► Record 2Q24 consolidated Revenue up 7.1% YoY in underlying USD
terms
► Record NAV per certificate of Ps. 47.8, up 12.5%
sequentially
► FY24 per certificate AFFO and distribution guidance
reaffirmed
► Post quarter-end, leased up a 225 thousand square foot
industrial development in MCMA, achieving a USD NOI yield of 12.0%
by way of FIBRAMQ’s differentiated value creation strategy of
delivering development profits and associated fee income to FIBRA
Macquarie certificate holders
FIBRA Macquarie México (FIBRAMQ) (BMV: FIBRAMQ) announced its
financial and operating results for the second quarter ended June
30, 2024.
SECOND QUARTER 2024 HIGHLIGHTS
- Consolidated 2Q24 NOI up 6.0% YoY, in underlying USD terms
- Consolidated 2Q24 AFFO flat YoY, in underlying USD terms
- Consolidated 2Q24 portfolio occupancy of 96.9%
- 2Q24 retail occupancy of 92.1%, the highest level since the
second quarter of 2020
- Quarterly Industrial leasing renewal spreads of 13.0% on
negotiated leases
“Our well-positioned industrial-focused portfolio continues to
deliver strong results,” said Simon Hanna, FIBRA Macquarie’s chief
executive officer. “We continue to deliver and lease up new
properties from our industrial development program, we have
maintained healthy occupancy and are realizing solid rental rate
increases across our industrial portfolio. Our development growth
strategy maintains its momentum with the delivery of a 200 thousand
square foot facility in Apodaca, Nuevo Leon, and 100% lease up of
our Mexico City development project. We are making good progress on
our other active projects in core industrial markets including our
recent acquisition of a strategic, 25-hectare industrial land bank
in Monterrey, where we intend to develop approximately 900 thousand
square feet of GLA over time.”
Mr. Hanna continued, “We continue to maintain our disciplined
approach to capital allocation and balance sheet management,
building on our consistent track record. We again enhanced our
balance sheet with a new US$150 million credit facility, which
notably is the first loan commitment for the International Finance
Corporation to a Mexican FIBRA. We are also progressing with our
pursuit of the acquisition of Terrafina, which would accelerate our
growth profile. We maintain our confidence in the FIBRA Macquarie
platform, including our robust development pipeline and strong
balance sheet, which is well positioned to support ongoing
attractive growth in the coming quarters.”
TENDER AND EXCHANGE OFFER FOR TERRAFINA
On July 8, FIBRAMQ obtained security holder approval for the
acquisition of the Irrevocable Trust Agreement number F/00939, also
known as "Terrafina" (BMV: TERRA13). Concurrently, FIBRAMQ launched
a tender and exchange offer (the “Offer”) for Terrafina Trust
Certificates, or certificados bursátiles fiduciarios inmobiliarios
(the “Terrafina CBFIs”), subject to the terms and conditions set
forth in the tender offer prospectus, for up to 100% of the
outstanding Terrafina CBFIs, at a current exchange ratio of 1.185x
FIBRAMQ CBFIs for each Terrafina CBFI. The expiration for the Offer
is August 12, 2024, unless the Offer Expiration Date is extended
pursuant to the terms of the tender and exchange offer
prospectus.
Additionally, FIBRA Macquarie announced on July 21 a further
reduction in the management fees paid to its Manager from 100 bps
of market capitalization to 75 bps of market capitalization,
subject to the completion of an acquisition of Terrafina, or any
other merger with, or acquisition of, a listed FIBRA or other
company by FIBRA Macquarie in the future.
FIBRAMQ believes that a combination with Terrafina, which would
form the largest institutional FIBRA, is a compelling value
proposition to both FIBRA Macquarie and Terrafina certificate
holders. The combined FIBRA would benefit from FIBRA Macquarie’s
scalable, vertically integrated property administration and
development platform, and would serve additional demand coming from
the favorable nearshoring tailwinds.
CAPITAL ALLOCATION
FIBRAMQ continues to pursue a strategy of investing in and
developing class “A” industrial assets in core markets that
demonstrate strong performance and a positive economic outlook.
Industrial Portfolio Growth Capex Program
FIBRAMQ has 1.5 million square feet of GLA under development or
stabilization with a total required investment of approximately
US$127.0 million. FIBRA Macquarie maintains a target NOI yield on
cost of between 9% and 11%, which incorporates the highest
sustainability standards and is designed to generate embedded
operational efficiencies for its customers.
Projects in process are summarized below. For further details
regarding recently delivered projects, please refer to the
Supplementary Information materials located at BMV Filings
(fibramacquarie.com).
Industrial Development Projects in
Process
Apodaca, Nuevo Leon
- FIBRAMQ delivered a 200 thousand square feet property during
2Q24.
- This building delivery is part of a class “A” industrial park
that is anticipated to comprise a total potential GLA of 790
thousand square feet, of which FIBRAMQ has completed construction
on 590 thousand square feet of GLA.
Tijuana, Baja California
- Work is ongoing for the first building comprising 405 thousand
square feet of GLA with an expected delivery date in the second
half of 2024.
- This class “A” industrial park is anticipated to comprise a
total potential GLA of 890 thousand square feet.
Cuautitlán, Mexico City Metropolitan Area
On July 24, FIBRAMQ executed a 5-year, U.S. dollar-denominated
lease with respect to its 225 thousand square foot development
project that will be occupied by a multinational e-commerce
retailer. The triple-net lease is expected to commence contributing
to net operating income in the first quarter of 2025. The property
is held in a joint venture in which FIBRA Macquarie holds an 82.2%
equity stake.
As an added value driver for its investors, FIBRA Macquarie is
the sole beneficiary of development and property administration
fees earned from the joint venture vehicle, harnessing the
capabilities of its vertically integrated development and property
management platform.
FIBRA Macquarie’s proportionate investment cost for the building
is expected to total US$17.4 million, excluding development fees
earned by FIBRA Macquarie. The project is expected to achieve a
12.0% NOI development yield, with a proportionate first year NOI of
US$2.1 million.
The building is being constructed in accordance with the U.S.
Green Building Council’s® LEED® v4.0 Building Design and
Construction: Core and Shell Development specifications and is
expected to achieve a minimum Gold level certification. In
addition, the lease has been executed in accordance with FIBRA
Macquarie’s green leasing standards.
As part of its continued growth plans, FIBRA Macquarie continues
to evaluate acquisition opportunities, including land parcels for
industrial development and stabilized property portfolios in
markets that FIBRAMQ considers core and strategic.
FINANCIAL AND OPERATING RESULTS
Consolidated Portfolio
FIBRAMQ’s consolidated 2Q24 results were as follows:
TOTAL PORTFOLIO
2Q24
2Q23
Variance
2Q24
2Q23
Variance
Weighted Average CBFIs (millions)
797.3m
761.3m
4.7%
797.3m
761.3m
4.7%
Net Operating Income (inc. SLR)
Ps. 975.9m
Ps. 938.5m
4.0%
US$ 56.7m
US$ 53.0m
7.1%
Net Operating Income (exc. SLR)
Ps. 972.0m
Ps. 944.8m
2.9%
US$ 56.5m
US$ 53.3m
6.0%
EBITDA
Ps. 885.6m
Ps. 859.8m
3.0%
US$ 51.5m
US$ 48.5m
6.1%
Funds From Operations (FFO)
Ps. 618.3m
Ps. 623.6m
(0.8%)
US$ 35.9m
US$ 35.2m
2.1%
FFO per certificate
Ps. 0.7755
Ps. 0.8191
(5.3%)
US$ 0.0451
US$ 0.0462
(2.5%)
Adjusted Funds From Operations (AFFO)
Ps. 480.6m
Ps. 496.3m
(3.2%)
US$ 27.9m
US$ 28.0m
(0.2%)
AFFO per certificate
Ps. 0.6028
Ps. 0.6519
(7.5%)
US$ 0.0350
US$ 0.0368
(4.8%)
NOI Margin (inc. SLR)
85.6%
86.5%
(85 bps)
85.6%
86.5%
(85 bps)
NOI Margin (exc. SLR)
85.3%
87.1%
(177 bps)
85.3%
87.1%
(177 bps)
AFFO Margin
42.2%
45.7%
(356 bps)
42.2%
45.7%
(356 bps)
GLA (’000s square feet) EOP
35,573
35,117
1.3%
35,573
35,117
1.3%
GLA (’000s sqm) EOP
3,305
3,263
1.3%
3,305
3,263
1.3%
Occupancy EOP
96.9%
97.5%
(62 bps)
96.9%
97.5%
(62 bps)
Average Occupancy
97.0%
97.3%
(27 bps)
97.0%
97.3%
(27 bps)
Weighted average CBFIs have increased year-over-year solely in
connection with an extraordinary distribution of 36,022,750 CBFIs
paid on March 14, 2024 to existing Holders.
Industrial Portfolio
The following table summarizes 2Q24 results for FIBRAMQ’s
industrial portfolio:
INDUSTRIAL PORTFOLIO
2Q24
2Q23
Variance
2Q24
2Q23
Variance
Net Operating Income (inc. SLR)
Ps. 837.7m
Ps. 806.4m
3.9%
US$ 48.7m
US$ 45.5m
7.0%
Net Operating Income (exc. SLR)
Ps. 829.8m
Ps. 807.2m
2.8%
US$ 48.2m
US$ 45.5m
5.9%
NOI Margin (inc. SLR)
89.2%
89.7%
(49 bps)
89.2%
89.7%
(49 bps)
NOI Margin (exc. SLR)
88.4%
89.8%
(141 bps)
88.4%
89.8%
(141 bps)
GLA (’000s square feet) EOP
30,947
30,513
1.4%
30,947
30,513
1.4%
GLA (’000s sqm) EOP
2,875
2,835
1.4%
2,875
2,835
1.4%
Occupancy EOP
97.6%
98.4%
(84 bps)
97.6%
98.4%
(84 bps)
Average Occupancy
97.8%
98.2%
(44 bps)
97.8%
98.2%
(44 bps)
Average monthly rent per leased (US$/sqm)
EOP
US$ 6.04
US$ 5.73
5.4%
US$ 6.04
US$ 5.73
5.4%
Customer retention LTM
86.3%
93.4%
(715 bps)
86.3%
93.4%
(715 bps)
Weighted Avg Lease Term Remaining (years)
EOP
3.5
3.1
10.6%
3.5
3.1
10.6%
FIBRAMQ’s industrial portfolio performance remains robust, with
growing average rental rates and strong retention. For the quarter
ended June 30, 2024, FIBRAMQ’s industrial portfolio delivered
quarterly NOI of US$48.2 million, a 5.9% annual increase. At
quarter-end, occupancy was 97.6%. Total leasing activity comprised
1,961 thousand square feet of GLA, including 136 thousand square
feet of new leases, and quarterly moveouts were 334 thousand square
feet. Renewal leases comprised 21 contracts across 1,825 thousand
square feet, driving a solid retention rate of 86.3% over the last
12 months. Renewal and new leases featured an electronics
manufacturer in Ciudad Juárez and a logistics company in
Reynosa.
Retail Portfolio
The following table summarizes the proportionally combined 2Q24
results for FIBRAMQ’s retail portfolio:
RETAIL PORTFOLIO
2Q24
2Q23
Variance
Net Operating Income (incl. SLR)
Ps. 138.2m
Ps. 132.1m
4.6%
Net Operating Income (excl. SLR)
Ps. 142.2m
Ps. 137.7m
3.3%
NOI Margin (%, inc. SLR)
68.9%
71.0%
(205 bps)
NOI Margin (%, exc. SLR)
70.9%
74.0%
(307 bps)
GLA (’000s square feet) EOP
4,627
4,604
0.5%
GLA (’000s sqm) EOP
430
428
0.5%
Occupancy EOP
92.1%
91.3%
77 bps
Average Occupancy
91.7%
90.9%
80 bps
Average monthly rent per leased sqm
EOP
$181.47
$173.10
4.8%
Customer retention LTM
84.5%
84.1%
36 bps
Weighted Avg Lease Term Remaining (years)
EOP
3.4
3.4
(0.1%)
- Retail portfolio cash collections during the quarter trended up
to Ps. 207.0 million, an increase of 11.1% versus the prior
corresponding period
- Weighted average lease term remained at 3.4 years and average
rents increased 4.8%
FIBRAMQ signed 77 new and renewal leases during the quarter
totaling 12.5 thousand square meters of GLA, across a diverse range
of tenants. New leasing included a 1.7 thousand square meter lease
for a furniture retailer and a 1.3 thousand square meter lease for
a general merchandiser. The retail portfolio benefited from strong
retention of 84.5% over the last twelve months.
As of June 30, 2024, trade receivables net of provisions were
Ps. 7.0 million (excl. VAT), lower by 23.9% QoQ.
Lease Rental Rate Summary
Based on annualized base rents, FIBRAMQ’s consolidated lease
portfolio is now 65.9% linked to either Mexican or US CPI,
representing an increase of 478 bps over the last twelve
months.
In the industrial portfolio, FIBRAMQ achieved a weighted average
positive releasing spread of 13.0%, in respect of leases generating
US$36.7 million of annualized base rent.
For further details about FIBRA Macquarie’s Second Quarter 2024
results, please refer to the Supplementary Information materials
located at BMV Filings (fibramacquarie.com).
BALANCE SHEET
As of July 23, 2024, FIBRAMQ had US$1,046.3 million of debt
outstanding and US$415.7 million available on its undrawn committed
and uncommitted revolving credit facilities as well as US$24.1
million of unrestricted cash on hand.
As of July 23, 2024, FIBRAMQ’s indebtedness is 100% fixed rate,
with 4.3 years of weighted average term remaining. FIBRAMQ does not
have any loans maturing before September 2026.
As of June 30, 2024, FIBRAMQ’s CNBV regulatory debt to total
asset ratio was 30.9% and debt service coverage ratio was 5.2x.
During the quarter, FIBRAMQ closed a senior unsecured,
sustainability-linked credit facility with International Finance
Corporation (IFC) for US$150 million, maturing in June 2031. The
non-amortizing facility has a seven-year term and will bear
interest at an all-in fixed-rate of 5.80% considering the executed
hedging.
CERTIFICATE REPURCHASE PROGRAM
FIBRAMQ has a Ps. 1,000 million CBFI repurchase-for-cancellation
program available through to June 25, 2025. No certificates were
repurchased during the quarter.
SUSTAINABILITY
At June 30, 2024, FIBRA Macquarie’s green building certification
coverage represented 39.9% of consolidated GLA.
Sustainability and green financing linked portion of drawn debt
stands at 62.6%.
FY24 GUIDANCE
FIBRA Macquarie’s ongoing strong and stable performance
continues to reflect the capacity to deliver solid returns to its
investors through AFFO and cash distributions.
AFFO
FIBRA Macquarie is reaffirming its FY24 AFFO per certificate
guidance of Ps. 2.55 to Ps. 2.60.
The FY24 AFFO guidance equates to a range of US$116 million to
US$120 million, representing an annual increase of between 6% and
8% in underlying USD terms.
FIBRAMQ maintains a positive 2024 outlook on operational
performance which is expected to be offset by the financing costs
of near-term investments in FIBRAMQ’s industrial growth capex
program that in turn are expected to incrementally contribute to
revenue and AFFO growth upon stabilization of each development
project. This guidance assumes:
- an average exchange rate of Ps. 17.75 per US dollar for the
remainder of 2024;
- no new acquisitions or divestments;
- no deterioration in broader economic and market
conditions;
- no certificate repurchases or issuances; and
- excludes any Manager performance fees, if earned
Cash Distribution
FIBRAMQ is reaffirming guidance for cash distributions in FY24
of Ps. 2.10 per certificate, paid in equal quarterly installments
of Ps. 0.5250 per certificate to FIBRA Macquarie holders, subject
to no new CBFI issuances in relation with the potential acquisition
of Terrafina.
Taking into account the ongoing Terrafina tender and exchange
offer process, FIBRA Macquarie will shortly provide a further
update on the expected timing of payment of the 2Q24 distribution,
which is ordinarily scheduled for payment in September.
Outstanding certificates
FIBRA Macquarie had 797,311,397 outstanding certificates as of
June 30, 2024. This considers the 36.0 million certificates
issuance to existing holders that was made in March 2024 in respect
of the extraordinary distribution corresponding to FY23, resulting
in a 4.7% increase in outstanding CBFIs.
WEBCAST AND CONFERENCE CALL
FIBRAMQ will host an earnings conference call and webcast
presentation on Friday, July 26, 2024, at 11:00 a.m. CT / 13:00
p.m. ET. The conference call, which will also be webcast, can be
accessed online at www.fibramacquarie.com or by dialing toll free
+1-877-407-2988. Callers from Mexico may dial 01-800-522-0034 and
other callers from outside the United States may dial
+1-201-389-0923. Please ask for the FIBRA Macquarie Second Quarter
2024 Earnings Call. An audio replay will be available by dialing
+1-877-660-6853 or +1-201-612-7415 for callers from outside the
United States. A webcast archive of the conference call and FIBRA
Macquarie’s financial information for the second quarter 2024 will
also be available on FIBRAMQ’s website, www.fibramacquarie.com.
About FIBRA Macquarie
FIBRA Macquarie México (FIBRA Macquarie) (BMV:FIBRAMQ) is a real
estate investment trust (fideicomiso de inversión en bienes
raíces), or FIBRA, listed on the Mexican Stock Exchange (Bolsa
Mexicana de Valores) targeting industrial, retail and office real
estate opportunities in Mexico, with a primary focus on stabilized
income-producing properties. FIBRA Macquarie’s portfolio consists
of 239 industrial properties and 17 retail properties, located in
20 cities across 16 Mexican states as of June 30, 2024. Nine of the
retail properties are held through a 50/50 joint venture. For
additional information about FIBRA Macquarie, please visit
www.fibramacquarie.com.
Cautionary Note Regarding Forward-looking Statements
This release may contain forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. We caution you that a number of important factors
could cause actual results to differ significantly from these
forward-looking statements and we undertake no obligation to update
any forward-looking statements.
Other than Macquarie Bank Limited ABN 46 008 583 542 (“Macquarie
Bank”), any Macquarie Group entity noted in this document is not an
authorized deposit-taking institution for the purposes of the
Banking Act 1959 (Commonwealth of Australia). The obligations of
these other Macquarie Group entities do not represent deposits or
liabilities of Macquarie Bank. Macquarie Bank does not guarantee or
otherwise provide assurance in respect to the obligations of these
other Macquarie Group entities. In addition, if this document
relates to an investment (a) the investor is subject to investment
risk including possible delays in repayment and loss of income and
principal invested, and (b) none of Macquarie Bank or any other
Macquarie Group entity guarantees any particular rate of return on
or the performance of the investment, nor do they guarantee
repayment of capital in respect to the investment.
Important Notice
No offering or any related document relating to the Terrafina
tender and exchange offer has been or will be filed with or
reviewed by any federal or state securities commission or
regulatory authority of any country, other than Mexico. No
authority has passed upon the accuracy or adequacy of the offering
or any related documents, and it is unlawful and may be a criminal
offense to make any representation to the contrary. The Terrafina
tender and exchange offer will be made in reliance on exemptions
from the registration requirements of the United States Securities
Act of 1933, as amended (the “Securities Act”).
The Terrafina tender and exchange offer will be made, and the
FIBRAMQ CBFIs will be offered and issued, only (a) in the United
States to holders of Terrafina CBFIs who are “qualified
institutional buyers” (as defined in Rule 144A under the Securities
Act) in reliance upon certain exemptions from the registration
requirements of the Securities Act, and (b) outside the United
States to holders of Terrafina CBFIs who are persons other than
“U.S. persons” (as defined in Rule 902 under the Securities Act) in
reliance upon Regulation S under the Securities Act.
This release does not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
The FIBRAMQ CBFIs will not be registered under the Securities Act
or the securities laws of any state and may not be offered or sold
in the United States absent registration or an exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
The FIBRAMQ CBFIs are not intended to be offered, sold or
otherwise made available to, and should not be offered, sold or
otherwise made available to, any persons in member states of the
European Economic Area except (i) to persons who are qualified
investors for the purposes of Regulation (EU) 2017/1129, as amended
(the “EU Prospectus Regulation”), or (ii) in any other
circumstances falling within Article 1(4) of the EU Prospectus
Regulation; provided that, no such offer of securities shall
require FIBRAMQ to publish a prospectus pursuant to Article 3 of
the EU Prospectus Regulation or supplement a prospectus pursuant to
Article 23 of the EU Prospectus Regulation.
The FIBRAMQ CBFIs are not intended to be offered, sold or
otherwise made available to, and should not be offered, sold or
otherwise made available to, any persons in the United Kingdom (the
“UK”) except (i) to persons who are qualified investors for the
purposes of the Regulation (EU) 2017/1129 of the European
Parliament and of the Council of June 14, 2017 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 (the “UK Prospectus Regulation”) or (ii) in any other
circumstances falling within Article 1(4) of the UK Prospectus
Regulation; provided that, no such offer of securities shall
require FIBRAMQ to publish a prospectus pursuant to Section 85 of
the Financial Services and Markets Act 2000 or supplement a
prospectus pursuant to Article 23 of the UK Prospectus
Regulation.
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