-- Full Year Revenues Grow 36% to Ch$68,271 million--

-- 2008 EBITDA Increases 33% with Expansion in Chile and Peru –

-- Total GLA Expands by 16% to 670 Thousand Square Meters; Average Occupancy at 99% --

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 full year and fourth quarter ended December 31, 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.

“Parque Arauco’s strong 2008 financial results benefited from the consolidation of two new malls, increased operating results from expanded and renovated properties in Chile and Peru, and the extension of the Company’s footprint in the region,” said Andrés Olivos, chief executive officer of Parque Arauco S.A.

“The Company’s conservative business model, with a high percentage of fixed rental income versus variable revenue, proved resilient during the economic slowdown in the latter part of the year, and we were able to complete a number of important construction, expansion and renovation projects which positions us competitively going into 2009. I am pleased to report that annual revenues and EBITDA each grew by more than one third and net profit nearly doubled. Our larger and more modern shopping centers now feature approximately 670 thousand square meters of GLA in Chile, Peru and Argentina.

2008 proved challenging due to a weaker economic climate in Chile, where GDP growth was only 3.5%, down from 5.7% in 2007. Foot traffic increased at most of our malls, however retail spending was less robust than expected during the second half of the year. While the Company posted solid financial results driven by the performance of newly integrated properties and strong numbers at Mega Plaza Norte in Peru, as we move into 2009, we are taking steps to increase our efficiency in a number of areas, including, for example, measures to reduce energy consumption at each of our properties. Additionally, in the near term, we will focus our development and new business efforts on completing projects with financing in place and maximizing returns on recently completed acquisitions, expansions, and renovations,” Mr. Olivos noted.

Full-Year Results

Revenues for the full year increased by 36.1% to Ch$68,271 million from Ch$50,157 million in 2007, reflecting the consolidation of two new shopping centers in Chile, Mall Plaza El Roble (December 2007) and Mall Plaza Estación (May 2008), and revenue growth derived from the completion of expansion and renovations at existing malls, principally Arauco Maipú in Chile, where the retail area nearly doubled during the past year, and Mega Plaza Norte in Peru, where GLA increased by 14%. The Peruvian shopping center contributed significantly to the increase, with revenues in local currency growing by 25% to Sol$51.1 million.

Gross Profit rose to Ch$41,077, an increase of 31.5% over the previous year. Cost of Sales increased by 43.7% as compared to the level in 2007, in accordance with the expansion of GLA at existing properties and incorporation of new properties to the Company’s portfolio. Cost of sales as a percentage of total revenues increased only slightly to 39.8%. Operating expenses per square meter remained consistent as compared to the previous year.

Net operating income (“NOI”), defined as revenues less cost of sales plus depreciation and amortization, increased by 31.8% to Ch$48,232 million from Ch$36,600 million in 2007. The consolidation of Mall Plaza Estación and El Roble positively affected the increase in NOI, as the two properties contributed Ch$9,018 million of NOI during the year.

Selling, General and Administrative Costs increased by 26.9% as compared to the previous year, to Ch$10,030 million, a change that was mainly driven by higher energy costs and real estate taxes, costs associated with increases to GLA and consolidation of new properties, as well as personnel costs associated with plans for regional expansion.

EBITDA for the year increased by 33.1% to Ch$38,202 million from Ch$28,695 million, achieving the outlook for consolidated EBITDA growth in 2008 that was announced in early 2007. Nearly every property reported an increase in EBITDA, while acquisitions also contributed to EBITDA growth. EBITDA margin declined slightly from 57% to 56%, however it is important to note that EBITDA includes a property tax totaling Ch$2,667 million which is usually excluded from EBITDA by comparable mall developers in Latin America. When adjusted to exclude the property tax, the 2008 EBITDA margin was 59.9%.

The Company’s profit on investments in related companies declined by 54.1% to Ch$2,784 million. While profits derived from Inmobiliaria Mall Viña del Mar (Chile) increased by 9.1%, there was a sharp decline in profitability at Alto Palermo due to a difficult credit environment, which adversely affected the company’s consumer credit division, Tarshop.

Net income increased to Ch$11,106 million from Ch$6,271 million in 2007. The previous year’s result reflected an extraordinary expense as a result of a refinancing transaction through the prepayment of bonds.

Adjusted FFO (“Funds from Operations”), defined as net income plus depreciation, monetary correction and exchange rate differences, increased by 57% to Ch$ 18,262 million from Ch$11,632 million in the prior year, 2007.

Cash and cash equivalents were Ch$39,515 million as of December 31, 2008 versus Ch$27,382 at the end of December 31, 2007. This increase was largely attributable to a reduction in current liabilities through the prepayment of short-term loans and a complete restructuring of the Company’s debt portfolio, which shifted short-term debt to longer term liabilities.

The Company increased its total GLA by 16% to 670 thousand square meters during 2008, principally due to the completion of expansion projects at Mall Plaza Estación and Mega Plaza Norte. Owned GLA increased by 22.3% to 388 thousand square meters during the year, and property occupancy rates were again high, averaging 99%.

“Parque Arauco reported solid fourth quarter results despite a challenging economic environment, as the Company benefited from the recent expansion of its portfolio of properties and positive performance in Peru, which both contributed to strong operating income improvement. The results in Peru were particularly encouraging as they help to validate our strategy of portfolio diversification and regional expansion.”

Fourth Quarter Results

Net revenues for the quarter increased by 50.5% as compared to the fourth quarter of 2007, to Ch$22,462 million, reflecting expansion and improvements to properties in Chile and Peru as well as the consolidation of Mall Plaza El Roble (December 2007) and Mall Plaza Estación.

Gross profit increased by 54.9% to Ch$14,660 million as compared to Ch$9,467 million in the fourth quarter of 2007.

Net operating income, or NOI (see definition above), increased to Ch$16,457 million, as compared to a result of Ch$10,894 million in the fourth quarter of 2007.

EBITDA for the quarter increased by 51.3% to Ch$11,893 million from Ch$7,863 million in the fourth quarter 2007. FFO (see definition above) declined slightly to Ch$5,592 million from Ch$5,931 million.

Net income declined to Ch$3,795 million from Ch$4,505 million in 2007. The decline was mainly caused by non-operating items, including higher interest expenses associated with project financing, lower profit from investments in related companies due to a poor result in Argentina, and a price level restatement of Ch$2,809 million associated with higher inflation of 8.9% in 2008 versus 7.4% in 2007.

Property Highlights (Financial & Operating) for Fourth Quarter and FY2008

Parque Arauco Kennedy – During 2008, PAK’s total revenues increased by 7% from 2007, to Ch$39,402 million, in line with the incremental percentage increase in the number of visitors to the property, which exceeded 29 million, and the annual expansion of the property’s total GLA. The property’s full year EBITDA increased by 6% to Ch$25,430, when adjusted in order to exclude corporate overhead costs that supported regional operations and expansion. However, total unadjusted EBITDA of Ch$21,898 million represented a decline of 1% as compared to the result during the previous year. Completion of two new office towers at the property in late Q308 increased GLA by more than 6,000 m² and contributed to an increase in foot traffic at the retail level during the fourth quarter, and an additional 17,000 m² of GLA is expected to become available during 2009.

Mall Arauco Maipú – This shopping center, located in Santiago, Chile, contributed Ch$8,637 million in revenues during 2008, a 65.7% increase as compared to the result in 2007, and EBITDA of Ch$4,536 million, an 83.7% increase. This significant improvement in the property’s annual results reflects the near doubling of its GLA during 2007 to 54,618 m² and the fact that much of the incorporation of additional retail space did not take place until late 2007. The number of annual visitors to the mall also increased by 28% to more than 18 million, and fourth quarter sales and EBITDA each improved by approximately 38% as compared to Q407. Mall Arauco Maipú’s financial results also reflect the consolidated financials of Arauco Express Pajaritos, a small strip center that is located nearby.

Arauco Express Pajaritos, formerly called Strip Center Pajaritos, is located next to Mall Arauco Maipú in Santiago Chile, and has a GLA of 5,801m². The small strip center began commercial operations in the fourth quarter of 2008 and its quarterly financial results are consolidated in Mall Arauco Maipú.

Mall Plaza El Roble – 2008 was the first full year during which the Company consolidated the financial results of El Roble, which was acquired in December 2007 (financial and operating results for 2007 are not available, as Parque Arauco did not operate the property throughout 2007). El Roble contributed total revenues of Ch$4,057 million and EBITDA of Ch$2,677 million during 2008. The property, located in Chillán, Chile, has a GLA of 25,068 m² and derived 78% of its income from anchor tenants.

Mall Paseo Estación – Parque Arauco holds an 83% interest in this property and began consolidating MPE’s financial results in May 2008 (financial and operating results for 2007 are not available, as Parque Arauco did not operate the property throughout 2007). The Company has expanded the property physically, increasing GLA by 28,000 m² and making significant changes to improve the efficiency of the property’s commercial operations, including a reduction in personnel. The expansion allowed for the opening of two large anchor stores during the second half of 2008, although the mall continues to feature many small stores, which accounted for about two thirds of total annual revenue in 2008. The property contributed full year revenues of Ch$7,468 million and EBITDA of Ch$4,927 million.

Mega Plaza Norte – The commercial performance of Mega Plaza Norte improved during 2008 thanks to sustained economic growth in Perú and a 14% expansion of GLA at the shopping center, which allowed for the integration of new tenants. These factors contributed to a 25% increase in total annual revenues to Sol$51,148 at the mall, which is located in the city of Lima, and EBITDA of Sol$34,145 million, 33% higher than the amount reported in 2007. Anchor stores continued to generate much of the property’s revenues in 2008, accounting for 77% of total sales. Sales per square meter increased by 11% and performance was strong across the diverse retail base. Total GLA was 71,495 m² at the year’s end.

Non-Consolidated Assets

Inmobiliaria Mall Viña del Mar S.A. (Chile) – Net profit for the fourth quarter of 2008 increased by 2.7% to Ch$708 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 – This shopping center, located in Viña del Mar, Chile, reported slight increases in total revenues, Ch$13,567, and EBITDA, Ch$9,815, in 2008 as compared to 2007 levels. Revenues were almost evenly split between small stores and anchor tenants.

Mall Center Curicó – Approximately eighty percent of the shopping center’s total GLA of 45,885 m² is allocated to anchor stores. 2008 revenues rose 6.4% to Ch$4,932 million, and EBITDA increased by 9.7% to Ch$3,206, thanks in part to a 14% year-over-year increase in the number of visitors.

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, the owner of ten shopping centers in Argentina that have a total GLA of 232,659 m². While sales increased at each of the ten malls in Argentina by an average of 22% during the year, the credit crisis experienced during the second half of 2008 affected performance of Alto Palermo’s credit division, Tarshop, weakening the Argentine company’s overall results. APSA has initiated a complete restructuring of Tarshop that is expected to eliminate the possibility of similar special provisions and write-offs in the future.

Outlook

Parque Arauco achieved its goals with respect to consolidated EBITDA growth and other key metrics in 2008. In light of current economic conditions and credit market dynamics that have an impact on the Company as well as its tenants, particularly anchor tenants which typically have consumer credit divisions, we will postpone the development of four projects – Premium Outlet Mall Quilicura, Quilicura Mall, El Golf, and Baranquilla – while continuing to develop properties such as Arauco del Pacífico and Mall Alameda, which are underway or have already been financed. This represents a modification of the regional expansion plan that Parque Arauco announced in mid-2007, which contemplated investment of approximately US$1 billion in new projects through 2009.

Expansion and New Development Projects

Arauco del Pacífico Mall -- San Antonio – Chile: Parque Arauco S.A. holds a 51% interest in this project, formerly named the Paseo del Pacífico Mall. The property, which will feature a casino, a hotel and a shopping center, is located in San Antonio, Chile, and will have a GLA of more than 30,000 m² at a total cost of US$44 million. About 25% of the overall physical construction is complete, and improvements to the casino’s interior began in January 2009.

Mall Arauco Maipú Stage II – Santiago – Chile: Parque Arauco completed the construction of Module B during the fourth quarter. Module A, a two-floor commercial area, and Module B, a retail banking and insurance center, each opened and began commercial operations in December 2008.

Office Towers Kennedy – Santiago – Chile: The construction of two commercial office towers has been completed, and as portions of the total expected GLA of 23,441 m² become operational, Parque Arauco will incorporate the space into its total GLA. Tower II has been fully leased, of which more than 6,000 m² is currently producing income. Tower I will be fully operational by March 2009, and its offices are currently in the leasing phase.

Strip Center Chorrillos – Chorrillos – Perú: This strip center, which has an expected GLA of 5,500 m², is expected to open in mid-2009 in Chorrillos, Perú, following an investment of US$3.7 million. During the fourth quarter, Parque Arauco began construction of the strip center, reached lease agreements with large tenants, and initiated lease negotiations with smaller tenants.

Mall Alameda – Pereira – Colombia: This shopping center in Pereira, Colombia, in which Parque Arauco will hold a 55% interest, is expected to begin operating commercially in late 2009. The property is expected to have a total GLA of 41,000 m² following a total investment of approximately US$80 million. With construction of the shopping center well underway and an agreement with an anchor tenant reached during the fourth quarter, the Company has begun lease negotiations with smaller tenants.

Mall Dot Baires – Buenos Aires – Argentina: This large shopping center, to be located in an upscale neighborhood of Buenos Aires, is expected to have a GLA of 37,855 following a total investment of more than US$100 million. The property will feature a large supermarket as well as an anchor store.

Arauco Premium Outlet Mall Quilicura – Santiago – Chile: Construction of this premium outlet center, formerly known as Premium Outlet Mall Quilicura and initially expected to be operational by 2010, has been postponed until better market conditions prevail. Importantly, the Company has procured the necessary land and permits so that it can proceed promptly once economic conditions improve, and management still expects to retain a 70% equity interest in the outlet center, which will have approximately 7,000 m² of GLA.

Mall Quilicura – Santiago – Chile: Construction of this shopping center, which is expected to include large and small stores, a supermarket, and a medical tower, has been postponed. Parque Arauco possesses the land and requisite permits so that it can proceed with the project upon the improvement of market conditions.

El Golf – Lima – Peru: Construction of this mixed-use property, originally scheduled to open in 2010 in San Isidro, Peru, will be delayed until there is improvement in the economic climate. Parque Arauco owns the project site parcel and has obtained the necessary permits for this project, which is expected to include a five star hotel, office towers and fashion mall after a total investment of approximately US$120 million.

Barranquilla – Colombia: Commercial operations of this urban shopping center in Colombia were expected to begin in 2010, however construction has been postponed in light of the current market conditions. Once market conditions improve, Parque Arauco expects to proceed in accordance with the joint venture agreement reached with Conpropriedad, which gives the Company a 51% interest in the property. Parque Arauco has obtained the land parcel and necessary permits for the project, which contemplates a total GLA of 80,000 m² following a total investment of US$160 million.

About Parque Arauco

Parque Arauco, based in Chile, is one of Latin America’s largest developers and operators, in terms of GLA, of retail real estate in Latin America. Over the last 25 years, Parque Arauco has developed, operated and managed shopping centers throughout Chile. 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)
Parque Arauco S.A.
Roberto Salas, +562-299-0645
Fax: +562-211-4077
ir@parauco.com
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