Corporación Inmobiliaria Vesta SAB de CV Q2 FY2025 earnings call

• Macro volatility and uncertainty continued, but Vesta's operating results were resilient. New leasing activity was slower overall, but Vesta had 1.8 million square feet of total leasing activity, with 1.4 million square feet closed in renewals and re-leasing. Rents increased 20%-30% with a 12-month spread of 13.7%. - Completed Vesta Park Apodaca buildings 6 and 7, with 8 under construction. Acquired 128.4 acres in Guadalajara and 20.2 acres in Monterrey. Focus on long-term vision, cost discipline, and tenant retention. - Dual exposure to domestic consumption and global manufacturing is a strength, with focus on completing projects and expanding land bank.

Total revenues for the second quarter were $67 million, up 6.8% year-over-year, driven by rental income from new leases and inflationary adjustments. Rental revenues in the second quarter were 89.4% denominated in U.S. dollars. Adjusted net operating income increased 7.2% to $61.8 million, with an adjusted NOI margin of 94.5%. Adjusted EBITDA was $55 million, a 9% increase year-over-year, with an EBITDA margin of 84.1%. Vesta's portfolio ended the quarter at 95.5% stabilized occupancy.

• Vesta expects to achieve its stated 2025 guidance. Sees the current slowdown in leasing as temporary. Anticipates better momentum in lease-up with USMCA clarity. Has approximately 2 million square feet in lease-up stage and a building pipeline.

• Macro volatility, trade dynamics, and tariff uncertainties. Muted investment decisions by global corporations. Potential impact on leasing activity and tenant decisions.

Q: Exposure to manufacturing, logistics, e-commerce and vertical integration.

A: Portfolio balanced between light manufacturing and logistics, flexible facilities. Vertically integrated, considering services like renewable energies. Focus on long-term leases with high-credit tenants and dollar-denominated leases.

Q: Asset recycling or divesting mature properties.

A: Consider asset recycling, key priority is to lease up lease-up properties now, but will continue to do asset dispositions occasionally.