• Revenues increase by 40% to Ch$16,040 million as compared to 3Q07
• NOI improves by 35% to Ch$11,112 million
• Total GLA reaches 638 thousand square meters

Parque Arauco S.A. (Santiago Stock Exchange: Parauco; Bloomberg: PARAUCO:CI), one of Latin America’s leading shopping center developers and operators, based on gross leasable area (GLA), today reported financial results for the third quarter ended September 30, 2008. The following financial and operating information, unless otherwise indicated, was prepared and presented in accordance with Chilean GAAP. Additionally, the Company utilizes the equity method of accounting, and its financial statements and operating information consolidate the numbers for Parque Arauco and its majority owned subsidiaries, and refer to Parauco’s stake (or participation) in its joint ventures and developments. For a more detailed review of the results filed with the SVS (Chilean Securities and Exchange Commission), please visit the investor section of Parque Arauco’s website www.parauco.cl.

“While our performance has been affected by the current economic environment and cautious spending among consumers, we have been able to offset some of the impact through our acquisition program as well as the improvements and renovations that we have made to existing properties in our portfolio. Those properties where we increased selling space and completed renovations, have demonstrated improved performance,” noted Chief Executive Officer of Parque Arauco, S.A., Andrés Olivos. “Arauco Maipú where we recently doubled our sales space and enhanced the physical property, we recorded an 83% improvement in revenues during this period. The upgrading of our existing portfolio of shopping centers and the strategic development of new retail properties where there is strong consumer demand continues to be the foundation for our improved results and ongoing growth.”

Third Quarter Results

Revenues for the third quarter of 2008 increased 40% to Ch$16,040 million from Ch$11,460 million in Q307. Third quarter results reflected higher revenues of Ch$2,576 million from the consolidation of Chilean malls Mall Plaza Estación (“MPE”) in May 2008, and Mall Plaza El Roble (“El Roble”), acquired in December 2007, and growth in revenues from the completion of renovations and expansion of selling areas at Chilean malls, principally at Arauco Maipú where the selling area has nearly doubled during the past year. In Peru, where strong consumer demand continued during the third quarter, the expansion in GLA and improvement of store mix at Mega Plaza Norte resulted in increased revenues in local currency by 25.4% to Sol$12.9 million.

Gross profit for the quarter increased 33.1% to Ch$9,207 million as compared to the third quarter of the previous year. Cost of sales also increased during the period by 50.3% to Ch$6,833 million, principally as a result of the addition of new assets (MPE and El Roble), increased energy costs in Chile and higher costs associated with additional GLA from operations that were not in place in the prior year period. Operating expenses per square meter (“m²”) remained constant as compared to previous year.

Net operating income (“NOI”), defined as revenues less cost of sales plus depreciation and amortization, increased by 35.3% to Ch$11,112 million from Ch$8,210 million in the third quarter of 2007. The consolidation of MPE and El Roble positively affected the improvement in NOI, contributing Ch$3,392 million in the third quarter.

Selling, General and Administrative Costs increased by 45.6% to Ch$1,896 million as compared to the previous year’s period. On a quarter over quarter basis, SG & A decreased by 5.1%. The increase in costs as compared to the second quarter of 2007 primarily reflects the consolidation of two malls, increases to GLA, and human resources to support the expansion of retail distribution channels.

In the third quarter, EBITDA increased 33.4% to Ch$9,216 million from Ch$6,908 million (EBITDA margin was 57.5% as compared to 60.3% in Q307). 2008 EBITDA reflects increased expenses associated with the Company’s expansion in Chile, Colombia and Peru. It is expected that as these malls’ operations stabilize, associated fixed costs will decrease and EBITDA margins will improve. The EBITDA also includes a property tax amount of Ch$33.430 million which is generally excluded from EBITDA for other comparable mall developers and operators in the Latin American region. When adjusted to exclude the property tax amount, the EBITDA margin is 61.8% in Q308. Parque Arauco can deduct property taxes paid in Chile as a credit when computing income tax.

Non operating losses improved to Ch$(5,343) million from Ch$(11,221) million in Q207, mainly due to the fact that the previous year’s quarter net income included a one-time cost related to the pre-payment and refinancing of bonds. During the quarter the Company recorded a loss on investment in related companies of Ch$(413) million as compared to a profit of Ch$1,571 million in the second quarter of 2007. The Company’s participation in Alto Palermo S.A. and Mall Viña del Mar S.A. is recorded utilizing the equity method of accounting. Third quarter results have not been provided by Alto Palermo to Parque Arauco. The nine month comparison only reflects the first six months results in 2008 and compares them with the full nine month period in 2007. The financial performance at Inmobiliaria Mall Viña del Mar, which operates two shopping centers in Chile, improved modestly, with total revenues and EBITDA increasing by 1% and 4.3% respectively.

Net income increased to Ch$484 million, or Ch$0.80 per share, compared with the loss of Ch$5,764 million, or Ch$9.49 per share in Q307.

FFO (“Funds from Operations”), defined as net income plus depreciation plus amortization, was Ch$2,389 million or Ch$3.94 per share from Ch$(4,469) million.

Cash and cash equivalents totaled Ch$43,221 million in the third quarter compared to Ch$75,126 million reported in 2007, as funds were used for the improvement and development of properties.

Total GLA was 637,799 square meters and owned GLA was 357,306 square meters. Occupancy rates continue to be near 99% or above for all owned properties except Mall Plaza El Roble where the occupancy rate was at 98.5%. Both Parque Arauco Kennedy and Mall Plaza Estacion were 100% occupied.

Property Highlights (Financial and Operating)

Parque Arauco Kennedy – During the third quarter, the construction of two new office towers, which are expected to increase foot traffic to the shopping center, was completed. PAK’s total revenues in Q308 increased by 4.2% from Q307, to Ch$8,906 million, in line with the incremental percentage increase to the property’s total GLA. The property’s adjusted EBITDA, excluding overhead costs to support regional operations and expansion, declined by 2.7% to Ch$4,991 million.

Mall Arauco Maipú – This property is located in Santiago, Chile. The shopping center, due in part to the near doubling of its GLA to 53,188 m² during the last year, contributed an Ch$ 2,050 million in revenues during the third quarter of 2008, an increase of 83.4% as compared to the total in Q307. EBITDA also rose to Ch$1,159 million, a 153% increase over the amount reported in Q307.

Mall Plaza El Roble – The Company began consolidating El Roble’s financial results in December 2007, shortly after its acquisition. The property, located in Chillán, Chile, which has a GLA of 25,016 m², derived 78% of its income from anchor tenants and contributed total revenues of Ch$938 million during the third quarter of 2008. Both total revenues and EBITDA of Ch$659 million remained at levels similar to those reported during the second quarter of 2008.

Mall Paseo Estación – Parque Arauco acquired an 83% stake in MPE and began consolidating this property’s financial results in May 2008. During Q308, MPE’s total GLA was increased by more than 20%, or nearly 7,000 m², as part of a plan to expand GLA by 25,000 m² by the end of 2008. The expansion, which allowed for the opening of two large anchor stores and additional small stores toward the end of Q308, was accompanied by a significant restructuring of the property’s commercial operations, including a reduction in personnel. For the quarter, MPE reported total revenues of Ch$1,638 million and EBITDA of Ch$1,011.

Mega Plaza Norte - Favorable economic conditions in Peru, the incorporation of new tenants, and improved store mix helped to attract more visitors (+9.5%) and increase sales by 25.4% to Sol$12,894 in the third quarter as compared to the same period in 2007. The urban shopping center also recorded EBITDA of Sol$8.7 million, a 29% increase over the amount reported in Q307. An increase to GLA of 15% has been achieved at Mega Plaza Norte in the past year, bringing the total GLA to 72,189 m².

Non-Consolidated Assets

Inmobiliaria Mall Viña del Mar S.A. (Chile) – Net profit for the third quarter of 2008 increased by 4.3% to Ch$537 million pesos based on the performance of properties Marina Arauco and Mall Center Curico. Combined, these two shopping centers have a GLA that exceeds 100,000 m². Parque Arauco holds a 33% stake in each of the malls.

Marina Arauco – Located in Viña del Mar, Chile. During the third quarter of 2008, the mall reported slight increases to revenues, Ch$3,138 million, and EBITDA, Ch$2,230 million, as compared to Q307 levels.

Mall Center Curicó – Located south of Santiago, approximately eighty-percent of the center’s total GLA of 50,323 m² is allocated to anchor stores, and its Q308 revenues, which totaled Ch$1,192 million, were primarily derived from large tenants. Third quarter revenues were in line with those of Q307 while EBITDA increased by 2.3% to Ch$723 million as compared to Q307.

Alto Palermo S.A (Argentina) – Parque Arauco holds a 31.6% share on a fully diluted basis in Alto Palermo S.A. (APSA) of Argentina, which owns ten shopping centers in Argentina. Combined, these ten shopping centers have a total GLA of 232,659 m². As noted in the discussion on investments in related companies above, this entity has not, to date, reported results for the third quarter of 2008. Argentina is undergoing a severe economic downturn and it is expected that performance from the malls and its credit division “Tarshop” will be affected by this situation.

Outlook

In mid-2007, Parque Arauco announced an expansion plan for investments through 2009 in new domestic and international projects valued at approximately US$1 billion. The Company’s strategic development plans for the region are unchanged. Yet, in light of the current uncertainty regarding international and local credit markets and the potential impact on regional economic growth, construction schedules for specific properties in Peru and Colombia may be reevaluated in order that commencement of commercial operations better coincides with expectations for a stronger economic climate.

Based on the current market outlook and the Company’s acquisition and development plans, the Company still expects to achieve consolidated EBITDA growth at a range of 30 to 40% in 2008 compared to 2007.

Expansion and New Development Projects

Paseo del Pacifico Mall -- San Antonio – Chile: In March 2008, Parque Arauco S.A. announced the purchase of a 51% interest in the Paseo del Pacifico Mall project, located in San Antonio, Chile, at a total cost of US$44 million. The property will feature a casino, a hotel and a shopping center in the same location and will have a GLA of more than 30,000 m². Construction has commenced and is on schedule.

Arauco Express Pajaritos – Santiago – Chile: Located in Santiago, Chile, this strip center, formerly called Strip Center Pajaritos, has a GLA of 5,274m². The construction phase is complete and the GLA 100% leased. The total investment made in the property was US$9.2 million.

Premium Outlet Mall Quilicura – Santiago – Chile: This premium outlet center is expected to be operational by 2010. Parque Arauco will retain a 70% equity interest in the outlet center, which will have approximately 7,000 m² of GLA and calls for a total investment of US$18 million.

Arauco Maipú Stage II – Santiago – Chile: Parque Arauco will continue to invest in this mall which is expected to open additional GLA in December 2008. Construction of Module A, a two-floor commercial area, was completed on schedule and Module B, a retail banking and insurance center, is under construction. Both phases of the mall are expected to begin commercial operations during the fourth quarter of 2008.

Office Towers Kennedy – Santiago – Chile: The commercial property, which is comprised of two office towers with a total GLA of 23,441 m², is in its final stage of construction. Tower II has been fully leased, Tower I will be fully operational by March 2009, and offices are currently in the leasing phase.

El Golf – Lima – Peru: This mixed-use property is scheduled to open in 2010 in San Isidro, Peru and is expected to include a five star hotel, office towers and fashion mall after a total investment of approximately US$120 million.

Strip Center Chorrillos – Chorillos – Peru: Parque Arauco expects to invest US$3.7 million in this strip center that is expected to open in mid 2009 in Chorrillos, Peru. During the third quarter, the City of Lima ratified changes to local zoning proposed by Parque Arauco and its local partner. With commercial zoning approved, the Company was able to proceed with its marketing study. The property has an expected GLA of 5,500 m².

Mall Alameda – Pereira – Colombia: Commercial operations at this shopping center in Pereira, Colombia are expected to begin by the end of 2009. The property, in which Parque Arauco holds a 55% stake, is currently in the construction phase and will require a total investment of approximately US$80 million. The shopping center has an expected total GLA of 41,000 m².

Barranquilla – Colombia: Under the terms of the joint venture agreement with Conpropriedad, following an expected total investment of US$160 million, Parque Arauco will have a 51% interest in the property. Commercial operations are expected to begin in 2010. Total GLA of the shopping center will be 80,000 m² once completed.

About Parque Arauco

Parque Arauco, based in Santiago, Chile, is one of Latin America’s largest developers and operators, in terms of GLA. Over the last 25 years, Parque Arauco has developed, operated and managed shopping centers throughout Chile, and today owns or has interests in 17 shopping centers in Chile, Peru, Colombia, and Argentina which have a combined GLA of 637,799 m². It has a 31.6% ownership interest in Argentina’s Alto Palermo, S.A., (APSA) which is traded on the Buenos Aires Stock Exchange and the NASDAQ. APSA is the owner and operator of 10 shopping centers. Parque Arauco also has a 45% interest in Peru’s Inmuebles Panamericana, S.A., owner and operator of one of Lima’s largest shopping centers.

This release contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Parque Arauco. These are merely projections and, as such, are based exclusively on the expectations of management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the economies in which we work and the industry, among other factors; therefore, they are subject to change without prior notice.

Investor Relations (Chile)
Roberto Salas
Phone: +562.299.0645
Fax: +562.211.4077
ir@parauco.cl
Website: www.parauco.cl
or
Investor Relations (International)
MBS Value Partners
Monique Skruzny / Betsy Brod, +1.212.750.5800
Fax: +1.212.661.2268
monique.skruzny@mbsvalue.com