Fibra Prologis Reit Ctfs

Ladies and gentlemen, thank you for standing by. Today's conference call will begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Thank you. Thank you for standing by. My name is Novi and I will be your conference operator today. At this time, I would like to welcome everyone to the Fieber Prologis fourth quarter earnings call. 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 would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. We also request that you please limit your question to one. If you would like to ask another question, please press star one again to get back in the queue. Thank you. I would now like to turn the call over to Alexandra Violante, head of IR. Please go ahead.

Thank you, Novi, and good morning, everyone. Welcome to our fourth quarter 2024 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 security. Paola Diaz- forward looking statements during this call speak only as of the date of this call our actual results performance prospects or opportunities. Paola Diaz- 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 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 fibroprologist.com and download this material. Today, we will hear from Hector Ibarzabal, 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 Fede Cantu, our Head of Operations. With that, it is my pleasure to hand the call over to Hector.

Thank you, Ale, and good morning, everyone. 2024 was our 10th anniversary. My first year as CEO, and I couldn't be happier seeing all the accomplishments we delivered. Let me provide you some highlights. In March, we successfully executed a $570 million follow-on. This transaction was oversubscribed. We appreciate the trust investors have placed on Fibra Prologis. We have improved the liquidity in our certificate. which allows us to bring new investors into the name. We successfully acquired Fibra Terrapina, owning as of today almost 90% of the company. With this transaction, we are now the largest publicly traded industrial real estate company in Latin America. In addition, we added more than 100 new customers to our base. We have initiated the pre-marketing stage for our asset recycling initiative. First indications show real interest from the market for these good quality assets. We will provide more color as this process moves forward. We keep delivering strong financial and operational results. We accomplished high occupancy, and importantly, we have another record rate change with an impressive 61% increase on rollover. Additional to Terrapina, during 2024, we acquired $284 million of new assets, mostly in Mexico City, acquired from a third party developer. Under a challenging geopolitical environment, I would like to describe our views on market conditions. Uncertainty has increased, particularly regarding trade, as the U.S. has implemented incremental 10% tariffs on Chinese products and postponed for next week similar 25% tariffs on Mexican and Canadian imports. Our market perspective is the following. The complexity of North America's supply chain has been built over more than three decades, with massive investment in Mexico mainly from U.S. companies. As the U.S. itself practically does not have sufficient labor willing to work in manufacturing, the advantage of our location is evident. We believe Mexico is the best alternative to develop and expand new operations. Due to tariff noise, we have indeed seen a slowdown on decision-making and leasing activity in the manufacturing markets. However, we believe demand for manufacturing space will restart in full force once certainty is recovered, as projects have not been canceled but deferred. On the consumption side, we had a 3% increase in real retail sales during 2024. which is substantially higher than GDP growth, consistent to what has occurred over the last three years. Although we have seen a consumption slowdown since last July, we are positive on the outlook for demand of logistics and consumption-related facilities. In addition, e-commerce continues to grow at high double-digit rates. with Mexico consistently ranking among the top five fastest growing e-commerce markets worldwide. Net absorption in our sixth market last year was almost 33 million square feet, lower than peak of 38 million presented in 2023, but still a very positive figure. 2024 vacancy, including sublease space, was 3.6%. stable quarter over quarter, and 240 basis points higher versus previous year. Let me provide some additional color per market as we continue to see differentiation among them. Manufacturing markets in the border saw 6 million square feet of net absorption, an important decline compared to the record 14 million square feet in 2023. We believe this was mainly driven by slower decision making given uncertainty regarding tariffs. There was an increase in period and vacancy for border markets from 1.6% to 5.7%. On the other hand, consumption markets like Mexico City and Guadalajara saw an increase in net absorption from 10 to 12 million square feet, driven mainly by e-commerce. Vacancy has consistently remained in the 1 to 3% range. We consider Monterrey a hybrid market, given that logistics and consumption accounted for 45% of last year net absorption. This market saw a marginal decline in net absorption from 15 to 14 million square feet, all the way to the lower decision making on the manufacturing sector. Consumption vacancy in the year increased from less than 1% to 2.7%. To summarize, 2024 was an exceptional year and, under my perspective, the best one since Fibra Prologis inception, as we almost doubled our footprint while keeping the operational metrics at outstanding levels. We will remain focused in our strategy, keeping discipline and creating value through rent revenue improvement. We are confident in our portfolio's resilience and our ability to navigate through current volatility. Also, we have a solid balance sheet that leave us well positioned to take advantage of market opportunities. Finally, as you all know, we remain committed to our shareholders, placing always their interest first. With that, I'll pass the call over to Jorge.