Fibra Prologis Reit Ctfs

Thank you for standing by and welcome to the FIBRA Prologies second quarter earnings. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today. Ms. Alexandra Violante of IR. Thank you. Please go ahead, ma'am.

Thank you, Justin, and good morning, everyone. Welcome to our second quarter 2021 earnings conference call. Before we begin our prepared remarks, I would like to remind everyone that all information presented in this conference call is proprietary and all rights are reserved. The information has been prepared only for information purposes and is not a solicitation of an offer to buy or sell any securities. Forward-looking statements during this call speak only as of the date of this call. Our actual results, performance, prospects, or opportunities may differ materially from those expressed in or implied by the forward-looking statements. Additionally, during this call, we may refer to certain non-accounting financial measures. The company does not assume any obligations to update or revise any of these forward-looking statements in the future, whether it's a result of new information, future events, or otherwise, except as required by law. As is our practice, we have prepared supplementary materials that we may reference during this call as well. If you have not already done so, I will encourage you to visit our website at fibraprologies.com and download this material. Today, we will hear from Luis Gutierrez, our CEO, who will discuss our strategy and market conditions, and from Jorge Giró, our Senior Vice President of Finance, who will review results. Also joining us today is Hector Ibarzabal, our Managing Director. With that, it is my pleasure to hand the call over to Luis.

Thank you, Ale, and good morning, everyone. Customer demand in 2021 has been accelerating, and what we're seeing might be the best year for logistic real estate globally, and Mexico is not the exception. This is reflected in our second quarter results. We have delivered a strong financial and operational performance. Let me provide some highlights. Occupancy remains healthy. We have addressed more than half of the 2021 expirations, and the rent change increased almost 8% in U.S. dollar terms. It's from cash flow generation for the year, with the highest same-store cash NOI in any single quarter, especially after the rent concessions arrived from the pandemic. And our FFO and AFFO increased significantly This growth mainly was driven by high rents achieved through our leasing activity, a decrease in interest expense, and the recent acquisitions. In addition, as part of our financing strategy, we recently completed a restructuring of our debt. This allowed us to have lower cost of capital and a stronger balance sheet. Jorge will provide more color on this. We recently acquired a property from our sponsor for an investment of approximately $20 million, and that will contribute 243,000 square feet to our portfolio. This property fits our investment strategy of being located in an irreplaceable location and leads to some of the best global customers. Consumption and manufacturing exports have been leading the economic recovery. The strong rebound of the US economy, the continuous interest from companies to redesign their supply chains closer to the market, relocating mainly from China. The structural changes arrived from e-commerce and companies revealing their inventories will make 2021 the best year for logistics real estate. The map of space in the last 12 months was 22.8 million square feet in our six markets. which exceeded supply, lowering vacancy rate to 3% for the quarter and 90 basis points lower than last year. We expect more than 50% of additional space demand in 2020. This is brought across our markets and Mexico City, Monterey, Juarez, and Tijuana to outperform. Guadalajara is also turning around. The vacancy that we're seeing is decreasing and market occupancy is nearing 100%. Respect in this environment grants to increase in most of our markets. This is driven by federal demand and supply fundamentals, coupled with inflation pressures, high construction costs, and land prices going up in our most land-constrained markets. Let me briefly discuss what we're seeing on the ground. On the manufacturing side, our sponsor is in final negotiations to lease 100% of a building in Juarez from existing customers that are growing with us. We have seen an increased number of companies looking for built-to-suits or pre-leasing. This demand is across all of our manufacturing market and companies from different sectors and countries that are required to relocate from Asia to consolidate and or expand their operations. Prologis is well positioned to take advantage of these opportunities given the strategic land positions. On the logistic front, e-commerce continues to lead the activity in the market and we are the largest landlord for predominant pure e-commerce players. It is important to remember that the shutdown only accelerated a portion of the structural change expected outlook for the segment. There is still significant room for growth. In Mexico City, we're closing additional space with one of the market leaders. Demand for space was brought across sectors, and we are expecting rents to rise as a result of the land's scarcity. Logistic real estate has been the preferred asset class. It has attracted new investors and developers to our markets. As a result, our portfolio valuations reach a record increase year-over-year, and this will boost the overall return performance for our investors. Mexico real estate values continue to be attractive on a relative basis if compared to other countries. We believe it offers the best foreign returns and a higher risk-adjusted spread. Cedar Prologis is very well positioned to take advantage of the opportunities that this rising market is offering. Our six markets are the most active, and our focus strategy to increase our market share has worked. Our best-in-class portfolio of properties has been resilient and is positioned to capture the upside on market rents. Our exclusive access to the Pelagio development pipeline has been a competitive advantage. Our sponsor will increase its properties under development and replenish the land bank, which will be uniquely positioned for organic growth in the short and medium term. Our balance sheet is the best in the sector, as it provides the liquidity and flexibility to continue our growth lines. Finally, I'm very proud of our sustainability performance and leadership. This year, we were included for the second time in the S&P BNB ESG index, and we just published our first sustainability report. ESG is embedded in the DNA of the company, and we will continue to work on those areas that need improvement. With that, let me turn the call over to Paul.