectory is the single most important variable. Log’s operating model generates strong EBITDA, but the spread between rental yields and the CDI rate determines whether new development projects clear their hurdle rates and whether net income recovers. Any delay in the expected easing cycle would extend the period of compressed earnings and force management to slow the development pipeline.
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The R$ 1.05 billion asset sale execution is the near-term catalyst. The closing timeline, the pricing achieved versus book value, and the terms of the investment vehicle structure will all influence how the market values the recycling strategy. Log’s ability to maintain management contracts on sold assets — earning fees without capital deployed — is the key to the capital-light evolution of the business model.
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E-commerce-driven warehouse demand remains the structural tailwind. Mercado Livre, Shopee, and Amazon continue to expand their logistics footprints across Brazil, and Log’s geographic diversification outside the Rio-São Paulo axis positions it well for the next wave of last-mile distribution buildout. The company’s growth plan through 2028 targets 20–25% annual growth in annualized rental revenue — a bold projection that hinges on sustained tenant demand and disciplined capital recycling.
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\nRisk Factors
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Interest rate risk is existential for the equity story. With a floating-rate debt book tied to CDI, every 100 basis points of Selic movement has a direct and immediate impact on net income. The company has demonstrated skill in compressing its spread to CDI+1.15%, but the base rate itself remains beyond management’s control — and at 15%, it is consuming a disproportionate share of operating cash flow.
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Asset recycling dependency adds execution risk. Log’s development-led model requires continuous asset sales to fund new projects. If the institutional investor appetite for Brazilian logistics assets cools — due to higher rates, rising cap rates, or shifts in foreign capital flows — the company could face a funding gap that forces either dilutive equity raises or a slowdown in the development pipeline.
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Vacancy risk in a slowing economy is the tail scenario. The company has historically maintained ultra-low vacancy rates (under 1% in recent quarters), but a sharp economic deceleration — particularly one that impacts e-commerce growth or small business logistics demand — could push vacancies higher and erode rental income just as new developments enter the portfolio. Construction cost inflation, especially in labor and steel, could also compress development margins on greenfield projects.
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\nSector Context
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Log is a pure-play logistics warehouse developer and operator, part of the MRV Engenharia group. Founded in 2008 and spun off as an independent listed company in 2018, it was the first logistics property company to trade on B3. The portfolio spans condominium-style logistics parks across 10 Brazilian states, with a deliberate strategy of geographic diversification beyond the São Paulo–Rio de Janeiro corridor.
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The stock’s 52-week performance of +52% reflects the market’s recognition of the underlying asset quality and e-commerce-driven demand, even as the rate cycle compresses near-term profitability. At 6.4x trailing P/E — less than half the historical average — LOGG3 is priced for a challenging rate environment. The investment case turns on the belief that the Selic will eventually normalize, at which point the 22% EBITDA growth rate and the capital-recycling model should translate into a significant re-rating of the equity.
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Related: Rio de Janeiro Brief | Brazil Morning Call