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

Greetings, ladies and gentlemen, and welcome to the Vesta first quarter 2026 earnings conference call. All participants are currently in listen-only mode. A question and answer session will follow today's prepared remarks, and as a reminder, this call is being recorded. It is now my pleasure to introduce your host, Fernanda Bettinger, Vesta's Investor Relations Officer. Please go ahead.

Good morning, everyone, and welcome to our review of the first quarter 2026 earnings results. Presenting today with me is Lorenzo Dominique Vero, Chief Executive Officer, and Juan Sotil, our Chief Financial Officer. The earnings release detailing our first quarter 2026 results was released yesterday after market close and is available on the IR website along with our supplemental package. It's important to note that on today's call, management remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risk and uncertainty that may cause actual results to occur. For more information on these risk factors, please review our public filings. VESTA assumes no obligation to update any forward-looking statements in the future. Additionally, note that all figures were prepared in accordance with IFRS, which refers to certain significant risks from U.S. GAAP. All information should be read in conjunction with and is qualified in its entirety by reference to our financial statements, including the notes thereto and are stated in U.S. dollars unless otherwise noted. I'll now turn the call over to Lorenzo Lara.

Thank you for joining us today and for your continued interest in Vesta. The first quarter marked a strong start to the year with solid leasing momentum and stable portfolio performance despite ongoing global tensions. Importantly, as our results demonstrate, we're seeing not only continued activity but growing conviction from our tenants. This was reflected in new leasing and expansions with existing clients as well as with exciting new clients during the quarter. Our performance reinforces the strength of Vespa's platform and reaffirms our approach for 2026 and of our Route 2030 strategy, which is centered on expanding a well-created, high-quality portfolio through disciplined development, leveraging our privileged land bank to capture demand. We believe value creation in our space is driven more by quality than size. While we are seeing increased competition for stabilized assets, Vesta's differentiation lies in our ability to develop and operate a selective portfolio aligned with global best practices and the evolving needs of our clients. Let me briefly highlight the key drivers of Vesta's results. As I noted, leasing activity remains strong. The total first quarter leasing reaching approximately 1.6 million square feet, including 1 million square feet in new leases with best-in-class companies. Total portfolio occupancy reached 89.7% by quarter cent, while stabilized and same-store occupancy reached 93.4% and 95% respectively, reflecting the strength and stability of our tenant relationships. During the quarter, we saw strength in the electronics and aerospace sectors and also in AI-related data center infrastructure, which is becoming an increasingly relevant demand driver that will benefit from long-term structural payments. On the development side, our pipeline continues to converge into active construction, with best of projects breaking ground across key markets. This is further evidence of both improving demand visibility and the strength of our land bank, which is expected to support destabilization and gradual recovery of occupancy. Along these lines, as leasing activity continues to gain momentum, we have selectively resumed developments. We launched two new projects in Mexico City and one in Tijuana during the first quarter, which brings our total development pipeline to approximately 1.6 million square feet. Importantly, our approach remains disciplined and demand-driven, prioritizing tenant-backed projects in high-convection markets. From a financial perspective, results remain solid. Total rental income increased to $76.7 million, while rental revenues reached $74 million, a 14.1% sequential increase. Also, we sustained strength across our key profitability metrics, including NOI and EBITDA. Let me now turn to the broader market environment and how we are seeing it reflected across our portfolio. Recent data has focused on rising vacancy in certain regions, particularly in the north. However, what we are seeing is better characterized as a correction, not a structural slowdown or decline in underlying demand. Markets such as Tijuana reflect more uneven dynamics, but it's important to note that this is largely due to supply from less experienced developers. Vestas' high-quality, infrastructure-ready buildings continue to outperform, reinforcing our focus on portfolio quality. We're leveraging our strength in this market and launch a new project in Tijuana during the first quarter. New construction starts in key markets such as Monterrey have declined significantly year over year, reflecting a market that is adjusting quickly. In Mexico City, fundamentals remain strong. According to CBRE, Mexico City gross absorption reached approximately 6.7 million square feet during the quarter, with pre-leasing accounting for most of the activity and more than half of new supply delivered already pre-leased. This dynamic reinforces both demand debt and forward visibility across this market. It has also led us to launch the two new projects in Mexico City, which I have described. In Guadalajara, we are seeing healthy demand, particularly from electronics and technology-related tenants, a key driver of activity in the market. During the quarter, we successfully pre-leased the two best of buildings on the construction, underscoring the strength of underlying fundamentals and the sustained momentum we're seeing in the region. Let me now turn to how we are executing against these environments. Our strategy remains consistent. Vesta will grow through a high-quality, work-rated portfolio developed with discipline and aligned with the long-term demand. As I have commented, our focus is on portfolio quality, not scale, ensuring that each asset meets the highest standards of infrastructure, energy, and operational performance. This is particularly relevant in the current environment. Despite the competition for stabilized assets we are seeing, we believe there is greater opportunity in selective development, where we can create value and differentiate through product quality and tenant alignment. Before I conclude, let me briefly touch on our capital position and outlook. As Juan will discuss, we continue to operate with a strong and flexible balance sheet. maintaining a disciplined approach to leverage and liquidity, which enables us to execute our strategy while navigating uncertainty. Capital allocation remains selective, with a focus on high-quality projects supporting efficient growth. In closing, we are highly confident in our outlook. While near-term uncertainty persists, the underlying structural drivers underpinning our business are stronger than ever. Tenant activity continues to be robust. Foreign direct investment is maintaining strong momentum and manufacturing exports at a record levels. At the same time, higher value industries such as electronics, aerospace, semiconductors, and data infrastructure are accelerating demand for Vestas premium properties. We also expect a more favorable interest rate environment together with greater clarity around USMCA to support activity in the quarters ahead. Let me now turn the call over to Juan to review our financial results in more detail. Thank you, Lorenzo. Good day, everyone. Let me start with a brief overview of our first quarter results. On the top line, we delivered a solid start of the year, with total revenues increasing 14.4% to 76.7 million, primarily driven by rental income from new leases and inflationary adjustments across our portfolios. In terms of currency mix, 88.9% of first quarter 2026 rental revenues were U.S. dollar denominated compared to 89.7% in the same period last year. Turning to profitability, adjusted net operating income increased 13.4% to $70.4.7 million. Our adjusted NOI margins decreased 52 basis points year-on-year to 95.1%, reflecting higher operating property costs relative to rental revenues in the quarter. Adjusted EBITDA totaled $62.1 million, 12.4% year-over-year, while margin contracted by 130 basis points to 83.9%, primarily driven by higher operating and administrative expenses during the quarter. Best tax equity, excluding current tax, was $43.1 million, compared to $45.1 million in the first quarter of 2025. The decrease was primarily due to higher interest expense in the first quarter of 2026 compared to the same period in 2025. We closed the quarter with pre-tax income of $97.9 million compared to $28.6 million in 2025. This increase was primarily due to higher gains in the valuation of investment properties, higher interest income, and higher other incomes. This was partially offset by higher interest expense, reflecting an increase in the debt balance during the period, along with the increase in foreign exchange losses and other expenses. Turning to our balance sheet, we ended the quarter with $206 million in cash-to-cash equivalents and total debt of $1.2 billion. Net debt to EBITDA stood at 4.1 times and our loan-to-value ratio was 26%, down from the 28.1% at the year's end, reflecting the prepayment of the remaining 118 million MetLife Street facilities. As of the end of the first quarter, we have no secure debt, with 100% of our debt denominated with U.S. dollars and 87.2% of our interest rate exposure on a fixed-rate basis. Finally, Consistent with our balanced capital allocation strategy, on April 22, 2026, Best Pass shareholders approved a 74.8 million dividend for 2026, representing a 7.5% increase year over year. On May 6, we will pay a first quarter cash dividend. This concludes our first quarter 2026 review Operator, could you please open the floor for questions?