Fibra Prologis Reit Ctfs

Good day, and thank you for standing by. Welcome to the Freebrook Prologis first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you need to press the one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Ms. Matej Chavez, Investor Relations for Freebrook Prologis. Please go ahead.

Thank you, Rochelle, and good morning, everyone. Thank you for joining us for our first quarter 2021 earnings conference call. Today, we will hear from Liz Gutierrez, our CEO, who will discuss our strategy and market conditions, and from Jorge Giro, our Senior Vice President of Finance, who will review results. Also joining us today is Hector Igor Zaval, our Managing Director. Before we begin our prepared remarks, I would like to remind everyone that all the information presented in this conference call is proprietary and all rights are reserved. The information has been prepared solely for information purposes and is not a solicitation of an offer to buy or sell any securities. Forward-looking statements during this call are subject to a number of risks and uncertainties that were actually resolved performance, prospects, or opportunities may differ materially from those expressed in or implied by the forward-looking statements. These forward-looking statements are current as of the date of this call. We take no obligation to publicly update, revise any forward-looking statements after completion of this call. without the result of new information, future events, or otherwise, except are required by you. Additionally, during this call, we may refer to certain non-accounting financial measures. As is our practice, we have prepared supplementary materials that we may reference during the call as well. If you have not already done so, I will encourage you to visit our website at peerrepology.com and download this material. With that, it is my pleasure to hand the call over to Luis.

Thank you, Montse, and good morning, everyone. The positive momentum from fourth quarter has carried into 2021, as evidenced by strong operating and financial results. We feel an even greater level of confidence in our outlook. Let me discuss the highlights for the quarter. We had a healthy increase in cash flow in the quarter, given the strong leasing activity and the revenues from last year's acquisitions. This is evidenced by the cash, same-store NOI, and the quarterly growth in FFO and AFFO. Our operating metrics were solid, and our period of occupancy was one of the highest of any first quarter since IPO in June of 2014. We expect to maintain this level of occupancy given the low leasing role for the remainder of the year. We collected 99% of the first quarter rent and have had no bad debt issues. The resilience of the portfolio during times of crisis is a testament of the credit risk management, solid client list, and the geographic and sector diversification of our portfolio. of three non-strategic buildings in Guadalajara and reinvested the proceeds back into three properties in Toluca and one last touch facility in Mexico City. These properties add state-of-the-art facilities to our portfolio. We have recast our line of credit, providing the liquidity and flexibility to grow with an accretive cost of debt. Our balance sheet at the current leverage is one of the best positions in the sector. Logistic real estate continues to outperform the broader economy globally, and Mexico is not the exception. We expect 2021 to be one of the best years for the industry, given the structural changes underway, including faster fulfillment times and the building of higher inventory levels. As a result, demand remains robust. For the quarter, net absorption in our six markets totaled 6.7 million square feet, with a market vacancy of 3.4%, which is near historic low. For example, the border market ended with a 2% vacancy as a result of the strong activity in the manufacturing sector. The pipeline is solid across all of our six markets, We're expecting demand and supply to move in tandem and keep a balance for the rest of the year. We anticipate this will result in higher market rental rates. Let me spend a few moments on what we're seeing on the ground. On the logistics side, e-commerce continues to be a significant driver of demand. We continue to see aggressive expansion plans which are broad-based. industry leaders expanding their footprint in middle cities and consumer companies beginning to plan new facilities in order to compete. We are well positioned to capture the additional demand of new projects under construction. By the way of example, we entered into a long-term lease in our Santa Maria infill project in Mexico City. This shows that this is a good time to build a last-mile portfolio. Consequently, as I just mentioned, we recently announced a new investment in this new sector. On the manufacturing side, the success of the vaccine program is opening up the economy of the United States faster, and this is driving additional demand for products from Mexico. In light of the ongoing trade tensions between the U.S. and China, some companies have taken the decision of opening a secondary operation as a backup. in case they are forced to shut down. Mexico has been a positive beneficiary of this additional demand. Evidence of that is the signing from Fibra Prologis of two letters of intent for expansions of close to half a million square feet, with current lines from our Monterey market. These developments will be stabilized mid-next year. In addition, markets with sufficient land supply normally have enough spec product under development and no built-to-suits. However, given the high level of demand, there is an unusual pipeline of built-to-suits for manufacturing clients in Tijuana, Reynosa, Juarez, and Monterrey. A sponsor with its land bank is well-positioned to win additional business. These properties will be offered in exclusivity to FEBR. Before concluding, let me summarize our views for the rest of 2021. Logistic real estate continues to be a favored asset class. Investors are strategically reassessing their property type focus. In operations, we will continue to concentrate on pushing rent and turnover. On the deployment front, we expect to be active and opportunistic. We will continue to acquire the Prologis development pipeline as well as explore opportunities from third parties to the extent they align with our disciplined investment strategy. Our banner sheet provides us with major competitive advantage. The flexibility and investment capacity allows us to take advantage of opportunities as they arise. I'm very proud of our team. There is strong culture of customer service, ESG, and excellence which drives seamless execution in challenging times. We believe at current pricing, Fibra Prologis is a compelling opportunity. It provides an attractive corner return in dollar terms, an opportunity for capital appreciation. We remain committed to creating value for certificate holders. Our portfolio is resilient and built to outperform in any environment. With that, let me turn the call over to Jorge.