Corporación Inmobiliaria Vesta (NYSE:VTMX) Q4 2025 Earnings call February 20, 2026 10:00 AM ET Company ParticipantsDavid Soto - Equity Research AssociateFernanda Bettinger - Investor Relations OfficerJuan Felipe Sottil Achutegui - CFOLorenzo Dominique Berho Carranza - CEOConference Call ParticipantsAbraham Fuentes - Equity Research AnalystEnrique Cantú - Equity Research AnalystGordon Lee - Equity Research AnalystJorel Guilloty - VP and Senior AnalystJuan Ponce - Mexico Equity Strategy AnalystPablo Monsivais ...

Core Insights - Prologis reported strong fourth-quarter earnings and revenue, exceeding Wall Street expectations, driven by robust leasing activity and positive guidance for 2026 [1][2] Financial Performance - The company achieved net earnings of $1.49 per diluted share for the fourth quarter, significantly above the consensus estimate of $0.70 [1] - Revenue for the quarter reached $2.1 billion, slightly surpassing expectations of $2.09 billion [1] - For the full year, net earnings were reported at $3.56 per share, a decrease from $4.01 in the previous year [4] - Core funds from operations (FFO) for 2025 totaled $5.81 per share, an increase from $5.56 in 2024, while adjusted core FFO rose to $5.86 per share from $5.53 [4] Leasing Activity - Prologis signed a record 228 million square feet of leases in 2025, indicating a broad recovery in warehouse demand across U.S. markets [2] - The leasing momentum is expected to position the company for stronger growth in 2026, with customers committing to longer-term space amid stabilizing demand [2] Future Outlook - The company forecasts net earnings attributable to common stockholders for 2026 to be between $3.70 and $4.00 per diluted share [3] - Projected core funds from operations for 2026 are estimated to be between $6.00 and $6.20 per share [3] Infrastructure Expansion - Prologis is expanding power capacity across its properties to meet rising data center demand, highlighting the intersection of logistics real estate and digital infrastructure [3]

Financial Data and Key Metrics Changes - Q4 core FFO was $1.44 per share, finishing at the top end of guidance ranges [10] - Average occupancy was 95.3% for Q4 and 95% for the full year, with period-end occupancy at 95.8% [10] - Same-store NOI growth was 4.7% on a net effective basis and 5.7% on a cash basis, exceeding guidance [11] - Net effective rent change for the year was over 50%, with a quarterly change of 44% [10][11] Business Line Data and Key Metrics Changes - The company signed 57 million sq ft of leases in Q4, driving occupancy towards 96% [9] - Development platform, particularly build-to-suits, exceeded expectations, capturing significant market share [9] - The Data Center business saw a growing power pipeline, with expectations for solid starts in the upcoming year [9] Market Data and Key Metrics Changes - Q4 net absorption was 59 million sq ft in the U.S., leading to a decline in U.S. vacancy to 7.4% [14] - Many markets are experiencing a slowdown in rent decline, with some showing positive growth [14] - International markets, particularly in Latin America and Europe, are outperforming, with strong occupancy and rent growth [16] Company Strategy and Development Direction - The company focuses on three priorities: extending leadership as a best-in-class operator, capturing value creation opportunities in logistics and data centers, and enhancing shareholder returns through growth in assets under management [7][8] - The company aims to develop critical infrastructure in logistics and data centers, leveraging customer relationships and expertise [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational momentum and strategic initiatives in place for 2026, indicating a strong position for long-term growth [22] - The tone of customer conversations is increasingly positive, with e-commerce driving demand [15] - Management noted that while uncertainties exist, they are treated as planning assumptions rather than impediments [15] Other Important Information - The company sold approximately $900 million of value-maximized assets and acquired $625 million at attractive discounts [11] - The company achieved significant milestones in strategic capital, including the IPO of the China AMC Prologis Logistics REIT [17] Q&A Session Summary Question: Changes in strategic initiatives with new leadership - Management highlighted a focus on compounding the core logistics business while broadening the platform, with plans to grow strategic capital significantly [24][25] Question: Market rent growth expectations for 2026 - Management expects net absorption to approach 200 million sq ft in 2026, with vacancies declining to 7.1%-7.2% by year-end [33] Question: Data Center project details and guidance - Management indicated that 40% of the overall development starts guidance will be in Data Centers, with a mix of powered shell and turnkey projects [38] Question: Update on the 10 GW power outlook - Management remains confident in the 10 GW pipeline, emphasizing the significant opportunities available [43] Question: Capital deployment pipeline and ramp-up - Management noted that capital deployment decisions are made based on market conditions, with a significant number of opportunities available [56][57] Question: Same-store growth guidance breakdown - Management indicated that occupancy gains are expected across geographies, with a smaller contribution from mark-to-market as rent changes normalize [79]

Financial Data and Key Metrics Changes - Fourth quarter core FFO was $1.44 per share, finishing at the top end of guidance ranges [10] - Average occupancy was 95.3% for the quarter and 95% for the full year, with period-end finishing at 95.8% [10] - Net effective rent change was 44% for the quarter, contributing approximately $60 million of annualized NOI, with a full-year net effective rent change exceeding 50% [10] - Same-store NOI growth was 4.7% on a net effective basis and 5.7% on a cash basis, each ahead of guidance midpoint [11] Business Line Data and Key Metrics Changes - The company signed 57 million sq ft of leases in the quarter, driving occupancy toward 96% [9] - Development platform, particularly in build-to-suits, continues to outperform, with $1.1 billion in new buildings started in the quarter [12] - In strategic capital, two new investment vehicles were formed in the U.S. and China [9] Market Data and Key Metrics Changes - Fourth quarter net absorption was 59 million sq ft in the U.S., with a decline in U.S. vacancy to 7.4% [13][14] - Many markets are beginning to see expansion as market rent growth starts to outpace portfolio churn [11] - International markets, particularly in Latin America and Europe, are outperforming, with strong occupancy and ongoing rent growth [16] Company Strategy and Development Direction - The company focuses on three priorities: extending leadership as a best-in-class operator, capturing value creation opportunities in logistics and data centers, and enhancing shareholder returns through growth in assets under management [6][8] - The company aims to develop critical infrastructure with a growing power pipeline and deep customer relationships [7] - Strategic capital partners are increasingly seeking fewer managers who can deliver consistent performance across geographies and strategies [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational and financial results despite challenges in 2025, highlighting the strength and resilience of the platform [20] - The company anticipates positive rent growth to emerge more clearly over the course of 2026, with market vacancies expected to improve [30][31] - Management noted that e-commerce remains a significant driver of demand, representing approximately 20% of new leasing activity over the last year [15] Other Important Information - The company achieved significant milestones in strategic capital, including the IPO of the China AMC Prologis Logistics REIT [17] - The installed capacity in the energy business reached 1.1 gigawatts, surpassing the previous goal [12] Q&A Session Summary Question: Changes in strategic initiatives with new leadership - Management emphasized a focus on compounding the core logistics business while broadening the platform, with plans to grow the strategic capital area significantly [22][24] Question: Market rent growth expectations for 2026 - Management expects net absorption to approach 200 million sq ft in 2026, with vacancies declining to 7.1%-7.2% by year-end [30][31] Question: Data center project details and guidance - Approximately 40% of the development starts guidance for 2026 is expected to be in data centers, with a small number of imminent projects [35] Question: Clarification on occupancy growth and FFO growth limits - Management expressed confidence in occupancy growth despite potential downticks, with a forecast of a 25 basis points increase in average occupancy [43] Question: Capital deployment pipeline and ramp-up - Management highlighted a significant number of opportunities and the ability to make decisions based on market conditions [51][52] Question: Same-store growth guidance breakdown - The guidance reflects a mix of occupancy gains and mark-to-market improvements, with occupancy drag expected to lessen over time [64]

Financial Data and Key Metrics Changes - Fourth quarter core FFO was $1.44 per share, including net promote expense, and $1.46 per share, excluding net promote expense, finishing at the top end of guidance ranges [9] - Average occupancy was 95.3% for the quarter and 95% for the full year, with period-end finishing at 95.8% [9] - Net effective rent change was 44% for the quarter, contributing approximately $60 million of annualized NOI, driving net effective rent change for the year to more than 50% [9] - Same-store NOI growth was 4.7% on a net effective basis and 5.7% on a cash basis, each ahead of guidance midpoint [10] Business Line Data and Key Metrics Changes - The company signed 57 million sq ft of leases in the quarter, driving occupancy toward 96% [8] - The development platform, particularly in build-to-suits, continues to outperform, with 48% of new buildings started being build-to-suit [11] - In strategic capital, two new investment vehicles were formed in the U.S. and China [8] Market Data and Key Metrics Changes - Fourth quarter net absorption was 59 million sq ft in the U.S., leading to a decline in U.S. vacancy to 7.4% [12] - Many markets are beginning to see expansion as market rent growth starts to outpace portfolio churn [10] - International markets, particularly in Latin America and Europe, are showing robust consumption trends and high occupancy [14][15] Company Strategy and Development Direction - The company focuses on three priorities: extending leadership as a best-in-class operator, capturing value creation opportunities in logistics and data centers, and enhancing shareholder returns through growth in assets under management [5][6] - The company aims to develop critical infrastructure with a growing power pipeline and deep customer relationships [5] - The strategic capital area is expected to grow significantly through existing and new vehicles [22] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational and financial results despite challenges in 2025, highlighting the strength and resilience of the platform [19] - The company anticipates positive rent growth to emerge more clearly over the course of 2026, with net absorption expected to approach 200 million sq ft [26] - Management noted that uncertainty remains, but it is treated more as a planning assumption rather than an impediment [13] Other Important Information - The company achieved significant milestones in strategic capital, including the IPO of the China AMC Prologis Logistics REIT [15] - The installed capacity in the energy business reached 1.1 gigawatts, surpassing the previous goal [11] Q&A Session Summary Question: Changes in strategic initiatives with new leadership - The focus remains on compounding the core logistics business while broadening the platform, with an emphasis on development where supply is constrained [22] Question: Market rent growth expectations for 2026 - Market vacancies are expected to improve, with net absorption anticipated to approach 200 million sq ft in 2026 [26] Question: Data center project details and guidance - Approximately 40% of the development starts guidance is expected to be in data centers, with a mix of Powered Shell and Turnkey projects [28] Question: Clarification on occupancy growth in U.S. vs. international markets - Occupancy gains are expected to be dispersed across geographies, with more weight coming from the U.S. [50] Question: Contribution expectations for new vehicles in 2026 - The contribution guidance includes the Agility Fund, which will undertake development activities and take contributions of land from Prologis [45]

Core Viewpoint - Prologis experienced an increase in fourth-quarter revenue due to a resurgence in demand for warehouses after a prolonged period of weakness [1] Group 1: Company Performance - Prologis reported higher revenue in the fourth quarter, indicating a recovery in the warehouse sector [1] Group 2: Industry Trends - The demand for warehouses is bouncing back, suggesting a positive shift in the logistics and supply chain industry following years of decline [1]

Core Insights - The article emphasizes the importance of understanding the different types of REITs and their unique characteristics rather than merely chasing high yields [2][24] - Singapore's REIT market consists of seven main property sectors, each with distinct risk-return profiles and average yields [3][5][6][8][9][10][11] REIT Sectors Overview - **Industrial REITs**: Average yield of 6.6%, driven by e-commerce growth and long-term leases with stable tenants [3][4] - **Diversified REITs**: Average yield of 6.5%, providing stability through geographic and sector diversification [5] - **Retail REITs**: Average yield of 6.0%, influenced by consumer spending and location quality, facing challenges from online shopping [6] - **Office REITs**: Average yield of 6.9%, affected by employment levels and hybrid work arrangements [8] - **Hospitality REITs**: Average yield of 6.7%, sensitive to tourism and economic cycles [9] - **Specialized REITs**: Average yield of 4.9%, benefiting from digital transformation and cloud computing growth [10] - **Healthcare REITs**: Average yield of 4.8%, supported by aging populations and stable long-term tenants [11] Quality Metrics for REITs - **Distribution Yield**: Sustainable yields between 4-8% are preferred, with a focus on distribution growth over time [12] - **Debt-to-Assets Ratio**: Aiming for below 40% for financial flexibility, with an average of 39.6% across Singapore REITs [13][14] - **Interest Coverage Ratio**: A minimum of 2.0x is necessary, with 3.0x or higher being preferable [15] - **Occupancy Rates**: Targeting above 90% for most property types, with consistency over multiple quarters [16] - **Weighted Average Lease Expiry (WALE)**: Longer WALE provides income predictability, balancing renewal risks [17] Geographic Diversification - Over 80% of Singapore REITs hold overseas assets, reducing concentration risk and providing exposure to various economic cycles [18] Red Flags to Avoid - Caution is advised for REITs with extremely high yields, declining occupancy trends, high debt levels, frequent asset sales, and inexperienced management [19][20] Portfolio Construction Strategy - A strategic approach is recommended, with core holdings in diversified REITs, targeted exposure to growth sectors, and geographic themes [21][23]

Financial Performance - Q3 2025 - Net income decreased by 51% to $0.7 million, compared to $1.4 million in Q3 2024, due to expenses related to the Altman Logistics platform acquisition and lower operating profit in the Industrial and Commercial segment[6] - Pro rata NOI decreased by 16% to $9.5 million, compared to $11.3 million in Q3 2024[6] - Multifamily pro rata NOI decreased by 3% to $4.57 million[6, 10] - Industrial and Commercial NOI decreased by 25% due to vacancies and lease expirations[6] - Mining Royalty Lands NOI decreased by 26% to $3.756 million, primarily due to the absence of a one-time catch-up minimum royalty payment of $1.9 million in the prior year period[6] Financial Performance - Year-to-Date (YTD) 2025 - Net income decreased by 37% to $3.0 million, compared to $4.7 million YTD 2024, largely due to Altman Logistics platform acquisition expenses and higher G&A expenses[6] - Pro rata NOI decreased by 2% to $28.6 million, compared to $29.0 million YTD 2024[6] - Multifamily pro rata NOI increased by 0% to $13.937 million[11] - Industrial & Commercial NOI decreased to $3.053 million[15] - Mining & Royalties NOI decreased by 2% to $10.705 million[21] Strategic Developments - FRP entered a JV with Strategic Real Estate Partners to develop 377,892 square feet of industrial space in Lake County, FL[6] - FRP completed the acquisition of Altman Logistics Properties, LLC, expanding FRP's professional capabilities and deal flow[6] Sum of the Parts Analysis - The total value of FRP is estimated to be between $699 million and $789 million, or $36.59 to $41.29 per share[31] - Income Producing Properties total value range from $515.7 million to $577.5 million[28] - Development Pipeline FRP Equity Investment is $85.1 million[31]

Core Insights - FRP Holdings, Inc. reported a net income decrease of 51% for Q3 2025, primarily due to legal expenses related to the acquisition of Altman Logistics, despite higher mining royalties and improved results in joint ventures [5][6][22] - The company aims to focus on long-term earnings and NOI growth by leasing industrial and commercial vacancies and advancing development projects in key markets [4][6] Financial Performance - Net income for Q3 2025 was $662,000, down from $1,361,000 in Q3 2024, with adjusted net income up $281,000 excluding Altman acquisition expenses [7][22] - Pro rata NOI decreased by 16% to $9.5 million compared to $11.3 million in the same quarter last year, primarily due to a one-time $1.9 million catch-up payment received in Q3 2024 [5][8] - Total revenues for Q3 2025 increased by 1.3% to $10.775 million, driven by a 15.3% increase in mining royalty and rents [7][17] Segment Performance - The Multifamily segment's pro rata NOI decreased by 3% to $4.57 million, impacted by higher uncollectable revenue and increased operating costs [9][11] - The Industrial and Commercial segment experienced a 25% decrease in NOI due to tenant eviction and lease expirations, with total revenues down 15.5% [15][22] - The Mining Royalty Lands segment saw a 15.3% increase in revenue to $3.689 million, but net operating income decreased by 26% due to a significant drop in unrealized revenues [17][22] Strategic Developments - The company entered a joint venture with Strategic Real Estate Partners to develop two warehouses in Florida, indicating a strategic move to expand its industrial real estate footprint [5][6] - The acquisition of Altman Logistics is seen as a critical step for scaling operations and entering new growth markets, particularly in Florida and New Jersey [6][22] Nine-Month Highlights - For the first nine months of 2025, net income was $2.95 million, down 40.9% from $4.77 million in the same period last year, largely due to $2 million in acquisition expenses [21][22] - Total revenues for the nine months increased by 2.2% to $31.931 million, with lease revenue slightly declining by 2.1% [21][22]

Group 1: Goodman Group (GMG) - Goodman Group's share price has decreased approximately 5.9% since the beginning of 2025, making it the largest ASX-listed property group in 2025 with operations across multiple continents including Australia, New Zealand, the UK, Japan, the US, and Brazil [1] - The company specializes in warehouses, large-scale logistics facilities, and business and office parks, aiming to build long-term relationships with customers and deliver high-quality assets [2] - The current dividend yield for Goodman Group shares is around 0.88%, which is lower than its 5-year average of 1.28%, indicating a potential decline in dividends or an increase in share price [6] Group 2: Sonic Healthcare (SHL) - Sonic Healthcare, listed in April 1987, is one of the largest pathology businesses globally, with operations in Australia, New Zealand, Europe, and North America, offering services such as laboratory medicine, pathology, diagnostic imaging, and corporate medical services [3][4] - The current price-sales ratio for Sonic Healthcare shares is 1.19x, which is below its 5-year long-term average of 1.94x, suggesting that SHL shares may be undervalued [7] - Sonic Healthcare focuses on acting in the best interests of doctors and patients, striving for medical excellence and being a desirable workplace [4]