FIBRA Prologis (FIBRAPL 14) Q3 2024 earnings summary

Executive summary

• Closed initial tender offer for FIBRA Terrafina, acquiring 77% ownership and taking control of governance; integration is progressing as planned.

• Achieved 56.2% net effective rent change on lease rollovers, with period-end occupancy at 98.1% and average occupancy at 97.8%.

• Customer retention was 52.7%, and same store cash NOI increased by 4.4% year-over-year.

• Acquired properties in Mexico City and Tijuana, adding 2 million sq ft to the portfolio.

• 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, or $0.044 per certificate, an 11.5% decline per certificate year-over-year, mainly due to lower interest income, increased CBFI count, and one-time Terrafina transaction expenses.

• AFFO reached $52 million, a 13% nominal increase, driven by rent changes, annual bumps, and Terrafina's contribution.

• Net earnings per CBFI were Ps. 6.4887 (US $0.3448), up from Ps. 6.1356 (US $0.3609) in Q3 2023.

• Funds from operations (FFO) per CBFI was Ps. 0.6481 (US $0.0461), compared to Ps. 0.9185 (US $0.0481) in Q3 2023.

• Leverage stood at 23.3% with liquidity of Ps. 14.3 billion (US $728 million) as of September 30, 2024.

Outlook and guidance

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

• 2024 FFO per CBFI guidance is US $0.1900–$0.1950.

• Same-store cash NOI growth expected between 8.5% and 9.5% for the year.

• Asset management and professional fees projected at US $50–$55 million, including Terrafina.

• Building acquisitions (excluding Terrafina) forecasted at US $250–$350 million.