Prologis Property Mexico, S.a. De C.v. · BMV:FIBRAPL/14
Prologis Property Mexico, S.a. De C.v — FIBRA Prologis — Non-Deal Roadshow (May 2020)
39 slides from Prologis Property Mexico, S.a. De C.v's roadshow presentation, May 2020
Slide 1: FIBRA Prologis
Prologis Tres Park Rios #1, Mexico Apodaca City 3, Monterrey FIBRA PROLOGIS Evercore ISI Non-Deal Roadshow, Mexico City & Monterrey May 6 - 8, 2020
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 Industrial Real Estate Fundamentals & Structural Drivers 13 Opportunities for Growth 16 FIBRA Prologis Key Differentiators 27 Appendix Apodaca 6, Monterrey 3
Slide 4: Industrial Real Estate Fundamentals & Structural Drivers
Prologis Park Grande 1, Mexico City Industrial Real Estate Fundamentals & Structural Drivers
Slide 5: Real Estate Fundamentals
Real Estate Fundamentals DEMAND (TTM) VS SUPPLY (PIPELINE) DEMAND VS SUPPLY VACANCY (MSF) (MSF) (%) • Political uncertainty 0 1 2 3 4 5 6 10 impacting development 24 cycle more so than Mexico City customer demand 8 20 • Mexico City’s market Monterrey vacancy for Class-A product is ~2.2% 16 6 Guadala
Slide 6: Nearshoring: Growth in Mexico-to-US Manufacturing
Nearshoring: Growth in Mexico-to-US Manufacturing TOTAL MANUFACTURED GOODS IMPORTS FROM MEXICO AS % OF IMPORTS FROM ASIAN LOW-COST COUNTRIES • In 2019, the U.S. imported 42 cents 42 worth of manufacturing imports from Mexico for every dollar of manufacturing imports from Asia 38 38 • 75% less time t
Slide 7: Automation: Adoption of Manufacturing Technology Evolves Gradually
Automation: Adoption of Manufacturing Technology Evolves Gradually CHANGE IN EQUIPMENT AGE BY SECTOR Years, change between 1980 and 2017 6 5 4 3 2 1 0 Electrical Nonmetallic Computer & Electronics Wood Products Chemical Metals Fabricated Metals Petro & Coal Furniture Paper Products Machinery Printin
Slide 8: Structural Drivers Offer Operating Environment Durability
Structural Drivers Offer Operating Environment Durability MODERN LOGISTICS STOCK PER CAPITA Square Feet per Consumer Household • Undersupply of modern logistics stock in 100 Greater Mexico City driven by: 80 • Scarcity of well-located sites / access to roadways south of the CTT tollbooth 60 • Econom
Slide 9: Mexico City is a rapidly growing urban consumer market
Mexico City is a rapidly growing urban consumer market Expected to be the third largest affluent urban population in North America within the next decade AFFLUENT HOUSEHOLDS, MAJOR CONSUMER MARKETS (2030F) Millions of Households Earning >$70k USD per Year, PPP-adjusted Constant USD 6 5 4 3 2 1 0 New
Slide 10: E-Commerce Becoming an Added Demand Driver
E-Commerce Becoming an Added Demand Driver SIGNIFICANT E-COMMERCE SALES, MEXICO POSITIVE UPSIDE IN INTERNET PENETRATION • E-commerce becoming an added Billions, MXN, Constant 2017 Prices %, Internet Sales as a Share of Total Retail Sales tailwind for logistics real estate 300 demand, especially in M
Slide 11: E-Commerce Requires ~3X the Distribution Space of Traditional Retail
E-Commerce Requires ~3X the Distribution Space of Traditional Retail Sales Facilities Productivity Efficiency E-fulfillment requires 3X US$, 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 12: 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 13: Opportunities for Growth
Prologis Park Grande 2, Mexico City Opportunities for Growth
Slide 14: 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 34% 16% 16% 14% 10% 9% 2020 2021 2022 2023 2024 2025 + AVERAGE IN-PLACE NER RATE OF LEASE EXPIRY PROFILE (Overall Portfolio Avg. in Place Rent of US$5.38) US$/SF/Yr Avg.
Slide 15: External Growth: Identified Future Growth Acquisitions
External Growth: Identified Future Growth Acquisitions EXTERNAL GROWTH VIA PROLOGIS DEVELOPMENT PIPELINE (MSF) Prologis & FIBRAPL UNIQUE COMPETITIVE ADVANTAGE Development Land Bank & Pipeline Expansion Land • Proprietary access to Prologis FIBRAPL Portfolio Acquisition (1) development pipeline at ma
Slide 16: FIBRA Prologis Key Differentiators
Prologis Park Los Altos, Guadalajara FIBRA Prologis Key Differentiators
Slide 17: 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 18: 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 100.0% Occupancy 94.6% Occupancy 63.62 $/sf 57.39 $/sf Reynosa 96.8% GLA 4.8 MSF 98.7% Occupancy Occupancy(1) 59.11 $/sf +20 bps Monterrey GLA 4.4 MSF Outperformance vs Market O
Slide 19: Diversified Customer Base
Diversified Customer Base 230 CUSTOMER ACTIVITY CUSTOMER INDUSTRY %, NRA basis %, NRA basis customers in Mexico 60% have 16% E-commerce 5% 327 leases with FIBRA 20% Prologis B2B 11% 11% 30% 86% of FIBRA Prologis’ 8% 8% 7% customers are multinational 6% companies(1) 33% Retail 5% 4% 3% 3% Our top 10
Slide 20: Disciplined Balance Sheet Management
Disciplined Balance Sheet Management $772M 4.5% 4.7X 18.6% Total Debt Wtd Avg Rate(1) Fixed Charge Coverage Loan-to-Value 100% USD 3.6 years 2.5X $663M denominated Wtd Avg Term Debt-to-Adjusted EBITDA Available Liquidity in USD (2) DEBT MATURITY SCHEDULE FIXED VS. FLOATING DEBT (US$ in millions) Flo
Slide 21: Portfolio Expansion Since IPO
Portfolio Expansion Since IPO GROSS LEASABLE AREA Thousands of SF, June 4, 2014 through March 31, 2020 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 Q4 Q1 Q1 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 20
Slide 22: Strategic Acquisition Completed April 2020
Strategic Acquisition Completed April 2020 Prologis Park Grande • Location: Mexico City • Land Size: 212.3 acres, 9.3 MSF • Potential Build Out: 3.9 MSF B-6 B-7 B-5 • Fully leased: Buildings 1, 2, 3, 4, 5, 7 and 8 (3.6 MSF) B-8 B-4 • Partially leased: Building 6 (0.3 MSF) B-3 • Under construction: B
Slide 23: Our Foundation Begins with ESG
Our Foundation Begins with ESG Cedros Building, Cool Roofing Prologis Impact Day Prologis team Environmental Social Governance • 21 sustainable building certifications • Community Workforce Initiative • Technical Committee members are (5.7 million square feet / 16.3% of GLA) ratified annually by cer
Slide 24: 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 25: Creating Value for Certificate Holders
Creating Value for Certificate Holders TOTAL RETURN OF CBFIS IN MEXICAN PESOS June 4, 2014 – April 29, 2020 137% 59% 57% 28% 4% (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 26: Location and Quality Matter
Location and Quality Matter • 137% Total Return Since IPO(1) • Superior organic growth • Reliable and sustainable cash flow • Access to Prologis development pipeline • Disciplined balance sheet management • Strong corporate governance • Attractive entry point with certificates trading below NAV 26 1
Slide 27: Appendix
Prologis Park Grande, Mexico City Appendix
Slide 28: Historical Operating Performance
Historical Operating Performance ELEVATED PERIOD-END OCCUPANCY (%) 97.5 97.6 96.6 96.8 96.8 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 POSITIVE RENT CHANGE ON ROLLOVER EXPECTED TO CASH SAME STORE NOI GROWTH DRIVEN BY CONTINUE OCCUPANCY AND RENT GROWTH (%) (%) 16.0 13.9 3.9 3.5 2.4 2.5 6.6 5.9 (1.4) (0.
Slide 29: Historical Growth
Historical Growth NOI GROWTH ADJUSTED EBITDA GROWTH Millions of USD Millions of USD 180 180 150 150 120 120 90 90 60 60 30 30 0 0 2015 2016 2017 2018 2019 2020 YTD 2015 2016 2017 2018 2019 2020 YTD FFO GROWTH AFFO GROWTH Millions of USD Millions of USD 125 125 100 100 75 75 50 50 25 25 0 0 2015 2016
Slide 30: Historical Credit Metrics
Historical Credit Metrics DEBT % OF INVESTMENT PROPERTIES FIXED CHARGE COVERAGE RATIO 40% 5X 4X 30% 3X 20% 2X 10% 1X 0% 0 Q416 Q417 Q418 Q419 Q120 Q416 Q417 Q418 Q419 Q120 DEBT TO ADJUSTED EBITDA LIQUIDITY Millions of USD 6X 750 5X 600 4X 450 3X 2X 300 1X 150 0 0 Q416 Q417 Q418 Q419 Q120 Q416 Q417 Q
Slide 31: Fee Structure
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 32: Mexico City
Mexico City FIBRA 32 € PROLOGIS’
Slide 33: Guadalajara
Guadalajara © Guadalajara = San Pedro Tlaquepaque Tonala © San Martin De Las Flores 1. Mexico City ‘37 misao km La Aurora © Los Gavilanes. © LaCaleritla © Santa Anita Santa Cruz © Valle |. Concepcion reunions ‘© Juanacatlan San Sebastian Del Valle’ —- De! Cuatro El Grande © Tlajomulco Tlajomulco De
Slide 34: Monterrey
Monterrey aredo, © Cienega de Flores: SEA km “3 S (Zoxn) ams ‘ancowne i ta ~~ General Escobedo San Nicolas de los Garza Guadalupe v2 = ‘140 misaze km Garza Garcia 2 Industrial Corridors. @) Development Properties & Land (Q) Prologis Stabilized Assets (_) FIBRAPL Assets FIBRA 4 € > PROLOGIS'
Slide 35: Tijuana
Tijuana FIBRA 38 € > PROLOGIS'
Slide 36: Ciudad Juarez
Ciudad Juarez FIBRA 36 € PROLOGIS’
Slide 37: Reynosa
Reynosa CC y 2 | | Industrial Corridors @) Development Properties & Land (_) FIBRAPL Assets FIBRA € > PROLOGIS'
Slide 38: Reynosa
Reynosa 2 << | | Industrial Corridors () Pipeline Assets (_) FIBRAPL Assets FIBRA € PROLOGIS’
Slide 39: FIBRA Prologis
FIBRA €*; PROLOGIS’