Q2 2026 Fibra Mty SAPI de CV Earnings Call
Operator: Presented in this conference 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. It is important to note that the presentation related to this conference is available at www.fibramty.com, and recordings of the call will be available on the website of the company in the next two hours. If you are connected using our webcast tool, you have the option to download the presentation in order to move the slides at your own pace. Let me remind you that the information discussed in today's call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties.
Speaker #1: Presented in this conference 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.
Speaker #1: It is important to note that the presentation related to this conference is available at www.fibramty.com and recordings of the call will be available on the website of the company in the next 2 hours.
Speaker #1: If you are connected using our webcast tool, you have the option to download the presentation in order to move the slides at your own pace.
Speaker #1: Let me remind you that the information discussed in today's call may include forward-looking statements. On the company's future financial performance and prospects, which are subject to risks and uncertainties, additionally, during this call we may refer to certain non-accounting financial measures' actual results may materially differ and the company advises not to rely on these forward-looking statements favor Monterey undertakes no obligation to publicly update or revise any forward-looking statement.
Operator: Additionally, during this call, we may refer to certain non-accounting financial measures. Actual results may materially differ. The company advises not to rely on these forward-looking statements. Fibra Monterrey undertakes no obligation to publicly update or revise any forward-looking statement. With us this morning from Fibra Monterrey, we have Mr. Jorge Ávalos, CEO; Jaime Martínez, CFO; Javier Llaca, COO and CIO; Eduardo Elizondo, Legal Counsel; and César Rubalcava with investor relations. They will discuss the most important strategic, financial, and operating aspects of the quarter.
Speaker #1: With us this morning from Fibra Monterey, we have Mr. Jorge Avalos, CEO, Jaime Martinez, CFO, Javier Llaca, COO, and CIO, Eduardo Elizondo, legal counsel, and Cesar Rubalcava, with investor relations.
Speaker #1: They will discuss the most important strategic financial and operating aspects of the quarter. I'll now turn the call over to Mr. Jorge Avalos.
Operator: I'll now turn the call over to Mr. Jorge Ávalos.
Speaker #2: Thank you and good morning, everyone. And thank you for joining us today. The second quarter of 2026 marked a defining moment for Fibra's Monterey history.
Jorge Ávalos Carpinteyro: Thank you. Good morning, everyone, and thank you for joining us today. The Q2 of 2026 marks a defining moment for Fibra Monterrey's history. The successful completion of our tender offer for Fibra Macquarie, with more than 80% of its outstanding certificates, represents the most significant transaction we've ever made. More importantly, the combination fundamentally transforms our platform by expanding its scale, increasing diversification, and positioning Fibra Monterrey among Latin America's leading industrial real estate companies. As expected, Fibra Macquarie's contribution to Q2 results reflects only the period following the settlement of the tender offer. Going forward, our results will increasingly reflect the full earnings capacity of the combined platform as integration advances and synergies begin to materialize. I would like to recognize the teams at Fibra Monterrey, MPA, which is Fibra Macquarie Operating Real Estate Platform, and Macquarie Asset Management.
Speaker #2: The successful completion of our tender offer for Fibra Macquarie with more than 80% of its outstanding certificates represents the most significant transaction we've ever made.
Speaker #2: More importantly, the combination from the mentally transforms our platform by expanding its scale positioning Fibra Monterey among Latin America's leading industrial real estate companies.
Speaker #2: As expected, Fibra Macquarie's contribution to second quarter results reflects only the period following the settlement of the tender offer. Going forward, our results will increasingly reflect the full earnings capacity of the combined platform as integration advances and synergies begin to materialize.
Speaker #2: I would like to recognize the teams at Fibra Monterey MPA, which is Fibra Macquarie Operating Real Estate Platform, and Macquarie Asset Management. Their professionalism, commitment, and countless hours of work made possible the first consolidated report possible.
Jorge Ávalos Carpinteyro: Their professionalism, commitment, and countless hours of work made possible the first consolidated report possible, an effort that required extraordinary coordination across both organizations. Today, we're not simply reporting another quarter. We're marking the beginning on a new chapter. When we founded Fibra Monterrey more than a decade ago, we had a very clear vision. We wanted to build a different kind of REIT based on disciplined capital allocation, internal management, strong corporate governance, and full alignment with our investors. This transaction validates that vision. It demonstrates that a company built on transparency, discipline, and long-term thinking can successfully execute one of the largest and most complex real estate transactions in Mexico's history while maintaining the confidence of investors, lenders, regulators, and business partners.
Speaker #2: An effort that required extraordinary coordination across both organizations. Today, we're not simply reporting another quarter. We're marking the beginning on a new chapter. When we founded Fibra Monterey more than a decade ago, we had a very clear vision.
Speaker #2: We wanted to build a different kind of REIT. Based on disciplined capital allocation, internal management, strong corporate governance, and full alignment with our investors.
Speaker #2: These transactions validate that vision. It demonstrates that a company built on transparency, discipline, and long-term thinking can successfully execute one of the largest and most complex real estate transactions in Mexico's history while maintaining the confidence of investors' lenders' regulators' and business partners.
Speaker #2: The strong support we received throughout the process reflects the market confidence not only in the strategic rationale of the combination but also in our ability to execute with discipline and creative long-term value.
Jorge Ávalos Carpinteyro: The strong support we received throughout the process reflects the market confidence not only in the strategic rationale of the combination, but also in our ability to create long-term value. The integration of MPA is equally important. By combining the experience and capabilities of both organizations, we are creating a stronger operating platform with broader experience in property management, development, engineering, and maintenance. This will support operating efficiencies, accelerate future growth opportunities, and preserve best-in-class service for our tenants. Together with the follow-on offering completed earlier this year, the transaction enabled us to achieve several important milestones. Our assets under management increased nearly threefold to approximately $6.56 billion. Our market cap nearly doubled to $4 billion, positioning Fibra Monterrey as the second-largest listed industrial real estate issuer on the Mexican Stock Exchange.
Speaker #2: The integration of MPA is equally important by combining the experience and capabilities of both organizations we are creating a stronger operating platform with broader experience in property management, development, engineering, and maintenance.
Speaker #2: This will support operating efficiencies accelerate future growth, opportunities, and preserve best-in-class service for our tenants. Together, with the follow-on offering completed earlier this year, the transaction enabled us to achieve several important milestones.
Speaker #2: Our assets under management increased nearly threefold to approximately $6.6 billion. Our market cap nearly doubled to $4 billion positioning Fibra Monterey as the second largest listed industrial real estate issuer on the Mexican stock exchange.
Speaker #2: Our average daily trading volume more than doubled to nearly $5.5 million reflecting a broader investor base and greater market participation. We received credit rating upgrades from S&P Global Ratings and Fitch Ratings.
Jorge Ávalos Carpinteyro: Our average daily trading volume more than doubled to nearly $5.5 million, reflecting a broader investor base and greater market participation. We received credit rating upgrades from S&P Global Ratings and Fitch Ratings. As an immediate demonstration of value creation, our NAV per share in US dollar terms increased by approximately 9%.
Speaker #2: And as an immediate demonstration of value creation, our MAV per share in US dollar terms increased by approximately 9%. With that, I will now turn the call over to Jaime and Javier who will discuss the transaction and our financial and operating performance for the quarter in greater detail.
Jorge Ávalos Carpinteyro: With that, I will now turn the call over to Jaime and Javier, who will discuss the transaction and our financial and operating performance for the quarter in greater detail.
Speaker #3: Thank you, Jorge, and good morning to everyone. As a result of the acquisition and as mentioned before, Fibra Monterey's MAV per share increased by approximately 9% in US dollars.
Jaime Martínez Trigueros: Thank you, Jorge, and good morning to everyone. As a result of the acquisition, as mentioned before, Fibra Monterrey's NAV per share increased by approximately 9% in US dollars compared with last quarter. The transaction was highly accretive on a standalone basis, supported by the relative trading to NAV valuation of both companies. Given the transaction's significant scale relative to Fibra Monterrey's pre-transaction platform, the resulting value creation is particularly meaningful for the combined entity. At the same time, our shares continue to trade at a premium of more than 10% to NAV, reflecting the market's recognition of the quality of the combined platform and Fibra Monterrey's investor-aligned business model. Moving to the next slide. During the quarter, we reached a key integration milestone by entering into an agreement with Macquarie Asset Management to internalize Fibra Macquarie's management once the agreed conditions are satisfied.
Speaker #3: Compared with last quarter, the transaction was highly accredited on a standalone basis supported by their relative trading to NAV valuations of both companies. Given the transaction's significant scale relative to Fibra Monterey's pre-transaction platform, the resulting value creation is particularly meaningful for the combined entity.
Speaker #3: At the same time, our shares continue to trade at a premium of more than 10% to NAV reflecting the market's recognition of the quality of the combined platform and Fibra Monterey's investor-aligned business model.
Speaker #3: Moving to the next slide, during the quarter, we reached a key integration milestone by entering into an agreement with Macquarie Asset Management to internalize Fibra Macquarie's management wants they agreed conditions are satisfied.
Speaker #3: The transition has been carefully designed to preserve operational continuity while enabling an orderly integration. Prior to the occurrence of the closing of the internalization agreement, Macquarie Asset Management will continue managing Fibra Macquarie under the existing agreement in the ordinary course of business.
Jaime Martínez Trigueros: The transition has been carefully designed to preserve operational continuity while enabling an orderly integration. Prior to the occurrence of the closing of the internalization agreement, Macquarie Asset Management will continue managing Fibra Macquarie under the existing agreement in the ordinary course of business. The closing remains subject to certain conditions, including obtaining the required approvals at the following Fibra Macquarie's shareholder meeting and the participation of Macquarie Infrastructure and Real Assets Holdings in the second tender offer of Fibra Macquarie's remaining certificates to be launched by Fibra Monterrey. By tendering its entire holding in Fibra Macquarie, representing approximately 5% of the outstanding certificates. However, the offer remains subject to regulatory approvals, and accordingly, no definitive launch date has been established.
Speaker #3: The closing remains subject to certain conditions including obtaining the required approvals at the following Fibra Macquarie's folder meeting and the participation of Macquarie Infrastructure and Real Assets Holding in the second tender offer of Fibra Macquarie's remaining certificates to be launched by Fibra Monterey.
Speaker #3: By tendering its entire holding in Fibra Macquarie representing approximately 5% of the outstanding services. We have already submitted the filing of the initial tender offer documents; however, the offer remains subject to regulatory approvals and accordingly to known definitive launch date has been established.
Speaker #3: Once the conditions are satisfied, Fibra Monterey will pay $172.4 million to Macquarie Asset Management as an internalization consideration and Administrator Fibra Monterey will take over the management of Fibra Macquarie.
Jaime Martínez Trigueros: Once the conditions are satisfied, Fibra Monterrey will pay MXN 172.4 million to Macquarie Asset Management as an internalization consideration, and Administrador Fibra Monterrey will take over the management of Fibra Macquarie. It is worth mentioning that Macquarie Asset Management will remain available to provide support services post-closing in accordance with the internalization agreement, subject to the satisfaction of applicable legal requirements, which include the acquisition of 95% of ownership of Fibra Macquarie certificates, of which we have already obtained approximately 81%. We will begin the process of delisting Fibra Macquarie. Moving to slide five. In parallel to the internalization of Fibra Macquarie's management, we established an integration plan designed to preserve business continuity while gradually bringing both platforms together. The plan involves Fibra Monterrey, MPA, Macquarie Asset Management, and specialized third-party advisors, all working in coordination to support the transition with prudence and care.
Speaker #3: It is worth mentioning that Macquarie Asset Management will remain available to provide support services post-closing in accordance with the internalization agreement. Subject to the satisfaction of applicable legal requirements which include the acquisition of 95% of ownership of Fibra Macquarie's certificates of which we have already obtained approximately $81%.
Speaker #3: We will begin the process of the listing Fibra Macquarie. Moving to slide 5, in parallel to the internalization of Fibra Macquarie's management, we established an integration plan designed to preserve business continuity while gradually bringing both platforms together.
Speaker #3: The plan involves Fibra Monterey MPA, Macquarie Asset Management, and Specialized Third-Party Advisors, all working in coordination to support the transition with proven suncare. The process is structured in three phases.
Jaime Martínez Trigueros: The process is structured in three phases. We are currently in the discovery phase, focused on maintaining uninterrupted operations, financial reporting, and regulatory compliance while we develop a deeper understanding of Fibra Macquarie's processes and evaluate best practices for the combined entity. The second phase will focus on joining systems, controls, and processes, including the consolidation of databases and reporting platforms. This will help to standardize information across the combined organization, improve data consistency and transparency, and enable faster, better-informed decision-making. The final phase is intended to maximize value by enhancing the combined operating model, strengthen the combined organizational structure, and position the platform for additional growth. The integration process and an orderly transition remain our highest priority. As shown on slide six, following the tender offer for Fibra Macquarie, our balance sheet reflects a higher leverage profile with a loan-to-value at almost 33%, still below our 35% debt ceiling.
Speaker #3: We are currently in the discovery phase focused on maintaining uninterrupted operations financial reporting and regulatory compliance. While we develop a deeper understanding of Fibra Macquarie's processes and evaluate best practices for the combined entity.
Speaker #3: The second phase will focus on joining systems controls and processes including the consolidation of data bases and reporting platforms. This will help to summarize information across the combined organization improve data consistency and transparency and enable faster better informed decision making.
Speaker #3: The final phase is intended to maximize value by enhancing the combined operating model strengthen the combined organizational structure and position the platform for additional growth.
Speaker #3: The integration process and an orderly transition remain our highest priority. As shown on slide 6, following the tender offer for Fibra Macquarie, our balance sheet reflects a higher leverage profile with a loan-to-value at almost 33% still below our 35% debt ceiling.
Speaker #3: This reflects three main drivers. Starting with the consolidation Fibra Macquarie's existing debt, additional borrowings used to fund the cash consideration in tender offer and the cash retained to fund the internalization consideration once the conditions are satisfied.
Jaime Martínez Trigueros: This reflects three main drivers, starting with the consolidation of Fibra Macquarie's existing debt, additional borrowings used to fund the cash consideration we tender offered, and the cash retained to fund the internalization consideration once the conditions are satisfied. Importantly, we hold 10% of assets in cash, mainly from the follow-on proceeds, which reduces our loan-to-value to around 25%. As of quarter year-end, net of the internalization consideration, our firepower was approximately MXN 700 million, with potential to expand to roughly MXN 1 billion as assets held for sale are monetized. Following the acquisition of Fibra Macquarie, we received credit rating upgrades from S&P Global Ratings and Fitch Ratings. S&P upgraded our global-scale corporate credit rating from BBB- to BBB+ with a stable outlook, and Fitch upgraded our local long-term rating from AA+ to AAA with a stable outlook.
Speaker #3: Importantly, we hold 10% of assets in cash mainly from the follow one proceeds which reduces our loan-to-value to around 25%. As of quarterly end, net of the internalization consideration, our firepower was approximately $700 million.
Speaker #3: With potential to expand to roughly $1 billion as assets held for sale are monetized. Following the acquisition of Fibra Macquarie, we received credit rating upgrades from S&P Global Ratings and Fitch Ratings.
Speaker #3: S&P upgraded our global scale corporate credit rating from triple D minus to triple D plus, with a stable outlook. And Fitch upgraded our local long-term ratings from double A plus to triple A.
Speaker #3: With a stable outlook. Assumed our global ratings at triple D minus and placed it on a positive watch pending further progress on the integration.
Jaime Martínez Trigueros: Affirmed our global rating at BBB- and placed it on a positive watch pending further progress on the integration. These rating actions reaffirm Fibra Monterrey's investment grade profile and reflect the strengthening of its financial capacity following the tender offer, which creates an opportunity to improve the debt structure, reduce financial costs, and execute liability management initiatives in a disciplined manner. As discussed in previous calls, both Fibra Monterrey and Fibra Macquarie have sufficient credit facilities to address upcoming debt maturities and provide flexibility to extend the combined debt maturity profile. Moving to the following slide, the commitments made in connection with the equity offering remain unchanged. Starting with investment, as of the quarter-end, we have deployed or commit more than MXN 300 million through the cash consideration paid in the tender offer, signed expansion, and acquisitions currently under evaluation.
Speaker #3: These ratings actions reaffirm Fibra Monterey's investment rate profile and reflect the strengthening of its financial capacity following the tender offer. Which creates an opportunity to improve the debt structure reduce financial cost and execute liability management initiatives in a disciplined manner.
Speaker #3: As discussed, in previous calls, both Fibra Monterey and Fibra Macquarie have sufficient credit facilities to address upcoming debt maturities and provide flexibility to extend the combined debt maturity profile.
Speaker #3: Moving to the following slide, the commitments made in connection with the equity offering remain unchanged. Starting with investment, as of the quarter end, we had deployed or commit more than $300 million through the cash consideration paid in the tender offer.
Speaker #3: Signed expansion and acquisitions currently under evaluation. This represents almost half of our target while preserving sufficient capacity to deliver on the remaining commitments. Second, we will continue to optimize our portfolio through discipline asset recycling.
Jaime Martínez Trigueros: This represents almost half of our target while preserving sufficient capacity to deliver on the remaining commitments. Second, we will continue to optimize our portfolio through disciplined asset recycling. To date, we have completed sales or entered into agreements subject to certain conditions for nearly half of the office portfolio and the entire retail portfolio. Javier will discuss this in very detail shortly. Lastly, the liquidity of our shares has continued to improve. During Q2, our ADTV reached nearly $5.5 million, supported by the larger number of shares outstanding and broader investor participation following the equity offering and the tender offer.
Speaker #3: To date, we have completed sales or entered into agreements subject to certain conditions for nearly half of the office portfolio and the entire retail portfolio Javier will discuss this in very detail shortly.
Speaker #3: Lastly, the liquidity of our share has continued to improve. During the second quarter, our ADTD reached nearly five and a half million dollars supported by the larger number of shares outstanding and broader investor participation following the equity fall offering and the tender offer.
Speaker #3: I will now turn the call over to Javier to discuss recent development activity updated portfolio composition and development activity. Javier?
Jaime Martínez Trigueros: I will now turn the call over to Javier to discuss recent development activity, updated portfolio composition, and development activity. Javier?
Speaker #2: Thank you, Jaime. As shown on the slide 9 of the webcast material, following quarter end, we completed the sale of two office properties located in Jalisco, Nuevo León, both of which were already subject to binding sale agreements.
Javier Llaca García: Thank you, Jaime. As shown on slide nine of the webcast material, following quarter end, we completed the sale of two office properties located in Jalisco, Nuevo León, both of which were already subject to binding sale agreements. The aggregate sale price was in line with the property's fair market value as determined by the external appraiser. For Fibra Monterrey's standalone portfolio, including assets currently under evaluation and excluding the Filios office assets within the Whirlpool campus, which we intend to remain, our remaining non-industrial exposure would be approximately $120 million, concentrated in two office properties, including our best-in-class facility in Jalisco, La Perla. This is consistent with our objective of optimizing the portfolio and increasing industrial exposure. At this stage of integration, we cannot comment on potential asset recycling activity within the Fibra Macquarie portfolio. We will update the market as internalization and integration processes advance.
Speaker #2: The aggregate sale price was in line with the property's fair market value as determined by the external appraiser. For Fibra Monterey's standalone portfolio, including assets currently under evaluation and excluding the affiliates office assets within the Whirlpool campus, which we intend to remain, our remaining non-industrial exposure would be approximately $120 million.
Speaker #2: Concentrated in two office properties including our best-in-class facility in Jalisco, La Perla. This is consistent with our objective of optimizing the portfolio and increasing industrial exposure.
Speaker #2: At this stage of the integration, we cannot comment on potential asset recycling activity within the Fibra Macquarie portfolio. We will update the market as the internalization and integration processes advance.
Speaker #2: Before discussing the updated composition, I would like to briefly address market conditions and tenant sentiment. On page 10, we present CBRE's key indicators across the 13 primary industrial markets in Mexico.
Javier Llaca García: Before discussing the updated composition, I would like to briefly address market conditions and tenant sentiment. On page 10, we present CBRE's key indicators across the 13 primary industrial markets in Mexico. According to CBRE data, vacancy across these markets stood slightly above 6%, while total net absorption during H1 reached approximately 11 million square feet. The Mexican industrial markets are moving into a normalization phase after the exceptional expansion recorded from 2021 through 2024. During H1 of this year, net absorption moderated and vacancy increased in selected markets, particularly where speculative supply expanded more rapidly. Nevertheless, leasing activity remained active, supported by expansions, pre-leases, and build-to-suit projects, while long-term fundamentals continued to benefit from Mexico's role in North American manufacturing and logistics supply chains. Performance remains mixed by region. Monterrey, Saltillo, Bajío, Guadalajara continue to show generally healthy and balanced conditions.
Speaker #2: According to CBRE data, vacancy across these markets stood slightly above 6% while total net absorption during the first half of the year reached approximately 11 million industrial market is are moving into a normalization phase after the exceptional expansion recorded from 2021 through 2024.
Speaker #2: During the first half of this year, net absorption moderated and vacancy increased in selected markets, particularly where speculative supply expanded more rapidly. Nevertheless, leasing activity remained active, supported by expansions releases and built to suit projects.
Speaker #2: While long-term fundamentals continued to benefit from Mexico's role in North America manufacturing and logistics supply chains. Performance remained mixed by region. Monterey's Altillo Vallejo and Guadalajara continued to show generally healthy and balanced conditions.
Speaker #2: Mexico City remains highly active but within but with a greater proportion of relocation and releases and Reynosa and Tijuana faced softer demand and higher vacancy.
Javier Llaca García: Mexico City remains highly active but with a greater proportion of relocation and pre-leases, and Reynosa and Tijuana face softer demand and higher vacancy. Overall, the current adjustment appears to reflect a rebalancing of supply and demand rather than a structural deterioration, favoring stabilized, well-located assets with long-term leases and strong tenant credit profiles. Tenant sentiment remains broadly stable, with occupiers continuing to prioritize deeper supply chain integration and the productivity advantages that Mexico offers, including attractive returns relative to labor costs compared with other manufacturing locations. The investment decisions continue to be made with a long-term perspective rather than in response to short-term geopolitical headlines. Consistent with this view, our approach to renewals and new investment remains unchanged. We continue to prioritize high-quality locations, low-risk tenants, and strong leasing fundamentals, including long weighted average lease terms and clear, predictable cash flow visibility.
Speaker #2: Overall, the current adjusted appears adjustment appears to reflect a rebalancing of supply and demand rather than a structural deterioration. Favoring stabilized well-located assets with long-term leases and strong tenant credit profiles.
Speaker #2: Tenant sentiment remains broadly stable. With occupiers continuing to prioritize deeper supply chain integration and the productivity advantages that Mexico offers. Including attractive returns relative to labor cost compared with other manufacturing locations.
Speaker #2: The investment decisions continued to be made with a long-term perspective rather than in response to short-term geopolitical headlines. Consistent with this view, our approach to renewals and new investment remains unchanged.
Speaker #2: We continue to prioritize high-quality locations low-risk tenants and strong leasing fundamentals. Including long-waited average lease terms and clear predictable cash flow visibility. Moving on to our portfolio indicators, as shown on slide 11 of the webcast material, our geographic presence across Mexico has expanded following the acquisition of Fibra Macquarie.
Javier Llaca García: Moving on to our portfolio indicators, as shown on slide 11 of the webcast material, our geographic presence across Mexico has expanded following the acquisition of Fibra Macquarie. We now operate across 17 states with a portfolio of 383 properties, totaling approximately 60 million sq ft of GLA and an occupancy rate of around 94%. It is worth noting that despite the significant increase in GLA, our exposure across border, central, and bajillo states remain broadly consistent. As shown on the following slide, based on our peers' Q1 2026 report, Fibra Monterrey Industrial portfolio has now the largest presence in border markets with almost 40 million sq ft, representing approximately 63% of our total GLA across 242 properties. It is worth mentioning that Fibra Monterrey remains our largest market, with 14.5 million sq ft that hold almost a quarter of total portfolio revenues for leases.
Speaker #2: We now operate across 17 states with a portfolio of 383 properties totaling approximately 60 million square feet of GLA and an occupancy rate of around 94%.
Speaker #2: It is worth noting that despite the significant increase in GLA, our exposure across border Central and Bajío states remain broadly consistent. As shown on the following slide, based on our peers' first quarter 26 report, Fibra Monterey's industrial portfolio has now the largest presence in border markets with almost 40 million square feet representing approximately 63% of our total GLA across 242 properties.
Speaker #2: It is worth mentioning that Fibra Monterey that I'm sorry, that Monterey remains our largest market. With 14 and a half million square feet that hold almost a quarter of total portfolio revenues for leases.
Speaker #2: Moving on slide 13 of the presentation, despite a meaningful increase in GLA, core fundamentals of our portfolio remain largely unchanged. Which was a key driver in the real estate rationale behind the tender offer.
Javier Llaca García: Moving on to slide 13 of the presentation, despite a meaningful increase in GLA, core fundamentals of our portfolio remain largely unchanged, which was a key driver in the real estate rationale behind the tender offer. Industrial assets continue to represent more than 80% of total revenues, now with greater geographic and industry diversification across core markets. The portfolio continues to be predominantly supported by US dollar-denominated leases with credit board dependence and with inflation-linked escalations. Together, these characteristics provide resilience across economic cycles. Moving to the following slide, the top 10 tenants' share of total revenues now stands slightly above 20%, a significant quarter-over-quarter reduction resulting from the combination of the portfolios. Fibra Macquarie's maturity profile is shorter than Fibra Monterrey's historical profile. As a result, approximately 30% of the revenues are set to mature during 2026 and 2027, with industrial leases representing most of those maturities.
Speaker #2: Industrial assets continue to represent more than 80% of total revenues now with greater geographic and industry diversification across core markets. The portfolio continues to be predominantly supported by US dollar denominated leases with credit worthy tenants and with inflation-linked escalations.
Speaker #2: Together, these characteristics provide resilience across economic cycles. Moving to the following slide, the top 10 tenant share of total revenues now stand slightly above 20%, a significant quarter over quarter reduction resulting from the combination of the portfolios.
Speaker #2: Fibra Macquarie's maturity profile is shorter than Fibra Monterey's historical profile. As a result, approximately 30% of the revenues asset to mature during 26 and 27 with industrial leases representing most of those maturities.
Speaker #2: We remain cautiously optimistic about capturing month-to-market opportunities while gradually while gradually the combined weathered average lease term increases. Page 15 of the webcast material summarizes our property year-over-year performance.
Javier Llaca García: We remain cautiously optimistic about capturing mark-to-market opportunities while gradually the combined weighted average lease term increases. Page 15 of the webcast material summarizes our property year-over-year performance. Same property NOI growth remains strong despite limited lease rotation, supported by inflation-linked escalations and renewals, new leasing activity, and expansion-related revenues. Together, these factors drove approximately 6% growth year-over-year in same property NOI in US dollar terms. Excluding Fibra Macquarie, acquisitions completed over the last 12 months further supported NOI growth by contributing more than MXN 90 million. As a result, Fibra Monterrey's standalone NOI margin remains above 90%. Fibra Macquarie's one-month contribution added approximately MXN 288 million of NOI and resulted in a consolidated NOI margin of 88.5%. As integration progresses and we begin to maximize the platform capabilities, we expect the consolidated NOI margin to gradually converge towards historical levels.
Speaker #2: Same property NOI growth remains strong despite limited lease rotation supported by inflation-linked escalations and renewals. New leasing activity and expansion-related revenues. Together, these factors drove approximately 6% growth year-over-year in same property NOI in US dollar terms.
Speaker #2: Excluding Fibra Macquarie acquisitions completed over the last 12 months further supported NOI growth by contributing more than 90 million pesos. As a result, Fibra Monterey's standalone NOI margin remained above 90%.
Speaker #2: Fibra Macquarie's one-month contribution added approximately 288 million pesos of NOI and resulted in a consolidated NOI margin growth of I'm sorry, NOI margin of 88.5%.
Speaker #2: As integration progresses, and we begin to maximize the platform capabilities, we expect the consolidated NOI margin to gradually converge towards historical levels. Moving to slide 16, I would like to briefly address weapons announcement regarding its manufacturing operations in Apodaca.
Javier Llaca García: Moving to slide 16, I would like to briefly address Whirlpool's announcement regarding its manufacturing operations in Apodaca. Whirlpool announced plans to gradually relocate one of the five business units operating at our Apodaca campus, beginning in the H2 2027. Production will be transferred to its Ramos Arizpe campus, where we own the related distribution facility. Importantly, the lease agreement has a fixed maturity until December 2031, and the expected exposure associated with the relocation remains limited to approximately 1.5% of Fibra Monterrey's total revenues. Therefore, based on the information currently available, we do not anticipate an immediate impact on occupancy or AFFO per se. In the meanwhile, we have been in contact with companies located near the campus for potential move-ins. The property is located on one of Mexico's most active industrial corridors, with competitive in-place rents and strong re-leasing potential.
Speaker #2: Whirlpool announced plans to gradually relocate one of the five business units operating at Apodaca campus beginning in the second half of 2027. Production will be transferred to its Ramos Arista campus where we own their related distribution facility.
Speaker #2: Importantly, the lease agreement has a fixed maturity until December 2031. And the expected exposure associated with the relocation remains limited to approximately 1.5% of Fibra Monterey's total revenues.
Speaker #2: Therefore, based on the information currently available, we do not anticipate an immediate impact on occupancy or AFFO per se. In the meanwhile, we have been in contact with companies located near the campus for potential move-ins.
Speaker #2: The properties located on one of Mexico's most active industrial corridors with competitive in-place rents and strong releasing potential. These characteristics should support an efficient commercialization process if required and help limit potential cash flow downtime.
Javier Llaca García: These characteristics should support an efficient commercialization process, if required, and help limit potential cash flow downtime. Moving on to slide 17, we continue to observe strong demand from existing tenants seeking to expand within our properties. These expansions are being driven by new production lines, resulting from supply chain optimization and increased demand for our tenants' products, underscoring both the quality of our tenant base and the strength of our longstanding relationship. As shown in the graph on the left, to date, we have delivered approximately $69 million on non-speculative developments, generating returns above 10%. During the quarter, we signed a new expansion within the Aerotech portfolio, representing an investment of approximately $27 million and an expected yield on cost above 9%. Including this project, we currently have nearly $50 million under construction, expected to generate a high single-digit average yield on cost.
Speaker #2: Moving on to slide 17, we continue to observe strong demand from existing tenants seeking to expand within our properties. This expansion is being driven by new production lines resulting from supply chain optimization and increased demand for our tenant's products underscoring both the quality of our tenant base and the strength of our long-standing relationship.
Speaker #2: As shown in the graph on the left, to date we have delivered approximately 68 million dollars of non-speculative developments generating returns above 10%. During the quarter, we signed a new expansion within the Aerotech portfolio representing an investment of approximately 27 million dollars and an expected yield on cost above 9%.
Speaker #2: Including this project, we currently have nearly 50 million dollars under construction. Expected to generate a high single-digit average yield on cost. This investment complement favorably acquisition yields and support growth in cash flow perception.
Javier Llaca García: These investments complement favorably acquisition yields and support growth in cash flow per se. In addition, we have under evaluation an expansion pipeline of almost $60 million, which we expect to sign gradually. Moving on the graph on your right, as you all may be aware of, Fibra Monterrey has a dedicated development team. Since 2013, it has reported development deliveries that represent an investment of more than a quarter of a billion dollars with an average yield of 11%. The integration of this team is expected to strengthen our development capabilities. As of quarter end, development projects under construction in Fibra Macquarie's portfolio totaled approximately 240,000 square feet of GLA, representing an estimated investment of $50 million. Additionally, Fibra Macquarie has almost 800,000 square feet under stabilization and a land bank of more than eight million square feet of additional potential GLA, which could eventually bolster portfolio returns.
Speaker #2: In addition, we have under evaluation an expansion pipeline of almost 60 million dollars which we expect to sign gradually. Moving on the graph on your right, as you all may be aware of, Fibra Monterey has a dedicated development team.
Speaker #2: Since 2013, it has reported development deliveries that represent an investment of more than a quarter of a billion dollars with an average yield of 11%.
Speaker #2: The integration of this team is expected to strengthen our development capabilities. As of quarter end, development projects under construction in Fibra Macquarie's portfolio totaled approximately 240,000 square feet of GLA representing an estimated investment of 50 million dollars.
Speaker #2: Additionally, Fibra Macquarie has almost 800,000 square feet under stabilization and a land bank of more than 8 million square feet of additional potential GLA which could eventually bolster portfolio returns.
Speaker #2: That said, our primary focus will remain on stabilized assets and pre-lease developments. Nevertheless, the combined platforms increase scale creates an opportunity to generate incremental returns through limited speculative development primary market where strong long-term fundamentals justify the commercial risk.
Javier Llaca García: That said, our primary focus will remain on stabilized assets and pre-lease development. Nevertheless, the combined platforms' increased scale creates an opportunity to generate incremental returns through limited speculative development in primary markets, where strong long-term fundamentals justify the commercial risk. I will be pleased to address markets, the portfolio, and investment during the Q&A. Before that, I will return the call to Jaime to discuss financial performance. Go ahead, Jaime.
Speaker #2: I will be pleased to address markets, the portfolio and investment during the Q&A. But before that, I will return the call to Jaime to discuss financial performance.
Speaker #2: Go ahead, Jaime.
Speaker #3: Thank you, Javier. From the acquisition date, Fibra Monterey's consolidated financial statements include 100% of Fibra Macquarie's assets liabilities, revenues, and expenses. They also separately recognize the non-controlling interest associated with the Fibra Macquarie shares not owned by Fibra Monterey and those already recognized in Fibra Macquarie's financial statement.
Jaime Martínez Trigueros: Thank you, Javier. From the acquisition date, Fibra Monterrey's consolidated financial statements include 100% of Fibra Macquarie's assets, liabilities, revenues, and expenses. They also separately recognize the non-controlling interest associated with the Fibra Macquarie shares not owned by Fibra Monterrey, and those already recognized in Fibra Macquarie's financial statement. For analytical purposes, the financial performance metrics include Fibra Macquarie's proportionate interest in its joint venture and exclude non-controlling interest. As shown on slide 19, operational and administrative consolidated margins decreased to 89% and 81% respectively. This decrease was mainly attributable to the inclusion of one month and Fibra Macquarie operations. Excluding this effect, Fibra Monterrey Q2 NOI and adjusted EBITDA margins would have been 90% and 83% respectively, in line with our target levels and broadly consistent with the Q1.
Speaker #3: On analytical purposes, the financial performance metrics include Fibra Macquarie's proportionate interest in its joint venture and exclude non-controlling interest. As shown on slide 19, operational and administrative consolidated margins decreased to 89% and 81% respectively.
Speaker #3: This most this decrease was mainly attributable to the inclusion of one-month and Fibra Mty Macquarie operations. Excluding this effect, Fibra Monterey's second quarter NOI and adjusted EBITDA margins would have been 90% and 83% respectively.
Speaker #3: In line with our target levels and broadly consistent with the first quarter. Excluding effects fluctuations, all key financial metrics increased year over year mainly reflecting the contribution from the Fibra Macquarie's acquisition.
Jaime Martínez Trigueros: Excluding FX fluctuations, all key financial metrics increased year over year, mainly reflecting the contribution from the Fibra Macquarie's acquisition. In prior large acquisitions, EBITDA has typically grown faster than NOI as economies of scale materialize. In this case, because Fibra Macquarie's management has not yet been internalized, we are initially experiencing the opposite effect. As Javier mentioned, as we internalize Fibra Macquarie's management and begin to maximize the combined platform capabilities, we expect margins to converge to our historical levels with the potential to exceed over time as EBITDA benefits from greater scale. Before moving to AFFO per share performance, I would like to clarify that the H1 of this year's distribution figures shown in the presentation already include the cash flows distributed by Fibra Macquarie that were generated before the tender offer.
Speaker #3: In three or large acquisitions, EBITDA has typically grown faster than NOI as economies of scale materialized. In this case, because Fibra Macquarie's management has not yet been internalized, we are initially experiencing the opposite effect.
Speaker #3: As Javier mentioned, as we internalize Fibra Macquarie's management and begin to maximize the combined platform capabilities, we expect margins to converge toward historical levels with the potential to exceed over time as EBITDA benefits from greater scale.
Speaker #3: Before moving to AFFO per share performance, I would like to clarify that the first half of this year's distribution figures shown in the presentation already include the cash flows distributed by Fibra Macquarie's that were generated before the tender offer.
Speaker #3: This explains the quarter over quarter increase in distribution is lower than the increase in other metrics. Moving to the next slide, we can see that both Fibra Monterey and Fibra Macquarie on a standalone basis remain on track relative to their last publicly available guidance.
Jaime Martínez Trigueros: This explains the quarter-over-quarter increase in distribution is lower than the increase in other metrics. Moving to the next slide, we can see that both Fibra Monterrey and Fibra Macquarie on a standalone basis remain on track relative to their last publicly available guidance. Beginning with Fibra Macquarie, in the first bar on the left shows the annualized Q2 AFFO per share, standing approximately MXN 2.60, near the upper end of their last publicly available guidance range. For Fibra Monterrey, the second bar from the right shows annualized standalone AFFO per share of approximately MXN 0.09, also near the upper end of the applicable guidance range based on the quarter's average exchange rate.
Speaker #3: Beginning with Fibra Macquarie, in the first bar on the left shows the analyzed second quarter AFFO per share stands in approximately two pesos and 60 cents near the upper end of their last publicly available guidance range.
Speaker #3: For Fibra Monterey, the second bar from the right shows analyzed standalone AFFO per share of approximately 90 cents. Also, near the upper end of the applicable guidance range based on the quarter's average exchange rate.
Speaker #3: After excluding Fibra Macquarie's non-controlling interest, as shown in the middle bar, and dividing it by the shares issued as a consideration for the tender offer, the transactions analyzed AFFO per share is approximately 98 cents.
Jaime Martínez Trigueros: After excluding Fibra Macquarie's non-controlling interest, as shown in the middle bar, and dividing it by the shares issued as a consideration for the tender offer, the transaction's annualized AFFO per share is approximately MXN 0.98, almost 10% above Fibra Monterrey's standalone performance. Furthermore, as shown in the financial bar in the right, consolidated annualized AFFO per share for the full Q2 would have been approximately MXN 0.93 per share, more than 3% above the upper end of our latest guidance range. This provides an initial indication that the transaction is also accretive on a cash flow per share basis, even before fully capturing the benefits from the internalization and combination of both companies. We will conclude our prepared remarks and open the call for questions. Operator, please proceed with the Q&A session.
Speaker #3: Almost 10% above Fibra Monterey's standalone performance. Furthermore, as shown in the financial bar in the right, consolidated analyzed AFFO per share for the full second quarter would have been approximately 93 cents per share.
Speaker #3: More than 3% above the upper end of our latest guidance range. This provides an initial indication that the transaction is also accretive on cash flow per share basis.
Speaker #3: Even before fully capturing the benefits from the internalization and combination of both companies. With that, we will conclude our prepared remarks and open the call for questions.
Speaker #3: Operator, please proceed with the Q&A session.
Speaker #1: Thank you. And if you'd like to ask a question, please press star one on your telephone keypad. If you're re connected using our webcast tool, please write your question in the chat section on the platform.
Operator: Thank you. If you'd like to ask a question, please press star one on your telephone keypad. If you're connected using our webcast tool, please write your question in the chat section on the platform. Our first question comes from the line of Adrián Huerta with J.P. Morgan. Please proceed with your question.
Speaker #1: Our first question comes from the line of Adrian Huerta with JP Morgan. Please proceed with your question.
Speaker #2: And thank you. Good morning, everyone. Thank you for taking my question. Hey, the question has to do with how both NQ and the acquisition of Macquarie how you shareholders base has changed in terms of concentration, percentage of foreign shareholders.
Adrián Huerta: Thank you. Good morning, everyone. Thank you for taking my question. Hey, my question has to do with how post-MQ, the acquisitions of Macquarie, how your shareholder base has changed in terms of concentration, percentage of foreign shareholders. How it changed with MQ, and how it has changed over the last couple of years, and what we should expect in terms of share liquidity going forward on that basis.
Speaker #2: How it changed with MQ and how it has changed over the last couple of years and whether we should expect in terms of share liquidity going forward on that basis.
Speaker #3: Thank you, Adrian. That's a very interesting question. First, let's focus on international investors, which is maybe the main change that we have in our shareholder base.
Jaime Martínez Trigueros: Thank you, Adrián. That's a very interesting question. First, let's focus on international investors, which is maybe the main change that we have in our shareholder base. It changed from around 14% to 18%, which represents, in absolute terms, we were at around MXN 300 million before the tender, and now we are at 18%, which is around MXN 800 million, which is a significant increase, of course, more than double. We assume that it might increase the number of international investors as well as the attention because of the size of the company. We can't find that by the normal investigation. We will see that in the next month as we go to some events, et cetera, and we will meet with more investors.
Speaker #3: It changed from around 14% to 18%, which represents in terms of in absolute terms, we were at around 300 million dollars before the tender.
Speaker #3: And now we are at 18%, which is around 800 million dollars, which is a significant increase of, of course, more than double. We assume that it might increase the number of international investors as well as the attention because of the size of the company.
Speaker #3: But that is I mean, we can't find that by the normal investigation. We will see that in the next months as we go to some events, et cetera, and we will met with more investors.
Speaker #3: The other important part is that we think that with that scale and the increase, in the tradability of the company, we might accept or increase our participation in certain indexes which will give an additional increase to the liquidity of the company.
Jaime Martínez Trigueros: The other important part is that we think that with that scale and the increase in the tradability of the company, we might accept or increase our participation in certain indexes, which will give an additional increase to the liquidity of the company. As you remember, before the first follow-on that we did back in 2024, we were trading at around MXN 400,000 per day. After the follow-on, we were at, let's say, MXN 2.5 million per day. As of now, or as the last quarter, we were at around MXN 5.6 million a day, which is a significant increase. We think that there's an additional boost of prices that we might see in the following months.
Speaker #3: As you remember, before the first follow-on that we did back in 2024, we were trading at around 400,000 dollars per day. After the follow-on, we were at, let's say, 2.5 million dollars per day.
Speaker #3: And as of now, or as the last quarter, we were at around 5.6 million dollars a day, which is a significant increase. So we think that there's an additional good surprises that we might see in the following months.
Speaker #2: Great. I mean, if I can just follow up very quickly, which are those indices that you're not participating on at the moment and that you believe has you will have chances to be included over the next 12 months?
Adrián Huerta: Great. Jaime, if I can just follow up very quickly. Which are those indices that you're not participating on at the moment, and that you believe you will have chances to be included over the next 12 months?
Jaime Martínez Trigueros: César, please.
Speaker #3: Cesar, please.
César Rubalcava Plascencia: Yes, Adrián, this is César. Sure. The next review on the indices, it could be on MSCI. We're writing them, let's say, at the edge to be improving our participation from small cap indices to the standard index. Importantly enough, our liquidity just improved in the last two months. If we're not able to enter in this review, we're hoping to enter in the upcoming one.
Speaker #4: Yes, Adrian. This is Cesar. Sure. So the next review on the indices it could be on MSCI. We're writing the, let's say, at the edge to be improving our participation from small-cap indices to the standard index.
Speaker #4: So importantly enough, our liquidity just improved in the last two months. So if we're not able to enter these in this review, we're hoping to enter in the upcoming one.
Speaker #2: Adrian. Thank you, Cesar. Thank you, Jaime.
Adrián Huerta: Thank you, César. Thank you, Jaime.
Speaker #3: Thank you.
Jaime Martínez Trigueros: Thank you.
Speaker #4: You're welcome.
César Rubalcava Plascencia: Welcome.
Speaker #1: Our next question comes from the line of Anton Mordekader, with DVM. Please proceed with your question.
Operator: Our next question comes from the line of Anton Mortensgaard with GBM. Please proceed with your questions.
Speaker #5: Hi, guys. Thank you for taking my question. I have two questions. One, maybe too soon still with the consolidation process, but I was wondering if is there any surprise positive or negative that you find out as you get more involved with Fibra Macquarie?
Anton Mortenkotter: Hi, guys. Thank you for taking my question. I have two questions. One, maybe too soon still with the consolidation process, but I was wondering if there any surprise, positive or negative, that you find out as you get more involved with Fibra Macquarie? The second one is related to the extraordinary costs that we saw. I was just wondering are these all the expenses that we should see, and when should we see this normalize?
Speaker #5: And the second one is and the second one is related to the extraordinary costs that we saw. I was just wondering if should we when are these all the expenses that we should see?
Speaker #5: And when should we see this normalize?
Speaker #3: Yeah. We're hearing the. The discovery phase. We're still in the discovery phase. Based on the information reviewed to date, and the portfolios recent operating performance, we have not identified any material issue that changes our strategic rationale for the transaction.
Jaime Martínez Trigueros: We're still in the
César Rubalcava Plascencia: Hello
Jaime Martínez Trigueros: the discovery phase. We're still in the discovery phase. Based on the information reviewed to date and the portfolio's recent operating performance, we have not identified any material issue that changes our strategic rationale for this transaction. We are closely reviewing the combined lease expiration profile for 2026 and 2027, and proactively evaluating the nearest debt maturities. Both remain manageable, and preserving operating and financial continuity is central to our integration plan. Your other question?
Speaker #3: We are closely reviewing the combined lease expiration profile for 2026 and 2027 and proactively evaluating the nearest debt maturities. Both remain manageable and preserving operating and financial continuity is central to our integration plan.
Speaker #3: And your other question.
Speaker #4: I'm sorry, Anton. Can you repeat the second question?
César Rubalcava Plascencia: I'm sorry, Anton, can you repeat the second question?
Speaker #5: Yeah. I was just wondering if any extraordinary expenses related to the acquisition are already finalized. Or if we should see something still forward.
Anton Mortenkotter: Yeah, I was just wondering if any extraordinary expenses related to the acquisition are already finalized or if we should see something still forward.
Speaker #3: Well, as of now, I mean, it's basically the same. We haven't found anything material. Of course, we have some expenses related with the transaction.
Javier Llaca García: Well, as of now, it's basically the same. We haven't found anything material. Of course, we have some expenses related with the transaction, but I don't think that there's something special that we should mention.
Speaker #3: But I don't think that there's something special that we should mention.
Speaker #5: Very useful. Thank you.
Anton Mortenkotter: Very useful. Thank you.
Speaker #3: Thank you.
Javier Llaca García: Thank you.
Speaker #1: Thank you. Our next question comes from the line of Andr Mazzini, with City. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of André Mazini with Citi. Please proceed with your question.
Speaker #2: Sure. Thanks, team. So two questions, as well. So the first one is around the capital recycling strategy. I mean, after the incorporation of Macquarie, so what can we expect on that front, in particular with regards to the retail portfolio?
André Mazini: Sure. Thanks, team. Two questions as well. The first one is around the capital recycling strategy, after the incorporation of Macquarie. What can we expect on that front, particularly with regards to the retail portfolio? We know that a portion of the retail portfolio has JV partners. Would these JV partners be interested in your portion of the retail portfolio, if that makes any sense at all? Also, the second question around delisting Macquarie. I think nowadays you guys have 81% directly plus the 5% the Macquarie Group has been selling to you guys. Any need to reach 95% ownership in order to delist? If there's a timeline, or where can we expect that to happen? Thank you.
Speaker #2: We know that a portion of the retail portfolio has JV partners, which is these JV partners be interested in your portion of the retail portfolio, if that makes any sense at all.
Speaker #2: And also, the second question, around the leasing Macquarie, I think nowadays you guys have 81% directly, plus the 5% Macquarie Group has been selling to you guys, has sold to you guys.
Speaker #2: So any need to reach 95% ownership in order to delist? So any kind of if there's a timeline or where can we expect that to happen?
Speaker #2: Thank you.
Javier Llaca García: Yeah, this is Javier. Hello. Right now, it's too early to say on the recycling of the assets from the Fibra M core portfolio, where, as Jaime mentioned, we're still on the discovery phase. Our intention continues to become a full industrial platform soon. Right now, we're in the discovery process. We will continue with the divestment of the legacy Fibra Monterrey portfolio, non-industrial properties. We're starting to do the analysis and the assessment on the non-industrial properties on the Fibra M portfolio. We will keep you apprised as we progress on that. It's too early to say right now. As for the second question, as you know, we already have the 81% of the certificates, and we are about to launch the second offer for the remaining certificates. I think 5% of those certificates are held by Mira Holdings.
Speaker #4: Yeah. This is Javier. Hello. Right now, it's too early to say on the recycling of the assets from the Fibra Mty portfolio. As Jaime mentioned, we're still on the discovery phase.
Speaker #4: Our intention continues to become a full industrial platform soon. But right now, we're in the discovery process. We will continue with the divestment of the legacy Fibra Monterrey portfolio non-industrial properties.
Speaker #4: And we're starting to do the analysis and the assessment on the non-industrial properties on the Fibra Macquarie portfolio. But we will keep you apprised as we progress on that.
Speaker #4: Too early to say right now.
Speaker #3: As for the second question, as you know, we already have the 81% of the certificates. And we are about to launch the second offer for the remaining certificates.
Speaker #3: We had identified I mean, 5% of those certificates are held by Mira Holdings. So they are going to be participating in the offer as we have agreed with them.
Javier Llaca García: They are going to be participating in the offer, as we have agreed with them. Once we reach the 95%, we will delist. Of course, there are certain conditions that need to be completed. We have to obtain certain approvals at the Macquarie's holding meeting that will be held on 11 August. We still have to obtain the authorization from the CNBV and the CNSF. Once those conditions are satisfied, we will proceed with any remaining steps.
Speaker #3: And once we reach the 95%, we will delist of course there are certain conditions that need to be completed. We have to obtain certain approvals at the Macquarie Holding meeting that will be held in August 11.
Speaker #3: And we still have to obtain the authorization from the TMVB and the CNA. But once those conditions are satisfied, we will proceed with any remaining steps.
Speaker #2: Thanks very much, guys. Good one.
André Mazini: Thanks very much, guys. Good one.
Speaker #1: Thank you. Our next question comes from the line of Elisa Gomez, with BTC Pactual. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Elisa Gomez with BTG Pactual. Please proceed with your question.
Speaker #6: Hi. Good morning. Thanks for taking my question. Could you provide more color on which were the renewal spreads this quarter? And which are your expectations for the coming quarter across both the legacy portfolio of Fibra Monterrey and Fibra Macquarie industrial assets?
Elisa Gomez: Hi. Good morning. Thanks for taking my question. Could you provide more color on which were the renewals spreads this quarter, and which are your expectations for the coming quarter across both the legacy portfolio, Fibra Monterrey, and Fibra Macquarie industrial assets?
Javier Llaca García: Yes, sure. Thank you, Elisa, for your question. As for the Fibra Monterrey portfolio, during the Q2, we had almost no activity on renewals. There were almost no expirations, and the few ones that we had were already agreed for renewal. Pretty much no activity on that front. In regards to the Fibra Macquarie portfolio, MPA, the company that Jorge mentioned on the opening remarks, is still in charge of the leasing activity and renewals and new leases for the portfolio. We were still in the discovery phase again, but it's been business as usual, and we have not been reported on a renewal that hasn't gone through or a new vacancy on the portfolio. I would say pretty much pretty stable on both portfolios. Exposure is diversified across the combined portfolio for 2026 and 2027. Maturities are concentrated in Noroeste and Jalisco.
Speaker #4: Yes. Sure. Thank you. Elisa, for your question. As for the Fibra Monterrey portfolio during the second quarter, we have almost no activity on renewals.
Speaker #4: There were almost no expirations and a few ones that we had were already agreed for renewal. So pretty much no activity on that front.
Speaker #4: In regards to the Fibra Macquarie portfolio, MPA, the company that Jorge mentioned on the opening remarks, is still in charge of the leasing activity and renewals and new leases for the portfolio.
Speaker #4: We're still in the discovery phase again. But it's been business as usual and we have not been reported on a renewal that hasn't gone through or a new vacancy on the portfolio.
Speaker #4: So I would say pretty much pretty stable on both portfolios. And exposure is a diversified across the combined portfolio for 26 and 27. And maturities are concentrated in Nuevo León and Jalisco.
Javier Llaca García: That I can tell you right now.
Speaker #4: That I can tell you right now.
Speaker #6: Okay. Thank you.
Elisa Gomez: Okay. Thank you.
Speaker #1: Thank you. Our next question comes from the line of Abraham Fuentes, with Santander. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Abraham Fuentes with Santander. Please proceed with your question.
Speaker #2: Hi. Hello. Good morning. Do you have mentioned that aside Fibra Macquarie, you're going to continue pursuing inorganic growth opportunities and that you have a pipeline close to 700 million and have firepower about 400 million dollars?
Abraham Fuentes: Hi. Hello. Good morning. You have mentioned that as Fibra Macquarie, you are going to continue pursuing inorganic growth opportunities and that you have a pipeline close to MXN 700 million and have firepower above MXN 400 million. I wonder if you can give us an update on this. Thanks.
Speaker #2: So I wonder if you can give us an update on this. Thanks.
Speaker #4: Sure. Of course. As we continue our business as usual on both the organic and the inorganic growth, I can tell you that we are going to remain focused on the integration of both platforms.
Javier Llaca García: Sure, of course. As we continue our business as usual on both the organic and the inorganic growth, I can tell you that we are going to remain focused on the integration of both platforms. Our immediate priorities are to complete this integration, to advancing the internalization process, to execute the follow-on tender offer, and to position the combined portfolio for additional growth before pursuing any large transactions. We are seeing a very active market for sizable opportunities. This could come to market over the coming months. We are evaluating those. We are going to continue to evaluate every single opportunity that we run across, but our priorities right now are those two to successfully and totally complete the integration of both platforms.
Speaker #4: Our immediate priorities are to complete this integration. To advance in the internalization process, to execute the following tender offer, and to position the combined portfolio for additional growth before pursuing any large transactions.
Speaker #4: We are seeing a very active market for sizable opportunities that could and this could come to market over the coming months. We are evaluating those.
Speaker #4: We're going to continue to evaluate every single opportunity that we run across. But our priorities right now are those two successfully and totally complete the integration of both platforms.
Speaker #2: Okay. Thank you.
Abraham Fuentes: Okay, thank you.
Speaker #1: Thank you. Our next question comes from the line of Philippe Barragan, with JP Morgan. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Felipe Barragán with J.P. Morgan. Please proceed with your question.
Speaker #5: Thank you. Good morning, team. Thanks for the call for taking my question. So I just want to get your take on the portfolio agent Macquarie.
Felipe Barragán: Thank you. Good morning, team. Thanks for the call and for taking my question. I just want to get your take on the portfolio age of Macquarie. It's a bit higher than what you guys have, 23 years for Macquarie versus yours of about 14. Just want to get a sense on maybe we could see some asset recycling on the Macquarie side or what's just your overall take on the older portfolio, and if we can see an uptick in the maintenance CapEx. Love to hear your thoughts here. Thank you.
Speaker #5: So it's a bit higher than the one you guys have, 23 years from Macquarie versus yours of about 14. So I just want to get a sense on maybe we could see some mastery cycling on the Macquarie side or what's just your overall take on the older portfolio.
Speaker #5: And if we can see an uptick in the maintenance capex, I'd love to hear your thoughts here. Thank you.
Speaker #4: Thank you. Again, as we said before, we're still in the discovery process. We are going to take a very deep look into the Fibra Macquarie's portfolio.
Javier Llaca García: Thank you. Again, as we said before, we're still in the discovery process. We are going to take a very deep look into the Fibra Macquarie's portfolio in every aspect, not only age, but also the shape and level of maintenance that the properties have. We feel confident that the MPA group and the MAM group have done a good job on maintaining a good quality portfolio. Still too early in the game to talk about specifics on how we see the recycling or potential recycling of our properties, both industrial and non-industrial, from the Fibra Macquarie portfolio.
Speaker #4: In every aspect, not only age but also the shape and level of maintenance that the properties have. We feel confident that the MPA group and the MAM group have done a good job on maintaining a good quality portfolio.
Speaker #4: But still, too early in the game to talk about specifics on how we see the recycling or potential recycling of properties both industrial and non-industrial from the Fibra Macquarie portfolio.
Speaker #5: Got it. Thank you.
Felipe Barragán: Got it. Thank you.
Speaker #1: Thank you. Our next question comes from the line of Joel Giotti, with Goldman Sachs. Please proceed with your question.
Operator: Thank you. Our next question comes from the line of Gerald Jawadi with Goldman Sachs. Please proceed with your question.
Speaker #2: Hello, everyone. Thank you for taking my questions. The first one is I want to understand if you already have provided any color on what the management expenses for Fibra Macquarie could look like once you do internalization.
Gerald Jawadi: Hello, everyone. Thank you for taking my questions. The first one is, I want to understand if you already have provided any color on what the management expenses for Fibra Macquarie can look like once you do internalization. Just understanding that right now, essentially, the payment is based on market cap. Once internalization is done, what can we expect in sort of like the fees, if you will, or the SG&A, if you will, for that business going forward? The other question is around your potential M&A pipeline. You pointed out $750 million is the target, but as you think about time spent in H2, you are digesting this large M&A. What is your expectations around timing for capital deployment for further M&A?
Speaker #2: So just understanding that right now, essentially, the payment is based on market cap. Once internalization is done, how can what can we expect in sort of the fees, if you will, or the SG&A, if you will, for that business going forward?
Speaker #2: And then the other question is around your potential M&A pipeline. You pointed out 750 million dollars is the target. But as you think about time spent in the second half of the year, you are digesting this large M&A.
Speaker #2: So should we expect what is your expectations around timing for capital deployment for further M&A? Has it changed at all before this from what we were thinking before this transaction?
Gerald Jawadi: Has it changed at all from what were you thinking before this transaction, or it's still like business as usual, you will acquire as you see fit, as the negotiations go through? Basically, are you being impacted by the consolidation of this portfolio? That's it. Thank you.
Speaker #2: Or is it still business as usual? You will acquire as you see fit, as the negotiations go through. Basically, are you being impacted by the consolidation of this portfolio?
Speaker #2: That's it. Thank you.
Speaker #4: Okay. In terms of the internalization agreement, I mean, let's put it in a very, very simple way. Let's say that the price of the tender is around 2 billion.
Jaime Martínez Trigueros: Okay. In terms of the internalization agreement, let's put it in a very simple way. Let's say that the price of the tender is around 2 billion, which is the market cap, which will represent around $20 million a year as the cost of the fee. If you use this 172 million, let's say at 7 or 7.5, you're going to use or the cost of opportunity is between $12 million or something around $12 million. The first outcome, it may be around $8 million per year as an advantage of the internalization. The rest, I think it's preliminary to talk about. We are working on that, but as we mentioned before, we're in the discovery process. That's pretty much what we think, just from a 10,000 feet perspective.
Speaker #4: Which is the market cap, which will represent around 20 million dollars a year as a as the cost of the fee. If you use this 172 million let's say at a 7 or 7 and a half, you're going to use or the cost of opportunity is between 12 or something around 12 million dollars.
Speaker #4: So the first outcome, it might be around 800 million dollars per year as an advantage of the internalization. The rest, I think it's preliminary to talk about.
Speaker #4: I mean, we are working on that. But as we mentioned before, we're in the discovery process. So that's pretty much what we think. I mean, just from 10,000 feet, perspective.
Speaker #3: And in regards to the second question, and as we have said before, and I want to emphasize that our even though our main objective on our priority right now is to successfully complete the integration of both platforms, our investment guidelines and thesis continue to be exactly the same.
Javier Llaca García: In regards to the second question, as we have said before, I want to emphasize that even though our main objective and our priority right now is to successfully complete the integration of both platforms, our investment guidelines and thesis continue to be exactly the same. We're going to be disciplined on acquisitions. We're going to be careful on non-speculative development. You should not expect any change of heart on the business model that we have had in the last 10 years. We are in the process of executing a couple of transactions that we have announced earlier this year that were in the progress before the Macquarie offer. We continue to evaluate every opportunity that comes along, but we're going to be just as disciplined as we have been in the past.
Speaker #3: We're going to be disciplined on acquisitions. We're going to be careful on non-speculative development. You should not expect any change of heart on the business model that we have had in the last 10 years.
Speaker #3: We are in the process of executing a couple of transactions that we have announced earlier this year, that were in the progress before the Macquarie OPA.
Speaker #3: But we continue to evaluate every opportunity that comes along. But we're going to be just as disciplined as we have had in the past.
Speaker #2: Thank you.
Gerald Jawadi: Thank you.
Operator: Ladies and gentlemen, as a reminder, if you'd like to join the queue, please press star one at this time. Our next question comes from the line of Edson Noriega with Summa Capital. Please proceed with your question.
Speaker #1: Ladies and gentlemen, as a reminder, if you'd like to join the queue, please press star one at this time. Our next question comes from the line of Edson Munguia, with Sumacap.
Speaker #1: Please proceed with your question.
Speaker #5: Hi. Good morning. Do you have two different fronts? The internalization and the integration process. So my question is, do you have any specific timeline?
Edson Noriega: Hi. Good morning. You have two different fronts, the internalization and the integration process. My question is, do you have any specific timeline? Let's say by the end of 2026 is going to be phase I of the integration, and we can expect the internal management from Fibra Macquarie at the beginning of 2027. What will be the timeframe? Of course, including all the regulatory approvals and so forth that you need to perform.
Speaker #5: Let's say by the end of 2026, it's going to be phase one. Of the integration, and we can expect the internal management from Fibra Macquarie at the beginning of 2027.
Speaker #5: What will be the time frame? Of course, including all the regulatory approvals and so forth that you need to perform.
Speaker #4: Thank you for your question. Edson, yeah, I mean, even though it's difficult to say, our I would say we have aggressive plans and we have a lot of I mean, everybody has a strong commitment on doing that.
Javier Llaca García: Thank you for your question, Edson. Even though it's difficult to say, I would say we have aggressive plans and everybody has a strong commitment on doing that. In a few weeks, we will finish the discovery part. After that, we will start with the integration. Our main goal, and we would like to do that, is to end the year by having together both platforms. We know that that's an aggressive and a very ambitious target. If we can find a way to combine the databases and processes, I think it's achievable. As I mentioned, it's a very challenging idea or target, but we are working to do that.
Speaker #4: In a few weeks, we will finish the discovery part. So after that, we will start with the integration. Our main goal, and we would like to do that, is to end the year by having together both platforms.
Speaker #4: And we know that that's an aggressive and a very ambitious target. But if we can find a way to combine the databases and processes, I think it's achievable.
Speaker #4: As I mentioned, it's a very challenging idea or target. But we are working to do that.
Speaker #5: And last, we've got a new topic. 196 million pesos referring to Fibra Macquarie reported this quarter. So my question is, are we expecting the similar number for the rest of the 2026?
Edson Noriega: Last, regarding on CapEx, MXN 196 million, referring to Fibra Macquarie, you reported this quarter. My question is, are we expecting the similar number for the rest of 2026?
Speaker #4: No, we don't so please.
Javier Llaca García: No.
César Rubalcava Plascencia: Yes. Hi Edson. This is César.
Javier Llaca García: Please.
Speaker #3: Thank you, Jaime. This is Edson. Thank you very much for your question. So as Javier and Jaime mentioned during the call, Macquarie's advancement continues to be the manager of Fibra Macquarie portfolio.
César Rubalcava Plascencia: Thank you, Jaime. This is César. Edson, thank you very much for your question. As Javier and Jaime mentioned during the call, Macquarie Asset Management continues to be the manager of Fibra Macquarie portfolio. We're in coordination, but nonetheless, we're not in a phase where we can speak about forward-looking statements regarding the Fibra Macquarie portfolio. Obviously, once we do the closing and internalization of the management, we can do more updates regarding CapEx on their portfolio.
Speaker #3: We're in coordination, but nonetheless, we're not in a phase where we can speak about forward-looking savings regarding the Fibra Macquarie portfolio. Obviously, once we do the closing and internalization of the management, we can do more updates regarding capex on their portfolio.
Speaker #5: Okay. Thank you so much.
Edson Noriega: Okay. Thank you so much.
Speaker #1: Thank you. With no other questions in the queue, I'll turn the conference over to management of the company.
Operator: Thank you.
César Rubalcava Plascencia: You're welcome. Thank you.
Operator: With no other questions in the queue, I'll turn the conference over to management of the company.
Speaker #3: Thank you, everyone, for attending this call. And we hope to hear you soon. Have a great week. Bye-bye.
Jorge Ávalos Carpinteyro: Thank you everyone for taking this call, and we hope to hear you soon. Have a great week. Bye-bye.
Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
