Corporación Inmobiliaria Vesta SAB de CV Q4 FY2025 earnings call

2025 was a year of disciplined execution and strategic positioning. Strengthened Route 2030 on schedule. Captured demand cycle beginning 2026. Disciplined in capital allocation, selective in development. Leasing activity strengthened in second half of 2025 with 6.9 million square feet full year leasing activity. Renewals and re-leasing activity reached 5.4 million square feet in 2025. Guadalajara benefits from structural trends with sustained demand from global manufacturing tenants. Monterrey market has leasing momentum building. Ciudad Juarez experienced inflection point. Tijuana stabilized. Secured strategic land positions in 2025 to support Route 2030 execution. Balance sheet strong, liquidity solid, leverage metrics trending as expected.

In 2025, rental revenues increased 11.8% to $274 million. Adjusted full year 2025 NOI margin reached 94.8% and adjusted EBITDA margin reached 84.4%. Vesta FFO totaled $174.9 million in 2025, a 9.2% year-on-year increase. Fourth quarter leasing activity reached 1.9 million square feet, including 770,000 square feet of new leases. Lease renewals totaled 1.2 million square feet. Total portfolio occupancy stood at 89.7% at quarter end, while stabilized and same-store occupancy reached 93.6% and 95%, respectively. 86% of Vesta's new leases in 2025 were manufacturing-related with electronics leading. Development-wise, invested ~$330 million in projects during the year on a cash flow basis, with $60 million under construction at quarter end with an expected yield on cost of 9.9%.

Expect to increase rental revenues between 10% to 11% year-on-year in 2026. Expect to achieve 93.5% adjusted NOI margin and 83% adjusted EBITDA margin for the full year 2026. CapEx and development pace in 2026 will be calibrated carefully to demand and absorption levels in each market. Dividend will continue to be paid and grown judiciously.

Q: 86% of 2025 leases were manufacturing related, how resilient is current development pipeline under USMCA review uncertainty?

A: Mexico has strong supplier base, global companies have strong bets on Mexico, Guadalajara, Queretaro, Monterrey have strong pipeline.

Q: Leasing in recently completed development projects and land bank acquisition in Monterrey?

A: Leasing activity strong, land bank acquisition in Monterrey was 330 acres with seller financing.

Q: Guidance on occupancy, development launches, income tax expense?

A: No specific occupancy guidance, development launches to continue, income tax expense related to peso appreciation.

Q: Revenue growth guidance drivers?

A: Buildings leased up, strong pipeline, renewals with mark-to-market rents.

Q: Rents in northern markets stability?

A: Rents held up well due to market stoutness, demand expected to increase.

Q: Development pipeline mix of build-to-suit and spec-to-suit?

A: Well balanced, continue both.

Q: Nissan plant divestment in Aguascalientes?

A: Positive for sector, Vesta will continue in the region.

Q: Asset recycling and dividends in 2026?

A: Asset recycling considered, dividends will continue.

Q: Vacant buildings marketing and leasing spreads?

A: Vacant buildings pipeline building, leasing spreads expected to continue.

Q: Infrastructure strides under Claudia Sheinbaum?

A: Proactiveness from administration, good access to government agencies.

Q: Pace of developments in 2026?

A: Monitor markets, will start projects where demand exists.

Q: Capital allocation and peso in guidance?

A: Capital allocation focused on infrastructure, peso strong affecting guidance.