Fibra Danhos

Good day, everyone, and welcome to the Fibra de Año's first quarter 2026 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. Please note this call is being recorded, and I'll be standing by for assistance. Now, I'll turn the call over to your host, Rodrigo Martinez. Please go ahead, Rodrigo.

Thank you, Elvis. 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 2026 First Quarter Conference Call. We showed our quarterly reports 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 in Mexico's Stock Exchange website. Before we begin our call today, I would like to remind you all that forward statements made during today's call do not account 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 were 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 Serranos, CFO of Fibra Danos, and Mr. Elias Misrachkin. Now I will turn the call to Jorge Sarralo for opening remarks of financial and operating indicators. Jorge, please go ahead.

Good morning. Thanks for joining us today. Fibra Danos posted sound financial and operating results for the first quarter of 2026. Fixed rent and 8% growth. explained by the full contribution of Coquitlam and Palomas industrial projects, indexation of lease agreements, and improved occupancy levels in our office portfolio. Overage and parking revenues increased almost 13% and 18% respectively, based on strong sales from our tenants and tariff adjustments in our properties. Consequently, total revenue during the quarter increased 9.4% year-over-year, while operating expenses did so by 7%, resulting in a 10% increase in net operating income and 11% on EBITDA, with margin improvements. AFFO per CBFI accounted for 76 cents, equivalent to 1.2 billion pesos, and almost 16% higher year-in-year. Distribution was determined at 45 cents per CBFI, that represents a payout ratio of 59%. GLA on our operating portfolio increased by 15% year-over-year, and overall occupancy level grew 220 basis points, reaching almost 92%. Least credit on 20,000 square meter renewal agreements on our operating portfolio was 4.3%. CAPEX pipeline continues to gain momentum, particularly in Palomas and Edom Express industrial projects that are due to deliver by year-end, while Parque Oaxaca and IZUC are making progress and running on schedule as well. Balance sheet remains with only 13.6% leverage. During the quarter, Fitch Ratty played rating for Fibra Danos EBFIs and Arred bond issuances. Fibra Danos shareholders' meeting took place on March 27 with a general quorum of assistance of more than 80% and resulting on the approval of all the agenda items with a favorable vote of more than 95% on each of them. Thanks, and we may now turn to the Q&A session.

Yes, if you'd like to ask a question, please press star 1 on your phone now. Again, star 1 for a question, and we'll pause briefly to form our queue. Our first question today comes from Igor Machado of Goldman Sachs. Please go ahead.

Hi, thanks for taking my question. So, the first one is, you know, with maturities, and you have a significant amount of maturities coming through sort of with 2.40, so 28% of total, right? And your maturities spread is around 7% in this quarter, so just want you to better understand I could respect the way these threats are going forward with and also giving the security.

Something happens with, we cannot understand well. Can you repeat the question? Yes, sir. Can you hear me well?

We can hear you. I mean, we cannot hear you clearly.

Yes, that's better. I think you're closer now to the microphone. Thanks. Yeah.

So the first question is not only about this. So you have a significant amount of liquidity for the retain portfolio. So I just want you to understand why could we expect the liquidity threat going forward if they move up? Also, given the significance of the maturities, if you see an opportunity to do a material change in your tenant for the retail portfolio.

Hi, Igor. This is Elias Mizrahi. So the maturities for our retail portfolio, historically, we have an average term of approximately four years. So around 25% of our contracts expire every year. And we actually do renovations on a three to five year renewals at the most, precisely to have these renovation windows. And that's where we can push rents up and have leasing spreads. So on retail, we continue to see lease spreads above inflation in general. And I think that's the question, right?

Yes.

Was there anything further, Igor?

Sorry. If it's possible, I have another question here. Could you comment on increasing construction costs in the Middle East?

We haven't seen an impact in costs because of the war in the Middle East. Let me pass this to Chava. He has some further remarks.

I mean, we haven't seen a significant change in prices. None of our contractors have let us know that we have to be prepared for it. So we're not expecting a big change on the increases in cost of construction. I'll do it for the moment.

Okay, thank you.

Our next question today comes from Gordon Lee of BTG Pastoral.

Hi, good morning. Thank you very much for the call. Two questions. I was wondering on the industrial side, now that that segment is becoming more relevant for you, will you be looking at any sort of potential M&A opportunities? And I'm not thinking of Macquarie, but I'm thinking more of, you know, there's the expectation that there will be a pipeline through the maturation of secadas and set of pieces of properties hitting the market. Would you look to acquire properties or do you look to focus 100% on developing them? And then the second question is just on Torre de Reyes. You know, that's one of your sort of flagship office properties where we where we really haven't seen sort of improvements in occupancy in the last two or three quarters. So I was wondering whether you think that's still something that's just cyclical, or do you think there's something about the property that may require, you know, more work, repositioning, something of that nature? Thank you.

Hi, Clive. How are you? This is Salvador. I mean, talking about auditory radius, it's 100% leased.

Sorry, I meant Toledo. I said Toledo, so sorry about that.

Okay. I mean, in Toledo, we've been working very hard. It was hit by the pandemic, and we lost some tenants. But we're seeing a gradually increasing occupancy, and we expect it to be even better in the next three months or so. We feel comfortable with it. And we believe we're going to see good numbers in the next year to come. So, as you know, the office segment is still just recuperating after the pandemic, but we've seen a lot more movement in clients and interest in spaces, especially in the last three months. So, I mean, I hope we'll be able to to fulfill our into contract with expectations. But we're, I mean, happy with it. And in terms of industrial, of course, we are always open to new opportunities. As you know, we prefer to develop because in that way we can actually get much higher yields with it. But But if we find a good opportunity in the market, we'll take advantage of it.

Perfect. Thank you. Thanks very much.

And from JP Morgan, we have Felipe Barragan.

Hey, good morning, Tima. Thanks for taking my question. So we've seen a good uptick on the office occupancy. Now coming close to 8%. I just want to get an update from what you guys commented last quarter. If we could see perhaps you guys breaking above the 80% threshold that you guys have been struggling to recover. Thank you.

Yes, we're expecting this to grow. I mean, it's not an easy task. Obviously, it's much better, but it's not still thriving. So we expect it to be a better number each trimester and to actually fill up our buildings in the next something like that.

Okay, thank you. And I have a second question real quick. So last quarter you said there was a stop to consumer demand that wasn't extremely prominent. Could you guys update what you've seen on the consumer environment for this quarter?

I mean, we're seeing it to be basically just based on a line, not increasing, not decreasing. It's not a high. consumer action. But we believe that things are getting much better, especially with the World Cup coming into Mexico. We expect that, as you know, our shopping malls are in Mexico City. So we expect this to contribute in a positive way to the portfolio. But the truth is that we're basically just flat online.

Great. That was very clear. Thank you.

Next we have Alan Macias of Bank of America.

Hi, good morning and thank you for the call. Just a question on land bank. If you can remind us your strategy of acquiring land in Mexico City for the industrial sector and what are you seeing there in terms of land prices and perhaps have anything changed in terms of licensing and permits? Thank you.

I think we're in a good place on acquiring some land with licensing and permitting. We're working very hard on it. We've been doing it in the past couple of years, and they're getting just mature to be almost ready to be developed. So we expect to give good notice in the next probably six months about it. But we're going to continue into the industrial development. We feel comfortable with it. I think we're doing a good job with it. And we are working very hard to basically just be able to, in the next few months or four months or 20 months, able to give a good notice to the market.

Thank you. Once again, everyone, press star 1 for a question. And we have no further questions at this time, but I'm going to go back over to you for any additional or closing comments.

Thank you very much, Luis. And thank you, everyone, for joining us today. Please do not hesitate to contact us, Salvador, Elias, Jorge, or myself for any further questions. We're always available, and we'll see you on the next conference call. Thank you very much.

That concludes our meeting today. Thank you for joining. You may now disconnect.