Fibra Prologis Reit Ctfs

My name is David, and I will be your conference operator today. At this time, I'd like to welcome everyone to the FIBRA Prologis first quarter earnings conference call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, simply press star 1 once again. Thank you, Alexandra Violante, head of IR. You may begin your conference.

Thank you, David, and good morning, everyone. Welcome to our first quarter 2022 earnings conference call. 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 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 statement. 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 as 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 the call as well. If you have not already done so, I will encourage you to visit our website at vibraprologist.com and download these materials. Today, we will hear from Luis 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 and guidance. 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. There is a positive momentum that has been carried out from last year. In spite of the recent geopolitical events, the logistic real estate sector keeps expanding at a rapid pace. This is reflected in our strong operational and financial results above expectations, which gives us confidence in our outlook for the year. Given the current market dynamics we're seeing, we are adjusting up our guidance and Jorge will provide more color. Let me give you some highlights. FFO and AFFO posted one of the highest growths since IPO in June of 2014. Occupancy closed at historic highs near 98%, reflecting favorable market conditions and the quality of our portfolio. Rental growth on rollover accelerated this quarter to 11%, which is reflected in the company's same-store NOI. Valuations have increased 6% quarter over quarter and 19% year over year, given the dynamics we're seeing we think that these values are still lagging. We have already sold 50% of the rollover for the year. On the external front, we acquired 670,000 square feet for around $17 million. These properties came from third-party acquisitions and from our sponsors' pipeline. Additionally, on the ESG front, on the environmental side, we achieved 50% of green certifications in our portfolio one year in advance. Our commitment on leadership to sustainability shows in our actions. Fundamental drivers such as e-commerce and structural shifts derived from supply chain disruptions that continue to foster nearshoring and foreign investment in manufacturing will keep on driving the demand in our markets. Demand was 8 million square feet in our six markets, outpacing supply by more than 2.5 million square feet, resulting in vacancy declining to a new record, and this is low of 1.1%. Barriers to supply, such as land scarcity and increased development costs, unbalanced the market. Our markets registered 6 million square feet of new supply In the case of Monterey, Tijuana, and Juarez, this imbalance underpinned a higher occupancy, facilitating rents to rise. With this low vacancy, market rents are expected to grow. This first quarter, we saw a rental increase of 5.3%. The industrial real estate sector has proven resilient against inflation and economic downturns. In an extreme case of volatility or uncertainty, it is reasonable to expect that our tenants increase their inventory, hence their demand for space. Let me spend a few moments on what we're seeing on the ground. On the manufacturing side, current events are making companies review the supply chain and bring manufacturing closer to the end consumer, initiating a nearshoring process. In addition, as a result of the pandemic and economic response, there is a labor shortage. in the United States, and Mexico is well positioned to take advantage of these two trends. Manufacturing is now two-thirds of overall industrial demand. It is broad-based among electronics, auto, medical, household products, distribution, among others. We continue to see several requests from clients requiring built-in suits in the border market and moderate. making evident the lack of available space and the need for future space for our clients. On the logistics front, e-commerce remains to be a key driver of demand near big urban areas. Despite the rising mobility since the last part of 2021, consumers changed their behavior permanently during the pandemic, favoring omnichannel retailing. Due to this, it is expected for these customers to have an increase in their SKUs of marketplaces and additional demand for high-quality space. Current deals are bigger in size than in the past. We see more activity outside of the toll booths, given there is a lack of space in Mexico City and rents are growing. This quarter, we renewed some leases with significant increases in their rent. which indicates that the clients are more open to the new market conditions. We have a strategic balance portfolio and customer base, which allows us to take advantage of tailwinds in both the manufacturing and logistics sectors. Logistics real estate continues to be the favorite asset class among investors, and Fever Prologis is well positioned to outperform. In summary, Manufacturing exports and e-commerce will continue to grow, and these trends will persist during 2022. On the internal growth side, market rents continue to increment. Our mark-to-market increased to 16%. This will be a resilient source for this year and future earnings as leases roll to market. On the external front, we will continue to be active. Our capital deployment plan to invest up to $250 million is on track. In addition, our sponsor has a development pipeline of around 6 million square feet for the next 12 months. These assets are well located and no other competitor has access to anything remotely close to the quality or size. On the vanishing, it remains strong. Our team has done an excellent job obtaining a low cost of fixed debt while extending maturities and also maintaining flexibility to keep growing in a rising interest rate environment. This will be a major competitive advantage as we go into the future. Finally, we remain committed to our shareholders and we put their interests first. With that, let me turn the call over to Jorge. Thank you.