Core Insights - Corporación Inmobiliaria Vesta has signed three new lease agreements totaling over 550 thousand square feet, indicating ongoing progress in its Route 2030 strategic growth plan [1] Company Summary - Vesta is a fully-integrated, internally managed real estate company focused on owning, managing, developing, and leasing industrial properties in Mexico [1] - The company expresses satisfaction with the continued confidence shown by businesses in Mexico [1]

Core Insights - Corporación Inmobiliaria Vesta, S.A.B. de C.V. (NYSE:VTMX) is recognized as a strong investment opportunity in the Mexican stock market, with a Buy rating reaffirmed by Barclays analyst Pablo Monsivais and a price target set at $40 [1] Financial Performance - In Q3 2025, Vesta reported total revenues of $72.4 million, reflecting a year-over-year increase of 13.7% compared to Q3 2024, driven by $7.8 million from new revenue-generating contracts and a $1.9 million positive impact from inflation [2] - Excluding energy income, revenues for the quarter were $69.9 million, marking a 14.5% year-over-year growth, primarily attributed to the core rental and related business [3] - Adjusted net operating income (Adjusted NOI) increased by 14.7% year-over-year to $66.1 million, with an adjusted NOI margin of 94.4%, which is approximately 16 basis points higher than the previous year [3] Management Outlook - Management emphasized strong leasing momentum and tenant demand as key factors contributing to revenue growth, alongside new contracts and inflation adjustments that enhanced rental income [4] - The company has revised its full-year 2025 guidance, now anticipating an EBITDA margin of about 84.5% and revenue growth between 10% and 11% for the year [4] Company Overview - Corporación Inmobiliaria Vesta, S.A.B. de C.V. is a fully-integrated industrial real estate company based in Mexico City, focusing on the acquisition, development, management, and leasing of industrial buildings and distribution facilities throughout Mexico [5]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy reached $69.9 million, a 14.5% increase [6][17] - Adjusted net operating income increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, reflecting higher operating leverage [17] - Adjusted EBITDA totaled $59.7 million, a 15% increase year-over-year, with a margin expansion of 34 basis points to 85.3% [17] - FFO, including current tax, increased 16.5% year-over-year to $47.4 million [17] - The company revised its full-year 2025 guidance, expecting EBITDA margin to reach 84.5% and revenue growth between 10% and 11% [16][17] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million sq ft, with 597,000 sq ft in new leases and 1.1 million sq ft in renewals [7] - The overall portfolio occupancy reached 89.7%, with stabilized and same-store occupancy at 94.3% and 94.8% respectively [8] - The retention rate remains high, and rents on rollovers continue to trend upward, indicating strong tenant relationships [5] Market Data and Key Metrics Changes - In Monterrey, the company completed construction of Apodaca Park, with strong interest from advanced manufacturing and logistics companies [9] - Ciudad Juárez saw a market turnaround with a 130 basis point contraction in overall vacancy and 1.3 million sq ft of net absorption [10] - Tijuana is experiencing slower recovery due to high vacancy from recent supply influx, but early signs of reactivation are noted [11] - Guadalajara maintained a healthy 2.8% vacancy rate, while Mexico City reported record absorption year-to-date, with a low vacancy of 2% [12] Company Strategy and Development Direction - The company is focused on its Route 2030 growth strategy, emphasizing land acquisitions and infrastructure readiness [9][15] - Vesta aims to be selective in tenant selection, particularly in high-demand areas like Monterrey [9] - The company is prioritizing markets with visible tenant demand and plans to direct capital towards land and infrastructure readiness [15] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging signs of improvement in leasing momentum and tenant demand, indicating a normalization of the market [5] - The company is confident in its ability to capture anticipated demand in 2026, supported by improving demand indicators [8] - Management highlighted the importance of energy supply and collaboration with federal authorities to enhance reliability for industrial users [14][58] Other Important Information - The company completed a $500 million senior unsecured notes offering, enhancing liquidity and extending maturity profiles [18] - Vesta sold an 80,604 sq ft building in Ciudad Juárez for $5.5 million, aligning with its strategy to recycle assets [15][19] - The company has nearly completed its land bank to support the Route 2030 strategy [9] Q&A Session Summary Question: Long-term development pipeline acceleration - Management indicated positive demand signals across most markets, with a focus on mid to long-term growth for Route 2030, while being cautious ahead of the USMCA review [21][23] Question: Demand from existing vs. new tenants - Demand is coming from both existing tenants and new companies, particularly in sectors like electronics and aerospace [24][26] Question: Update on leasing activity in October - Management confirmed leasing activity has picked up, with successful leases in various regions [30][31] Question: Sustainability of improved EBITDA margins - Management expects EBITDA margins to remain strong, with a focus on maintaining a low-cost base [40][41] Question: Indicators for launching new developments - Decisions are based on internal data, occupancy trends, and demand from existing tenants [64][66] Question: Trends in real estate taxes and insurance costs - No major adjustments in insurance costs or real estate taxes are expected, with costs being competitive for tenants [88][90]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy reached $69.9 million, a 14.5% increase [5][6] - Adjusted net operating income increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, up 16 basis points from the prior year [16] - Adjusted EBITDA totaled $59.7 million, a 15% increase year-over-year, with a margin expansion of 34 basis points to 85.3% [16] - FFO, including current tax, increased 16.5% year-over-year to $47.4 million [16] - The company revised its full-year 2025 guidance, expecting EBITDA margin to reach 84.5%, up from 83.5% [15] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million sq ft, with 597,000 sq ft in new leases and 1.1 million sq ft in renewals [6] - The overall portfolio occupancy reached 89.7%, while stabilized and same-store occupancy reached 94.3% and 94.8% respectively [7] - The retention rate remains high, and rents on rollovers continue to trend upward, indicating strong tenant relationships [5] Market Data and Key Metrics Changes - In Monterrey, the company completed construction of Apodaca Park, with strong interest from advanced manufacturing and logistics companies [8] - Ciudad Juárez saw a market turnaround with a 130 basis point contraction in overall vacancy and 1.3 million sq ft of net absorption during the quarter [9] - Tijuana is experiencing slower recovery due to high vacancy from recent supply influx, but early signs of reactivation are noted [10] - Guadalajara maintained a healthy 2.8% vacancy rate, while Mexico City reported record absorption year-to-date at the highest in five years, with a low vacancy of 2% [11] Company Strategy and Development Direction - The company is focused on its Route 2030 growth strategy, prioritizing markets with visible tenant demand and ensuring capital allocation is tied to quality and timing [14] - The company is cautious about new developments, with only one project under construction, but plans to resume new development starts by the end of 2025 and beginning of 2026 [14] - The company is actively engaging in land acquisitions to support future growth, having acquired 330 acres in Monterrey [8] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging signs of improvement in leasing momentum and tenant demand, indicating a recovery in the industrial real estate market [4] - The company is confident in its ability to capture demand as market conditions improve, particularly in key regions [7] - Management emphasized the importance of energy supply and collaboration with government authorities to support industrial parks [13] Other Important Information - The company completed a $500 million senior unsecured notes offering, enhancing liquidity and extending maturity profiles [17] - The company sold an 80,604 sq ft building in Ciudad Juárez for $5.5 million, aligning with its strategy to recycle assets [14] Q&A Session Summary Question: Are you comfortable accelerating Route 2030 projects in the first half of 2026? - Management highlighted positive demand signals across most markets, particularly in Mexico City and Guadalajara, and will analyze market trends before resuming new operations [20][22] Question: Are the positive demand signals coming from existing tenants or new tenants? - Demand is coming from both existing and new tenants, with interest from various industries including electronics and aerospace [25] Question: Can you provide an update on leasing activity in October? - Management confirmed leasing activity has picked up, with successful leases in Ciudad Juárez and Tijuana [30] Question: How sustainable is the improvement in EBITDA margins? - Management expects EBITDA margins to remain strong, projecting them to stay in the 83%-85% range as the company continues to grow [40] Question: What indicators are used to decide on new developments? - The company relies on internal data and market trends, focusing on occupancy trends and demand from existing tenants [62] Question: What is the trend in real estate taxes and insurance costs? - Management noted that insurance costs are secured for the next couple of years, and real estate taxes have not seen major adjustments [88]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy reached $69.9 million, a 14.5% increase [5][17] - Adjusted net operating income increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, reflecting higher operating leverage as revenue growth outpaced costs [17] - Adjusted EBITDA totaled $59.7 million, a 15% increase year-over-year, with a margin expansion of 34 basis points to 85.3% [17] - FFO, including current tax, increased 16.5% year-over-year to $47.4 million [17] - The company revised its full-year 2025 guidance, expecting EBITDA margin to reach 84.5% and revenue growth between 10% and 11% [15][17] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million square feet, with 597,000 square feet in new leases and 1.1 million square feet in renewals [5] - The retention rate remains high, and rents on rollovers continue to trend upward, indicating strong tenant relationships [5] - The overall portfolio occupancy dipped slightly to 89.7%, while stabilized and same-store occupancy reached 94.3% and 94.8% respectively [6] Market Data and Key Metrics Changes - In Monterrey, the company completed construction of Apodaca Park, with strong interest from advanced manufacturing and logistics companies [6] - Ciudad Juárez saw a market turnaround with a 130 basis point contraction in overall vacancy and 1.3 million square feet of net absorption during the quarter [9] - Tijuana is experiencing slower recovery due to high vacancy from recent supply influx, but early signs of reactivation are noted [10] - Guadalajara maintained a healthy 2.8% vacancy rate, while Mexico City reported record absorption year-to-date, with a low vacancy of just 2% [11] Company Strategy and Development Direction - The company is focused on its Route 2030 growth strategy, prioritizing markets with visible tenant demand and ensuring capital allocation is tied to quality and market visibility [15] - The company is highly selective in determining future tenants, particularly in Monterrey, which is a key nearshoring destination [7] - The company aims to maintain a conservative capital allocation strategy, focusing on asset recycling and reinvesting in higher growth opportunities [15] Management's Comments on Operating Environment and Future Outlook - Management noted encouraging signs of improvement in leasing momentum and tenant demand, indicating a normalization of the market [4] - The company is confident in its ability to capture anticipated demand in 2026, supported by improving demand indicators [6] - Management emphasized the importance of energy supply and collaboration with federal authorities to enhance reliability for industrial users [12][13] Other Important Information - The company successfully completed a $500 million senior unsecured notes offering, enhancing liquidity and extending maturity profiles [18] - The company sold an 80,604 square feet building in Ciudad Juárez for $5.5 million, approximately 10% above appraised value [15][19] Q&A Session Summary Question: Long-term development pipeline acceleration - Management indicated positive demand signals across most markets, with a focus on mid to long-term plans for Route 2030, analyzing demand trends carefully [22][24] Question: Demand from existing vs. new tenants - Demand is coming from both existing tenants and new tenants, with interest from various industries including electronics and aerospace [25][26] Question: Update on leasing activity in October - Management confirmed leasing activity in various regions, including logistics operations in Ciudad Juárez and Tijuana [29][30] Question: Sustainability of improved EBITDA margins - Management expressed confidence in maintaining strong EBITDA margins due to a focus on expense control and operational efficiency [35][36] Question: Indicators for launching new developments - Decisions are based on internal data, occupancy trends, and direct communication with clients, ensuring alignment with market demand [53][56] Question: Trends in real estate taxes and insurance costs - No major adjustments in insurance costs or real estate taxes were noted, with costs being competitive for tenants [73][75]

Financial Data and Key Metrics Changes - Total income for Q3 2025 reached $72.4 million, a 13.7% year-over-year increase, while total income excluding energy was $69.9 million, reflecting a 14.5% increase [7][23] - Adjusted net operating income (NOI) increased 14.7% to $66.1 million, with an adjusted NOI margin of 94.4%, up 16 basis points from the prior year [24] - Adjusted EBITDA totaled $59.7 million, a 15% year-over-year increase, with a margin expansion of 34 basis points to 85.3% [24] - Funds from operations (FFO), excluding current tax, increased 16.5% year-over-year to $47.4 million [24] Business Line Data and Key Metrics Changes - Total leasing activity for Q3 2025 reached 1.7 million square feet, with 597,000 square feet in new leases and 1.1 million square feet in renewals, showing a trailing twelve-month average spread of 12.4% [7][8] - Portfolio occupancy reached 89.7%, while stabilized and same-store occupancy reached 94.3% and 94.8% respectively [8] Market Data and Key Metrics Changes - In Monterrey, strong interest from advanced manufacturing and logistics companies was noted, with the completion of new facilities in Apodaca Park [9][10] - Ciudad Juarez showed early signs of market recovery, with a 130 basis point contraction in overall vacancy and a 190 basis point decline in Class A vacancy [11] - Tijuana experienced slower recovery due to high vacancy rates from recent supply influx, but early signs of reactivation were observed [12][13] - Guadalajara maintained a healthy 2.8% vacancy rate, supported by foreign direct investment in advanced manufacturing sectors [15] Company Strategy and Development Direction - The company is focused on its Route 2030 strategy, aiming to build a diversified industrial platform across key corridors in Mexico [21] - A cautious approach to capital allocation is being maintained, with only one project under construction currently [20] - The company is prioritizing markets with visible tenant demand and is committed to asset recycling to reinvest in higher growth opportunities [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving demand signals across most markets, particularly in Mexico City and Guadalajara, where vacancy rates are low [5][29] - The company is confident in its ability to capture future demand cycles, especially in light of the upcoming USMCA review [30][56] - Management highlighted the importance of energy supply and collaboration with federal authorities to support industrial parks [17][18] Other Important Information - The company completed a €500 million senior unsecured notes offering to enhance liquidity and extend maturity profiles [25] - An acquisition of 330 acres of land in Monterrey was announced, strategically located near the Monterrey International Airport [10][26] Q&A Session Summary Question: Long-term development pipeline acceleration - Management noted positive demand signals across most markets and emphasized careful analysis before resuming new operations [29][30] Question: Demand from existing vs. new tenants - Demand is coming from both existing tenants and new companies, with interest from various industries including electronics and aerospace [33][34] Question: Leasing activity in October - Management confirmed leasing activity in Ciudad Juarez and the Bajio region, with expectations for continued absorption [39][40] Question: Sustainability of EBITDA margin improvement - Management indicated that the focus on maintaining a low cost base will support sustainable EBITDA margins in the future [47][49] Question: Indicators for new development launches - Decisions are based on internal data, occupancy trends, and direct communication with existing tenants [73][76] Question: Trends in lease spreads - Management acknowledged a slight decline in leasing spreads but remains optimistic about sustaining double-digit increases going forward [94][97] Question: Cap rate of recently sold building - The cap rate for the sold building was 6.2%, with a sale price reflecting a 10% premium to appraisal value [104]

Core Insights - Corporación Inmobiliaria Vesta S.A.B. de C.V. announced its third-quarter results for the period ending September 30, 2025, highlighting its position as a leading industrial real estate company in Mexico [1] Financial Performance - The financial results were prepared in accordance with International Financial Reporting Standards (IFRS), which differ from U.S. GAAP [1]

Financial Performance - Total income for Q3 2025 reached US$ 72.4 million, a 13.7% year-over-year increase from US$ 63.7 million in Q3 2024[9] - Adjusted NOI for Q3 2025 increased by 14.7% to US$ 66.1 million, with an Adjusted NOI margin of 94.4%[10] - Vesta FFO for Q3 2025 was US$ 47.4 million, reflecting a 16.5% increase compared to US$ 40.7 million in Q3 2024[9] - Vesta's total revenues for Q3 2025 increased by 13.7% to US$ 72.4 million, up from US$ 63.7 million in Q3 2024[22] - Adjusted EBITDA for Q3 2025 increased by 15.0% to US$ 59.7 million, with an EBITDA margin of 85.3%[33] - Profit before income taxes for Q3 2025 was US$ 52.4 million, down from US$ 62.7 million in Q3 2024, reflecting a 16.4% decrease[40] - Vesta's total comprehensive income for Q3 2025 was US$ 27.6 million, compared to US$ 43.4 million in Q3 2024[43] - Profit for the nine months of 2025 was US$ 67.6 million, a decrease of 76.4% compared to US$ 286.2 million in 2024[65] - Total comprehensive income for the nine months of 2025 was US$ 71.3 million, down 74.2% from US$ 276.7 million in 2024[66] Revenue and Income Sources - Rental income rose by US$ 8.7 million, primarily driven by a US$ 7.8 million increase from previously vacant space[22] - The company declared dividends of $69.5 million in 2025, up from $64.7 million in 2024, reflecting an increase of 12.9%[73] Expenses and Costs - Total operating costs for Q3 2025 reached US$ 8.2 million, a 27.1% increase from US$ 6.5 million in Q3 2024[25] - General and Administrative Expenses rose by 11.8% to US$ 7.8 million in Q3 2025, attributed to higher auditing and consulting expenses[29] - Income tax expense for Q3 2025 was US$ 27.4 million, significantly higher than US$ 10.7 million in Q3 2024[41] - The Company reported a significant increase in income tax expense, rising 156.2% to US$ 27.4 million in Q3 2025 compared to US$ 10.7 million in Q3 2024[47] - Finance costs for the three-month period ended September 30, 2025, were $12.3 million, slightly up from $11.2 million in 2024, an increase of 9.8%[91] Assets and Liabilities - Total assets increased to $4,601.2 million as of September 30, 2025, up from $3,957.9 million at the end of 2024, representing a growth of 16.3%[71] - Current liabilities increased to $224.0 million, up from $90.8 million, reflecting a rise of 146.0%[71] - Long-term debt surged to $1,278.9 million from $797.2 million, an increase of 60.3%[71] Cash Flow - Net cash generated by operating activities improved to $146.2 million compared to $79.2 million in the previous year, a growth of 84.5%[72] - Net cash used in investing activities was $224.9 million, up from $143.3 million, indicating a 57.0% increase[72] Portfolio and Occupancy - Vesta's stabilized portfolio occupancy was 94.3% at the end of Q3 2025, consistent with historical levels[13] - The overall vacancy rate for Vesta's property portfolio was 10.3% as of September 30, 2025[55] - The total portfolio comprised 235 industrial assets with a gross leased area of 43.0 million square feet, and 89.4% of income was in U.S. dollars[53] - Vesta is currently developing 376,016 square feet of inventory buildings, expected to be completed by April 2026[57] - The Company had 39.7 million square feet in land reserves as of September 30, 2025[58] Capital Expenditures - Vesta's capital expenditures for Q3 2025 totaled US$ 56.7 million, primarily for construction and land bank purchases[46] - Capital expenditures (Capex) for the nine months of 2025 reached US$ 226.5 million, related to investment property development and land purchases[66] Shareholder Information - Vesta paid US$ 17.4 million in dividends for Q3 2025, equivalent to MXN$ 0.3751 per ordinary share[9] - The company approved a US$ 69.5 million dividend to be paid in quarterly installments[67] Other Financial Metrics - Adjusted EBITDA for the nine months of 2025 reached US$ 170.0 million, an 11.9% increase compared to US$ 152.0 million in 2024[64] - The diluted EPS for the nine months of 2025 was US$ 0.0828, compared to US$ 0.3104 in the same period of 2024[70] - Adjusted NOI for the nine-month period ended September 30, 2025, reached $190.0 million, compared to $171.5 million in 2024, indicating a 10.8% increase[91]

Core Points - Vesta will release its Third Quarter 2025 financial results on October 23, 2025, after market close, followed by a conference call on October 24, 2025 [1][2] - The company is a real estate owner, developer, and asset manager specializing in industrial buildings and distribution centers in Mexico [2] Financial Information - Vesta has successfully closed a bond transaction amounting to US$500 million with a 5.500% interest rate, maturing in 2033 [4][5] - The bond issuance received a credit rating of BBB-/Positive from both S&P Global Ratings and Fitch Ratings [4] Company Overview - As of June 30, 2025, Vesta owned 231 properties across 16 states in Mexico, totaling an operating Gross Leasable Area (GLA) of 41.7 million square feet (approximately 3.9 million square meters) [2] - The company serves a diverse range of industries, including automotive, aerospace, retail, high-tech, pharmaceuticals, electronics, food and beverage, and packaging [2]

Core Points - Corporación Inmobiliaria Vesta, S.A.B. de C.V. announced the closing of US$ 500 million in senior unsecured notes with a 5.500% interest rate due in 2033 [1] - The issuance received a credit rating of BBB-/Positive from both S&P Global Ratings and Fitch Ratings [1] Company Summary - Vesta is a fully-integrated, internally managed real estate company focused on owning, managing, developing, and leasing industrial properties in Mexico [1]