FIBRA Prologis (FIBRAPL 14) Q2 2024 earnings summary

Executive summary

• Closed initial tender offer for Terrafina, acquiring 77% ownership and taking control of governance; integration is progressing as planned with asset recycling to begin early next year.

• Achieved record net effective rent change of 58.1% on lease rollovers in Q2 2024.

• Portfolio occupancy remains above 98%, with period-end occupancy at 98.4% and Terrafina at 95%.

• Operational activity was concentrated in Mexico City, Monterrey, and Tijuana.

• Market volatility increased due to Mexican judicial reform and U.S. election cycle, slowing client decision-making, especially in manufacturing markets.

Financial highlights

• FFO for the quarter was $63.4 million ($0.044 per certificate), down 11.5% per certificate year-over-year due to lower interest income, increased CBFIs, and one-time Terrafina expenses.

• Nominal FFO reached $52 million, up 13% year-over-year, driven by rent increases and Terrafina contribution.

• FFO per CBFI was Ps. 0.8112 (US$0.0485), slightly up from Ps. 0.8048 (US$0.0445) year-over-year.

• Net earnings per CBFI were Ps. 0.7770 (US$0.0470), down from Ps. 3.0949 (US$0.1687) year-over-year.

• Same-store cash NOI rose 4.4% and GAAP NOI increased 3%, offset by peso movement; same store cash NOI increased 11.9% year-over-year.

Outlook and guidance

• Market rent growth expectations for 2024 adjusted to mid-single-digits.

• Full-year FFO per certificate guidance set between $0.19 and $0.195.

• Same-store cash NOI growth expected between 8.5% and 9.5%; G&A guidance at $50–$55 million including Terrafina.

• Capital deployment guidance for acquisitions between $250 million and $350 million.

• Management expects favorable market conditions to continue for the remainder of the year.