Prologis Property Mexico, S.a. De C.v. · BMV:FIBRAPL/14
Prologis Property Mexico, S.a. De C.v — FIBRA Prologis — Non-Deal Roadshow (November 2019)
37 slides from Prologis Property Mexico, S.a. De C.v's roadshow presentation, Nov 11, 2019
Slide 1: FIBRA Prologis
Tres Rios 8, Mexico City FIBRA PROLOGIS Scotiabank Non-Deal Roadshow – Minneapolis & Chicago November 11, 2019
Slide 2: Forward-Looking Statements / Non Solicitation
Forward-Looking Statements / Non Solicitation This presentation includes certain terms and non-IFRS financial measures that are not specifically defined herein. These terms and financial measures are defined and, in the case of the non-IFRS financial measures, reconciled to the most directly compara
Slide 3: Contents
Contents 04 FIBRA Prologis Key Differentiators 13 Why Industrial Real Estate 18 Why FIBRA Prologis 28 Appendix Apodaca 6, Monterrey 3
Slide 4: FIBRA Prologis Key Differentiators
Prologis Park Los Altos, Guadalajara FIBRA Prologis Key Differentiators
Slide 5: FIBRA Prologis Key Differentiators
FIBRA Prologis Key Differentiators FOCUSED INVESTMENT STRATEGY • Own irreplaceable industrial real estate in Mexico • Investing in the six most dynamic markets • Consumption and e-commerce driving incremental growth • Proprietary access to acquire Prologis development pipeline IRREPLACEABLE PORTFOLI
Slide 6: Unmatched Portfolio Focused in the Top Consumption and Manufacturing Markets
Unmatched Portfolio Focused in the Top Consumption and Manufacturing Markets Tijuana Ciudad Juarez GLA 4.2 MSF GLA 3.2 MSF 100% Occupancy 94.6% Occupancy 62.71 $/sf 57.40 $/sf Reynosa 96.8% GLA 4.7 MSF 99.6% Occupancy Occupancy 58.84 $/sf 120 bps Monterrey GLA 4.3 MSF Outperformance vs Market Occupa
Slide 7: Diversified Customer Base
Diversified Customer Base 230 CUSTOMER ACTIVITY CUSTOMER INDUSTRY %, NRA basis %, NRA basis customers in Mexico 62% have E-Commerce 5% 16% 318 leases with FIBRA 21% Prologis B2B 11% 10% 32% 86% of FIBRA Prologis’ 8% 8% 8% 35% customers are multinational 5% companies(1) Retail 5% 3% 3% 3% Our top 10
Slide 8: Consistent Growth
Consistent Growth NOI GROWTH ADJUSTED EBITDA GROWTH Millions of USD Millions of USD 180 160 150 140 120 120 90 100 80 60 60 30 40 0 20 2015 2016 2017 2018 YTD 2019 2015 2016 2017 2018 YTD 2019 FFO GROWTH AFFO GROWTH Millions of USD Millions of USD 125 125 100 100 75 75 50 50 25 25 0 0 2015 2016 2017
Slide 9: Strong Credit Metrics
Strong Credit Metrics DEBT % OF INVESTMENT PROPERTIES FIXED CHARGE COVERAGE RATIO 40% 5X 30% 4X 3X 20% 2X 10% 1X 0% 0 Q415 Q416 Q417 Q418 Q319 Q415 Q416 Q417 Q418 Q319 DEBT TO ADJUSTED EBITDA LIQUIDITY Millions of USD 6X 500 400 4X 300 200 2X 100 0 0 Q415 Q416 Q417 Q418 Q319 Q415 Q416 Q417 Q418 Q319
Slide 10: Creating Value for Certificate Holders
Creating Value for Certificate Holders TOTAL RETURN OF CBFIS IN MEXICAN PESOS June 4, 2014 – November 8, 2019 115% 85% 58% 46% 2% 30% FIBRAPL FIBRAPL Peer A Peer B Peer C Peer D FIBRA Index Stock Return Dividend Return FIBRAPL AFFO PER CBFI FIBRAPL DISTRIBUTIONS PER CBFI PAYOUT RATIO USD, millions U
Slide 11: Our Foundation Begins with ESG
Our Foundation Begins with ESG FIBRA Prologis’ ESG Highlights Recognized for Performance and Transparency Environmental • 21 sustainable building certifications (5.7 million square feet / 16.3% of GLA) • Smart LED systems are being installed to better understand energy use Social Dow Jones Sustainab
Slide 12: Corporate Governance
Corporate Governance Alignment with Certificate Holders Philosophy Technical Committee Members Our governance structure reflects a market-leading • Technical Committee members are ratified approach to corporate governance prioritizing the annually by certificate holders interests of our CBFI holders
Slide 13: Why Industrial Real Estate
Prologis Park Izcalli, Mexico City Why Industrial Real Estate
Slide 14: Real Estate Fundamentals
Real Estate Fundamentals DEMAND (TTM) VS SUPPLY (PIPELINE) DEMAND VS SUPPLY VACANCY (MSF) (MSF) (%) • Tempered supply and 0 1 2 3 4 5 10 strong demand have kept 24 market vacancies at or near Mexico City historical lows 8 20 • Political uncertainty Monterrey impacting development cycle more so than
Slide 15: E-Commerce Becoming an Added Demand Driver
E-Commerce Becoming an Added Demand Driver SIGNIFICANT E-COMMERCE SALES, MEXICO POSITIVE UPSIDE IN INTERNET PENETRATION • E-commerce becoming an added Billions, MXN, Constant 2017 Prices %, Internet Sales as a Share of Total Retail Sales tailwind for logistics real estate 300 demand, especially in M
Slide 16: E-Commerce Requires ~3X the Distribution Space of Traditional Retail
E-Commerce Requires ~3X the Distribution Space of Traditional Retail Sales Facilities Productivity Efficiency E-fulfillment requires 3X US$, B SF, M US$ / SF SF / $1B the logistics space used of brick-and-mortar retailers due to: • Shipping parcels versus pallets Online $228B 286 $799 1,251 KSF +/•
Slide 17: Location Matters
Location Matters CONTINUUM OF LOGISTICS REAL ESTATE LOCATION REQUIREMENTS Production Consumption Raw International Retail material manufacturing/ centers supplies Order consolidation Import/national Regional City distribution / distribution center distribution Last TouchTM Customer Raw Domestic Retu
Slide 18: Why FIBRA Prologis
Prologis Pharr Bridge, Reynosa Why FIBRA Prologis
Slide 19: Solid Operating Performance
Solid Operating Performance ELEVATED PERIOD-END OCCUPANCY (%) 97.4 97.5 96.6 96.8 96.5 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 POSITIVE RENT CHANGE ON ROLLOVER EXPECTED TO CASH SAME STORE NOI GROWTH DRIVEN BY CONTINUE OCCUPANCY AND RENT GROWTH (%) (%) 3.9 3.5 16.0 13.5 2.4 10.6 1.7 5.9 (1.4) Q3 2018
Slide 20: Embedded Earnings Potential from Harvesting the Gap between In-place Rents and Market Rents
Embedded Earnings Potential from Harvesting the Gap between In-place Rents and Market Rents LEASE EXPIRY PROFILE BY ANNUALIZED NER 29% 24% 16% 15% 11% 4% 2019 2020 2021 2022 2023 2024+ AVERAGE IN-PLACE NER RATE OF LEASE EXPIRY PROFILE (Overall Portfolio Avg. in Place Rent of US$5.24) US$/SF/Yr Avg.
Slide 21: Portfolio Expansion Since IPO
Portfolio Expansion Since IPO GROSS LEASABLE AREA Thousands of SF, June 4, 2014 through September 30, 2019 40,000 30,000 20,000 10,000 0 IPO IPO Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 20
Slide 22: External Growth: Identified Future Growth Acquisitions
External Growth: Identified Future Growth Acquisitions EXTERNAL GROWTH VIA PROLOGIS DEVELOPMENT PIPELINE (MSF) UNIQUE COMPETITIVE ADVANTAGE Prologis and Prologis and FIBRAPL FIBRAPL • Proprietary access to Prologis Development Land Bank and FIBRAPL Portfolio Pipeline Expansion Land (B) development p
Slide 23: Potential Future Investments
Potential Future Investments Prologis Park Grande • Location: Mexico City B-6 B-7 B-5 • Land Size: 212.3 acres, 9.3 MSF B-8 B-4 • Potential Build Out: 3.9 MSF • Fully leased: Buildings 1, 2, 3, 4, 5, 7 and 8 (3.6 B-3 MSF) B-2 • Built: Buildings 1, 3, 4, 5, 6, 7 and 8 (2.93 MSF) • Partially leased: B
Slide 24: Disciplined Balance Sheet Management
Disciplined Balance Sheet Management $772M 4.5% 4.1X 32.0% Total Debt Wtd Avg Rate(1) Fixed Charge Coverage Loan-to-Value 100% USD 4.1 years 5.2X $496M denominated Wtd Avg Term Debt-to-Adjusted EBITDA Available Liquidity in USD (2) DEBT MATURITY SCHEDULE FIXED VS. FLOATING DEBT (US$ in millions) Flo
Slide 25: Compelling Valuation
Compelling Valuation OCCUPANCY IN-PLACE RENT PER SQFT FFO MARGIN AFFO MARGIN 96.8% $5.24 56.9% 96.5% 53.7% 48.0% 48.5% $4.99 FIBRAPL Industrial Peers FIBRAPL Industrial Peers FIBRAPL Industrial Peers FIBRAPL Industrial Peers FIBRA Prologis shares represent an attractive entry point trading at a: • D
Slide 26: Distribution Growth Potential
Distribution Growth Potential INTERNAL GROWTH DRIVERS • Positive demand / supply imbalance and low vacancy of ~4.3% • Market rents forecast to grow between 1% and 2% in 2019 and should continue to grow given favorable operating conditions • Portfolio is ~6% under rented with ~20% expiring annually E
Slide 27: Location and Quality Matter
Location and Quality Matter • 115% Total Return Since IPO(1) • Raised the distribution four consecutive years • Superior organic growth • Reliable and sustainable cash flow • Access to Prologis development pipeline • Disciplined balance sheet management • Strong corporate governance 1. IPO was June
Slide 28: Appendix
Alamar Industrial Center, Tijuana Appendix
Slide 29: Mexico City
Mexico City Nicolas Ecatepec jalInepanta ovoacan, Adalo Lopez in Industrial Corridors Pipeline Assets FIBRA 29 € PROLOGIS"
Slide 30: Guadalajara
Guadalajara HoaLes © Guadalajara © San Pedro Tlaquepaque Tonala © San Martin De Las Flores 10 Mexico city ss7msaz kin La Aurora © © Los Gavilanes © La Calerilla © Santa Anita Santa Cruz © Del Val “ Juanacatian ? Concepcion ‘San Sebastian ~ Del Valle El Grande © Tlajomutco Tlajomulco Industrial Corri
Slide 31: Monterrey
Monterrey Toda © Cienega de Flores few —_— ancowns — ~ General Escobedo San Nicolas de los Garza Guadalupe Garza Garcia 2) Industrial Corridors) Pipeline Assets (_) FIBRAPL Assots FIBRA 31 € PROLOGIS"
Slide 32: Tijuana
Tijuana Presa Rodriguez FIBRAPL Assets FIBRA 32 € PROLOGIS"
Slide 33: Ciudad Juarez
Ciudad Juarez 33 FIBRA €> PROLOGIS’ °
Slide 34: Reynosa
Reynosa 2 << | | Industrial Corridors () Pipeline Assets (_) FIBRAPL Assets FIBRA € PROLOGIS"
Slide 35: Capital Expenditure
Capital Expenditure CAPEX AS PERCENTAGE OF NOI: MEXICAN FIBRAS CAPEX AS PERCENTAGE OF NOI: US REITS Full Year 2018 Full Year 2018 FIBRAPL 16.8% 13.8% 13.4% 11.7% 11.4% 9.6% 7.9% 5.4% 0.2% FIBRAPL Peer A Peer B Peer C Duke Realty First EastGroup STAG Liberty Industrial Property Property Improvements
Slide 36: Administration Fees
Fee Structure Transparent and Aligned Fee Type Calculation Payment Frequency Property Management 3% x collected revenues Monthly Operating Fees New leases: 5% x lease value for <5 yrs; Leasing Commission 2.5% x lease value for 5-10 yrs; ½ at closing 1.25% x lease value for > 10 yrs Only when no brok
Slide 37: FIBRA Prologis
FIBRA €*; PROLOGIS’