TRXF11 to Cut Dividend After Reserves Plunge — Is the Bonus Over for Real Estate Fund Unitholders?

At R$ 60, the Brazilian real estate fund TRXF11 already prices in a dividend cut: even if the distribution drops from R$ 0.93 to R$ 0.75 per month, buyers at current prices yield 15% per year, tax-free for individual investors. What the market read into the October report—triggering a 5.4% drop in the unit price on Monday—is real and public: the reserve buffer that covered the gap between what the fund generated and what it paid out is gone, leaving just R$ 0.04 per unit. The risk is not insolvency: 129 properties are fully leased, tenants are paying, and debt does not mature before 2033. The risk is a lower dividend in 2027—and buyers at R$ 60 are already paying for it.

What Happened to TRXF11?

On Friday, November 6, TRX Gestora published its monthly report for the period ending October 30. The market focused on four figures that units had not yet priced in: operating income of R$ 0.63 per unit (versus R$ 0.93 distributed), accumulated reserves plunging to R$ 0.04, net asset value (NAV) falling to R$ 93.35, and net leverage jumping from 8.47% in September to 19.19% of assets in October.

October income totaled R$ 60.5 million, or R$ 0.63 per unit. To pay out R$ 0.93—totaling R$ 89.2 million across 95.9 million units—the fund tapped its accumulated reserves. This cushion plunged from R$ 0.51 per unit in September to R$ 0.04, leaving a modest R$ 3.5 million buffer. Without reserves, future distributions depend entirely on monthly operating generation.

NAV dropped from R$ 96.67 in September to R$ 93.35 in October. At R$ 60.10, the price-to-book (P/NAV) multiple stands at 0.64. The manager did not explain the R$ 3.32 per-unit difference between the two reports in the document. Net leverage jumped because idle cash was deployed into contracted acquisitions: October saw R$ 539 million in cash outflows, reducing liquid assets from R$ 2.08 billion to R$ 1.90 billion while debt remained relatively stable.

The manager attributes the weak results to an accounting timing mismatch: some properties acquired in the 13th unit offering entered the portfolio throughout October rather than on day one, meaning the fund received only a proportional fraction of each asset's rent. While this is a temporary effect, the issue is that it arrived with no reserve cushion to absorb it.

Will the R$ 0.93 Dividend Hold?

To pay R$ 0.93 per month, the fund needs R$ 89.2 million in income (95.9 million units × R$ 0.93). Results for the past four months were: July at R$ 60.0 million, August at R$ 45.1 million, September at R$ 74.2 million (boosted by extraordinary gains), and October at R$ 60.5 million. None of these reached R$ 89.2 million in recurring income. Over the 12 months through October, accumulated income per unit reached R$ 12.38, but that figure included capital gains from property sales, placing recurring baseline generation lower.

Financial expenses doubled in 2026: from ~R$ 7.5 million per month in February to R$ 18.4 million in October — an increase of ~R$ 0.11 per share that previously went to distribution. With the properties from the 13th offering generating rent for the entire month starting in November, recurring net income should be close to R$ 0.67 per share (our estimate, with the detailed breakdown right below; the actual proof will come in the November report, published in early December).

Already-contracted property sales provide additional margin. The sale of the Delboni property in Vila Mariana, São Paulo, closed on October 28 for R$ 77 million—12.23% above its appraisal value—generating a profit of roughly R$ 0.04 per unit. A GPA retail store in São José do Rio Preto, São Paulo, is under a memorandum of understanding (MOU) for R$ 24 million, yielding an estimated profit of R$ 0.06 per unit, while an Extra store in Praia Grande, São Paulo, has an accepted proposal of R$ 18.3 million, yielding roughly R$ 0.03 per unit. These total R$ 0.13 per unit in agreed gains, still subject to definitive documentation, which could support distributions above recurring income in certain months—the same mechanism that sustained June's R$ 1.50 extra dividend.

Official guidance: R$ 0.90 to R$ 0.93 through December 2026. For 2027, the report mentions "potential for maintenance" — not a promise. In 2027, the most likely level in our model is ~R$ 0.70 per share from rent alone, and ~R$ 0.80 if the property sales plan moves forward; maintaining R$ 0.93 requires profitable sales every month. The report starts disclosing monthly the share balance held by property sellers — also without confirmation of when any potential cut announcement will come.

How much TRXF11 actually generates — and how much it should pay in 2027

First, debt in its true perspective. The report shows R$ 4.64 billion in debt (R$ 3.45 billion in CRIs and R$ 1.19 billion in installments for properties already purchased) against R$ 14.28 billion in total assets: 32%. But what belongs to the shareholder is net equity, standing at R$ 8.95 billion. Against it, debt represents 52% of equity, not 32%. For every R$ 100 owned by shareholders, the fund owes R$ 52.

With that, the calculation for November, the first month with all properties from the 13th offering generating rent for the entire month (our estimate):

This falls below the R$ 0.90 to R$ 0.93 projected by management through December. The difference of ~R$ 0.25 per share per month can only come from property sale profits, as reserves have run out (R$ 0.04 per share). The most uncertain part of the equation is interest: the report does not disclose the grace period or payment schedule for each CRI, and monthly expenses could range between R$ 18 and R$ 34 million.

In 2027, from rent alone, the level stays near R$ 0.70 per share: today's R$ 0.67 plus ~R$ 0.03 from IPCA inflation adjustments, which index 72% of contracts. Above that, only through property sale profits. Management stated in the October report that it expects to sell an average of ~R$ 500 million in real estate per semester in 2026 and 2027, or ~R$ 1 billion per year, as part of portfolio recycling. If the plan moves forward, distributions could reach ~R$ 0.80. Maintaining R$ 0.93 throughout the year would require ~R$ 240 million in sales profit for the year, which is challenging.

Sales already closed or underway total ~R$ 119 million (Delboni R$ 77 million, GPA Rio Preto R$ 24 million, Extra Praia Grande R$ 18.3 million) and ~R$ 0.13 per share in profit, which is a one-time gain, not monthly. If this capital is used to pay down CDI-indexed debt, interest savings minus lost rent yield only ~R$ 0.01 per share per month. Of the ~R$ 1 billion annual plan, only these R$ 119 million are underway so far.

What if the fund sold properties to pay off all debt?

Hypothetical calculation: sell ~R$ 4.2 billion in properties (appraisal value) for ~R$ 4.64 billion, 10% above appraisal as in recent sales, and eliminate all debt.

Paying off debt does not change VP, because the same amount leaves both assets and liabilities. VP only increases through the profit of selling above appraisal (~R$ 4.40 per share, one-time); selling at appraisal value, it would remain at R$ 93.35. Monthly dividends would drop slightly: lost rent (~R$ 30 million per month) outweighs cash interest paid (~R$ 25 million), because IPCA adjustments on CRIs go into the debt balance and do not show up in earnings. In economic value, the fund would gain little (~R$ 0.05 per share per month), since debt costs an average of ~14% per year while properties yield ~13% (rent plus inflation), and this gain appears in VP, not in dividends. The math improves if the fund sells lower cap rate properties and pays off CDI-indexed debt first, as shown in the calculation further below.

The Properties Are Strong — Why TRXF11 Is Not DEVA11

The challenge lies in the capital structure, not the underlying assets. The fund's 129 properties maintain a physical vacancy of 0.5%, financial vacancy of 0.3%, and zero default rates, spread across 19 states, 67 cities, and 1,375 tenants. Distressed funds that suffered permanent losses, such as DEVA11 and HCTR11, invested in real estate credit notes (CRIs), where debtor defaults resulted in permanent principal loss. In TRXF11, the underlying real estate remains fundamentally healthy.

The contract mix improved in October: 62.25% of revenue stems from atypical leases (long-term agreements with heavy penalties for early exit), with an average duration of 11 years, and 71.7% indexed to the IPCA inflation gauge. The largest tenant, Mercado Livre, which accounts for roughly 15% of revenue, recently expanded its footprint with a R$ 250 million investment in Meli City Campinas. This project features a Class A logistics warehouse with 461,000 square meters of gross leasable area (GLA), a minimum yield of 8.5% per year during construction—scheduled for completion in July 2028—and a 16-year atypical lease. Pão de Açúcar, representing roughly 3.4% of revenue, is undergoing an extrajudicial debt restructuring approved in May 2026, with rent payments remaining current.

Market price pressure stems from management decisions rather than asset failure. The 13th unit offering expanded total units by 53.6%, paying 83% of the transaction value in units via credit compensation for property sellers rather than cash. Of those units, 23 million—representing 82.4% of what sellers received and 24% of all fund units—remain in the market. Portfolio recycling did not unfold as planned: the sale of three GPA stores was canceled in October, although a new MOU for a different GPA store was signed shortly afterward. The October report began publishing the balance held by sellers monthly, providing a key gauge for tracking selling pressure on the units.

What the Market Is Pricing In — Five Key Risks

1. Overhang of Offered Units. Twenty-three million units remain in the hands of property sellers, who received 27.9 million and sold roughly 4.9 million in October. Average daily liquidity stands at R$ 36.7 million, equivalent to roughly 560,000 units at R$ 65. At October volumes, clearing this inventory will take many months.

2. Lower dividend. Without reserves, any earnings below R$ 89.2 million imply a cut. The estimate for recurring income is ~R$ 0.67 per share (~R$ 0.70 in 2027); agreed property sales add ~R$ 0.13 per share in non-recurring gains that sustain levels near R$ 0.93 for a few months — but depend on the conclusion of final documentation.

3. Expensive debt for longer. R$ 4.64 billion in total debt (32.5% of the R$ 14.28 billion assets, but 52% of the R$ 8.95 billion net equity): half at CDI + 1.83%, 42% at IPCA + 7.13%. With Copom keeping the Selic rate at 13.75% in November and the Focus Bulletin pointing to a Selic rate of 12.50% for 2027 — compared to 11.75% before the elections —, financial costs remain high for longer. The relief: amortizations over the next 12 months are only R$ 83.8 million (0.94% of equity), covered 22 times over by R$ 1.90 billion in liquid assets. The first final maturity of a CRI occurs in 2033.

4. Potential for Further NAV Declines. Property appraisal reports apply discount rates; with long-term real interest rates near 7.5% on NTN-B 2035 government bonds, future revisions could pressure NAV downward. Even with a 10% decline in NAV to roughly R$ 84, trading at R$ 60 implies a P/NAV multiple of 0.71, still deeply discounted relative to historical brick-and-mortar real estate fund valuations.

5. Management Execution Risk. TRX admitted to a "transparency error" when announcing the 13th offering. The October report signals that "new acquisitions will be evaluated very cautiously." Factors that would elevate risk include defaults by major tenants, property sales below appraisal value, new unit issuances below NAV, or a renewed upward cycle in interest rates.

Why does the share price keep falling if the information is public?

Part of the answer is documented, and part is not. It is documented: the sellers of the properties from the 13th offering received 27.94 million shares as payment, and as of October 30, they still held 23.03 million. In October they sold 4.92 million, roughly 40% of all volume traded in the month (our estimate, with average liquidity of R$ 36.7 million per day). It is not documented: who the rest of the sellers are. Funds of funds facing redemptions, pension funds, and retail investors spooked by the report are also selling, and B3 does not show who is on the other side.

There is also no "minimum price" for these sellers. They received shares as payment for property, want cash, and sell in daily batches (generally capped at 5% to 10% of the day's volume). The pressure only stops when the inventory runs out, and each month's report now states how much is left. In practice, nobody knows where the bottom is. Anyone buying has to accept seeing a lower price before seeing a higher one.

Can the debt handle 15% interest for four years?

It can. The risk of the debt is eating into part of the dividend, not breaking the fund. The math, using figures from the October report:

• How much Selic weighs: out of the R$ 3.45 billion in CRI (real estate receivables certificates), about R$ 1.73 billion pays CDI + 1.83% per year. Each 1 percentage point increase in Selic costs about R$ 17 million per year, or ~R$ 0.015 per share per month. Selic at 15% instead of 13.75% costs ~R$ 0.02 per share per month. Even with Selic at 17%, it would be ~R$ 0.05.
• Paying capacity: that is R$ 18.4 million per month in interest against R$ 85 to 100 million in revenue, meaning revenue covers interest 4 to 5 times over.
• Maturities: only R$ 83.8 million in amortization over the next 12 months (0.94% of equity). The first final CRI maturity is on 06/20/2033.
• The real cost: debt tied to CDI costs ~15.6% per year, and the property yields ~7% in rent plus inflation. This is what we call a negative carry: while interest rates remain high, this difference comes out of the dividend.
• The point to watch is cash: that is R$ 1.90 billion in liquid assets, against R$ 1.19 billion in property installments payable and R$ 250 million for Meli Campinas. According to the fund's own projection, cash will drop near R$ 104 million by the end of 2027. From then on, large buybacks or debt reductions depend on property sales (target of ~R$ 500 million per semester).
• Gap: the report does not include creditor protection clauses (covenants) for each CRI. With debt at 32% of assets and interest covered 4 to 5 times, the fund is far from the levels that typically trigger these clauses, but we cannot confirm this in the documents.

Can the fund be forced to sell property at fire-sale prices?

Today, no. There are no large maturities, amortization is small, and recent sales closed above the appraisal: Delboni 12.23% above and GPA Rio Preto 6.57% above, with a cap rate (annual rent ÷ price) of ~7%. A true forced sale, at 30% below appraisal, happens to funds with no cash and maturing debt, which is not the case before 2033.

And there is a counterintuitive point: with the share price at 0.64 of net asset value, selling property for up to 10% below appraisal to pay off CDI debt improves the unitholder's life. Illustrative math: selling R$ 1 billion in appraised value for R$ 900 million generates an accounting loss of R$ 100 million (~R$ 1.04 per share, ~1% of NAV). In exchange, the fund stops receiving ~R$ 63 million per year in rent and stops paying ~R$ 140 million per year in interest. The balance is +R$ 77 million per year, ~R$ 0.07 per share per month, and with less risk. The condition is that the CRI accepts early payment, which may carry a penalty we are unaware of.

Can the dividend drop to R$ 0.65 or R$ 0.50?

The fund spends ~R$ 24.6 million per month (R$ 6.2 million operational and R$ 18.4 million financial) and has 95.9 million shares. This is the revenue it needs to pay each level:

Two caveats. First, an isolated month may come in below expectations, because CRI and other FII earnings fluctuate (they were −R$ 14.7 million in August and +R$ 5.5 million in October). What matters is the average level. Second, by law the FII must distribute at least 95% of the semester's cash profit, so management cannot simply retain the cash. And every profitable sale adds up: that is ~R$ 0.13 per share already agreed upon.

What supports the price and what could push the share to R$ 40 or R$ 30?

There is no guaranteed floor. R$ 50 is a very advantageous buying range, not a floor. Screen prices can drop below that purely due to selling pressure, for weeks or months. The useful question is different: at each price, what is the market saying about the fund? The calculation starts with the market value of the shares, adds total debt (R$ 4.64 billion), and subtracts liquid assets (R$ 1.90 billion). The result is how much the market is paying for the properties compared to the appraisal:

What supports the price:

• The dividend. The more the share falls, the higher the yield on price becomes, and more buyers show up. This only holds as long as the dividend doesn't drop alongside it.
• The buyback. The lower the price, the cheaper it gets for the fund itself to buy shares. Buying 10% would cost R$ 575 million at R$ 60 and R$ 384 million at R$ 40.
• Property sales above appraisal. Each one proves that the assets are worth what the report says.
• The end of sellers' inventory. That is 23 million shares as of 10/30.

What would take the share to R$ 40–45 without anything breaking: a combination of forced sellers, retail panic, a weak November report or the announcement of a dividend cut, and rising future interest rates. This type of overreaction can happen and tends to be temporary. In this case, flow is what drives the price down, not a worsening fund.

What would take it to R$ 30–40 and keep the price there, meaning a deeper hole: the dividend permanently dropping to R$ 0.40–0.50. For this to happen, it would take:

• Losing major tenants. Losing Mercado Libre would mean ~15% of revenue.
• Forced property sales 30% or more below appraisal.
• A new share offering below net asset value, diluting current investors.
• An interest rate crisis with Selic well above 17%, making CDI debt more expensive and driving down appraisals.
• Some severe management decision.

Today, none of these signs appear in the documents. Vacancy at 0.5%, delinquency at 0%, sales above appraisal, and no debt maturing before 2033. These are the items to monitor month by month. If any of them appear, the price ruler of this analysis ceases to apply and must be redone.

Valuation and What to Expect Through 2030

For a fund with this risk profile, a reasonable required return is 14% to 15% per year, tax-free. Dividing the expected monthly dividend by this required rate yields the maximum fair entry price, calculated as dividend × 12 ÷ required return:

At R$ 60, the asset offers a 15% annual yield even if the monthly dividend falls to R$ 0.75, placing it in the "deep value" zone for investors who believe payouts will not fall below that level. At R$ 0.80, the fair price under a 15% hurdle rate is R$ 64. Above R$ 75, the fund does not look inexpensive under any scenario unless it maintains the R$ 0.93 payout. By comparison, liquid CDI returns after a 15% tax rate sit near 11.7%, while gross NTN-B 2035 yields hover around 12.5% nominally. A leveraged real estate fund carrying this level of risk must offer a higher return.

The recently approved buyback program for up to 9.59 million units (10% of the total, running from November 3, 2026, to October 19, 2027, executed exclusively below NAV) may cushion the downside, though it does not guarantee a return to R$ 70–75 on its own. Reacquiring 10% of units at R$ 60 would cost roughly R$ 575 million, and out of R$ 1.90 billion in liquid cash, R$ 1.19 billion is committed to contracted property installments alongside the R$ 250 million allocated to Meli Campinas. Execution depends on cash inflows from property sales. Catalysts that could push units back toward R$ 70+ include a November report showing income at or above R$ 0.80, a drying up of seller-driven supply, and declining long-term interest rates.

Purchasing units at R$ 60.10 and holding through the end of 2030, excluding dividend reinvestment, yields four estimated arithmetic scenarios:

TRXF11 is included in the Rico aos Poucos model portfolio, representing 5% of assets in the bullish real estate fund allocation, as detailed in our analysis published Friday following the report. This does not constitute an individualized recommendation.

What is the bargain price?

Using the bad scenario as a benchmark: average dividend of R$ 0.65 for four years (R$ 31.20 accumulated), book value 10% lower (~R$ 84) and the market still paying only 0.60 of it, which gives a share price of R$ 50.40 at the end of 2030.

• R$ 60 — good price: pays 15% per year even with a dividend of R$ 0.75.
• ~R$ 54 — bargain: below this, it beats the net CDI (~11% per year, ~+52% in four years) even in the bad scenario.
• ~R$ 50 — almost no chance of losing capital in four years: there is a gain on the share price even in the bad scenario, barring the loss of major tenants.

Nominal loss in the bad scenario only happens when buying above ~R$ 81. For those building a position from scratch, one way not to depend on hitting rock bottom is to enter in three tranches: one-third near R$ 60, one-third near R$ 54 and one-third near R$ 50, or when the November report (early December) shows a result of at least R$ 0.80 per share. Don't wait for a "right" price: selling pressure might end before the share price gets there.

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Autor do artigo Edinei Bauer

Investidor e fundador do Rico aos Poucos.

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