FIBRA Macquarie Mxico Reports Third Quarter 2021 Results | Financial Buzz

FIBRA Macquarie Mxico Reports Third Quarter 2021 Results

FIBRA Macquarie México (FIBRAMQ) (BMV: FIBRAMQ) announced its financial and operating results for the third quarter ended September 30, 2021.

THIRD QUARTER 2021 HIGHLIGHTS

  • AFFO per certificate of Ps. 0.5972
  • Increased FY21 AFFO per certificate guidance to approximately Ps. 2.34, from the prior range of Ps. 2.27 to Ps. 2.32
  • Consolidated occupancy of 94.8%, up 105 bps YoY and up 38 bps sequentially
  • Authorized 3Q21 cash distribution of Ps. 0.4750 per certificate and reaffirmed FY21 distribution guidance of Ps. 1.90 per certificate
  • FIBRAMQ achieves improved GRESB results in 2021, now ranking above the average of its GRESB Peer Groups and the broader GRESB Average in both the GRESB Standing Investments Benchmark and the GRESB Development Benchmark – GRESB 3 Star rating reaffirmed

“Performance in our high quality, well-located industrial portfolio has continued to be strong and is benefiting from favorable market dynamics as well as Mexico’s increasingly important role in the global supply chain,” said Juan Monroy, FIBRA Macquarie’s chief executive officer. “Industrial portfolio occupancy ended the quarter at 95.5%, as we added a number of global customers to our tenant roster, along with high levels of renewals. With more than 80% of our industrial GLA in the northern markets, we anticipate sustained demand driven by compelling nearshoring tailwinds. We are also encouraged with the improving outlook for our retail portfolio, as COVID restrictions have continued to ease, and traffic is gradually increasing. We remain optimistic about the outlook for the remainder of the year and for our future growth prospects. We will continue to demonstrate our disciplined approach to growth, as we pursue selective new development and expansions opportunities which we anticipate will continue to emerge, and which FIBRAMQ is well-positioned to pursue.”

FINANCIAL AND OPERATING RESULTS

Consolidated Portfolio

FIBRAMQ’s total results were as follows:

TOTAL PORTFOLIO

3Q21

3Q20

Variance

9M21

9M20

Variance

Net Operating Income (NOI)

Ps. 874.7m

Ps. 906.9m

-3.5%

Ps. 2,624.6m

Ps. 2,822.4m

-7.0%

EBITDA

Ps. 812.5m

Ps. 841.4m

-3.4%

Ps. 2,431.0m

Ps. 2,633.5m

-7.7%

Funds From Operations (FFO)

Ps. 575.2m

Ps. 574.6m

0.1%

Ps. 1,720.2m

Ps. 1,836.7m

-6.3%

FFO per certificate

0.7556

0.7544

0.2%

2.2590

2.4079

-6.2%

Adjusted Funds From Operations (AFFO)

Ps. 454.7m

Ps. 466.1m

-2.4%

Ps. 1,343.1m

Ps. 1,523.2m

-11.8%

AFFO per certificate

0.5972

0.6119

-2.4%

1.7638

1.9969

-11.7%

NOI Margin

87.4%

86.8%

63 bps

87.6%

87.9%

-24 bps

AFFO Margin

45.4%

44.6%

84 bps

44.8%

47.4%

-258 bps

GLA (’000s sqft) EOP

34,530

34,262

0.8%

34,530

34,262

0.8%

GLA (’000s sqm) EOP

3,208

3,183

0.8%

3,208

3,183

0.8%

Occupancy EOP

94.8%

93.7%

105 bps

94.8%

93.7%

105 bps

Average Occupancy

94.3%

93.7%

67 bps

94.0%

94.7%

-76 bps

FIBRAMQ’s same store portfolio results were as follows:

Consolidated Portfolio – Same Store

3Q21

3Q20

Variance

9M21

9M20

Variance

Net Operating Income

Ps. 868.2m

Ps. 908.7m

-4.5%

Ps. 2,603.2m

Ps. 2,720.4m

-4.3%

Net Operating Income Margin

87.5%

87.0%

57 bps

87.7%

87.6%

14 bps

Number of Properties

251

251

251

251

GLA (’000s sqft) EOP

34,313

34,262

0.1%

34,313

34,262

0.1%

GLA (’000s sqm) EOP

3,188

3,183

0.1%

3,188

3,183

0.1%

Occupancy EOP

94.7%

93.7%

101 bps

94.7%

93.7%

101 bps

Average Monthly Rent (US$/sqm) EOP

$5.47

$5.22

4.8%

$5.47

$5.22

4.8%

Weighted Avg Lease Term Remaining (years) EOP

3.2

3.3

-3.8%

3.2

3.3

-3.8%

Percentage of US$ denominated Rent EOP

75.7%

77.5%

-175 bps

75.7%

77.5%

-175 bps

COVID-19 Reporting Disclosures

FIBRAMQ continues to provide enhanced COVID-19 related disclosures for its rent collections, retail center store openings, rent relief and trade receivables as part of its Third Quarter 2021 Supplementary Information materials, located at https://www.fibramacquarie.com/en/investors/bmv-filings.html.

Industrial Portfolio

The following table summarizes the results for FIBRAMQ’s industrial portfolio:

INDUSTRIAL PORTFOLIO

3Q21

3Q20

Variance

9M21

9M20

Variance

Net Operating Income (NOI)

Ps. 776.1m

Ps. 812.1m

-4.4%

Ps. 2,330.9m

Ps. 2,404.0m

-3.0%

NOI Margin

91.3%

90.7%

65 bps

91.4%

91.5%

-7 bps

GLA (’000s sqft) EOP

29,952

29,699

0.9%

29,952

29,699

0.9%

GLA (’000s sqm) EOP

2,783

2,759

0.9%

2,783

2,759

0.9%

Occupancy EOP

95.5%

94.0%

153 bps

95.5%

94.0%

153 bps

Average Occupancy

95.0%

93.9%

109 bps

94.5%

95.1%

-55 bps

Average monthly rent per leased (US$/sqm) EOP

$5.16

$4.98

3.7%

$5.16

$4.98

3.7%

Customer retention LTM

83.2%

79.7%

353 bps

83.2%

79.7%

353 bps

Weighted Avg Lease Term Remaining (years) EOP

3.2

3.3

-0.9%

3.2

3.3

-0.9%

FIBRAMQ’s industrial portfolio performance remains robust. For the quarter ended September 30, 2021, FIBRAMQ’s industrial portfolio delivered NOI of Ps. 776.1 million, compared to Ps. 812.1 million in the prior corresponding period. Underlying performance in the industrial portfolio continued to be strong supported by a favorable demand-supply environment. Reported results were primarily impacted by a stronger Mexican Peso, which appreciated 11.0% on a year-over-year basis. In underlying USD terms, 3Q21 NOI was US$ 38.8 million, up 5.7% over the prior corresponding period. FIBRAMQ delivered positive results across key metrics including occupancy, rental rates and NOI margin.

At quarter-end, occupancy was 95.5%, up 153 basis points from the prior year period, and up 53 basis points sequentially. New leasing gained momentum through the year adding 424 thousand sqft during the third quarter, the most active quarter on a year-to-date basis. New leasing activity included seven diverse customers in six markets. Renewal leases comprised 16 leases and 869 thousand sqft, driving a healthy retention rate of 83.2% over the last 12 months.

Cash collections continue to be strong. Through to October 26, 99.4% of scheduled 3Q21 rental income has been collected.

As of September 30, 2021, trade receivables net of provisions were Ps. 14.2 million (excl. VAT), lower by 31.1% sequentially and 74.7% over the prior corresponding period, reflecting the solid cash collections along with prudent provisioning.

Retail Portfolio

The following table summarizes the proportionally combined results for FIBRAMQ’s retail portfolio:

RETAIL PORTFOLIO

3Q21

3Q20

Variance

9M21

9M20

Variance

Net Operating Income (NOI)

Ps. 98.7m

Ps. 94.8m

4.1%

Ps. 240.7m

Ps. 355.6m

-32.3%

NOI Margin

65.3%

63.4%

195 bps

79.1%

81.6%

-248 bps

GLA (’000s sqft) EOP

4,578

4,562

0.3%

4,578

4,562

0.3%

GLA (’000s sqm) EOP

425

424

0.3%

425

424

0.3%

Occupancy EOP

90.0%

92.1%

-214 bps

90.0%

92.1%

-214 bps

Average Occupancy

90.1%

92.2%

-212 bps

90.6%

92.8%

-216 bps

Average monthly rent per leased (Ps./sqm) EOP

$156.48

$153.78

1.8%

$156.48

$153.78

1.8%

Customer retention LTM

63.5%

65.0%

-148 bps

63.5%

65.0%

-148 bps

Weighted Avg Lease Term Remaining (years) EOP

3.4

3.7

-8.6%

3.4

3.7

-8.6%

FIBRAMQ’s retail portfolio benefited from improving trading conditions.

  • Through October 26, 0.3% of retail GLA, or 0.5% of ABR, remain closed on a tenant discretionary basis for COVID-related reasons.
  • Retail portfolio cash collections during the quarter totaled Ps. 139.7 million, steady on a sequential basis and 26.6% higher compared to the prior corresponding period.
  • Total quarterly rent discounts of Ps. 12.9 million were lower sequentially by 4.2%, and down 43.2% compared to the prior corresponding quarter.

For the quarter ended September 30, 2021, FIBRAMQ’s retail portfolio delivered NOI of Ps. 98.7 million, up 4.1% from the prior comparable period. Furthermore, after the exclusion of non-cash straight line amortization, quarterly NOI is up 26.9% when compared to the third quarter of 2020, with quarterly revenues reaching their highest levels since the onset of the COVID-19 pandemic.

During the third quarter of 2021, FIBRAMQ signed 104 retail leases across 13.8 thousand square meters, representing the fifth sequential increase in quarterly leasing activity and the highest level of new leasing activity since 2019. A leasing highlight for the quarter was a new, long-term lease with Smart Fit, a leading gym operator, at Multiplaza Arboledas, located in the Mexico City Metropolitan Area. We consider that this 1.3 thousand square meter lease up in a retail segment that was particularly impacted by COVID underscores the recovery taking place in the broader retail sector.

Retail cash collections remained steady during the quarter. Through to October 26, 89.1% of scheduled 3Q21 rental income has been collected.

As of September 30, 2021, trade receivables net of provisions were Ps. 10.0 million (excl. VAT), lower by 2.5% sequentially and 41.5% over the prior corresponding period.

Same Store Portfolio Results

For detail on FIBRAMQ’s industrial and retail same store portfolio results, please refer to Third Quarter 2021 Supplementary Information materials located at BMV Filings (fibramacquarie.com).

PORTFOLIO ACTIVITY

Industrial Development

FIBRAMQ is pursuing a strategy to complement and grow its industrial portfolio by investing in class “A” assets in core markets demonstrating strong performance and a positive economic outlook. Preconstruction work continued at FIBRAMQ’s two active development projects which fit this strategic objective.

  • FIBRAMQ is continuing its pre-construction work on a 186 thousand sqft industrial property development in Apodaca, Nuevo Leon, part of an approximately 800 thousand sqft development project, with completion expected in early 2022.
  • FIBRAMQ also continued its industrial development project in the Mexico City Metropolitan Area market. FIBRAMQ expects to develop more than 700 thousand square feet of industrial logistics GLA on the site and anticipates completion of the first phase comprising a 510 thousand sqft building in mid-2022.

BALANCE SHEET

As of September 30, 2021, FIBRAMQ had approximately Ps. 16.2 billion of debt outstanding, Ps. 4.7 billion available on its undrawn revolving credit facility and Ps. 0.5 billion of unrestricted cash on hand.

FIBRAMQ’s indebtedness was 98.8% fixed rate and had a weighted-average debt tenor remaining of 4.3 years.

FIBRAMQ’s CNBV regulatory debt to total asset ratio was 35.3% and the debt service coverage ratio was 5.4x.

ESG

FIBRAMQ remains committed to sustainability including protecting the environment, prioritizing governance, and developing its employees, serving its customers and the community. In October, GRESB, a leading ESG benchmark for real estate investments on a global basis, reaffirmed its GRESB 3 Star rating for 2021, in respect of both the GRESB Standing Investments Benchmark and the GRESB Development Benchmark. This followed improved scores from the respective GRESB 2021 Benchmark reports, and confirms that FIBRAMQ ranks above both its GRESB Peer Groups and the broader GRESB Averages in both GRESB Benchmarks. This performance recognizes FIBRA Macquarie’s continuing focus on, amongst other things, green building and green leasing, stakeholder engagement and transparency, as well as the commitment to continual improvement.

For additional details on FIBRAMQ’s strategy and progress with regards to its ESG strategy can be found in its annual ESG report at https://www.fibramacquarie.com/en/corporate-responsibility.html.

DISTRIBUTION

On October 27, 2021, FIBRAMQ declared a cash distribution for the quarter ended September 30, 2021 of Ps. 0.4750 per certificate. The distribution is expected to be paid on January 28, 2022, to holders of record on January 27, 2022. FIBRAMQ’s certificates will commence trading ex-distribution on January 26, 2022.

FY21 GUIDANCE

AFFO per certificate

FIBRA Macquarie is increasing its FY21 AFFO per certificate guidance to approximately Ps. 2.34, from its prior range of Ps. 2.27 to Ps. 2.32.

This guidance assumes:

  • an average exchange rate of Ps. 20.0 per US dollar for the remainder of FY21;
  • no new government restrictions regarding retail trading activities;
  • no new acquisitions or divestments of stabilized properties;
  • no issuances or repurchases of certificates; and
  • no further deterioration in broader economic and market conditions

Distribution per certificate

FIBRAMQ is reaffirming it guidance of cash distributions for FY21 of Ps. 1.90 per certificate, therefore indicating an expected fourth quarter 2021 distribution of Ps. 0.4750 per certificate.

The payment of cash distributions is subject to the approval of the Manager, stable market conditions and prudent management of FIBRAMQ’s capital requirements.

WEBCAST AND CONFERENCE CALL

FIBRAMQ will host an earnings conference call and webcast presentation on Thursday, October 28, 2021 at 7:30 a.m. CT / 8:30 a.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 Third Quarter 2021 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 a copy of FIBRA Macquarie’s financial information for the third quarter 2021 will also be available on FIBRA Macquarie’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 236 industrial properties and 17 retail properties, located in 20 cities across 16 Mexican states as of September 30, 2021. 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. None of the entities noted in this document is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities.

THIS RELEASE IS NOT AN OFFER FOR SALE OF SECURITIES IN THE UNITED STATES, AND SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED.

THIS ANNOUNCEMENT IS NOT FOR RELEASE IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA.

Contacts

Investor relations contact:

Tel: +52 (55) 9178 7751

Email: fibramq@macquarie.com

Nikki Sacks

Tel: +1 203 682 8263

Email: nikki.sacks@icrinc.com

For press queries, please contact:

Flavio J. Díaz-Tueme

FleishmanHillard México

Tel: +52 (55) 5520 5460

Email: flavio.diaz@fleishman.com

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