Fibra Danhos

Good day, everyone, and welcome to the Fibra de Año's fourth quarter 2025 conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. You may register to ask a question at any time by pressing star 1 on your phone. Please note this call is being recorded, and I'll be standing by for assistance. Now, it's my pleasure to turn the call over to your host, Roligo Martinez. Please go ahead, Roligo.

Thank you very much, Alice. Hello, everyone. I am Rodrigo Martinez, and I run Investor Relations for the company. At this time, I'd like to welcome everyone to Fibra Danos 2025 Fourth Quarter Conference Call. We should report yesterday. If you did not receive a copy, please do not hesitate and contact us. Please be aware that they are also available on our website and the Mexico Stock Exchange website. Before we begin the call today, I would like to remind you that forward-looking statements made during today's call do not account for future economic circumstances industry conditions, and company performance or financial results. These statements are subject to a number of risks and uncertainties. All figures included herein are prepared in accordance to IFRS standards and are stated in nominal Mexican pesos unless otherwise noted. Joining today from Fibra Danos in Mexico City is Mr. Salvador Daniel, CEO of Fibra Danos, Mr. Jorge Serrano, CFO of Fibra Danos, and Mr. Elias Mirraji. Now I will turn the call for questions. Jorge Serrano for opening remarks and financial operating indicators. Jorge, please go ahead.

Thanks, Rodrigo. Good morning. Thanks for joining us today. Let me share some initial remarks on Fibra Dano's fourth quarter. Despite a softer consumption environment, financial and operating results reflect steadiness on our operating portfolio. complemented by the recent contribution from industrial projects. Increased revenues were explained by higher fixed rents with sound occupation levels, overage, and positive lead spreads that more than compensated the effect of the dollar depreciation on our office portfolio. Revenue was up 6.5% on the quarter and 11.8% on the year. NOI margin of 78%. for the quarter and 78.5% for the year reflect expense control and operating efficiencies. Quarterly AFFO reached 1.3 billion pesos that accounted for 80 cents per CBFI and accumulated close to 4.6 billion in the year or 2.85 pesos per CBFI. Distribution for the quarter was determined at the same level of 45 cents per CBFI. which amounts to $724 million and represented a payout ratio of 56%. Capital expenditures on new developments during 2025 were financed with non-distributed cash flow plus additional debt of $1.5 billion. Balance sheet, however, remained strong with only 13.5% leverage. Our $3 billion Segure Danos 16, will reach maturity by mid-year. We are analyzing the best alternatives in order to fulfill our commitment and optimize financial expense. Danos maintains AAA local debt rating. New projects, Nisuk and Oaxaca, have gained momentum on its construction phase and report progress as scheduled. Industrial projects on development stage are making progress as well, and expect to deliver quick and sound cash flow returns. execution capabilities, high quality construction standards, and have become a reference in the logistic corridor located in the north of Mexico City metropolitan area. Overall, GLA increased 15% year-over-year and reached 1.25 million square meters with an overall portfolio occupancy of 91.5%. Resale occupancy reaching 94.2%, office 77%, and industrial 100%. Least spread on 24,000 square meter renewal agreements was 3.9% during the quarter, which is in line or above inflation levels. Thanks, and we may now turn to the Q&A session.

Thank you. If you'd like to ask a question, please press star 1 on your phone now, and you'll be placed into the queue in the order receipt. Again, everyone, press star 1, and we'll pause briefly to form our queue. And our first question today will come from Jarrell of Goldman Sachs. Please go ahead. Thanks for taking my questions. I'm actually focused on your B2 portfolio. One thing that we found interesting is that when we look at the rentals, we see that the fixed rent portion went up, but the old version went down. So just want to understand a little bit more about that dynamic. And also, we saw a couple of the malls, three of them that saw a decline one year on overall rental revenues. So I just wanted to get a sense of of what could have driven those gone. Thank you.

Hi, how are you? This is Daniel. I mean, what we've always done and what we always do is every time we have a chance to transform variable rent to fixed rent, we do that. And sometimes you will see a decrease in the variable rent and an increase on the fixed rent because we've done that. And that's something we usually do on shopping malls. Although we have to recognize that we saw a little bit of a slowdown in the last couple of months in the consumption, although it still remains strong. We did see a minimum decrease on it. And On the other three properties you've been talking about, Parque Esmeralda is not a shopping mall. It is an office building with one tenant, which had a discount for a 10-year lease that we signed last year. So that was very important for us. It is a pretty old building. We've actually did some work on it. and one cap is on it, and it's now fully leased for the next 10 years. Parque Alameda, it's a very, very, very small shopping mall. Actually, we can barely call it a shopping mall. And we lose a tenant. We already leased that, and it's time to redo the space. So probably in the next couple of months, you will see the income coming back. And the rest, I think, it's operating in a great way. We feel very comfortable with it.

I think following up on your – while we did see that dynamic on rent, we did see that parking revenues were actually quite strong year on year. So I just wanted to get your comment on that, look at what is driving that higher execution Is it all coming through pricing? Is it an expansion of parking spaces? We just want to get a sense of the short performance.

I mean, we basically, every couple of years, we do the pricing on the parking spaces. That's something we did last year, and especially, I think, in the middle of the year. And we've seen also a little bit more people coming into the parking. We haven't expanded our parking spaces. But that's probably the natural thing about people coming back by car to the shopping malls.

Thank you. Our next question comes from Philip Aragon of JP Morgan.

Good morning, Daniel's team. Thanks for the call and for taking my question. Just a little bit on the office occupancy. I saw it drew quarter-by-quarter mostly on the Urbitech office asset you have. So, I just want to get a sense if, you know, this is just more property-related or if you guys are seeing a pickup in the office segment overall. Any color on that would be appreciated. Thank you.

I mean, especially in Urbitech, we changed our mindset. We were trying to find just one tenant for the whole building. And we changed that, and we basically took opportunity if a couple of people wanted to come into the building. And that's why you saw especially that building being leased. We actually done three floors of it, and that's why. But we've actually seen a little bit more movement in the office spaces with having more – people asking about them and companies inquiring about prices and opportunities. So we've actually seen this past semester a little bit more movement in the office spaces.

Great. Thank you.

Our next question comes from Alan Macias of Bank of America.

Good morning and thank you for the call. Just a quick question on distribution per certificate. If you can share your thoughts on what we should be thinking about for this year, what level and what level of loan to value should we be thinking for the end of the year?

Thank you. I mean, we actually think we're going to leave the distribution at the same level we've been doing in the past. We have a lot of projects in development which we need a cash requirement, and we feel that the best way to achieve them is by putting some cash in it and having some debt on it. So we feel we're going to be loan-to-value below below 15% by the end of the year, for sure. And with that and the cash flow we've been retaining, we're going to be able to achieve our goals in the new projects.

Thank you.

Once again, everyone, press star 1 for a question. Rodrigo, we have no further questions at this time. We'll turn it back over to you for any closing comments.

Thank you very much, Elvis. Everyone, please know that we are always available for any further questions that you might have, and thank you very much. See you next quarter.

That concludes our meeting today. You may now disconnect.