Macquarie Mexican REIT Announces Third Quarter 2013 Earnings and Distribution

  Macquarie Mexican REIT Announces Third Quarter 2013 Earnings and
  Distribution

  *Funds From Operations of Ps.0.46 in the third quarter
  *Portfolio performance largely in line with expectations
  *618,855 square feet (57,493 square meters) of new and renewed leases in
    3Q13
  *Third quarter distribution of Ps.0.50 per CBFI declared
  *Readying internal property administration for launch in early 2014

Business Wire

MEXICO CITY -- October 25, 2013

Macquarie Mexican REIT (MMREIT) (BMV:FIBRAMQ) today announced its financial
results for the quarter and nine months ended September 30, 2013.

Third Quarter 2013 Financial Results

MMREIT reported total revenue of Ps.413.5 million for the third quarter of
2013 and Ps.1.23 billion for the nine month period ended September 30, 2013.
Base rental revenues totaled Ps.377.6 million, including one-time lease
termination revenue of Ps.25.7 million, for the quarter. There were
567,166,126 MMREIT real estate trust certificates (Certificados Bursátiles
Fiduciarios Inmobiliarios or CBFIs) outstanding as of September 30, 2013.

                                                                         
                   Quarter                       Nine
                   Ended           Third         Months          Nine
               September    Quarter    Ended        Months
                   30,             per           September       per
                   2013            CBFI          30,             CBFI*
                                                 2013
Net                Ps.376.1                      Ps.1.11
Operating       million      Ps.0.66    billion      Ps.1.96
Income (NOI)
Net Profit      Ps.247.1     Ps.0.44    Ps.1.05      Ps.1.85
                   million                       billion
Funds from         Ps.259.8                      Ps.688.5
Operations      million      Ps.0.46    million      Ps.1.21
(FFO)
*Based on 567,166,126 total outstanding CBFIs as of September 2013
                                                                             

Property Operating Results and Leasing Activity

As of September 30, 2013, MMREIT owned 244 industrial properties located in 21
cities across 15 states in Mexico, with approximately 26.8 million square feet
(2.5 million square meters) of gross leasable area. Operating highlights as of
the quarter ended September 30, 2013 include the following.


Metric                     3Q13         2Q13
Occupancy Rate             89.6%        89.9%
Rolling Occupancy Rate     89.4%        89.4%
(YTD Average)
Avg. Monthly Rent per      US$4.53      US$4.55
Leased m^2
Rolling Av. Lease Rate
per Leased m^2 (YTD        US$4.57      US$4.58
Average)
Customer Retention Rate    65%          60%
Weighted Average Lease     3.1 years    3.1 years
Term
                                                        

Occupancy was 89.6% at the end of the third quarter, slightly down from 89.9%
as of June30,2013. This reduction in occupancy was mainly due to the early
termination of a lease in Monterrey. Excluding the impact of the early
termination, occupancy rates would have increased to 90.1% in the third
quarter of 2013. The customer terminating the Monterrey lease paid MMREIT a
US$1.9 million early termination fee. This amount represents 85% of the
outstanding financial obligations under the lease and is reflected in this
quarter’s operating results. MMREIT considers Monterrey to be a favorable
submarket given its attractive location and is working to fill the vacated
space. The portfolio’s weighted average remaining lease term (based on
annualized base rent) as of September 30, 2013 was 3.1 years, flat with the
previous quarter.

“Our portfolio performed in line with our expectations for the quarter,” said
Jaime Lara, CEO of MMREIT. “Towards the end of the quarter there were some
indications of customers opting to wait and see how reforms in Mexico and the
political events in the US would unfold. However, that was accompanied by an
uptick in interest from foreign multinationals considering Mexico for their
operations. We believe that this interest will be reflected in both increased
occupancy and average rental rates in the year ahead.”

Leasing Activity Highlights

New and renewed leases totaling 618,855 square feet (57,493 square meters)
were commenced during the quarter. Leasing highlights include:

  *7-year lease agreement for a 114,030 square foot (10,594 square meter)
    lease expansion in Puebla
  *5-year lease agreement for a 98,328 square foot (9,135 square meter)
    expansion of a previously leased space in Ciudad Juarez
  *4-year lease agreement for a 100,000 square foot (9,290 square meter)
    lease in Nogales

Rental rates on renewals were down in certain markets resulting in a slight
reduction in the average rent per leased square foot per month to US$4.53 in
the third quarter compared with US$4.55 in the second quarter of 2013.
MMREIT’s customer retention rate was 65% in the third quarter of 2013 based on
leased area.

“Over the quarter we were able to increase rental rates in key cities
including Puebla and Tijuana. We continue to believe that occupancy in flat
markets such as Ciudad Juarez will revert to historic norms and that rents
will follow. MMREIT’s portfolio in the northern markets is strongly correlated
with the health of the US economy and any uptick in the US is likely to have a
meaningful, positive impact,” said Lara. “We are confident that we are well
positioned to capitalize on positive medium and long term trends in the
region.”

Update on Internal Property Administration Platform

On September 30, 2013, MMREIT provided an update on the progress it has made
towards the establishment of an internal property administration platform.
That platform will perform property management, leasing and accounting
services for MMREIT’s properties once the respective transitional third-party
property administration arrangements end. MMREIT expects to derive economies
of scale through this platform as it expands its portfolio of properties
across Mexico. The platform is expected to formally launch early in January
2014.

“The establishment of an internal property administration platform is an
important milestone for us,” said Lara. “Not only will this translate into
lower unit costs as our portfolio grows but, more importantly, it removes an
intermediary and brings us closer to our customers. Controlling all of the
touch-points with our customers will allow us to improve customer satisfaction
and better enable us to achieve our occupancy and financial performance
objectives.”

MMREIT also announced that it has brought forward the expiry date of its
transitional property administration agreement with GE Capital Real Estate
Mexico (GECREM) to December 31, 2013, a year earlier than provided under the
original agreement. Certain transitional accounting and related services are
expected to continue into 1Q14. MMREIT has agreed to pay GECREM US$9 million
to discharge in full GECREM’s earn-out entitlement under the terms of the
December 2012 industrial portfolio acquisition. The payment will be made in
five equal quarterly installments through March 31, 2015. The original
acquisition terms provided for a maximum earn-out of approximately US$18
million, payable incrementally upon reaching certain occupancy hurdles as well
as upon early termination of GECREM’s property administration agreement.

MMREIT’s existing property administration agreements with Corporate Properties
of the Americas (CPA) is expected to expire December 31, 2013.

Acquisitions

MMREIT entered into agreements to acquire 23 properties for a total of
approximately Ps.5.9 billion in the third quarter. The properties, in three
portfolios, include six retail properties, one mixed-use property (retail,
office and hotel), one office building and 15 industrial properties. The
retail, office and mixed-use properties have a gross leasable area of
2,689,382 square feet (249,852 square meters) and were 96.4% occupied at the
time of signing. The industrial properties have a gross leasable area of
1,652,847 square feet (153,555 square meters) and were 100% occupied at the
time of signing.

MMREIT announced the financial close of the portfolio of 15 industrial
properties early in the fourth quarter of 2013 and anticipates the other two
portfolios will close during the fourth quarter of 2013, subject to customary
closing conditions.

The acquisition of 15 industrial properties is expected to generate
approximately Ps.0.11 (approximately US$0.009) per CBFI of incremental FFO in
2014. MMREIT expects that the three transactions together will generate
incremental funds from operations in a range of between Ps.0.48 and Ps.0.52
(approximately US$0.037 and US$0.040) per CBFI and an incremental FFO of
approximately US$24.0 million (approximately Ps.313.2 million) on an
annualized basis when closed.

“We are excited to have completed the first of the three acquisitions
announced during the quarter,” stated Lara. “These acquisitions are expected
to be accretive to earnings going forward and to generate strong cash flow
boosting our performance in the coming quarters. Additionally, we continue to
review a number of other acquisition opportunities that would help to further
diversify and build upon our current portfolio.”

Distribution for Third Quarter 2013

On October 24, 2013, MMREIT declared a distribution for the quarter ended
September 30, 2013 of Ps.0.50 per CBFI. The distribution includes an ordinary
distribution of Ps.0.38 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. MMREIT’s current distribution policy is to pay
quarterly cash distributions.

MMREIT reaffirmed its full year 2013 distribution guidance range of Ps.1.80 to
Ps.2.00 and intends to provide guidance for 2014 in its reporting of FY2013
results.

Webcast and Conference Call

Macquarie Mexican REIT will host an earnings conference call on Friday,
October 25, 2013 at 7:30 a.m. CT / 8:30 a.m. ET. The conference call, which
will also be webcast, can be accessed by dialing toll free +1-877-303-6152 or
online at www.macquarie.com/mmreit. Callers from outside the United States may
dial +1-678-809-1066. Please ask for the Macquarie Mexican REIT Third Quarter
2013 Earnings Conference Call.

An audio replay of the call will be available through October 29, 2013, by
dialing +1-855-859-2056 or +1-404-537-3406 for callers outside the United
States. The passcode for the replay is 80664418. A webcast archive of the
conference call and a copy of MMREIT’s financial information for the third
quarter 2013 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 259
industrial properties located in 21 cities across 15 Mexican states (as of
October 17, 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 69 office locations in 28 countries. Macquarie employs
approximately 13,600 people and has assets under management of over US$362
billion (as of March 31, 2013).

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 March 31, 2013).

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.


CONDENSED INTERIM CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2013

CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE
STATED)

                                        3 months ended   9 months ended
                                             Sep 30 2013        Sep 30 2013
                                Note   $’000            $’000
                                                                
Property rental income              4(a)     413,489            1,234,590
Property expenses                      (28,076)         (98,584)
Net property income                    385,413          1,136,006
                                                                
Management fees                     14       (40,228)           (115,461)
Transaction related expenses        4(c)     (54,446)           (77,167)
Professional fees, legal fees    4(b)   (21,814)         (68,489)
and insurance expense
Total expenses                         (116,488)        (261,117)
                                                                
Finance costs                                (127,116)          (397,989)
Interest income                              55,467             84,434
Other income                                 66,009             110,312
Foreign exchange loss               4(d)     (79,492)           (56,490)
Net unrealized foreign
exchange gain on foreign
currency denominated                4(e)     175,409            548,689
investment property measured
at fair
value
Revaluation of investment
property measured at fair        4(e)   (112,088)        (112,088)
value
Profit for the period                  247,114          1,051,757
                                                                
Other comprehensive income
Other comprehensive income             -                -
for the period
Total comprehensive profit             247,114          1,051,757
for the period
                                                      
Earnings per CBFI
Basic earnings per CBFI             8        0.44               1.87
(pesos)
Diluted earnings per CBFI        8      0.41             1.74
(pesos)
                                                                


CONDENSED INTERIM CONSOLIDATED STATEMENT OF
FINANCIAL POSITION AS AT SEPTEMBER 30, 2013

CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE
STATED)

                                              Sep 30 2013   Dec 31 2012
                                      Note   $’000         $’000
Current assets
Cash and cash equivalents                          4,221,601       1,324,884
Restricted cash                                    92,468          -
Trade receivables                                  46,671          144,934
Value added tax receivable                         -               2,418,952
Other assets                                       45,133          -
Total current assets                               4,405,873       3,888,770
                                                                   
Non-current assets
Restricted cash                                    92,601          75,878
Other assets                                       9,438           319
Investment properties                     9        19,024,102      18,476,503
Total non-current assets                     19,126,141    18,552,700
Total assets                                 23,532,014    22,441,470
                                                                   
Current liabilities
Trade and other payables                           152,820         14,286
Interest-bearing liabilities              10       9,528           886,794
Total current liabilities                          162,348         901,080
                                                                   
Non-current liabilities
Other liabilities                                  333,162         465,706
Interest-bearing liabilities              10       9,788,663       9,677,860
Total non-current liabilities                10,121,825    10,143,566
Total liabilities                            10,284,173    11,044,646
                                                         
Net assets                                   13,247,841    11,396,824
Equity
Contributed equity                        11       12,921,183      12,121,923
Retained earnings/(accumulated               326,658       (725,099)
losses)
Total equity                                 13,247,841    11,396,824
                                                                   


CONDENSED INTERIM CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2013

CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE
STATED)

                                                   Retained
                                   Contributed     earnings/
                              equity        (accumulated   Total

                                                   losses)
                      Note   $’000         $’000          $’000
Total equity at                    12,121,923      (725,099)        11,396,824
January 1, 2013
Issued CBFIs, net         11       1,349,411       -                1,349,411
of issue costs
Distribution to           11       (550,151)       -                (550,151)
CBFI Holders
Total comprehensive
profit for the               -             1,051,757      1,051,757
period
Total equity at              12,921,183    326,658        13,247,841
September 30, 2013
                                                                    


CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH
FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE
STATED)

                                                       9 months ended
                                                            Sep 30 2013
                                                            $’000
                                               Note   Inflows/(outflows)
Operating activities:
Profit for the period                                       1,051,757
Adjustments for:
Net unrealized foreign exchange gain on
foreign currency denominated                       4(e)     (548,689)
investment property measured at fair value
Revaluation of investment property measured                 112,088
at fair value
Straight line rental income adjustment                      (7,510)
Leasing commissions amortization                            3,751
Net foreign exchange loss                          4(d)     56,490
Finance costs recognized in profit for the                  397,989
period
Other income                                                (110,312)
Movements in working capital:
Decrease in receivables                                     2,462,963
Increase in payables                                        88,429
Net cash flows from operating activities                    3,506,956
Investing activities:
Investment property capital expenditure                     (107,239)
Net cash flows from investing activities                    (107,239)
Financing activities:
Repayment of interest-bearing liabilities                   (893,942)
Interest paid                                               (316,956)
Proceeds from issue of CBFIs, net of capital       11       1,349,411
raising costs
Distribution to CBFI holders                       11       (550,151)
Net cash flows from financing activities                    (411,638)
Net increase in cash and cash equivalents                   2,988,079
Cash, cash equivalents and restricted cash                  1,400,762
at the beginning of the period
Effect of exchange rate changes on cash and           17,829
cash equivalents
Cash, cash equivalents and restricted cash            4,406,670
at the end of the period


Contact:

Investor Relations:
Macquarie Mexican REIT
Jay Davis, +1 212-231-1825
Investor Relations
jay.davis@macquarie.com
or
For international press queries:
Macquarie Group
Paula Chirhart, +1 212-231-1239
Corporate Communications
paula.chirhart@macquarie.com
or
For press queries in Mexico:
CarralSierra PR & Strategic Communications
Jose Manuel Sierra, Cel: +52 55 5105 5907
Tel: +52 55 5286 0793
jmsierra@carralsierra.com.mx
or
Andrea Barba, Cel: +52 55 3355 4968
Tel: +52 55 5286 0793
abarba@carralsierra.com.mx
 
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