Macquarie Mexican REIT Announces First Quarter 2013 Earnings and Distribution; Provides Distribution Guidance for 2013 *1.2 million square feet of property leased in 1Q13; 2.1 million square feet of leases currently pending execution *Northern Mexico fundamentals continue to improve *Portfolio occupancy rate down; impacted by 4Q12 early lease termination *Total revenues for 1Q13 were Ps.407.0 million; net operating income of Ps.360.3 million *Funds from operations of Ps.211.3 million in 1Q13 *First quarter distribution of Ps.0.47 per CBFI *Distribution guidance for 2013 of Ps.1.80 to Ps.2.00 per CBFI Business Wire MEXICO CITY -- April 26, 2013 Macquarie Mexican REIT (MMREIT) (BMV: FIBRAMQ), a real estate investment trust (fideicomiso de inversíon en bienes raices) targeting industrial, office and retail real estate assets in Mexico, today announced its results for the quarter ended March 31, 2013. “We are pleased with the results we were able to deliver during our first full quarter as a publicly traded trust,” said Jaime Lara, Chief Executive Officer of MMREIT. “Our performance during the period is consistent with our expectations and is indicative of the strength of our portfolio. We look forward to continued improvement in a number of markets, and growing our portfolio over the course of 2013.” First Quarter 2013 Results MMREIT’s total revenue in the first quarter of 2013 amounted to Ps.407.0 million. Rental revenues totaled Ps.384.2 million. Net operating income (NOI) for the quarter was Ps.360.3 million. NOI per real estate trust certificate (Certificado Bursátil Fiduciario Inmobiliario or CBFI) was Ps.0.64 based on 567,166,126 total outstanding CBFIs as of March 31, 2013. Net profit for the first quarter totaled Ps.84.4 million, or Ps.0.15 per CBFI based on 567,166,126 total outstanding CBFIs as of March 31, 2013. Funds from Operations (FFO) for the first quarter 2013 totaled Ps.211.3 million, or Ps.0.37 per CBFI based on 567,166,126 total outstanding CBFIs as of March 31, 2013. Total cash and cash equivalents amounted to Ps.2,089.3 million as of March 31, 2013. Total liabilities outstanding at the end of the first quarter totaled Ps.9,778.4 million. Property Operating Results and Leasing Activity MMREIT Portfolio Highlights as of March 31, 2013 Metric 4Q12 1Q13 Occupancy Rate 92.1% 89.3% Avg. Monthly Rent per $4.58 $4.58 Leased m^2 Tenant Retention Rate 85% 58% Weighted Average Lease 3.5 years 3.2 years Term As of March 31, 2013, MMREIT owned 244 industrial properties located in 21 cities across 15 states in Mexico, with approximately 2.5 million square meters of gross leasable area. Occupancy was 89.3% at the end of the first quarter, down from 92.1% as of December 31, 2012. This reduction in occupancy was mainly due to the early termination of a lease in Ciudad Juarez without which occupancy at the end of the quarter would have been largely in line with fourth quarter 2012. The tenant terminating this lease paid MMREIT a US$7.6 million early termination fee. This amount represents more than 3 years of rent under the terminated lease and was reflected in MMREIT’s 4Q12 operating results. MMREIT anticipates executing long-term leases for the majority of the space during the second quarter of 2013. The portfolio’s weighted average remaining lease term (based on annualized base rent) as of March 31, 2013 was 3.2 years, down from 3.5 years in 4Q12. “We continue to see stronger leasing demand, especially across the northern Mexican states, which have been beneficiaries of the upswing in Mexico’s manufacturing output,” said Lara. “We are encouraged by the response received to date from existing and prospective tenants and expect our 2013 occupancy rate to be at least in line with historical averages.” MMREIT recorded 24 lease transactions totaling approximately 1.2 million square feet in the first quarter of 2013. Rental rates on renewals were broadly stable across the portfolio except on a small number of leases where renewal rent was significantly lower than terminating rent, resulting in flat average rent per leased square foot. In addition, MMREIT has 26 leases pending execution, totaling 2.1 million square feet. MMREIT’s tenant retention rate was 58% in the first quarter of 2013 based on leased area, impacted mainly by the termination of the Ciudad Juarez lease. Excluding the early contract termination, the tenant retention rate would have been 78%. “While the markets and leasing demand have improved, recovery has not yet reached a point where it has shifted rental rate bargaining power to property owners in some of our key markets. We expect rental rates to increase over time, but rate improvement will lag the pace of improving occupancy rate numbers. Some notable exceptions to this dynamic are markets that have experienced more rapid recovery, such as Puebla, Hermosillo, Mexico City and Tijuana,” added Lara. Integration Update MMREIT’s properties are currently administered under transitional third party property administration agreements, however, MMREIT is well advanced on the transition process that will see the formation of MMREIT’s own property administrator. Distribution for First Quarter 2013 On April 25, 2013, MMREIT declared a distribution to CBFI holders for the quarter ended March 31, 2013 of Ps.0.47 per CBFI. This distribution includes an ordinary distribution of Ps. 0.35 per CBFI and an extraordinary distribution of Ps. 0.12 per CBFI corresponding to 25% of the Founder’s Grant reinvestment on closing of the global offering. None of the distribution includes a taxable component. MMREIT’s current distribution policy is to pay quarterly cash distributions. Distribution Guidance for 2013 MMREIT has established a full year 2013 distribution guidance range of Ps.1.80 to Ps.2.00 per CBFI based on 567,166,126 total outstanding CBFIs as of March 31, 2013. The principal drivers supporting MMREIT’s 2013 guidance include the following: *Year-end occupancy expected to be above 90% in line with historical portfolio performance; *Rental rates remaining flat; and *NOI margin of 90%. Webcast and Conference Call MMREIT will host a webcast and conference call to discuss quarterly results and current market conditions on Friday, April 26, 2013 at 7:30 a.m. CT / 8:30 a.m. ET. The conference call, which will also be webcast, can be accessed online at www.macquarie.com/mmreit or by dialing toll free +1-877-303-6152. Callers from outside the United States may dial +1-678-809-1066. Please ask for the Macquarie Mexican REIT First Quarter 2013 Earnings Call. An audio replay of the conference call will be available through April 29, 2013 by dialing +1-855-859-2056 or +1-404-537-3406 for callers outside the US. The passcode for the replay is 43742168. A webcast archive of the conference call and a copy of first quarter 2013 financial information will also be available on MMREIT’s website: www.macquarie.com/mmreit. About Macquarie Mexican REIT Macquarie Mexican REIT (MMREIT) (BMV: FIBRAMQ) is a real estate investment trust (fideicomiso de inversíon en bienes raices), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico, with a primary focus on stabilized income-producing properties. MMREIT’s portfolio consists of 244 industrial properties located in 21 cities across 15 Mexican states (as of March 31, 2013). MMREIT is managed by Macquarie México Real Estate Management, S.A. de C.V. which operates within the Macquarie Infrastructure and Real Assets division of Macquarie Group. For additional information about MMREIT, please visit www.macquarie.com/mmreit. About Macquarie Group Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Founded in 1969, Macquarie operates in more than 70 office locations in 28 countries. Macquarie employs approximately 13,500 people and has assets under management of over US$353 billion (as of September 30, 2012). Macquarie Infrastructure and Real Assets, a division of Macquarie, is a leading global alternative asset manager specializing in investments across infrastructure, real estate, agriculture and energy. Macquarie Infrastructure and Real Assets manages 49 funds with US$101 billion of assets under management across 25 countries (as of December 31, 2012). Cautionary Note Regarding Forward-Looking Statements: This release may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ significantly from these forward-looking statements. THIS RELEASE IS NOT AN OFFER FOR SALE OF SECURITIES IN THE UNITED STATES, AND SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. All figures included herein have been prepared in accordance with Mexican IFRS (MFRS) Unaudited condensed interim consolidated financial statements CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2013 ^CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS 3 Months Ended Mar 31 2013 Note $'000 Property rental income 4(a) 407,028 Property expenses (38,217) Net property income 368,811 Management fees 14 (35,441) Acquisition related expenses 4(d) (7,382) Professional, legal fees and insurance 4(e) (21,853) Total expenses (64,676) Finance costs (148,752) Interest income 15,202 Foreign exchange gain 4(c) 496,480 Net unrealized foreign exchange loss on foreign currency denominated investment property measured at 4(b) (582,688) fair value Profit for the period 84,377 Other comprehensive income Other comprehensive income for the period - Total comprehensive profit for the period 84,377 Earnings per CBFI Basic earnings per CBFI (pesos) 8 0.15 Diluted earnings per CBFI (pesos) 8 0.15 CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT MARCH 31, 2013 ^CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS March 31 2013 Dec 31 2012 Note $'000 $'000 Current assets Cash and cash equivalents 2,089,258 1,324,884 Trade receivables 82,570 144,934 Value-added tax receivable 2,414,762 2,418,952 Total current assets 4,586,590 3,888,770 Non-current assets Restricted cash 73,534 75,878 Other assets 4,345 319 Investment properties 9 17,944,567 18,476,503 Total non-current assets 18,022,446 18,552,700 Total assets 22,609,036 22,441,470 Current liabilities Trade and other payables 135,763 14,286 Interest bearing 10 - 886,794 liabilities Total current liabilities 135,763 901,080 Non-current liabilities Other liabilities 445,469 465,706 Interest bearing 10 9,197,192 9,677,860 liabilities Total non-current 9,642,661 10,143,566 liabilities Total liabilities 9,778,424 11,044,646 Net Assets 12,830,612 11,396,824 Equity CBFIs issued 11 13,471,334 12,121,923 Accumulated loss (640,722) (725,099) Total equity 12,830,612 11,396,824 CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2013 ^CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS Contributed Accumulated Total Equity Loss Note $'000 $'000 $'000 Total equity at December 12,121,923 (725,099) 11,396,824 31, 2012 Issued CBFIs, net of issue 11 1,349,411 - 1,349,411 costs Total comprehensive - 84,377 84,377 profit for the period Total equity at March 31, 13,471,334 (640,722) 12,830,612 2013 CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED MARCH 31, 2013 ^CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS 3 Months Ended Mar 31 2013 $'000 Note Inflows / (Outflows) Operating activities: Profit for the period 84,377 Adjustments for: Net unrealized foreign exchange loss on foreign currency denominated investment 4(b) 582,688 property measured at fair value Straight line rental income adjustment (4,026) Leasing commissions amortization 1,297 Net foreign exchange (gain) /loss 4(c) (511,676) Finance costs recognized in profit for 148,752 the period Movements in working capital: Decrease in receivables 66,554 Increase in payables 71,769 Net cash flows from operating activities 439,735 Investing activities: Purchase of investment property (52,049) Net cash flows from investing activities (52,049) Financing activities: Repayment of interest bearing (893,942) liabilities Interest paid (84,665) Proceeds from issue of CBFIs, net of 11 1,349,411 issue costs Net cash flows from financing activities 370,804 Net increase in cash and cash 758,490 equivalents Cash, cash equivalents and restricted 1,400,762 cash at the beginning of the period Effect of exchange rate changes on cash 3,540 and cash equivalents Cash, cash equivalents and restricted cash at the 2,162,792 end of the period Contact: Investor Relations: Eduardo Camarena, +52 (55) 9178 7730 Investor Relations, Macquarie Mexican REIT firstname.lastname@example.org or For international press queries: Paula Chirhart, +1-212-231-1239 Corporate Communications, Macquarie Group email@example.com or For press queries in Mexico: CarralSierra PR & Strategic Communications Jose Manuel Sierra Cel: +52 55 5105 5907 Tel: +52 55 5286 0793 firstname.lastname@example.org or Andrea Barba Cel: +52 55 3355 4968 Tel: +52 55 5286 0793 email@example.com
Macquarie Mexican REIT Announces First Quarter 2013 Earnings and Distribution; Provides Distribution Guidance for 2013
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