Prologis Property Mexico, S.a. De C.v. · BMV:FIBRAPL/14
Prologis Property Mexico, S.a. De C.v — FIBRA Prologis — Non-Deal Roadshow (July 2020)
41 slides from Prologis Property Mexico, S.a. De C.v's roadshow presentation, July 2020
Slide 1: FIBRA Prologis Scotiabank Non-Deal Roadshow
Prologis Park Grande 1, Mexico City FIBRA PROLOGIS Scotiabank Non-Deal Roadshow July 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 28 Appendix Apodaca 6, Monterrey 3
Slide 4: Industrial Real Estate Fundamentals & Structural Drivers
Prologis Tres Rios Industrial Park, 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) (%) • Logistics real estate demand 0 1 2 3 4 5 6 10 intensified throughout the 24 second quarter Mexico City 8 • Border markets remain 20 severely constrained with Monterrey market vacancy near 2.0 16 6 •
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 Wood Products Metals Chemical Fabricated Metals Petro & Coal Furniture Computer & Electronics Machinery Paper Products 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: Lease Expiration Schedule & Embedded Earnings Potential
Lease Expiration Schedule & Embedded Earnings Potential LEASE EXPIRY PROFILE BY ANNUALIZED NER 46% 12% 16% 13% 8% 5% 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. Market Rent US$5.55 Total Portfolio
Slide 15: External Growth: Identified Future Growth Acquisitions
External Growth: Identified Future Growth Acquisitions EXTERNAL GROWTH VIA PROLOGIS DEVELOPMENT PIPELINE (MSF) A Prologis & FIBRAPL UNIQUE COMPETITIVE ADVANTAGE Development Land Bank & Pipeline Expansion LandB • Proprietary access to Prologis FIBRAPL Portfolio development pipeline at market values •
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 61.44 $/sf 59.76 $/sf Reynosa GLA 4.7 MSF 99.0% Occupancy 65.52 $/sf 95.5% Monterrey GLA 4.4 MSF Occupancy(1) Guadalajara 92.7% Occupancy 63.36
Slide 19: Superior High-Barrier Market Concentration Versus Peers
Superior High-Barrier Market Concentration Versus Peers Supply Chain Center Growth Economy Global Metropolis High-Barrier FIBRAPL Others FIBRAPL Others 31% 17% 42% 24% Lower-Barrier FIBRAPL Others FIBRAPL Others 0% 47% 26% 11% Subtotal FIBRAPL Others FIBRAPL Others FIBRAPL Others 31% 64% 26% 11% 42%
Slide 20: Diversified Customer Base
Diversified Customer Base 227 CUSTOMER TYPE CUSTOMER INDUSTRY %, NER basis %, NRA basis customers in Mexico have 14% 14% 24% 337 leases with FIBRA 37% 11% Prologis B2B 10% 15% 7% 7% 87% of FIBRA Prologis’ 6% customers are multinational 24% 4% companies(1) Retail 3% 3% 4% Manufacturing 1% 1% Our top
Slide 21: Disciplined Balance Sheet Management
Disciplined Balance Sheet Management $842M 4.3% 4.4X 29.0% Total Debt Wtd Avg Rate(1) Fixed Charge Coverage Loan-to-Value 100% USD 3.2 years 4.7X $283M denominated Wtd Avg Term Debt-to-Adjusted EBITDA Available Liquidity in USD (2) DEBT MATURITY SCHEDULE FIXED VS. FLOATING DEBT (US$ in millions) Flo
Slide 22: Portfolio Expansion Since IPO
Portfolio Expansion Since IPO GROSS LEASABLE AREA Thousands of SF, June 4, 2014 through June 30, 2020 50,000 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 Q2 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2
Slide 23: 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 • 100% leased B-8 B-4 B-3 Unique Competitive Advantage: • State of the art logistics park focused on e- commerce customers and consolid
Slide 24: 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 (5.7 • Community Workforce Initiative • Technical Committee members are million square feet / 16.3% of GLA) ratified annually by cer
Slide 25: 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 26: Creating Value for Certificate Holders
Creating Value for Certificate Holders TOTAL RETURN OF CBFIS IN MEXICAN PESOS June 4, 2014 – July 22, 2020 128% 68% 57% 54% 6% (37%) 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 US
Slide 27: Location and Quality Matter
Location and Quality Matter • 128% 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 27 1
Slide 28: Appendix
Prologis Park Grande, Mexico City Appendix
Slide 29: Performance Update Amid Covid-19
Performance Update Amid Covid-19 2020 Variance to 2019 • Overall leasing activity remains strong with: Lease Proposals 12.5MSF +57% • Higher lease proposals Leasing Activity 7.7MSF +114% • Lower gestation period Lease gestation 35DAYS -7DAYS • Rent collection tracking to 2019 Retention 86.4% +1% • E
Slide 30: Historical Operating Performance
Historical Operating Performance ELEVATED PERIOD-END OCCUPANCY (%) 97.5 97.6 96.6 96.8 96.8 95.5 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 POSITIVE RENT CHANGE ON ROLLOVER EXPECTED TO CASH SAME STORE NOI GROWTH DRIVEN BY CONTINUE OCCUPANCY AND RENT GROWTH (%) (%) 16.0 3.9 13.9 13.2 2.4 2.5 6.6
Slide 31: 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 32: 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 Q220 Q416 Q417 Q418 Q419 Q220 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 Q220 Q416 Q417 Q
Slide 33: 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 34: Mexico City
Mexico City FIBRA 34 € PROLOGIS’
Slide 35: 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 36: 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 %6 € > PROLOGIS'
Slide 37: Tijuana
Tijuana FIBRA 37 € > PROLOGIS'
Slide 38: Ciudad Juarez
Ciudad Juarez FIBRA 38 € PROLOGIS’
Slide 39: Reynosa
Reynosa CC y 2 | | Industrial Corridors @) Development Properties & Land (_) FIBRAPL Assets FIBRA € > PROLOGIS'
Slide 40: Reynosa
Reynosa 2 << | | Industrial Corridors () Pipeline Assets (_) FIBRAPL Assets FIBRA € PROLOGIS’
Slide 41: FIBRA Prologis
FIBRA €*; PROLOGIS’