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FIBRA Macquarie México Reports First Quarter 2022 ResultsFIBRA Macquarie México (FIBRAMQ) (BMV: FIBRAMQ) announced its financial and operating results for the first quarter ended on March 31, 2022. FIRST QUARTER 2022 HIGHLIGHTS
"The strengthening market backdrop has contributed to healthy momentum in our results, contributing to a 17.1% annual growth in AFFO per certificate and an AFFO margin expansion of 448 bps," said Simon Hanna, FIBRA Macquarie's chief executive officer. "Our high-quality portfolio of industrial assets realized a 6.5% annual increase in NOI, as we closed the quarter with record occupancy of 97.1%. Supported by the ongoing demand for manufacturing and logistics properties, leasing momentum has continued to accelerate, including interest in new developments. We are nearing completion on the delivery of the first building in our Monterrey development project and advancing with the development of our Mexico City industrial project. We are also seeing ongoing stabilization in our retail portfolio and are pleased to report a 9.3% increase in first quarter NOI compared to the prior year. In addition, we recently announced enhancements to our balance sheet with the refinancing of our unsecured bank facility, thereby lowering our cost of borrowing, extending our maturities, and positioning us to execute on our organic and new development growth strategies." FINANCIAL AND OPERATING RESULTS Consolidated Portfolio FIBRAMQ's total results were as follows:
FIBRAMQ's same store portfolio results were as follows:
Industrial Portfolio The following table summarizes the results for FIBRAMQ's industrial portfolio:
FIBRAMQ's industrial portfolio performance remains robust, with positive results across key metrics including occupancy, rental rates and NOI margin. For the quarter ended March 31, 2022, FIBRAMQ's industrial portfolio delivered NOI of Ps. 821.9 million, a 6.5% increase year over year. This result was driven by top line performance, with record quarterly lease revenues of US$40.9 million. Underlying performance in the industrial portfolio continued to be supported by a favorable supply-demand environment with the quarterly increase in average rental rates accelerating to 6.0% on an annualized basis. At quarter-end, occupancy was 97.1%, up 279 basis points from the prior year period, and also up 108 basis points sequentially. New leasing activity gained momentum through the quarter adding 481 thousand sqft. with six new customers across five northern markets, and all new leases being denominated in a US Dollars. New leasing deals included Asian domiciled electronics manufacturers and German domiciled industrial manufacturers. Renewal leases comprised 14 leases and 713 thousand sqft, driving a healthy retention rate of 83.5% over the last 12 months. Cash collections continue to be strong, and through April 26, 98.7% of scheduled 1Q22 rental income has been collected. Cash collections for the quarter totaled Ps. 1,025 million, up 5.7% over the prior corresponding quarter. As of March 31, 2022, trade receivables net of provisions were Ps. 20.2 million (excl. VAT), lower by 16.7% over the prior corresponding period, reflecting solid cash collections along with prudent provisioning. Retail Portfolio The following table summarizes the proportionally combined results for FIBRAMQ's retail portfolio:
FIBRAMQ's retail portfolio benefited from improving trading conditions, with NOI higher by 9.3% year over year.
Lease renewal activity was strong for the quarter. FIBRAMQ signed 60 leases encompassing 24.5 thousand sqm of retail space during the first quarter of 2022. This single 2022 quarter of leasing renewal compares favorably to the full year lease renewal activity in FY21 (46.5k sqm) and FY20 (17.6k sqm). Leasing highlights included renewals for Fun Central family entertainment centers at our Coacalco and Tecamac Power Centers (14.5 thousand sqm, MCMA), and a new restaurant lease for Casa de Toño in Multiplaza Ojo de Agua (0.5 thousand sqm, MCMA). As of March 31, 2022, trade receivables net of provisions were Ps. 6.8 million (excl. VAT), lower 39.3% over the prior corresponding period. Same Store Portfolio Results For detail on FIBRAMQ's industrial and retail same store portfolio results, please refer to First Quarter 2022 Supplementary Information materials located at BMV Filings (fibramacquarie.com). New Disclosure - Lease rental rate summary Consistent with our efforts to provide increasing transparency to the market, this quarter we have included additional detail in our Supplementary Information materials with regards to contractual rental rate increases in our portfolio. These disclosures include information pertaining to the scheduled lease escalation profile by type of escalation as well as phasing of such escalations throughout the year. Of note, 57.8% of leases for FIBRAMQ's consolidated portfolio is directly linked to either Mexican or US CPI. In addition, rental rates in our industrial portfolio increased by 13.7% for leases that renewed during the quarter. For detail on FIBRAMQ's lease rental rate disclosures, please refer to First Quarter 2022 Supplementary Information materials located at BMV Filings (fibramacquarie.com). CAPITAL ALLOCATION Industrial Development FIBRAMQ continues to pursue a strategy to complement and grow its existing industrial portfolio by investing and developing class "A" assets in core markets that demonstrate strong performance and a positive economic outlook.
These projects, as well as FRIBAMQ's active build to suit expansion projects, amount to approximately one million square feet of new GLA which is expected to be completed during 2022. Certificate repurchase program At the recent annual general meeting, FIBRA Macquarie received certificate holder approval for an extension of its Ps. 1,000.0 million CBFI repurchase-for-cancellation program through June 25, 2023. BALANCE SHEET As of March 31, 2022, FIBRAMQ had approximately Ps. 16.0 billion of debt outstanding, with Ps. 4.7 billion available on its undrawn committed revolving credit facility and Ps. 0.4 billion of unrestricted cash on hand. As of March 31, 2022, FIBRAMQ's indebtedness was 98.8% fixed rate, with 3.8 years weighted-average debt tenor remaining. FIBRAMQ's CNBV regulatory debt to total asset ratio was 32.2% and the debt service coverage ratio was 5.8x. On a consolidated basis, NAV per certificate increased over the year by 18% to Ps. 40.5. On April 5, 2022, FIBRAMQ closed on a US$425.0 million sustainability-linked unsecured credit facility, and primarily used the new sustainability-linked facility to repay the amounts drawn under the unsecured credit facility that was due to expire on April 1, 2024. As a result of the transaction, and taking into account related interest rate swap transactions, FIBRAMQ's indebtedness was 92% fixed rate and the weighted average annual cost of debt for its entire debt portfolio of US$836.0 million was 5.2%. ESG FIBRAMQ remains committed to sustainability including protecting the environment, prioritizing governance, and developing its employees, serving its customers and the community. FIBRAMQ has been recognized for its ongoing focus on, amongst other things, green building and green leasing, stakeholder engagement and transparency, as well as the commitment to continual improvement.
For additional details on FIBRAMQ's strategy and progress with regards to its ESG strategy can be found in its annual ESG report at https://www.fibramacquarie.com/en/corporate-responsibility.html. DISTRIBUTION On April 28, 2022, FIBRAMQ declared a cash distribution for the quarter ended March 31, 2022 of Ps. 0.5000 per certificate. The distribution is expected to be paid on June 16, 2022, to holders of record on June 15, 2022. FIBRAMQ's certificates will commence trading ex-distribution on June 14, 2022. FY22 GUIDANCE AFFO per certificate FIBRA Macquarie is reaffirming its FY22 AFFO per certificate guidance of Ps. 2.50 to Ps. 2.55. This guidance assumes:
The ability to maintain guidance in a strengthening Peso environment is reflective of FIBRA Macquarie's strong underlying performance. Distribution per certificate FIBRAMQ is reaffirming it guidance of cash distributions for FY22 of Ps. 2.00 per certificate, therefore indicating an expected first quarter 2022 distribution of Ps. 0.5000 per certificate. The payment of cash distributions is subject to the approval of the Manager, stable market conditions and prudent management of FIBRAMQ's capital requirements. WEBCAST AND CONFERENCE CALL FIBRAMQ will host an earnings conference call and webcast presentation on Friday, April 29, 2022 at 7:30 a.m. CT / 8:30 a.m. ET. The conference call, which will also be webcast, can be accessed online at www.fibramacquarie.com or by dialing toll free +1-877-407-2988. Callers from Mexico may dial 01-800- 522-0034 and other callers from outside the United States may dial +1-201-389-0923. Please ask for the FIBRA Macquarie First Quarter 2022 Earnings Call. An audio replay will be available by dialing +1-877-660-6853 or +1-201-612-7415 for callers from outside the United States. A webcast archive of the conference call and a copy of FIBRA Macquarie's financial information for the first quarter 2022 will also be available on FIBRA Macquarie's website, www.fibramacquarie.com. About FIBRA Macquarie FIBRA Macquarie México (FIBRA Macquarie) (BMV:FIBRAMQ) is a real estate investment trust (fideicomiso de inversión en bienes raíces), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico, with a primary focus on stabilized income-producing properties. FIBRA Macquarie's portfolio consists of 236 industrial properties and 17 retail properties, located in 20 cities across 16 Mexican states as of March 31, 2022. Nine of the retail properties are held through a 50/50 joint venture. For additional information about FIBRA Macquarie, please visit www.fibramacquarie.com. Cautionary Note Regarding Forward-looking Statements This release may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ significantly from these forward-looking statements and we undertake no obligation to update any forward-looking statements. Other than Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment. THIS RELEASE IS NOT AN OFFER FOR SALE OF SECURITIES IN THE UNITED STATES, AND SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. THIS ANNOUNCEMENT IS NOT FOR RELEASE IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA.
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