Terrafina: Fourth Quarter 2021 Earnings Report

Mexico City, February 24^th, 2022 – Terrafina® (“TERRA” or “the Company”) (BMV: TERRA13), a leading Mexican industrial real estate investment trust (“FIBRA”), externally advised by PGIM Real Estate and dedicated to the acquisition, development, leasing and management of industrial real estate properties in Mexico, announced today its fourth quarter 2021 (4Q21) earnings results.

The figures in this report have been prepared in accordance with International Financial Report Standards (“IFRS”). Figures presented in this report are expressed in millions of Mexican pesos and millions of U.S. dollars, unless stated otherwise. Additionally, figures may vary due to rounding.

Operating and Financial Highlights as of December 31^st, 2021

OPERATING

• As of December 31^st, 2021, the occupancy rate was 94.9%, a 30-basis point decrease compared to the fourth quarter of 2020 (4Q20).
• Renewal rate for 4Q21 was 88.1%, a 180 basis-point decrease compared to 4Q20.
• Annualized average leasing rate per square foot at the end of the year was US$5.40, a 2.2% or US$0.12 increase compared to 4Q20.
• At the end of 2021, Terrafina reported a total of 38.6 million square feet (msf) of Gross Leasable Area (GLA) comprised of 273 properties and 288 tenants.
• 2021 leasing activity reached 10.0 msf, of which 20.0% corresponded to new leases, 55.0% to lease renewals and 25.0% to early renewals. Leasing activity was concentrated in the Cuautitlán Izcalli, Ciudad Juárez, Chihuahua, Ramos Arizpe, Querétaro, Toluca, Silao, Tijuana, Monterrey, San Luis Potosí, Reynosa, Derramadero, Huehuetoca, Saltillo, San Pedro de las Colinas, Arteaga, Irapuato, Apodaca, Gómez Palacio, Guadalajara, and Durango markets.

 FINANCIAL

• FY2021 net collections (rental revenues – uncollected revenues + collected revenues) reached US$189.6 million, of which US$47.4 million were generated during 4Q21. This was a 3.5% or US$1.7 million decrease compared to 4Q20, and a 2.6% or US$5.1 million decrease compared to FY2020.
• FY2021 rental revenues reached US$187.4 million, of which US$46.6 million were generated during 4Q21. This implies a 4.1% or US$2.0 million decrease compared to 4Q20, and a 5.9% or US$11.7 million decrease compared to FY2020.
• FY2021 NOI was US$182.1 million, of which US$45.6 million were generated during 4Q21. This translates into a 5.3% or US$2.5 million decrease compared to 4Q20, and a 3.2% or US$6.0 million decrease compared to FY2020.
• The NOI margin was 93.8% in FY2021 and 93.6% in 4Q21, a 60-basis point decrease compared to the 4Q20, and a 25-basis point decrease compared to FY2020.
• FY2021 EBITDA reached US$161.3 million, of which US$40.1 million were generated during 4Q21. This was a 7.2% or US$3.1 million decrease compared to 4Q20, and a 4.3% or US$7.2 million decrease compared to FY2020.
• The EBITDA margin was 83.1% in FY2021 and 82.4% in 4Q21, a 223-basis point decrease compared to the 4Q20, and a 115-basis point decrease compared to FY2020.
• FY2021 adjusted funds for operations (AFFO) reached US$102.3 million, of which US$24.7 million were generated in 4Q20, a decrease a decrease of 9.2% or US$2.5 million compared to 4Q20, and a 0.6% or US$0.6 million decrease compared to FY2020.
• The AFFO margin was 52.5% for FY2021 and 50.7% in 4Q21, a 208-basis point decrease compared to 4Q20, and a 150-basis point increase compared to FY2020.
• Total distribution for FY2021 were US$71.6 million; distributions per CBFI were US$0.0959. Considering the average share price for 2021 of US$1.47 (Ps.29.79), Terrafina’s dividend yield for the year was 6.5%.

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About Terrafina

Terrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, develop, lease and manage industrial real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically located warehouses and other light manufacturing properties throughout the Central, Bajío and Northern regions of Mexico. It is internally managed by highly-qualified industry specialists and externally advised by PGIM Real Estate. Terrafina owns 278 real estate properties, including 273 developed industrial facilities with a collective GLA of approximately 38.6 million square feet and 9 land reserves, designed to preserve the organic growth capability of the portfolio. Terrafina’s objective is to provide attractive risk-adjusted returns for the holders of its certificates through stable distributions and capital appreciations. Terrafina aims to achieve this objective through a successful performance of its industrial real estate and complementary properties, strategic acquisitions, access to a high level of institutional support, and an effective management and corporate governance structure. For more information, please visit www.terrafina.mx/en

About PGIM Real Estate

As one of the largest real estate managers in the world with $201 billion in gross assets under management and administration¹, PGIM Real Estate strives to deliver exceptional outcomes for investors and borrowers through a range of real estate equity and debt solutions across the risk-return spectrum. PGIM Real Estate is a business of PGIM, the $1.7 trillion global asset management business of Prudential Financial, Inc. (NYSE: PRU).

PGIM Real Estate’s rigorous risk management, seamless execution, and extensive industry insights are backed by a 50-year legacy of investing in commercial real estate, a 140-year history of real estate financing², and the deep local expertise of professionals in 31 cities globally. Through its investment, financing, asset management, and talent management approach, PGIM Real Estate engages in practices that ignite positive environmental and social impact, while pursuing activities that strengthen communities around the world. For more information visit www.pgimrealestate.com.

¹As of September 30, 2021. Includes US$45 billion in assets under management (AUA).
²Includes legacy lending through PGIM’s parent company, PFI.

About PGIM and Prudential Financial, Inc.

PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world¹ with more than $1.7 trillion in assets under management as of September. 30, 2021. With offices in 16 countries, PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. For more information about PGIM, visit www.pgim.com.

Prudential’s additional businesses offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information about Prudential, please visit www.news.prudential.com.

Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.

¹Prudential Financial, Inc. (PFI) is the 10th largest investment manager (out of 527 firms surveyed) in terms of global assets under management based on Pensions & Investments’ Top Money Managers list published on June 1, 2020. This ranking represents global assets under management by PFI as of March 31, 2020. 

Forward Looking Statements

This document may include forward-looking statements that may imply risks and uncertainties. Terms such as “estimate”, “project”, “plan”, “believe”, “expect”, “anticipate”, “intend”, and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document, or realized by Terrafina’s management imply risks and uncertainties that could change in function of various factors that are out of Terrafina’s control. Future expectations reflect Terrafina’s judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance is not an indicator to anticipate future performance.

Conference Call

Terrafina
(BMV: TERRA13)
Cordially invites you to participate in its Fourth Quarter 2021 Conference Call

Friday, February 25^th, 2022
11:00 a.m. Eastern Time
10:00 a.m. Central Time

To access the call, please dial: