Mexico City, February 23rd, 2023 – 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 (4Q22) and full year 2022 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 31st, 2022
OPERATING
- As of December 31st, 2022, the occupancy rate was 96.4%, a 150-basis point increase compared to the fourth quarter of 2021 (4Q21).
- Renewal rate for 4Q22 was 99.1%, a 1,100 basis-point increase compared to 4Q21.
- Average leasing rate per square foot for 4Q22 was US$6.47, with a 22.8% leasing spread compared to the last twelve months.
- At the end of 2022, Terrafina reported a total of 39.4 million square feet (msf) of Gross Leasable Area (GLA) comprised of 276 properties and 288 tenants.
- 2022 leasing activity reached 7.4 msf, of which 34.6% corresponded to new leases, 47.4% to lease renewals and 18.0% to early renewals. Leasing activity was concentrated in the Ciudad Juárez, Chihuahua, Ramos Arizpe, Cuautitlán Izcalli, San Luis Potosí, Tijuana, Monclova, Camargo, Guadalajara, Arteaga, Querétaro, Saltillo, Monterrey, Huehuetoca, Irapuato, Toluca, Delicias, Silao, and Hermosillo markets.
FINANCIAL
- FY2022 net collections (rental revenues – uncollected revenues + collected revenues) reached US$197.5 million, of which US$50.4 million were generated during 4Q22. This implies increases of 4.2% or US$7.9 million compared to FY2021, and 6.4% or US$3.0 million compared to 4Q21.
- FY2022 rental revenues reached US$196.0 million, of which US$50.7 million were generated during 4Q22. This implies 4.6% or US$8.7 million and 8.8% or US$4.1 million increases, respectively, compared to FY2021 and 4Q21.
- FY2022 NOI was US$188.6 million, of which US$48.0 million were generated during 4Q22. This translated into increases of 3.6% or US$6.5 million compared to FY2021, and 5.3% or US$2.4 million compared to 4Q21.
- The NOI margin was 93.6% in FY2022 and 93.5% in 4Q22. This implies 22- and 15-basis point decreases, respectively, compared to FY2021 and 4Q21.
- FY2022 EBITDA reached US$166.1 million, of which US$41.9 million were generated during 4Q22. This implies 3.0% or US$4.8 million and 4.4% or US$1.8 million increases, respectively, compared to FY2021 and 4Q21.
- The EBITDA margin was 82.4% in FY2022 and 81.5% in 4Q22. This implies 67- and 86-basis point decreases, respectively, compared to FY2021 and 4Q21.
- FY2022 funds for operations (FFO) reached US$123.5 million, of which US$30.4 million were generated in 4Q22. These were 2.9% or US$3.4 million and 2.0% or US$0.6 million increases, respectively, compared to FY2021 and 4Q21.
- The FFO margin was 61.3% for FY2022 and 59.1% in 4Q21, 57- and 202-basis points less than in FY2021 and 4Q21, respectively.
- FY2022 adjusted funds for operations (AFFO) reached US$104.4 million, of which US$23.4 million were generated in 4Q22. This was a 2.0% or US$2.1 million increase compared to FY2021, and a 5.3% or US$1.3 million decrease compared to 4Q21.
- The AFFO margin was 51.6% for FY2022 and 45.5% in 4Q22. This implies 91- and 520-basis point decreases, respectively, compared to FY2021 and 4Q21.
- Total distribution for FY2022 were US$73.1 million. Distributions per CBFI were US$0.0942. Considering the 2022 average share price of US$1.36 (Ps.27.46), Terrafina’s dividend yield for the year was 6.9%.
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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 280 real estate properties, including 276 developed industrial facilities with a collective GLA of approximately 39.4 million square feet and 4 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
With $204.4 billion in gross assets under management and administration1, PGIM Real Estate provides investors and borrowers access to a range of real estate equity, real estate debt, agriculture, and impact solutions across the risk-return spectrum.
PGIM Real Estate is a business of PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU). PGIM Real Estate’s risk management approach, execution capabilities and 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 local experience of professionals in 31 cities globally. Through its investment, financing, asset management, and talent management approach, PGIM Real Estate engages in practices that strive to ignite positive environmental and social impact, while pursuing activities that seek to strengthen communities around the world. For more information visit pgimrealestate.com.
1As of Sept. 30, 2022; AUA is $46.6 billion.
2Includes legacy lending through PGIM’s parent company, PFI.
About PGIM
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 $1.2 trillion in assets under management as of Sept 30th, 2022. 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.
Additional Prudential companies offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information 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 2022 Conference Call
Friday, February 24th, 2023
11:00 a.m. Eastern Time
10:00 a.m. Central Time
To access the call, please dial: