Mallplaza, a subsidiary of Falabella, reported a substantial surge in net income for the fourth quarter of 2025, reaching nearly CLP 857.6 billion. This represents a tenfold increase compared to the previous quarter and an 8.5-fold increase year-over-year. However, a significant portion of this gain – CLP 470,161 million in total, with CLP 133,862 million recognized as deferred tax – stems from a fair value adjustment to its property holdings, reducing the gain to just over CLP 138 billion when excluding this adjustment.
The practice of revaluing properties to reflect current market values, rather than historical cost, is becoming increasingly common among mall operators, according to analysts. “The revaluation to fair value of a shopping center means updating its book value to reflect what It’s worth today in the market, not what it cost to build or buy it,” explained Joel Lederman, an analyst at Itaú BBA. “The potential effect for investors is the update of the NAV (net asset value), which is the value of a company’s assets less its debts. In simple terms, it’s what would be left for shareholders if everything were sold today and all obligations were paid theoretically.”
Shares of Mallplaza rose by more than 2% on the Santiago Stock Exchange following the release of the results on Tuesday afternoon. Even excluding the fair value effect, the company’s quarterly profit exceeded expectations, increasing by 86% year-over-year.
The extraordinary figure originates in the “other income” section of the company’s income statement, where CLP 980 billion was reported for the September-December period – 25 times the amount reported a year ago. Flavio Nicovani, an analyst at Bci Corredor de Bolsa, noted that the fair value adjustment doesn’t represent cash flow and therefore doesn’t impact the company’s valuation or dividend payments, which are based on distributable net income.
Analysts suggest that the increasing adoption of annual property revaluations by major mall operators can sometimes be “a little misleading” as it “inflates” earnings with a non-operational component. However, Macarena Gutiérrez, Senior Variable Income Research Analyst at Renta Variable Research, pointed out that the market is now accustomed to focusing on earnings excluding the fair value effect.
Mallplaza’s full-year 2025 net income totaled CLP 1.43 trillion, or CLP 370 billion when excluding the fair value adjustment – a 53% increase compared to the previous year. Falabella also disclosed the impact of these adjustments on its overall results.
“Investment property” is by far the most significant item on Mallplaza’s balance sheet, encompassing shopping centers, projects under construction, and land earmarked for future developments. The details of the specific assets revalued remain confidential.
The change in “other income” reflects an increase in the fair value adjustment recognized in the results, bringing the value of investment property to nearly CLP 7 trillion – 30% higher than at the end of 2024. The valuation methods employed adhere to international standards (NIC 40 and NIIF 13) and rely on various assumptions and estimates, including appraisals, discounted future cash flow models, and discount rates.
Recent analysis from Simply Wall St indicates a shift in analyst sentiment towards Mallplaza. On , the Fair Value Estimate increased from CLP 2,430 to CLP 2,530, driven by improvements in projected revenue growth. However, the Net Profit Margin estimate decreased slightly, from 44.34% to 43.35%. More recently, on , the Fair Value estimate was revised upwards again, from CLP 2,653 to CLP 2,724, supported by a stronger profit margin outlook despite slightly lower revenue growth projections. The Net Profit Margin expectation increased from 43.35% to 44.42% during this period.
The Q4 2025 earnings report demonstrated exceptional growth, with a 23.6% year-over-year increase in net revenue, largely attributed to the integration of its Peruvian portfolio and strong organic performance. While the fair value adjustments significantly boosted reported earnings, analysts are focusing on the underlying operational performance and the evolving margin dynamics as key indicators of Mallplaza’s future prospects.
