Corporacion Inmobiliaria Vesta, S.A.B de C.V. American Depositary Shares, each representing ten (10) Common Shares

Greetings, ladies and gentlemen. Welcome to the Vesta third quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow today's prepared remarks. And as a reminder, this call is being recorded. Please note that you will need to connect via telephone if you would like to participate in the Q&A. It is now my pleasure to introduce your host, Fernanda Bettinger, Investor Relations Officer. Please go ahead.

Good morning, everyone, and thank you for joining us today. With me are Lorenzo Dominique Vero, Chief Executive Officer, and Juan Sotil, Chief Financial Officer. The earnings release detailing our third quarter 23 results was released yesterday after market, and it's available on the company's website, along with our supplemental materials. On today's call, management's remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risk and uncertainties that may cause actual results to differ. For more information on these risk factors, please review our public filings. This assumes no obligation to update any forward-looking statements in the future. Additionally, note that all figures included herein were prepared in accordance with IFRS, which differs in certain significant respects to U.S. GAAP. All information should be read in conjunction with and its qualified insincerity by reference to our financial statements, including the notes directo and are stated in U.S. dollars unless otherwise noted. I'll now turn the call over to Lorenzo Vero.

Thank you, Fernanda, and good morning, everyone. Recent geopolitical events have deeply saddened and affected the global community. We hope for increased stability and a peaceful resolution. While there is understandable concern regarding today's volatile capital markets, expectations of increased interest rates and enduring inflation, it's important to note that Vesta will continue to benefit from strong momentum on development front despite macro unpredictability. Our sector and our business are uniquely resilient. with a well-balanced portfolio of outstanding clients in diversified high demand industries. Vesta's business case remains attractive in an inflationary environment as we benefit from a natural hedge on inflation with annual rent increases that are tied to CPI, an important competitive advantage. Further, Vesta's business is dollarized. So while our third quarter results reflect foreign exchange headwinds, This will not materially impact our long-term performance despite a strengthening of PESO. As always, we are vigilant to changes in market dynamics and plan for a range of outcomes to respond accordingly if we see current trends shift. However, outstanding nearshoring driven demand continues. Driven by different concerns about escalating risks and the rising cost of sourcing and manufacturing in Asia, particularly China. We believe today's turbulence and geopolitical volatility will not only strengthen this trend, as manufacturers seek to future-proof their supply chain more than ever. INEGI reported that Mexico's July industrial production surged by nearly 5% year-over-year, which marks the 21st straight month of industrial growth and at a solid pace. Vesta's third quarter performance reflected strong execution across our organization in line with our level three strategy goals on multiple fronts. Before I get into the results, I'd like to underscore our team's commitment to excellence, which is enabling our success on the execution of our growth plan. Now, let me share more with you on our third quarter 2023 results. We saw vacancy rates at record lows with strong leasing and increasing rental prices driven by tightening supply, particularly in Mexico's most desirable manufacturing hubs. During the third quarter 2023, we began construction on nine new buildings equivalent to 2.6 million square feet in Mexico's most strategically relevant markets including three in Mexico City metropolitan area, three in Juarez, two in San Luis Potosi, and one in Aguascalientes. Note, we have increased our presence and continued traction in the Bajio region during the quarter. CBRE remarked within its market analysis that the Bajio region saw acceleration in new demand and revived construction activity, particularly from the automotive sector. Starting price for space is trending upwards, in line with other key Mexico markets as logistic companies expand their presence, attracted to the Bajio's highly desirable and advantaged location, skilled labor force, and infrastructure. Half of the overall activity under construction within the Bajio market is pre-leased with net demand, therefore expected to continue to further increase for the remainder of 2023 and into 2024, which will drive up asking prices. For Vesta, part of our Aguascalientes building we're starting has already been pre-leased, and the development plans Vesta has in place for our land reserves will continue to capitalize on this trend to further close the gap between Bajio and other regions. Our total development pipeline therefore reached 3.5 million square feet for the third quarter, with a $291 million expected investment and a 10.2% average yield on cost. Third quarter 2023 deliveries of 2.3 million square feet and buildings under construction increased Vesta's total portfolio to more than 40 million square feet, an important milestone for Vesta. Our properties appraised value increased materially during the quarter. to just over $3 billion as we've been incorporating new assets while the total portfolio has also been increasing in overall value. Vesta's land bank decreased during the quarter as land holdings transferred to the current active portfolio. Vesta's third quarter leasing activity reached 1.4 million square feet. of which 736,000 were new shoring-led contracts with multinational clients such as Foxconn, Sage Automotive, Sumitomo, Becker-Disley, Gates, and Continental in markets such as Guadalajara, Juarez, Aguascalientes, San Luis Potosi, among others. And 626,000 square feet in lease renewals during the quarter. I would like to highlight Vesta's strong balance sheet, reflected in our outstanding ratios, such as net to EBITDA of 3.1 times and loan to value of 25.8%, with no significant near-term maturities. We're focused on maintaining our discipline to drive continued four-quarter success on the final stretch of Vesta's level three strategy. we expect a strong end to 2023 driven by continued robust leasing while strategically and selectively executing on construction starts and potential asset sales. We're maintaining high levels of vigilance on our tenant base with a steadfast focus on sustainable growth to secure a solid foundation for 2024 that ensures sustained value creation for Vesta stakeholders. With that, Let me pass our conversation to Juan, and I will return for some brief closing remarks.