The unit closed at R$ 77.25 on Monday, November 9. That is 18% below its October 23 peak and sits well outside the R$ 92 to R$ 105 range we projected. The October management report, released late in the afternoon, shows that the decline is not just a matter of market sentiment: the fund generates about R$ 0.58 per unit, pays out R$ 0.75, and covers the difference using a reserve that has fallen to R$ 0.87.
What Is the Price of HSML11 Today?
The fund closed at R$ 77.25, with a price-to-book (P/B) ratio of 0.78. In practice, the market is paying 78 cents for every real of the fund's net asset value, which stands at R$ 99.10 per unit. When we published our analysis with an ACCUMULATE verdict, the discount was 13% (P/B of 0.87). Now it stands at 22%.
The path here has been a round trip. Between the first round of the election (October 2) and the eve of the runoff (October 23), units of the HSML11 real estate fund rose 13.9%, from R$ 83.00 to R$ 94.50, compared with a 5.8% gain for the IFIX index. According to the report itself, the market was betting on fiscal adjustment. For a few days, the price even entered our projected range. Following Lula's reelection with 51.79% of valid votes, the opposite occurred: a weaker real, rising futures interest rates, and the unit price back down to R$ 79.80 by the end of October. Today, it trades even lower than the starting point of the rally.
The pressure had been building before the election. On October 19, Banco Safra downgraded the fund to neutral, as we detailed in our coverage of Safra's rating cut for shopping center funds. However, the question that matters for unitholders is found in the report: October earnings plummeted. Was this a one-time event or a structural issue?
Why Did October Earnings Fall to R$ 0.39 Per Unit?
It was a delayed charge that highlights a broader problem. The securitization firm behind the Shopping Paralela real estate receivables certificates (CRIs) failed to debit the August and September installments "due to an operational failure" and charged everything at once in October: R$ 3.9 million, or about R$ 0.18 per unit. As a result, realized earnings dropped from R$ 0.66 in September to R$ 0.39 in October, and the fund distributed nearly double what it earned (a payout ratio of 192%).
The reassuring interpretation is that this expense will not recur. The uncomfortable reality is that it is not new: the cost existed and remained invisible for two months. August and September results were inflated. By our calculation, dividing the charge equally between the two months, a "corrected" September would have been close to R$ 0.57 rather than R$ 0.66. The October operating result, excluding the adjustment, stood at R$ 0.58, practically the same level. In other words, September's improvement never really happened, and the fund currently generates something close to R$ 0.58 per month.
This figure falls well short of what this site's analysis expected.
What We Expected Versus What the Report Showed
Our ACCUMULATE thesis rested on two drivers. The first was the sale of a stake in Pátio Maceió, which would reduce debt and lift recurring generation to R$ 0.72 per unit. The second was a decline in the Selic rate, with the Focus report pointing to 11% over twelve months. Six indicators show where each promise stands:
| Indicator | What We Said | What Happened (October Report) |
|---|---|---|
| Recurring generation per unit | R$ 0.72 (post-sale projection) | R$ 0.58 operating |
| Selic rate | 14.75%, heading toward ~11% | 13.75%, paused; management sees stability through Dec 2027 |
| Net leverage | 16.1% post-sale | 18.5% |
| Physical vacancy | 3.3% (96.7% occupancy) | 4.5% in Sept (was 3.7% in Aug) |
| P/B ratio | 0.87 | 0.78 |
| Price in 3 to 6 months | R$ 92 to R$ 105 | R$ 77.25 |
The Selic rate did fall by a point. But at the November 4 Copom meeting, the cycle was interrupted—defying expectations—and management adjusted its outlook to 13.75% through the end of 2027. This weighs on the fund in two ways. The portion of debt tied to CDI + 2.75%, roughly one-third of the R$ 550 million in CRIs, will not receive the expected relief. The larger portion, tied to IPCA + 7.29%, faces inflation projected by management at 5.3% for 2026, above the 4.5% threshold we previously identified as a sensitivity point. Leverage also rose from 16.1% to 18.5%, and the report does not detail the bridge between the two figures.
Management views the picture differently:
“The two swings in the unit price reflect a repricing of the discount rate applied to domestic assets, rather than changes in the Fund’s fundamentals, which remain solid.”HSI, October 2026 Management Report
In terms of mall operations, they are right. Net operating income (NOI) is up 2.8% in 2026 compared to 2025, sales are up 5.6%, delinquency remained stable at 2.2%, and retailers' occupancy cost stands at a healthy 9.4%. However, the problem is not in the shopping centers. It lies between NOI and the unitholder's pocket, specifically in financial expenses. And that expense determines the next question.
Will the R$ 0.75 Dividend Be Cut?
Through December, no. The guidance of R$ 0.74 to R$ 0.78 for the remainder of 2026 was maintained, and only two payments remain. With a gap of about R$ 0.17 per month, this consumes roughly R$ 0.34 from the reserve, which can absorb it. In fact, the October distribution hits accounts today, November 9. The open question is 2027, and the answer depends on how much monthly generation rises from here. This pattern is not unprecedented for the manager: the same firm made a similar move with HSLG11, which maintained its dividend by drawing down reserves.
The calculations below are our estimates. They divide the current reserve by the monthly difference between payouts and generation, assuming the dividend remains at its current level:
The reserve runs out around March 2027. From then on, the dividend tends to converge toward generation—a cut of about 23%.
The expansion of Uberaba and C&A at Tucuruvi bring the fund back to the baseline we used in August. The cut is delayed to the second half of 2027, but not avoided.
Our old projection is fulfilled. With a difference of only R$ 0.03 per month, the current dividend becomes practically sustainable.
There is good news hidden in the report: debt does not pinch in the near term. Of the CRI amortizations scheduled for 2026, which totaled R$ 124.6 million in our March analysis, only R$ 0.5 million remains. For 2027, scheduled amortizations total R$ 15 million, compared with R$ 89.7 million in cash and portfolio CRIs. The risk, therefore, is to the dividend, not to solvency. Furthermore, two new developments could push generation higher.
Vacancy Rose. Do C&A and Uberaba Compensate?
They compensate in part, and only in 2027. Consolidated vacancy reached 4.5% in September, the highest in the past twelve months (the previous peak was 3.8%). It is concentrated in two assets. Pátio Cianê in Sorocaba has 14.3% vacant, but accounts for only 2.8% of NOI, as we noted when pointing out Pátio Cianê as a weak spot in the second quarter. The real concern is Metrô Tucuruvi: 10.3% vacancy in a mall that is now the fund's largest source of NOI (21.2%, ahead of Paralela at 18.9%).
Yet that is precisely where the month's positive new development lies. The fund signed a lease with C&A for the 1,400 square meters previously occupied by Lojas Marisa, with opening scheduled for 2027. This equals roughly 4.3% of Tucuruvi's gross leasable area (GLA). All else being equal, the mall's vacancy would drop to near 6% (our estimate). The report does not disclose rental values or grace periods. Meanwhile, the expansion of Shopping Uberaba has been completed and opens to the public in the second half of November, slightly later than the third-quarter timeline in our optimistic scenario.
Is HSML11 a Good Investment at R$ 77?
The price improved at the same rate that the thesis deteriorated. At R$ 77.25, the current dividend yields 11.7% per year tax-free, compared with 9.5% when we recommended accumulating. The gap relative to the Selic rate has narrowed from over 5 points to about 2. But this yield relies on a distribution that is currently funded in part by reserves. If the fund starts paying out what it actually generates—around R$ 0.58—the yield at today's price drops to 9.0%. That is still reasonable for shopping centers trading at a 22% discount, but it is far from a bargain.
In short, what supports accumulating now is the discount to net asset value, no longer the falling-interest-rate catalyst. Investors who bought anticipating a declining Selic must accept a longer timeline. Those buying now should model their math on the lower dividend rather than the current one. Figures for each mall and the debt profile can be found in our complete analysis of the HSML11 fund. The next three reports will determine which scenario plays out.
Operating result per unit — above R$ 0.65 in December or January, with Uberaba open, confirms the intermediate scenario. If it stays near R$ 0.58, a 2027 cut becomes the base case.
Accumulated reserve — falling below R$ 0.50 per unit in the December report implies less than three months of cushion at the current pace.
2027 guidance — a floor below R$ 0.70 would mean management is acknowledging the adjustment. Maintaining a R$ 0.74 floor requires explaining where the shortfall will be covered.
Selic and inflation — management's baseline assumes a 13.75% Selic through December 2027. Any sign of rate cuts prior to that provides relief for the CDI portion. IPCA inflation above 5.3% increases costs for the larger portion of the debt.
Consolidated vacancy — returning below 4% indicates the September peak was temporary. Staying above 5% without C&A open triggers an alert for Tucuruvi.
