FUNO Bringing In Flagship Samara, Plus Some Others

FIBRA UNO
Bringing In Flagship Samara, Plus Some Others
Introducing New 2015 TP Of MX$60.00
August 8, 2014
■ We are introducing our 2015 target price of MX$60.00 /CBFI (+8.1% versus previous
of MX$55.50). It offers a 27.7% capital appreciation and a 35.7%E total return.
■ In this report we are presenting a detailed update on FUNO’s pipeline, as well as the
output of our improved earnings model.
■ Our positive outlook on FUNO is reinforced. Following the follow-on FIBRA Uno has
delivered faster-than-expected through new accretive acquisitions worth MX$5.8
billion, including eGroup’s flagship Samara. BUY recommendation is reiterated.
What Has Changed?. We have revised FUNO’s estimates for the 2014-2017 period. Our
last revision accounted up to the R15 acquisition. Thus, we have additionally incorporated
the company’s recent acquisition announcements of Galerias Guadalajara, Vallarta, and
Masaryk 111, Corporativo La Viga, Samara Complex, Corporativo San Mateo, as well as
new expected acquisitions related to the follow-on (2015E). Also we have adjusted our
estimates to reflect the ~1Q delay of the closure of California’s and Hilton’s acquisitions, and
the sooner than expected advance of industrial developments from the G-30 portfolio. We
have also revised our model in order to account for FUNO’s announced debt repayment
(June 20, 2014) of MX$3,975 MM related to the G-30’s portfolio.
We Now Expect FUNO’s Dividend Per CBFI To Present A 2013-2018 CAGR Of 15.3%.
FUNO’s proven value creation capacity will continue being translated into incremental
dividends per CBFI for the next 4 years. Despite the short-term negative effect from its
issuance of 800.4 MM new CBFIs in its last follow-on (dilution of 42.3%) we expect FUNO to
deliver a 13.2% YoY growth in its 2014E dividend per CBFI of MX$1.9354. For 2018, our
estimated dividend implies a 7.4% yield and a 15.3% 2013-2018 CAGR. However, the story
does not end there as FUNO still has significant long-term growth prospects, in our view.
Just through its sponsor eGroup, the company could add other iconic and large properties
such as Arcos Bosques, Reforma Grand and Pantaco during the coming years. As we have
experienced many times before, this could be translated into even higher dividends per CBFI
given the potential cap rate arbitrage its management could effectively generate. Today
FUNO pays a ~9% dividend yield considering its IPO price. Why waiting till the end?
Local Ticker
Price Target 2015
Last Price
Expected Return
Dividend Yield 2015
Total Return
Market Cap (MM)
Firm Value (MM)
LTM Price Range (MX$)
Free Float
Avg. Daily Trade (MX$ MM)
FUNO11
MX$ 60.00
MX$ 47.00
27.7%
5.7%
33.4%
MX$ 130,517
MX$ 136,273
(33.59 - 47.45)
82%
311.0
Stock performance
125
120
115
110
Return Index
■ Our earnings model now incorporates FIBRA Uno’s announced acquisitions of
Samara, Galerias Guadalajara, Peninsula Vallarta, Corporativo Masaryk 111 and San
Mateo, as well as new acquisitions that FUNO could materialize in 2015 through the
deployment of its net available resources from the follow-on (MX$25 billion).
Buy
105
100
95
90
85
80
Feb-13
Jun-13
Oct-13
Jan-14
FUNO11
BUY Is Reiterated. Our YE2015 TP of MX$60.00 /CBFI offers an attractive 35.7% total
return. It was built up by two components: 1) a DDM valuation and 2) a Fire-Power valuation.
2014
2015
2016
2017
8,659
7,352
6,575
5,069
1.89
1.97
13,403
11,544
10,993
8,371
2.77
2.70
15,302
13,113
12,497
9,312
3.07
2.98
16,916
14,475
13,835
10,450
3.43
3.32
4.5%
4.1%
4.3%
4.2%
5.8%
5.6%
5.9%
5.7%
6.6%
6.3%
6.5%
6.3%
7.3%
6.9%
7.3%
7.1%
Financials (MX$ MM)
Property Operating Revenue
Net Operating Inc ome (NOI)
EBITDA
Funds From Operations (FFO)
FFO/CBFI (MX$)
CAD/CBFI (MX$) [Cash Available for Distibution]
Valuation
NOI Cap Rate (%)
EBITDA Cap Rate (%)
FFO Yield (%)
Dividend Yield (%)
1
Pablo E. Duarte de León
Real Estate
[email protected]
+52 (55) 1103 6600 x4334
Actinver
1200 Guillermo Gonzalez Camarena
11th Floor, Santa Fe
Mexico City, 01210
May-14
IPC
Contents
2
Table of Contents
Delivering Faster-Than-Expected………..………………….
4-6
FUNO’s Remaining Fire Power………..………………………….
5-6
Recent New Acquisitions ……………………………………….…..
6-10
Galerias Guadalajara And Peninsula Vallarta…..……………….
6
Corporativo Masaryk 111………………………....……………….
7
Corporativo La Viga………….…………………....……………….
8
The Iconic Samara Complex………….………....…….………….
9-10
Corporativo San Mateo………….…….………....…….………….
10
FUNO’s Announced Pipeline For 2014-2017……..……………...
11-13
The R15 Portfolio…………………………………..……………….
11-12
Torre Diana…………..……………………………..……………….
12
Delaware………...…..……………………………..……………….
12
Apolo And G-30 Developments………...………..……………….
12-13
Updating Forecasts On Recent And New Acquisitions………..
13-17
FUNO’s Revised 2014-2017 Financial Forecasts………………. 14-17
3
Dividend Discount Model (DDM) And Fire-Power Valuations...
18-19
Forecasted Operating Metrics And Revenues By Segments ..
20
Forecasted Income Statement / Valuation Metrics …………….
21
Forecasted Balance Sheet / Leverage Ratios …………………...
22
Forecasted Cash Flow Statement …………………………...…….
23
Forecasted Distributions / Dividends……..………………...…….
24
FUNO’s Company Profile…………………....………………...…….
25
Corporate Directory ………..………………………………………...
26
Disclaimer ……………………...……………………………………...
27-28
Historical Acq. Stabilized Gross NOI Cap Rates
Delivering, Faster-Than-Expected
16%
Following the MX$32,816 million follow-on of June, 2014, FIBRA Uno accelerated its
shopping spree, closing the acquisition of 36 properties comprised in 6 different
portfolios for a total investment of MX$15,874 MM. From those, 3 corresponded to
new acquisitions not previously incorporated in FUNO’s pipeline: Corporativo La Viga
(office property with 38,250 sqm of GLA / initial investment of MX$412 MM), Samara
(iconic mixed-use property with 144,000 sqm of GLA / MX$5,400 million investment),
and Corporativo San Mateo (office property with 5,500 sqm of GLA / MX$121 MM).
14%
12%
10%
9.20%
8%
6%
Source: FUNO's press releases, Actinver.
The Hilton Hotel located in downtown Mexico City, as well as Garza Ponce (portfolio
of 29 industrial properties located in the North of Mexico), were portfolios previously
expected to close during 1Q2014, however, they closed on July and May, 2014,
respectively. Regarding the stabilized R15 mixed portfolio (MX$13,500 MM value),
FUNO completed, sooner than expected, the purchase of 3 properties: Galerias
Guadalajara (a 72,893 sqm of GLA shopping mall / MX$3,459 MM investment),
Peninsula Vallarta (mall with 11,874 sqm of GLA / MX$260 MM value), and
Corporativo Masaryk 111 (office building with 26,250 sqm of GLA / MX$1,484 MM).
From the total investment of the aforementioned properties, MX$5,833 MM belonged
to the new (non-previously disclosed) acquisitions. FUNO still has ample fire power
to complete its pipeline commitments and acquire new properties. For the post follow
-on purchases, FUNO has deployed MX$1,329 million of its cash, assumed total debt
of MX$1,719 MM, and issued 200 million new CBFIs worth MX$8,088 million (please
refer to the “Acquisitions’ Details” table shown in the next page).
FUNO’s Historical M&A Activity
Contribution
Period
Announcement
Date
Property
Portfolio
3Q2011
1Q2011
Initial
2Q2012
1Q2012
Azul
2Q2012
1Q2012
Rojo
3Q2012
2Q2012
Morado
2Q2012
2Q2012
Gris
3Q2012/2Q2015
2Q2012
Verde
4Q2012
2Q2012
Blanco
2Q2013
2Q2012
Villahermosa
1Q2013
4Q2012
TM
1Q2013
4Q2012
G-30
2014/2015
4Q2012
G-30
2Q2013
1Q2013
Pace
2Q2013
2Q2013
G-30
4Q2013
2Q2013
P8
3Q2014
2Q2013
Hilton
1Q2015
2Q2013
Tanara Ags.
2Q2017
2Q2013
Torre Diana
4Q2013
3Q2013
Finsa
4Q2013
3Q2013
Apolo
4Q2013
3Q2013
Gpo. Posadas
3Q2013
3Q2013
UAG
3Q2013
3Q2013
P. E. Cancun
1Q2014
4Q2013
Colorado
2Q2014
4Q2013
California
1Q2014
4Q2013
Maine
1Q2014
4Q2013
Maine
3Q2014
2Q2014
R15
3Q2014
2Q2014
R15
2Q2017
4Q2013
Delaware
3Q2014
2Q2014
R15
3Q2014
3Q2014
Corp. La Viga
3Q2014
3Q2014
Samara
4Q2014
2Q2014
R15
2016-2017
2Q2014
R15
2Q2014
2Q2014
San Mateo
Total
Post Follow-On 2014 Acquisitions
Source: Actinver Research.
4
Property Name
Related
Party
Portfolio
Asset Type
Number of
Properties
GLA Real
(sqm)
Toluca WM
MexFund
Santander
GICSA
Tlalnepantla
Lerma II
Cuemanco
Plaza Sendero
Torre Mayor
G-30
G-30 Dev.
Pace
Tepotzotlan
P8
Hilton Hotel
Tanara Ags.
Torre Diana
Finsa
MRP
Gpo. Posadas
UAG
P. E. Cancun
C. Bancomer
Garza Ponce
Hines
City Center M.
Galerias GDL
Vallarta
Siqueiros
Masaryk 111
Corp. La Viga
Samara
R15 Stabilized
R15 Develop.
San Mateo
YES
NO
NO
YES
NO
NO
NO
NO
NO
YES
YES
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
NO
YES
YES
NO
NO
Retail
Mixed
Mixed
Mixed
Mixed
Industrial
Retail
Retail
Office
Mixed
Mixed
Industrial
Industrial
Office
Retail
Retail
Mixed-Use
Industrial
Mixed
Office
Retail
Mixed-Use
Mixed-Use
Industrial
Industrial
Retail
Retail
Retail
Mixed-Use
Mixed-Use
Office
Mixed-Use
Mixed
Mixed
Office
1
23
219
16
1
1
1
1
1
25
8
2
1
8
1
1
1
34
49
1
1
1
1
29
5
1
1
1
1
1
1
1
4
8
1
452
36
15,023
126,467
173,884
539,757
80,000
130,000
44,793
22,777
83,971
1,145,187
821,000
43,594
71,900
79,433
40,000
15,700
63,000
524,588
941,000
4,815
163,000
18,000
101,348
345,544
119,324
26,614
72,893
11,874
70,000
26,250
38,250
144,000
290,000
270,000
55,000
6,718,986
733,811
Initial
NOI Pipeline NOI Stabilized
Investment
(MX$ MM)
(MX$ MM)
(MX$ MM)
$ 24
$ 24
$ 260
$ 111
$ 119
$ 1,032
$ 280
$ 280
$ 3,334
$ 928
$ 1,060
$ 11,600
$ 82
$ 82
$ 202
$ 76
$ 79
$ 260
$ 84
$ 85
$ 500
$ 53
$ 60
$ 250
$ 196
$ 196
$ 2,242
$ 901
$ 1,235
$ 12,702
$ 670
$ 670
$ 4,925
$ 24
$ 27
$ 227
$ 40
$ 48
$ 331
$ 183
$ 223
$ 2,411
$ 106
$ 106
$ 1,165
$ 41
$ 44
$ 330
$ 123
$ 123
$ 1,040
$ 425
$ 448
$ 5,302
$ 1,504
$ 1,768
$ 23,155
$ 18
$ 18
$ 199
$ 69
$ 69
$ 580
$ 12
$ 16
$ 178
$ 237
$ 237
$ 1,633
$ 260
$ 300
$ 3,572
$ 91
$ 91
$ 1,125
$ 39
$ 39
$ 472
$ 284
$ 284
$ 3,459
$ 17
$ 22
$ 260
$ 251
$ 251
$ 1,820
$ 113
$ 113
$ 1,484
$ 35
$ 69
$ 412
$ 460
$ 460
$ 5,400
$ 648
$ 648
$ 8,297
$ 1,044
$ 1,044
$ 10,000
$ 17
$ 17
$ 121
$ 9,444
$ 10,354
$ 110,279
$ 1,292
$ 1,371
$ 15,874
Acquisitions' Details
Portfolio / Property Name
Contribution Period
GLA (sqm)
Initial Investment (MX$ MM)
Development Inv. (MX$ MM)
Total Investment (MX$ MM)
Cash (MX$ MM)
Debt (MX$ MM)
Equity (MX$ MM)
New CBFIs (MM)
Entry NOI (MX$ MM)
Stabilized NOI (MX$ MM)
Entry Cap Rate
Stabilized Cap Rate
Galerias GDL
3Q2014
72,893
$ 3,459
$0
$ 3,459
$ 739
$0
$ 2,720
66.3
$ 284.3
$ 284.3
8.22%
8.22%
Vallarta
3Q2014
11,874
$ 260
$0
$ 260
$ 57
$0
$ 203
4.9
$ 17.2
$ 21.8
6.62%
8.38%
Masaryk 111
3Q2014
26,250
$ 1,484
$0
$ 1,337
$0
$ 819
$ 665
16.2
$ 112.6
$ 112.6
8.42%
8.42%
Corp. La Viga
3Q2014
38,250
$ 412
$0
$ 412
$ 412
$0
$0
$ 35.0
$ 69.0
8.49%
16.74%
Samara
3Q2014
144,000
$ 5,400
$0
$ 5,300
$0
$ 900
$ 4,500
112.5
$ 460.0
$ 460.0
8.68%
8.68%
R15 Stabilized R15 Develop.
4Q2014
2016-2017
290,000
270,000
$ 8,297
$ 10,000
$0
$0
$ 8,297
$ 10,000
$0
$ 10,000
$ 2,681
$0
$ 5,616
$0
124.8
$ 648.3
$ 1,043.5
$ 648.3
$ 1,043.5
7.81%
10.44%
7.81%
10.44%
San Mateo
2Q2014
55,000
$ 121
$0
$ 121
$ 121
$0
$0
$ 17.0
$ 17.0
14.05%
14.05%
Source: Actinver.
FUNO’s Remaining Fire Power
FUNO still has plenty of fire power (MX$31,706 MM) to continue with its aggressive
growth strategy. So far, the company has issued 1,000 million of its 1,250 million
approved CBFIs, and has commitments for another 125 MM (MX$5,615 million) to
close the purchase of the 4 remaining properties from the R15 stabilized portfolio. It
is worth noting that, from the MX$13,500 million value of the stabilized R15 portfolio
(its under development portion is estimated at an additional MX$10,000 MM value),
FUNO has disbursed MX$5,203 million. Thus, we are assuming that the remaining
part of it will be paid through: i) MX$2,681 million of assumed debt (equal to the
announced MX$3,500 MM total debt for this portfolio less the MX$819 MM debt
already assumed through the acquisition of Masaryk 111), and ii) MX$5,615 MM from
the aforementioned 125 million new CBFIs to be issued.
Said that, FUNO still has MX$4,996 million of additional fire power from its approved
CBFIs (assuming a conservative price of MX$40.00 /CBFI, at which the company
might have already agreed further acquisitions). Additional leverage at a target 35%
loan-to-value (LTV) from that amount, would imply a total MX$6,745 MM total fire
power from remaining CBFIs. We are not incorporating this in our earnings model,
however, we believe it would be somewhat irrational not to account for the potential
value FUNO could generate through accretive acquisitions, particularly given its
sound track record and execution capacity. Considering a conservative acquisition
cap rate of 7.75%, the potential stabilized NOI from this fire power would be MX$523
MM, equivalent to 7.1% of our estimated FUNO’s consolidated NOI for 2014.
Regarding the follow-on, FUNO has MX$24,961 MM estimated further net available
resources. As shown in the following exhibit, the company had a total of MX$44,302
MM resources from the follow-on (MX$32,816 MM from the global offer [800.4 MM
CBFIs @MX$41.00] + additional debt of MX$11,486 MM from the capital increase
@35% LTV).
From that total potential investment, FUNO had MX$19,341 million of committed
investments corresponding to: 1) developments of Delaware, Diana, G-30 and Apolo
portfolios; 2) R15’s under development portion; and 3) acquisitions of Galerias
Guadalajara, Vallarta, Masaryk 111, Corporativo La Viga, and Samara. As we will
show at major detail later in this report, we do incorporate new acquisitions coming
from the use of these net resources available from the follow-on in our earnings
model. With our target conservative 7.75% net NOI cap rate, we assume FIBRA Uno
will generate an additional MX$2,053 million of stabilized NOI.
5
FUNO's Fire Power
From Remaining Approved CBFIs
From Net Resources Available From Follow-On
Approved CBFIs Issuance
- Follow-On (June, 2014)
- Acquisition Of R15
Galerias Guadalajara (R15)
Peninsula Vallarta (R15)
Masaryk 111 (R15)
Pending Stabilized Properties
1,250.0
800.4
212.2
66.3
4.9
16.2
124.8
- Samara Complex
112.5
Issuance of CBFIs Follow-On
Follow-On CBFI Price
Follow-On Resources
Loan-to-Value (LTV) (%)
Additional Debt From Capital Increase
Potential Investment
800.4
$ 41.00
$ 32,816
35%
$11,486
$ 44,302
Committed Funds For Developments
Delaware, Diana, G-30 and Apolo
-$ 6,414
= Remaining CBFIs
Price /CBFI
Additional Fire Power CBFIs
Loan-To-Value (%)
Additional Fire Power Debt
124.9
$ 40.00
$ 4,996
35%
$1,749
Committed Funds For R15
-$ 10,000
Committed Funds For Acquisitions
Galerias GDL, Vallarta, Masaryk 111,
Corp. La Viga, Samara
-$ 2,927
Total Fire Power From Remaining CBFIs
Target Acquisition Net NOI Cap Rate
Potential Stabilized NOI
$ 6,745
7.75%
$ 523
Net Resources Available From Follow-On
Target Acquisition Net NOI Cap Rate
Potential Stabilized NOI
$ 24,961
7.75%
$ 2,053
Recent New Acquisitions
Galerias Guadalajara And Peninsula Vallarta
Located in the state of Jalisco (Bajio), these two properties were packaged together
as part of FUNO’s R15 acquisition / development portfolio. The total investment for
the properties was MX$3,719 million, from which MX$796 MM were paid in cash and
MX$2,923 MM were paid in CBFIs. The combined acquisition cap rate (gross NOI)
was 8.23%, equivalent to a 7.72% net NOI cap rate (after property administration and
acquisition fees). Both properties will begin contributing to the FIBRA beginning
2Q2014 (vs. our previous estimation which considered 1Q2015 as the closing date).
• Galerias Guadalajara: This mall has a total GLA of 72,893 sqm and occupancy
of 90%. According to the company, it will generate a next 12 month (NTM) net
operating income of MX$284.3 million. For this property, FUNO paid MX$3,459
million, from which MX$739 MM were paid in cash and MX$2,720 MM in CBFIs.
The acquisition NOI cap rate for this property was 8.22%.
• Peninsula Vallarta: This one has a GLA of 11,874 sqm with an occupancy of
75%. FUNO estimates a stabilized NOI generation of MX$21.8 MM, to be
reached in the following 12 months, considering: a) occupancy of 95% (we are
assuming this occupancy is reached by YE2015 in our model), and b) that
currently empty spaces are leased at 60% of the rent per sqm of existing
contracts (conservative). The purchase price for this shopping center was
MX$260 million, from which MX$57.2 MM were paid in cash and MX$202.8 MM
in CBFIs. Its implied acquisition stabilized gross NOI cap rate was MX$8.38%.
Rental Revenues And Other Revenues
Period
Galerias Guadalajara
2014
Rental Revenues (MX$ MM)
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
6
2016
2017
2018
Retail
Rental Revenues (MX$ MM)
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
Vallarta
2015
$ 140
$7
$ 147
$ 295
$ 15
$ 309
$ 312
$ 16
$ 328
$ 326
$ 16
$ 342
$ 338
$ 17
$ 354
$8
$0
$8
$ 23
$1
$ 24
$ 25
$1
$ 26
$ 26
$1
$ 27
$ 27
$1
$ 28
Retail
Corporativo Masaryk 111
It is one of the 15 properties comprising the R15 portfolio. It is an office property
located on Presidente Masaryk Avenue, in the Polanco area in Mexico City, which is
one the city’s main business and high-end retail corridors. The property has a 100%
occupancy on its 26,250 square meters of GLA, from which 24,400 sqm (93%)
correspond to office and 1,850 sqm (7%) to retail space.
The total acquisition price was MX$1,484 million. From that amount, FUNO agreed to
pay MX$665.3 million in CBFIs and MX$818.7 million (~USD63 million) in debt
assumed by the company. In addition, Fibra Uno mentioned it has the right to receive
back (past) rents from the property for MX$146.9 million as part of the acquisition.
Thus, this would imply a lower purchase price of MX$1,337.4 million.
According to FUNO, the Corporativo Masaryk 111 will generate MX$112.6 million of
net operating income (NOI) in the next twelve months, with 75% of it being USDdenominated. On the back of that, the transaction represented an implied entry gross
NOI cap rate (property cap rate) of 8.42% for FUNO, or 7.93% net NOI cap rate to
the FIBRA (after the property management and acquisition fees).
Corporativo Masaryk 111 (Prime Office Property From R15 Portfolio)
Source: GICSA, Actinver.
Rental Revenues And Other Revenues
Period
Masaryk 111
Rental Revenues (MX$ MM)
Masaryk 111 (Office)
Masaryk 111 (Retail)
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
Masaryk 111 (Office)
Masaryk 111 (Retail)
7
2014
2015
2016
2017
2018
Mixed-Use
Office
Retail
Office
Retail
$ 48
$ 44
$3
$0
$ 48
$ 44
$4
$ 110
$ 102
$8
$0
$ 111
$ 102
$8
$ 114
$ 106
$8
$0
$ 115
$ 106
$9
$ 117
$ 108
$9
$0
$ 117
$ 108
$9
$ 120
$ 111
$9
$0
$ 120
$ 111
$9
Corporativo La Viga
This acquisition is not part of the previously announced R15 Portfolio. Thus, it
represents additional net operating income (NOI) generation which we already added
to FUNO’s results beginning in 3Q2014.
The property is located in Iztapalapa, Mexico City. It has a total gross leasable area
(GLA) of 38,250 sqm and is currently 60% occupied by a Mexican Government
related institution. With its current occupancy level, the property generates MX$35
million of NOI, but it has the potential to generate up to MX$69 MM if fully occupied.
Considering its current occupancy of 60%, FUNO paid a NOI property cap rate of
8.49% for Corporativo La Viga. However, if stabilized at a 100% occupancy level, it
would represent a much higher 16.74% cap rate.
Significant growth potential. FIBRA Uno’s management believe that the property
has the potential to generate MX$225 MM of stabilized NOI through an expansion
(which already began) of 67,750 sqm of GLA (+77.1% vs its current space) that
would lead to a total GLA of 106,000 square meters. This expansion would require
an additional investment of MX$500 MM, resulting in a total investment of MX$912.2
million on this property (MX$412.2 million of initial investment + MX$500 million of
expansion). Given that, the implied acquisition property cap rate would be 24.7%. In
line with the company’s guidance, we are assuming that this fully-stabilized NOI will
be generated by year end 2015.
Corporativo La Viga Project
Actual
Project
Source: Google Earth, Grupo Inmobiliario DLV, Actinver.
8
The Iconic Samara Complex
On July 24, 2014, FUNO announced the agreement to acquire the Samara Complex
(mixed-use property) for a total amount of MX$5,400 MM. This would become
FUNO’s most valuable single property acquisition to date. Samara has a 54%
component of related parties, therefore it still requires the approval of the Corporate
Practices Committee of FIBRA Uno, as well as the approval of the Federal Economic
Competition Commission.
Samara Complex, prime and iconic property. The property is located in the Santa
Fe area, one of Mexico City’s main office corridors. It has a total gross leasable area
(GLA) of 144,000 sqm and is occupied at 96% overall. Just to put it as a reference,
Samara has 1.7x more GLA than Torre Mayor, still the tallest building in Mexico and
the second in LatAm (crossing the street, there is the under construction Torre BBVA
Bancomer, which upon completion will be 10 meters taller than Torre Mayor at 235
meters).
• Retail. The space for retail operation (Samara Shops) comprises 30,000 sqm of
GLA and is 97% occupied. It is anchored by a retail store (Chedraui Selecto), a
fitness center (Sport City Entrenna, constructed over a 4,600 sqm area), nine
VIP-screen movie theater (Cinepolis), clothing stores and a large food court. It is
the second largest mall in the area after Patio Santa Fe, which is also part of
FUNO’s retail portfolio Apolo.
• Office. The prime office building area has a GLA of 90,000 sqm and is occupied
at 95% with high-quality tenants such as leading companies in the aviation, financial, energy, infrastructure, consumer goods, and real estate sectors, including
the corporate headquarters of FIBRA Uno.
• Hotel. Samara also has a five-star Hilton hotel which was opened in the last part
of 1Q2014. It occupies an area of 24,000 square meters of GLA, with 290 rooms
in operations. FUNO refers to this hotel as the most important hotel in Santa Fe,
above JW Marriott, Westin, Sheraton, Camino Real, and other high-end hotels in
the area. The hotel is 100% leased.
Samara Complex (Prime Mixed-Use Property)
Source: eGroup, Actinver.
9
It is no longer a novelty, but FUNO keeps surprising us. For the largest singleproperty acquisition, one of the flagship properties from E-Group, FUNO agreed to
pay an accretive 8.68% gross NOI cap rate. FIBRA Uno expects Samara to generate
MX$460 MM of NOI in the next 12 months. The operation assumes a purchase price
of MX$5,400, however, FUNO will receive back rents of MX$100 million as part of
the deal, which effectively reduces the price to MX$5,300. It was financed through
MX$900 million of assumed debt and the reminder with CBFIs (MX$4,500 million). If
we consider that the acquisition was closed at an agreed price of MX$40.00 per
CBFI, the implied net cap rate to the FIBRA after fees was 7.39%. It is worth
highlighting that FUNO is not paying any acquisition fee for the related parties
component of the property (54%).
Still a positive and accretive acquisition considering that i) it was one of the iconic
properties from the trust’s sponsor E-Group and ii) the arbitrage generated against
FUNO’s implied forward NOI cap rate of 6.0% for 2015E. We have incorporated
Samara in our earnings model and it delivered a MX$0.75 fully-diluted value creation
per CBFI, representing 17% of our target price increment.
Samara Complex (Prime Mixed-Use Property)
Source: Actinver.
Corporativo San Mateo
FUNO disclosed the acquisition of San Mateo (office building) in its 2Q2014 earnings
results press release. This property is located in the north part of Mexico City (Lomas
Verdes), has a total GLA of 5,500 sqm and is currently 100% occupied by a premium
multinational tenant (which we believe is Walmart).
The company mentioned that it paid MX$121 million for the property. According to
the rental rates of office space of ~USD19.81 per sqm per month in the area, and
their usual type of leasing contracts, we estimate that this property will generate
MX$17 million of stabilized NOI to the FIBRA.
10
FUNO’s Announced Pipeline For 2014-2017
Fibra Uno has still pending acquisitions and developments to be closed / finished
during the 2014-2017 period but that have been already announced. As shown in the
table below, the ~26 properties from which the pipeline is composed, will represent
an annual incremental NOI of ~MX$3,030 million, and additional GLA of 1.67 million
sqm and a total investment of MX$28,017 million.
FUNO’s Pipeline Of Acquisitions And Developments
Contribution
Period
1Q2013
2014-2015
1Q2015
2Q2017
2Q2017
4Q2014
2015-2017
2015-2016
Announcement
Date
4Q2012
4Q2012
2Q2013
2Q2013
4Q2013
2Q2014
2Q2014
4Q2012
Property
Portfolio
G-30
G-30
Tanara Ags.
Torre Diana
Delaware
R15
R15
Apolo
Property Name
G-30
G-30 Dev.
Tanara Ags.
Torre Diana
Siqueiros
R15 Stabilized
R15 Develop.
Apolo Dev.
Acquisition /
Development
YES
Development
Development
Development
Development
Acquisition
Development
Development
Total FUNO
Portfolio
Asset Type
Mixed
Mixed
Retail
Mixed-Use
Mixed-Use
Mixed
Mixed
Retail
Total
Number of GLA Pipeline NOI Stabilized
Investment
(MX$ MM)
Properties
(sqm)
(MX$
MM)
25
1,145,187
$ 1,235
$ 12,702
7
821,600
$ 828
$ 5,626
1
15,700
$ 44
$ 330
1
63,000
$ 123
$ 1,040
1
70,000
$ 251
$ 1,820
4
290,000
$ 648
$ 8,297
8
270,000
$ 1,100
$ 10,000
4
139,899
$ 92
$ 904
26
1,670,199
$ 3,086
$ 28,017
Source: FUNO’s information, Actinver Research.
The R15 Portfolio
Clearly the largest component of FUNO’s development pipeline corresponds to the
R15 portfolio. For its 4 remaining stabilized properties we are assuming that their
MX$648 million NOI will be reflected in FUNO’s results by 4Q2014. The 4 properties
include 2 shopping centers with a total 175,000 square meters GLA (estimated), 1
office building with ~25,000 sqm of GLA, and 1 industrial property (the only industrial
facility from the R15 portfolio), with an estimated 90,000 sqm of GLA.
The 8 properties comprising its development portion are expected to generate a NOI
of MX$1.1 billion once stabilized. Furthermore, FUNO mentioned that they have
already pre-leased 90% of its 270,000 sqm GLA, and commitment letters in a form of
a waiting list for another 70% of it. FUNO expects that the development properties
will begin generating cash flow 18 months after closing the acquisition and
completion of construction is expected to take 36 months. Thus, we are assuming
that the retail portion of it (250,000 sqm of GLA) will begin contributing with additional
rents by 2Q2016, while for the office segment (20,000 sqm of GLA) we have set
2Q2017 as the start date. Its NOI breakdown by segments is MX$968.5 million of
annual NOI for the retail segment and MX$75 MM for the office one.
According to our estimates, the total investment from R15’s under development
properties imply a 10.44% stabilized cap rate, which will be translated into higher
dividends per FUNO’s CBFI once they are fully-stabilized (2H2017).
It is worth mentioning that the main changes of our previous R15’s forecasts are the
sooner than expected acquisitions of Galerias Guadalajara, Peninsula Vallarta, as
well as the announcement of the acquisition of Corporativo Masaryk 111. Basically,
we are maintaining unchanged the rest of our assumptions explained in our previous
FUNO’s report “Adding-Up R15, FUNO’s Largest Acquisition Yet” released on May
21, 2014.
11
Rental Revenues And Other Revenues
Period
2014
R15 Stabilized
2016
2017
2018
Mixed
Rental Revenues (MX$ MM)
Industrial
Office
Retail
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
Industrial
Office
Retail
Industrial
Office
Retail
Industrial
Office
Retail
R15 Develop.
$ 167
$ 16
$ 24
$ 127
$6
$ 173
$ 16
$ 24
$ 133
$ 688
$ 66
$ 96
$ 525
$26
$ 714
$ 66
$ 96
$ 552
$ 710
$ 68
$ 99
$ 543
$27
$ 737
$ 68
$ 99
$ 571
$ 734
$ 70
$ 101
$ 563
$28
$ 763
$ 70
$ 101
$ 592
$ 760
$ 71
$ 104
$ 585
$29
$ 789
$ 71
$ 104
$ 614
$ 796
$$ 796
$40
$ 836
$$ 836
$ 1,161
$ 60
$ 1,101
$55
$ 1,216
$ 60
$ 1,156
$ 1,224
$ 81
$ 1,143
$57
$ 1,282
$ 81
$ 1,200
Mixed
Rental Revenues (MX$ MM)
Office
Retail
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
Office
Retail
Torre Diana Project
2015
Office
Retail
Office
Retail
Torre Diana
Along with Reichmann International (FUNO’s partner in Torre Mayor) and Grupo MF,
Fibra Uno signed a joint venture agreement to develop Torre Diana in Paseo de la
Reforma. Fibra Uno will own 50% of the JV with a USD50 million contribution, while
the other two partners will own 25% each. Later on, FUNO will have to deploy
additional USD30 MM from debt in order to complete the project. Torre Diana is a 33floor class A+ office project, located steps away from Paseo de la Reforma on Rio
Mississippi street. The project is expected to have 63,000 sqm of GLA, from which
60,000 sqm will be offices and 3,000 sqm will be space for retail. The construction is
ongoing and is expected to be stabilized by 2Q2017. With Torre Diana, FUNO will
strengthen its footing in the most important office corridor in Mexico, as it will become
its fifth property there. Along with its sponsor, E-Group, Fibra Uno has the potential to
continue expanding its presence in Paseo de la Reforma
Delaware
This development was announced in June, 2013. The expected MX$1,820 million
total investment for this project entails the construction of a mixed-use property
(office and retail) on Insurgentes Avenue (south of Mexico City), from which FUNO
estimates to have 70,000 sqm of GLA (56,000 for office space and 14,000 for retail).
Apolo And G-30 Developments
Apolo (MRP) Under Development
Source: Torre Diana website, Actinver.
12
From Apolo, two specified properties remain under construction (Loreto and San
Rafael) and are expected to be stabilized by 4Q2015, while there are other greenfields estimated for 4Q2016. The total investment for these properties was expected
to reach MX$5,095 million, from which MX$904 MM have been deployed already.
Once the developments are completed, Apolo’s portfolio will have ~1,094,377 sqm of
total GLA.
Torre Reforma Latino
G-30 Under Development
Fibra Uno is currently developing 7 properties from the G-30 portfolio. From those, 3
are industrial (San Martin Obispo II, Checa Iusa, and Purisima), 2 are office (Torre
Reforma Latino, and TecnoParque), and 2 are retail (Xochimilco I and Xochimilco II).
Regarding Reforma Latino (prime office building), according to eGroup, it is one of
FUNO’s most ambitious and modern projects being constructed in Paseo de la
Reforma, Mexico City. It is expected to have a height of 179 meters, with 44 levels
and a total GLA of 45,464 sqm. Up to the 2Q2014, the company has invested
MX$2,746.5 million of the total MX$5,626 MM expected for the total projects of G-30.
Updating Forecasts On Recent And New Acquisitions
In this report we are presenting our revised FUNO’s estimates, which incorporate the
company’s aforementioned recent announced acquisitions, as well as new ones
related to the use of the net resources available from the follow-on (MX$24,961 MM).
For the latter we are using the following main assumptions:
• FUNO realizes new investments on stabilized properties at a conservative 7.75%
net NOI cap rate. On the back of that, the annual potential stabilized NOI is
MX$2,053 million (equivalent to 27.5% our forecast for 2014).
• The total investment is deployed as follows: 1/2 in new acquisitions from related
parties and 1/2 from third parties.
Source: eGroup, Actinver.
• Properties begin contributing to the FIBRA stabilized NOI in 2Q2015 (9 months
from now), using the company’s target time span for its pipeline execution
(maximum of 18 months).
As part of any FIBRA’s/REIT’s natural investment
cycle, once a clear pipeline of acquisitions or
developments has been identified, they execute
their financing options through equity, debt, or
CBFIs issuance in order to complete them and
consequently, grow. Based on that, we believe
that considering that the trust will not deploy its
available resources to fund new acquisitions,
would be irrational. Because of that, we have
incorporated new acquisitions worth MX$24,961
million in our earnings model by using the
assumptions detailed on this page. By not doing
so, the implied dilution on dividends would be
clearly detrimental to the FIBRA’s value.
• FUNO raises MX$11,486 million of additional debt (target 35% LTV from the
follow-on resources) at the end of 1Q2015.
Main Operating Assumptions
NOI / Rents
NOI / Total Revenue
Current NOI (MX$ MM)
Rents (MX$ MM)
GLA (sqm)
Occupancy
Leased GLA (sqm)
Rental Rate (MX$ /sqm /month)
Industrial
Office
Retail
100.0%
100.0%
100.0%
100.0%
96.2%
84.2%
$ 821
$ 821
$ 411
$ 411
$ 821
$ 853
$ 2,053
$ 2,085
1,180,000
95.0%
1,121,000
$ 61.05
133,000
95.0%
126,350
$ 270.81
440,000
95.0%
418,000
$ 170.15
1,753,000
95.0%
1,665,350
$ 104.35
Total
Source: Actinver.
Rental Revenues And Other Revenues
Period
Follow-On 2014
Rental Revenues (MX$ MM)
Industrial
Office
Retail
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
Industrial
Office
Retail
13
2014
2015
2016
2017
2018
Mixed
Industrial
Office
Retail
Industrial
Office
Retail
$ 1,884
$ 753
$ 385
$ 747
$37
$ 1,922
$ 753
$ 385
$ 784
$ 2,215
$ 882
$ 451
$ 883
$44
$ 2,260
$ 882
$ 451
$ 927
$ 2,281
$ 904
$ 462
$ 915
$46
$ 2,327
$ 904
$ 462
$ 961
$ 2,348
$ 925
$ 473
$ 950
$48
$ 2,396
$ 925
$ 473
$ 998
FUNO’s Revised 2014-2017 Financial Forecasts
We have revised FUNO’s estimates for the 2014-2017 period through our improved
earnings model. Our last revision accounted up to the R15 acquisition. Thus, we
have additionally incorporated the company’s recent acquisition announcements and
new expected acquisitions related to the follow-on. Also we have adjusted our
estimates of the California’s and Hilton’s portfolios, as their acquisitions came in later
than previously expected. These revisions are summarized as follows:
• The 3 acquisitions from the R15 portfolio, Galerias Guadalajara, Vallarta, and
Masaryk 111(2.6% of FUNO’s 2014E rents / 3.5% 2015E). These were previously
expected for 4Q2014, now we are considering a 158-day contribution for the two
shopping centers, and a 150-day contribution for Masaryk 111 in 2014.
• The incorporation of Corporativo La Viga (0.4% of FUNO’s 2014E rents / 0.9%
2015E). This property was not previously considered in our forecasts. We expect
a full 2H2014 contribution from it and to increase our annual revenue estimates
by MX$42.6 million (inflation-adjusted). Furthermore, its expected GLA expansion
for YE2015 will boost its rental revenues to MX$200 million, according to our
model.
• The incorporation of Samara (3.2% of FUNO’s 2014E rents / 4.1% 2015E). This
property will add annual rents of MX$484.5 MM (inflation-adjusted) beginning
3Q2014.
• The incorporation of San Mateo (0.1% of FUNO’s 2014E rents / 0.1% 2015E).
This property will add annual rents of MX$17 MM beginning 3Q2014.
• The sooner than expected advance of industrial developments from G-30.
• New acquisitions coming from the deployment of resources from the company’s
third follow-on (mentioned in the previous page).
• A ~1-quarter delay rents contribution from the California and Hilton portfolios
(2.9% of FUNO’s 2014E rents / 2.3% 2015E).
2014 Revenues
We now expect FUNO to present a 109.8% growth in rental revenues to MX$7,719
million for 2014, propelled by: i) a full-year contribution from properties acquired
during 2013 (particularly from Apolo’s portfolio, Finsa, Grupo Posadas, P8, UAG,
Parque Empresarial Cancun, Pace, and Tepotzotlan); and ii) new rents coming from
the 12 new portfolios acquired in 2014. Up to date FUNO has already closed the
following: Hilton, Colorado, California, Maine, Galerias Guadalajara, Vallarta,
Masaryk 111, Corporativo La Viga, Samara and San Mateo. There are just pending
the stabilized properties from the R15 to be acquired this year, considering FUNO’s
announced pipeline only.
FUNO’s total GLA will present a 31.4% year-over-year increase in 2014, going from
4.97 million sqm to 6.53 million sqm. For 2015 we expect an additional 42.7%
increment to 8.65 million sqm (+32.5% vs. 2014E), with the addition of Corporativo
La Viga’s expansion, Tanara Aguascalientes, developments from G-30 and new GLA
from acquisitions related to the follow-on. GLA for 2016 will reach 9.02 million sqm
(+4.2% vs. YoY) through the incorporation of the retail portion of R15’s development
portfolio as well as developments from Apolo. Finally, our model reaches a total GLA
of 9.17 million sqm (+84.4% vs. 2013A), with the additional incorporation of the office
portion of R15’s development portfolio, Torre Diana, and Delaware. This figure
reflects FUNO’s full potential from its existent pipeline and follow-on acquisitions.
14
This translates in an investment properties’ value of MX$161,651 million (+77.2% vs.
2013 and +31.4% vs. 2014E). Next we are presenting FUNO’s total GLA bridge for
the 2013-2017 period, which is based in our earnings model’s assumptions.
FUNO's Total GLA 2013-2017 Bridge
10.0
+3.1%
+7.3%
+42.7%
9.17
9.02
8.65
9.0
+5.0%
+0.4% +1.3% +1.4%
+2.3%
+6.2%
8.0
GLA In Million Square Meters (sqm)
+31.4%
7.0
6.53
6.0
4.97
5.0
+2.4%
+7.0%
+0.8%
+0.9%
+5.8%
+0.1% +8.9%
+2.9%
+1.5% +0.2% +0.5% +1.2%
+0.3% +35.3%
4.0
3.0
2.0
1.0
2017E
Delaware
Torre Diana
R15 Dev. Office
2016E
Apolo Dev.
R15 Dev. Retail
2015E
G-30 Dev.
Follow-On 2014
Tanara AGS
Exp. Corp. La Viga
2014E
R15 Stabilized
San Mateo
Samara
Corp. La Viga
Masaryk 111
Vallarta
Galerias GDL
Hilton
California
G-30 / Other Dev.
Source: Actinver.
Colorado
2013
0.0
In terms of occupancy, our model projects a 95.5% rate at YE2014, up 50bps versus
2013. While for FUNO’s implied average monthly rent (weighted average of all of its
properties), we expect a 11.3% YoY growth, basically reflecting the annual inflation
adjustment on “same stores” as well as the effect from the incorporation of new
portfolios with higher rental rates. We are not assuming any real growth for monthly
rents per sqm of the industrial and the office markets.
For tenant reimbursements (basically maintenance) and other revenues, we estimate
additional MX$940 million for the year, resulting in our MX$8,659 million property
operating revenue (+121.8% YoY).
2014 NOI & EBITDA
On the costs’ side, our estimates assume MX$1,502 million of property related
expenses in 2014. On the back of that, our earnings model gives us a MX$7,352
million net operating income (NOI), which implies a 125.0% growth as compared to
2013. The resulting NOI margin will be 84.9%, 121bps above 2013’s margin. Going
forward, we expect the NOI margin to normalize over 85%-86% levels, in line with
FUNO’s guidance. Turning to FUNO’s EBITDA, we expect an increase of 123.7%
YoY to MX$6,575 million. The resulting EBITDA margin is 75.9%.
15
2014 FFO, CAD & Distributions
Funds from operations (FFO) will amount to MX$5,069 million (+74.6% YoY), giving
an implied FFO yield of 4.3% for 2014E considering FUNO’s CBFI price @MX$47.0.
Despite the negative effect from the follow-on issuance of 800.4 million new CBFIs
(implied dilution of 42.3%), the incremental FFO that Fibra Uno will be generating per
CBFI in 2014 will be +14.1% vs. 2013, with a FFO per CBFI of MX$1.8871. Total
outstanding CBFIs would have increased 66.6% YoY by YE2014 according to our
estimates.
For the dividend calculation we first calculate the
fiscal net income [accounting net income +
accounting D&A - fiscal D&A (+/-) valuation adj.
to properties (+/-) net FX gain / loss] to obtain the
minimum distribution required by law (95% of
such result). Then, we identify cash dividends
and dividends paid as return of capital, the latter
from fiscal D&A. The total dividend distributions
should never exceed our adjusted CAD, as it
would imply the company is distributing part of its
cash on balance.
Cash available for distribution (CAD), or most commonly referred to as adjusted FFO,
is expected at MX$5,194 million in 2014, from which our model is assuming a 99.9%
distribution as dividends. Fully-diluted dividends per CBFI will be MX$1.9354 (4.2%
dividend yield), which is basically in line with FUNO’s last guidance of MX$2.00. This
dividend will be distributed MX$1.1036 in cash, and MX$0.7734 as return of capital.
FUNO’s capacity of generating value to its CBFI holders is reflected in 2014’s
dividend per CBFI growth of 13.2% vs. 2013, included the aforementioned temporal
negative effect from the follow-on. For the 2013-2017 period, our forecasts assume a
CAGR of 18.1% in dividends per CBFI. For 2017 the implied dividend yield is
expected at 7.1%.
It is worth noting that we calculate total dividends parting from the company’s FFO
after TIs, leasing and development fees, and maintenance CapEx. Then, from that
AFFO, we subtract i) changes in working capital, excluding VAT reimbursements (as
it would imply that the company distributes part of its cash from the balance); and ii)
debt amortizations, but excluding balloon and bullet payments expected to be
refinanced. At the end, that is the real distribution potential a FIBRA has, its free cash
flow to equity (FCFE).
Dividends / Distributions (MX$ MM)
Period
16
2014
2015
2016
2017
EBITDA
+ Non-Cash Items
Gross Cash Flow
+ Interest Income
- Interest Expense
- Unused Financing Fees
- Tenant Improvements (TIs)
- Leasing Commissions / Fees
- Development Commissions / Fees
- Maintenance CapEx
Cash Available For Distribution (CAD) / AFFO
- Changes in Working Capital (Exc. VAT Reimbursements)
VAT Reimbursements
- Debt Amortizations (Exc. Est. Refinanced Balloon / Bullet Pymts)
Estimated Refinanced Balloon / Bullet Debt Payments
Adjusted CAD / Free Cash Flow To Equity (FCFE)
$ 6,575
$ 425
$ 7,000
$ 35
-$ 1,699
$-$ 15
-$ 111
$-$ 16
$ 5,194
$ 429
$ 884
$-$ 5,975
$ 4,623
$ 10,993
$$ 10,993
$ 43
-$ 2,665
$-$ 22
-$ 169
$-$ 42
$ 8,138
$ 445
-$ 101
$-$ 1,594
$ 8,583
$ 12,497
$$ 12,497
$ 40
-$ 3,225
$-$ 24
-$ 192
$-$ 67
$ 9,029
$ 166
$ 3,195
$-$ 8,302
$ 9,195
$ 13,835
$$ 13,835
$ 43
-$ 3,428
$-$ 25
-$ 212
$-$ 74
$ 10,139
$ 145
$$$$ 10,284
Total Dividends (MX$ MM)*
% of CAD (/AFFO)
Outstanding CBFIs (MM)
Total Distribution (Dividends Paid) per CBFI (MX$)
Dividend Yield In MX$ (@ Current CBFI Price)
$ 5,176
99.7%
3,014
$ 1.9354
4.2%
$ 8,138
100.0%
3,030
$ 2.6962
5.7%
$ 9,029
100.0%
3,047
$ 2.9752
6.3%
$ 10,139
100.0%
3,063
$ 3.3233
7.1%
FUNO's Rents & NOI Estimates
2015 Forecasts
NOI
CAGR:
45.1%
$16,000
$14,000
88%
For 2015 we are expecting a 56.6% year-over-year growth in rental revenues to
MX$12,087 million, and a 54.8% increase in property operating revenue, which goes
to MX$13,403 MM. This will be driven by the incorporation of 3 additional retail
properties to FUNO’s consolidated portfolio: Tanara Aguascalientes, Loreto (from
Apolo), and San Rafael (also from Apolo), as well as by the already mentioned
introduction of new properties related to the follow-on, developments from the G-30
portfolio, and the expansion of Corporativo La Viga. As already mentioned, Fibra
Uno’s total GLA will reach 8.65 million sqm by YE2015, with a 95.8% occupancy rate
and an implied consolidated average monthly rent of MX$125 per sqm (+2.9% YoY).
87%
$12,000
86%
$10,000
$8,000
85%
$6,000
84%
$4,000
83%
$2,000
$0
Furthermore, we are projecting a MX$11,544 MM NOI for 2015 (+57.0% YoY), with a
86.1% margin. EBITDA is expected at MX$10,993 million with a margin of 82.0%.
82%
2013
2014
Rents
2015
2016
NOI
2017
Finally, funds from operations (FFO) will rise 65.1% to MX$8,371 million, implying a
FFO yield of 5.9%, while CAD of MX$8,138 million will be 56.7% higher YoY (+36.6%
per CBFI). Total dividends per CBFI will be MX$2.6962 (5.7% dividend yield). This
dividend will be distributed MX$1.4793 in cash, and MX$1.2170 as return of capital.
NOI Margin
Source: Actinver.
2016-2017 Forecasts
FUNO will reach rental revenues of MX$13,720 million by 2016 (+13.5% vs. 2015E),
driven by the completion of the retail developments from R15 and Apolo. Total
operating revenue will amount to MX$15,302 million and NOI will total MX$13,113
MM (+13.6% vs. the previous year). Our expected dividend per CBFI for that year is
MX$2.9752 (+10.3% vs. 2015E).
Lastly, by year end 2017 FUNO will present a fully-stabilized portfolio, reflecting all its
current pipeline’s potential (please recall that we are not assuming any real growth in
market rents, which could be an additional upside to rents). With the completion of
the office segment portion of the R15 portfolio, Diana and Delaware, the company's
GLA will stand at 9.17 MM. Thereafter our model does not assume any further
expansion or acquisition. That leads to rents of MX$15,145 million in 2017 (+10.4%
YoY), total revenues of MX$16,916 million, and NOI of MX$14,475 MM. At this year,
FUNO will distribute a 7.1% yield dividend of MX$3.2333 /CBFI (+11.7% YoY).
Outstanding Debt
We have also revised our model in order to account for its June 20, 2014 announced
debt repayment of MX$3,975 MM (related to the G-30’s portfolio). New debt from the
acquisitions of Hilton, Masaryk 111, Samara and R15’s stabilized portfolio (total of
~MX$4,800 MM is also included in our earnings model.
Total
FUNO
Use of Resources
$ 39,489
$ 1,651
USD
Available Balance To Draw (MX$ MM)
Available Balance To Draw (USD MM)
Interest Rate
5.38%
Spread
Additional Spread
Initial Date
Initial Start Period
Maturity Date
17
Local
Bond
Local
Bond
Local Bond Local Bond Local Bond
[Tranch 1] [Tranch 2] [Tranch 3]
Lender Institution
Initial Debt Amount (MX$ MM)
Initial Debt Amount (USD MM)
Debt Currency
Interest Rate Type
Local
Bond
International
Bond
International
Bond
Intl. Bond
[Tranch 1]
Intl. Bond
[Tranch 2]
Credit
Line 1
GE RE
Mexico
[Tranch 1]
Credit
Line 1
GE RE
Mexico
[Tranch 2]
Credit
Line 2
GE RE
Mexico
[Tranch 1]
Credit
Line 2
GE RE
Mexico
[Tranch 2]
Credit
Line 3
Credit
Line 4
Credit
Line 5
Bancomext
Bancomer
Banamex
Debt Pmt /
Corp
Debt Pmt /
Corp
Debt Pmt /
Corp
Debt Pmt /
Corp
Debt Pmt /
Corp
Morado
Morado
Finsa
Finsa
Finsa
VAT Payment
Of
Acquisitions
MRP
$ 4,350.0
$ 0.0
MX$
Variable
$ 2,000.0
$ 0.0
MX$
Fixed
$ 2,150.0
$ 0.0
MX$
Fixed
$ 7,838.4
$ 600.0
USD
Fixed
$ 5,225.6
$ 400.0
USD
Fixed
$ 1,781.1
$ 0.0
MX$
Fixed
$ 5,253.1
$ 399.4
USD
Fixed
$ 36.4
$ 0.0
MX$
Fixed
$ 1,357.5
$ 104.1
USD
Fixed
$ 1,100.6
$ 84.4
USD
Fixed
$ 2,000.0
$ 0.0
MX$
Variable
$ 1,594.4
$ 0.0
MX$
Variable
$TIIE-28
80 bps
$8.40%
$5.09%
$5.25%
$6.95%
$6.52%
$2.20%
$7.80%
$3.98%
$4.89%
$TIIE-28
90 bps
$TIIE-28
150 bps
16-Dec-13
4Q2013
10-Jun-19
16-Dec-13
4Q2013
4-Dec-23
16-Dec-13
4Q2013
27-Nov-28
30-Jan-14
1Q2014
15-Dec-24
30-Jan-14
1Q2014
30-Jan-44
30-Sep-13
3Q2013
1-Jul-16
30-Sep-13
3Q2013
1-Jul-16
31-Dec-13
4Q2013
30-Nov-16
31-Dec-13
4Q2013
30-Nov-16
31-Dec-13
4Q2013
30-Nov-20
31-Dec-13
4Q2013
31-Dec-14
18-Dec-13
4Q2013
21-Mar-15
Dividend Discount Model (DDM) And Fire-Power Valuations
We are introducing our FUNO’s 2015 target price (TP) of MX$60.00 per CBFI. It
compares 8.1% higher against our previous MX$55.50 TP. This new fair value
implies a 27.7% expected capital return and a total expected return of 35.7% taking
into account the estimated dividend yields of 5.7% for 2015E and 2.3% for 2H2014.
Our BUY recommendation is unchanged. We like FUNO’s ability to create value
for its CBFI holders through accretive acquisitions and developments, its heavy
funding capabilities, and its high growth prospects for the coming years (NOI CAGR
of +45.1% for the 2013-2018 period).
Our new target price was built up by two components:
1) A DDM valuation which is based in our earnings model. It reflects FIBRA Uno’s
announced acquisitions of Samara, Galerias Guadalajara, Peninsula Vallarta,
Corporativo Masaryk 111 and San Mateo, as well as new acquisitions that FUNO
could materialize in 2015 through the deployment of its net available resources
from the follow-on; and
2) FUNO’s Fire-Power valuation, from its remaining 124.9 million (~MX$6,745 MM)
approved CBFIs.
DDM Valuation (MX$57.00 /CBFI). We have determined the first component of our
target price through a DDM valuation model, as for FIBRAs, the expected stream of
dividend distributions are easier to predict (by law, FIBRAs have to distribute at least
95% of their fiscal net income as dividends). For the specific case of Fibra Uno, we
are assuming it will distribute 100% of its CAD throughout our 10-year explicit model.
Dividend Discount Model (DDM) Valuation (MX$ MM)
Explicit Model 2014-2024
2014
Funds From Operations (FFO)
Funds Available For Distribution (CAD)
Dividend Payout Ratio (% of CAD)
Cash Distribution
Return of Capital
Total Dividends Paid
EQR Discount Rate [Rf+Re]
10-Year U.S. Treasury
+ Country Risk Premium [CRP]
+ Mx-US Inflation Spread
Risk Free Rate [Rf]
Real Estate (RE) Risk Premium
FUNO Relevered Beta
EQR Risk Premium [Re]
Modeled (Debt+Pref.) / Equity Ratio
Loan-to-Value (LTV) (%)
Present Value of Dividends
$ 5,069
$ 2,872
$ 2,134
$ 5,176
9.24%
3.50%
1.50%
1.00%
6.00%
5.50%
0.590
3.24%
37.77%
26.71%
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Terminal
$ 8,371
$ 8,138
100.0%
$ 4,465
$ 3,673
$ 8,138
$ 9,312
$ 9,029
100.0%
$ 5,017
$ 4,012
$ 9,029
$ 10,450
$ 10,139
100.0%
$ 5,956
$ 4,183
$ 10,139
$ 11,034
$ 10,708
100.0%
$ 6,485
$ 4,223
$ 10,708
$ 11,554
$ 11,213
100.0%
$ 6,977
$ 4,235
$ 11,213
$ 12,164
$ 11,810
100.0%
$ 7,555
$ 4,255
$ 11,810
$ 12,701
$ 12,335
100.0%
$ 8,063
$ 4,272
$ 12,335
$ 13,259
$ 12,880
100.0%
$ 8,590
$ 4,290
$ 12,880
$ 13,815
$ 13,423
100.0%
$ 9,115
$ 4,307
$ 13,423
$ 14,456
$ 14,051
100.0%
$ 9,722
$ 4,329
$ 14,051
$ 176,768
$ 78,702
$ 255,470
9.67%
3.50%
1.50%
1.00%
6.00%
5.50%
0.668
3.67%
56.06%
34.85%
$ 7,420
9.65%
3.50%
1.50%
1.00%
6.00%
5.50%
0.664
3.65%
55.08%
34.36%
$ 7,510
9.64%
3.50%
1.50%
1.00%
6.00%
5.50%
0.662
3.64%
54.68%
34.12%
$ 7,693
9.65%
3.50%
1.50%
1.00%
6.00%
5.50%
0.663
3.65%
54.90%
34.18%
$ 7,408
9.62%
3.50%
1.50%
1.00%
6.00%
5.50%
0.659
3.62%
53.92%
33.75%
$ 7,083
9.63%
3.50%
1.50%
1.00%
6.00%
5.50%
0.659
3.63%
54.04%
33.76%
$ 6,804
9.63%
3.50%
1.50%
1.00%
6.00%
5.50%
0.660
3.63%
54.21%
33.81%
$ 6,481
9.62%
3.50%
1.50%
1.00%
6.00%
5.50%
0.659
3.62%
53.93%
33.66%
$ 6,175
9.62%
3.50%
1.50%
1.00%
6.00%
5.50%
0.658
3.62%
53.61%
33.49%
$ 5,874
9.61%
3.50%
1.50%
1.00%
6.00%
5.50%
0.657
3.61%
53.44%
33.39%
$ 5,612
9.61%
3.50%
1.50%
1.00%
6.00%
5.50%
0.657
3.61%
53.44%
33.39%
$ 102,035
DDM Valuation
Terminal Value Cap Rate
Present Value of Terminal Value
Present Value of FCFFs
DDM Implied Equity Value
Outstanding CBFIs Est. (MM)
Fair Value per CBFI (MX$)
FUNO Last Price per CBFI
Expected Return to Fair Value
+ Dividend Yield 2015E
Total Expected Return
Source: Actinver.
18
5.50%
$ 102,035
$ 68,059
$ 170,094
3,030
$ 57.00
$ 47.00
21.3%
5.7%
27.0%
For purposes of our DDM we emphasize the relevance of disaggregating dividends in
the form of cash distributions (based on net income) and dividends in the form of
return of capital (based on fiscal depreciation) as cash distributions are subject to a
30% withholding tax payment at the investor level (except for pension funds, which
are tax exempt). On the other hand, returns of capital are tax free for all investors.
It is worth recalling that this value does not incorporate any potential organic growth
coming from real growth in market rents, nor any additional acquisition or
development different from FUNO’s announced pipeline.
We are assuming that FIBRA Uno maintains its loan-to-value ratio between 26% and
35% for all our explicit period, implying debt refinancing.
The DDM model is based on a lease-by-lease analysis with a 10-year explicit holding
period. To discount our dividend forecasts, we have calculated FUNO’s discount rate
assuming a 6.0% adjusted risk-free rate (using a prospective 3.5% base 10-year U.S.
Treasury [Rf] plus a country risk premium [CRP] of 1.5% and a Mx-US inflation
spread of 1.0%), a Real Estate risk premium of 5.5%, and an 1st year levered beta of
0.668 (FUNO’s statistical beta). Also, we are assuming a terminal growth rate of
2.55%, which results from a target terminal cap rate of 5.5%, in-line with FUNO’s
historical NOI forward cap rate.
Valuation of Fire-Power (MX$3.00 /CBFI). FUNO still has 124.9 million CBFIs,
equivalent to MX$4,996 million of additional fire power from its approved issuance of
1,250 million CBFIs (assuming a conservative price of MX$40.00 /CBFI, at which the
company might have already agreed further acquisitions). Additional leverage at a
target 35% loan-to-value (LTV) from that amount, would imply a total MX$6,745 MM
total fire power from remaining CBFIs.
As we previously mentioned, we are not incorporating this in our earnings model,
however, we believe it would be somewhat irrational not to account for the potential
value FUNO could generate through accretive acquisitions, particularly given its
sound track record and execution capacity. Considering a conservative acquisition
cap rate of 7.75%, the potential stabilized NOI from this fire power would be MX$523
MM, equivalent to 7.1% of our estimated FUNO’s consolidated NOI for 2014.
As shown in the next exhibit, we are subtracting the advisory fee (0.5% of NAV) to
the MX$523 million potential NOI in order to determine FUNOs’ potential EBITDA
generation, which results in MX$489 million. As we are considering MX$1,749 million
from additional debt at a target LTV of 35%, the potential FFO is reduced by interest
expenses to MX$402 million. The incremental CAD, after TIs, maintenance CapEx
and leasing commissions is MX$389 million, from which we assume FUNO
distributes 100% as dividends. Finally, we are just valuing the incremental
distributions at a target terminal cap rate of 5.5% (the same we have used in our
DDM valuation). The incremental value from FUNO’s remaining CBFIs’ fire power is
MX$7,078 million, or MX$3.00 /CBFI (fully-diluted).
Valuation Of FUNO's Fire Power From Remaining Approved CBFIs
FUNO's Fire Power
From Remaining Approved CBFIs
Approved CBFIs Issuance
- Follow-On (June, 2014)
- Acquisition Of R15
Galerias Guadalajara (R15)
Peninsula Vallarta (R15)
Masaryk 111 (R15)
Pending Stabilized Properties
- Samara Complex
1,250.0
800.4
212.2
66.3
4.9
16.2
124.8
112.5
= Remaining CBFIs
Price /CBFI
Additional Fire Power CBFIs
Loan-To-Value (%)
Additional Fire Power Debt
124.9
$ 40.00
$ 4,996
35%
$1,749
Total Fire Power From Remaining CBFIs
Target Acquisition Net NOI Cap Rate
Potential Stabilized NOI
$ 6,745
7.75%
$ 523
Source: Actinver.
Total Fire Power From Remaining CBFIs
$ 6,745
Expected Acquisitions Net NOI Cap Rate
7.75%
Incremental NOI
$ 523
Advisory (Asset Management) Fee
Incremental EBITDA
Incremental FFO
Incremental CAD (/AFFO)
% of CAD (/AFFO) Distrib uted
Incremental Distributions
Terminal Value Cap Rate
Incremental Market Value
Outstanding CBFIs 2015E (MM)
Incremental Value per CBFI
Current Market Cap.
Incremental Market Value
Upside to Current Market Capitalization*
Source: Actinver.
19
-0.5% NAV
$ 489
$ 402
$ 389
100%
$ 389
5.50%
$ 7,078
$ 3,030
$ 3.00
$ 130,517
$ 7,078
5.4%
Forecasted Operating Metrics And Revenues By Segments
Consolidated Figures
Period
2013
2014
2015
2016
2017
2018
Operating Metrics
FUNO Initial Portfolio + Acquisitions
Total GLA (sqm)
Industrial (sqm)
Office (sqm)
Retail (sqm)
Additional GLA (sqm)
Leased Area (sqm)
Industrial (sqm)
Office (sqm)
Retail (sqm)
Implied Occupancy Rate (%)
Industrial (%)
Office (%)
Retail (%)
Implied Avg. Rental Rate (MX$ /sqm /month)
Industrial (MX$ /sqm /month)
Office (MX$ /sqm /month)
Retail (MX$ /sqm /month)
Industrial
Office
Retail
Industrial
Office
Retail
Industrial
Office
Retail
Industrial
Office
Retail
4,971,672
2,548,637
374,483
2,048,552
141,483
4,724,449
2,487,291
326,459
1,910,699
95.0%
97.6%
87.2%
93.3%
$ 109.21
$ 60.17
$ 255.14
$ 148.11
6,531,418
3,403,281
691,514
2,436,623
326,018
6,238,661
3,299,882
632,189
2,306,590
95.5%
97.0%
91.4%
94.7%
$ 121.50
$ 60.88
$ 255.31
$ 171.55
8,653,753
4,583,281
1,011,281
3,059,191
353,635
8,291,280
4,431,935
934,475
2,924,870
95.8%
96.7%
92.4%
95.6%
$ 124.98
$ 62.50
$ 270.76
$ 173.06
9,016,683
4,583,281
1,011,281
3,422,121
112,930
8,650,741
4,435,450
942,807
3,272,484
95.9%
96.8%
93.2%
95.6%
$ 136.32
$ 65.01
$ 280.38
$ 191.47
9,169,683
4,583,281
1,147,281
3,439,121
0
8,809,322
4,435,450
1,074,003
3,299,869
96.1%
96.8%
93.6%
96.0%
$ 143.46
$ 67.89
$ 287.35
$ 198.21
9,169,683
4,583,281
1,147,281
3,439,121
0
8,812,522
4,435,450
1,077,203
3,299,869
96.1%
96.8%
93.9%
96.0%
$ 148.43
$ 70.10
$ 297.11
$ 205.18
$ 7,920
$ 1,872
$ 1,605
$ 4,046
$ 166
$ 8,085
$ 2,269
$ 1,605
$ 4,157
$ 12,087
$ 2,854
$ 2,908
$ 5,927
$ 253
$ 12,340
$ 3,252
$ 2,908
$ 6,067
$ 13,720
$ 3,084
$ 3,108
$ 7,124
$ 314
$ 14,034
$ 3,488
$ 3,108
$ 7,320
$ 15,145
$ 3,234
$ 3,627
$ 7,881
$ 348
$ 15,493
$ 3,637
$ 3,627
$ 8,107
$ 15,830
$ 3,368
$ 3,871
$ 8,183
$ 361
$ 16,192
$ 3,776
$ 3,871
$ 8,417
Rental Revenues & Other Revenue (MX$ MM)
FUNO Initial Portfolio + Acquisitions
Rental Revenues (MX$ MM)
Industrial
Office
Retail
Other Revenue [Other Rents and Parking] (MX$ MM)
Total Revenue (MX$ MM)
Industrial
Office
Retail
20
Industrial
Office
Retail
Industrial
Office
Retail
Forecasted Income Statement / Valuation Metrics
Income Statement (MX$ MM)
Period
Rent Revenues
Tenant Reimbursements & Other
Other Revenues
Property Operating Revenue
YoY Change
4Q2013
2013
$ 1,093
$ 78
$ 3,614
$ 277
$ 1,184
151.8%
Property Related Expenses
F1 - Management Fee
F2 - Service Fee
Adjustment For Other Amortizations
Net Operating Income (NOI)
YoY Change
NOI Margin
Advisory (Asset Management) Fee
EBITDA
EBITDA Margin
2014
2015
2016
2017
2018
$ 3,904
144.9%
$ 7,719
$ 780
$ 160
$ 8,659
121.8%
$ 12,087
$ 1,063
$ 253
$ 13,403
54.8%
$ 13,720
$ 1,269
$ 314
$ 15,302
14.2%
$ 15,145
$ 1,423
$ 348
$ 16,916
10.5%
$ 15,830
$ 1,483
$ 361
$ 17,674
4.5%
-$ 217
-$ 11
-$ 22
$$ 967
N.A.
81.7%
-$ 636
-$ 36
-$ 72
$$ 3,268
N.A.
83.7%
-$ 1,502
-$ 76
-$ 152
$ 195
$ 7,352
125.0%
84.9%
-$ 2,054
-$ 118
-$ 236
$ 195
$ 11,544
57.0%
86.1%
-$ 2,384
-$ 137
-$ 274
$ 195
$ 13,113
13.6%
85.7%
-$ 2,636
-$ 151
-$ 303
$ 195
$ 14,475
10.4%
85.6%
-$ 2,743
-$ 158
-$ 317
$ 195
$ 15,127
4.5%
85.6%
-$ 93
$ 874
73.9%
-$ 328
$ 2,940
75.3%
-$ 408
$ 6,575
75.9%
-$ 550
$ 10,993
82.0%
-$ 616
$ 12,497
81.7%
-$ 640
$ 13,835
81.8%
-$ 644
$ 14,483
81.9%
Valuation Adjustment to Properties
Interest Expense
Interest Income
Other Income
Net Foreign Exchange (FX) Gain / Loss
Net Income
$ 6,229
-$ 316
$ 189
$-$ 8
$ 6,969
$ 6,229
-$ 758
$ 721
$-$ 16
$ 9,116
$ 1,073
-$ 1,909
$ 35
-$ 56
$ 727
$ 6,619
$-$ 2,665
$ 43
$$ 83
$ 8,259
$-$ 3,225
$ 40
$-$ 87
$ 9,030
$-$ 3,428
$ 43
$$ 160
$ 10,415
$-$ 3,500
$ 52
$-$ 240
$ 10,599
Valuation Adjustment to Properties
Net Foreign Exchange (FX) Gain / Loss
Other Non Cash Items
Funds From Operations (FFO)
-$ 6,229
$8
$$ 747
-$ 6,229
$ 16
$$ 2,903
-$ 1,073
-$ 727
$ 250.6
$ 5,069
$-$ 83
$ 195.0
$ 8,371
$$ 87
$ 195.0
$ 9,312
$-$ 160
$ 195.0
$ 10,450
$$ 240
$ 195.0
$ 11,034
$ 2,863
-$ 16
-$ 129
-$ 20
$ 5,194
-$ 23
-$ 175
-$ 51
$ 8,138
-$ 24
-$ 199
-$ 69
$ 9,029
-$ 25
-$ 216
-$ 75
$ 10,139
-$ 26
-$ 223
-$ 80
$ 10,708
Tenant Improvements (TIs)
Leasing Commissions / Fees
Maintenance CapEx
Cash Available For Distribution (CAD) / AFFO
$ 727
Valuation Metrics
Period
4Q2013
2013
2014
2015
2016
2017
2018
NOI Cap Rate (LTM) (%)
EBITDA Cap Rate (LTM) (%)
FFO Yield (LTM) (%)
CAD Yield (LTM) (%)
Rent Revenues Yield (LTM) (%)
Annualized Dividend Yield (%)
4.5%
4.1%
4.3%
4.5%
6.8%
4.2%
5.8%
5.6%
5.9%
5.7%
8.5%
5.7%
6.6%
6.3%
6.5%
6.3%
9.6%
6.3%
7.3%
6.9%
7.3%
7.1%
10.6%
7.1%
7.6%
7.2%
7.7%
7.4%
11.0%
7.4%
P/E (x)
P/FFO (x)
P/CAD (x)
P /Sales (x)
EV/EBITDA (x)
P/NAV [Book Value] (x)
20.9x
27.3x
26.7x
13.5x
24.6x
1.34x
17.2x
17.0x
17.5x
7.6x
18.0x
1.37x
15.8x
15.3x
15.8x
5.7x
15.9x
1.37x
13.8x
13.7x
14.2x
5.1x
14.4x
1.37x
13.6x
13.1x
13.5x
4.8x
13.8x
1.38x
$ 2.4867
$ 1.8871
$ 1.9735
$ 34.28
$ 1.9354
-51.3%
14.1%
20.9%
13.2%
$ 2.7363
$ 2.7735
$ 2.6962
$ 34.25
$ 2.6962
10.0%
47.0%
36.6%
39.3%
$ 2.9751
$ 3.0685
$ 2.9752
$ 34.18
$ 2.9752
8.7%
10.6%
10.3%
10.3%
$ 3.4135
$ 3.4253
$ 3.3233
$ 34.15
$ 3.3233
14.7%
11.6%
11.7%
11.7%
$ 3.4553
$ 3.5974
$ 3.4912
$ 33.98
$ 3.4912
1.2%
5.0%
5.1%
5.1%
E/CBFI (USD)
FFO/CBFI (USD)
CAD/CBFI (USD)
BV/CBFI (USD)
Dividend/CBFI (USD)
Growth in E/CBFI (YoY)
Growth in FFO/CBFI (YoY)
Growth in CAD/CBFI (YoY)
Growth in Dividend/CBFI (YoY)
Source: Actinver.
21
$ 3.8522
$ 0.4131
$ 0.4020
$ 32.18
$ 0.4800
$ 5.1104
$ 1.6545
$ 1.6323
$ 32.18
$ 1.7104
Forecasted Balance Sheet / Leverage Ratios
Balance Sheet (MX$ MM)
Period
4Q2013
Total Assets
Current Assets
Cash and Cash Equivalents
Restricted Cash (Reserve For Lenders)
Trade and Account Receivables
Other Current Assets
Related Parties
Other Account Receivables
Value-Added Tax (VAT) Receivable
Non-Current Assets
Investment Properties
Trust Rights
Other Non-Current Assets
Other Assets, Net
Total Liabilities
Current Liabilities
Trade and Account Payables
Creditors for Property Acquisition
Short-Term Debt
Other Current Liabilities
Non-Current Liabilities
Long-Term Debt
Other Non-Current Liabilities
Tenant Deposits in Guarantee
Other Liabilities
Shareholders Equity
$ 101,330
$ 6,700
$ 1,514
$ 575
$ 732
$ 3,879
$ 126
$ 18
$ 3,736
$ 94,630
$ 88,906
$ 2,342
$ 898
$ 2,484
$ 43,116
$ 15,352
$ 1,237
$ 6,950
$ 7,032
$ 133
$ 27,763
$ 27,270
$ 493
$ 390
$ 103
$ 58,214
Total Liabilities and Shareholders Equity
$ 101,330
2013
2014
2015
2016
2017
2018
$ 101,330
$ 6,700
$ 1,514
$ 575
$ 732
$ 3,879
$ 126
$ 18
$ 3,736
$ 94,630
$ 88,906
$ 2,342
$ 898
$ 2,484
$ 43,116
$ 15,352
$ 1,237
$ 6,950
$ 7,032
$ 133
$ 27,763
$ 27,270
$ 493
$ 390
$ 103
$ 58,214
$ 146,130
$ 20,197
$ 15,738
$ 24
$ 1,024
$ 3,411
$ 181
$ 129
$ 3,101
$ 125,933
$ 120,662
$ 2,395
$ 587
$ 2,289
$ 42,796
$ 4,433
$ 886
$ 1,650
$ 1,594
$ 303
$ 38,363
$ 37,432
$ 931
$ 721
$ 211
$ 103,334
$ 166,968
$ 7,562
$ 2,235
$ 36
$ 1,603
$ 3,688
$ 283
$ 202
$ 3,202
$ 159,406
$ 154,917
$ 2,395
$$ 2,095
$ 63,163
$ 11,748
$ 1,387
$ 1,650
$ 8,237
$ 474
$ 51,415
$ 49,956
$ 1,458
$ 1,129
$ 330
$ 103,806
$ 166,932
$ 4,141
$ 1,727
$ 36
$ 1,819
$ 558
$ 322
$ 230
$7
$ 162,792
$ 158,497
$ 2,395
$$ 1,900
$ 62,781
$ 3,762
$ 1,574
$ 1,650
$$ 538
$ 59,018
$ 57,363
$ 1,656
$ 1,281
$ 374
$ 104,152
$ 167,630
$ 4,274
$ 1,614
$ 36
$ 2,008
$ 615
$ 355
$ 254
$7
$ 163,356
$ 159,257
$ 2,395
$$ 1,705
$ 63,012
$ 3,982
$ 1,737
$ 1,650
$$ 594
$ 59,030
$ 57,203
$ 1,828
$ 1,414
$ 413
$ 104,618
$ 168,071
$ 4,585
$ 1,807
$ 36
$ 2,099
$ 643
$ 371
$ 265
$7
$ 163,487
$ 159,582
$ 2,395
$$ 1,510
$ 63,440
$ 20,601
$ 1,816
$ 1,650
$ 16,514
$ 621
$ 42,839
$ 40,929
$ 1,910
$ 1,478
$ 432
$ 104,631
$ 101,330
$ 146,130
$ 166,968
$ 166,932
$ 167,630
$ 168,071
$ 39,026
$ 23,264
3.5x
31.7%
26.7%
4.33x
2.06x
37.8%
$ 58,194
$ 55,922
5.1x
37.0%
34.9%
4.07x
2.00x
56.1%
$ 57,363
$ 55,600
4.4x
35.7%
34.4%
4.22x
2.44x
55.1%
$ 57,203
$ 55,553
4.0x
35.4%
34.1%
4.32x
2.59x
54.7%
$ 57,443
$ 55,600
3.8x
35.5%
34.2%
4.51x
2.65x
54.9%
Leverage Ratios
Total Debt (MX$)
Net Debt (MX$)
Net Debt-to-EBITDA (x)
Loan-to-Value (LTV) (%)
Total Debt / Total Assets (%)
DSCR (N12M) (x)
Adjusted DSC Indicator (x)
Debt-to-Equity (D/E) (%)
Source: Actinver.
22
Forecasted Cash Flow Statement
Cash Flow Statement (MX$ MM)
Period
Reported Net Income
Non-Cash Adjustments
Financing Activities:
Finance Costs Recognized in Profit for the Period
Investing Activities:
Interest Income
Changes in Working Capital
Operating Cash Flows
Leasing Commissions / Fees
Tenant Improvements (TIs)
Acquisitions CapEx
Capital Expenditures
Maintenance CapEx
Expansion / Development CapEx
Acquisition of Intangible Assets
Trust Rights
Development Commissions / Fees
Advanced Payments For Acquisitions
Disposition Of Short-Term Investments
Interest Income
Investing Cash Flows
Creditors for Property Acquisition
Debt Amortizations / Repayments
Debt Additions
Interest Expense (Cash)
Equity Capital Increase (Issue of CBFIs, Net of Costs)
Equity Capital Reductions
Distributions (Cash Dividends) to CBFI Holders
Financing Cash Flows
Net Change in Cash and Cash Equivalents
Cash, Cash Equivalents and Restricted Cash at BoP
FX Effect on Cash and Cash Equivalents
Cash, Cash Equivalents and Restricted Cash at EoP
Source: Actinver.
23
4Q2013
2013
2014
2015
2016
2017
2018
$ 6,928
-$ 7,812
$ 9,075
-$ 7,799
$ 6,667
-$ 1,616
$ 8,259
-$ 83
$ 9,030
$ 87
$ 10,415
-$ 160
$ 10,599
$ 240
$ 316.0
$ 757.6
$ 1,909
$ 2,665
$ 3,225
$ 3,428
$ 3,500
-$ 149
-$ 1,525
-$ 2,241
-$ 681
-$ 1,446
-$ 92
-$ 35
-$ 707
$ 6,219
-$ 43
$ 344
$ 11,142
-$ 40
$ 3,361
$ 15,663
-$ 43
$ 145
$ 13,785
-$ 52
$ 70
$ 14,357
-$ 169
-$ 22
-$ 24,961
-$ 9,103
-$ 42
-$ 9,061
$ 195
$$$ 587
$$ 43
-$ 33,431
-$ 192
-$ 24
$-$ 3,364
-$ 67
-$ 3,297
$ 195
$$$$$ 40
-$ 3,345
-$ 212
-$ 25
$-$ 523
-$ 74
-$ 448
$ 195
$$$$$ 43
-$ 521
-$ 222
-$ 26
$-$ 78
-$ 78
$$ 195
$$$$$ 52
-$ 79
-$ 14,932
$ 1,347
$$ 1,347
-$ 2,484
-$ 597
-$ 24,303
-$ 2,122
$-$ 2,122
-$ 2,484
-$ 1,779
$ 1,331
-$ 807
$ 149
-$ 14,223
$ 681
-$ 29,852
-$ 89
-$ 11
-$ 27,122
-$ 4,738
-$ 12
-$ 4,726
$ 146
$$$ 311
$ 646
$ 35
-$ 30,823
-$ 2,357
-$ 6,611
$ 20,184
-$ 273
-$ 6,435
-$ 289
-$ 526
$ 3,692
-$ 180
-$ 7,457
$ 20,834
-$ 715
$ 20,955
-$ 703
-$ 1,787
$ 30,948
$-$ 14,380
$ 19,767
-$ 1,699
$ 38,794
-$ 1,807
-$ 2,397
$ 38,278
$-$ 1,594
$ 20,844
-$ 2,665
$-$ 3,480
-$ 4,307
$ 8,798
$-$ 8,302
$ 7,384
-$ 3,225
$-$ 3,935
-$ 4,749
-$ 12,827
$$$-$ 3,428
$-$ 4,158
-$ 5,791
-$ 13,377
$$$-$ 3,500
$-$ 4,220
-$ 6,366
-$ 14,086
-$ 12,772
$ 15,824
$$ 2,088
$ 1,004
$ 2,048
$$ 2,088
$ 13,674
$ 2,088
$$ 15,762
-$ 13,491
$ 15,762
$$ 2,272
-$ 509
$ 2,272
$$ 1,763
-$ 113
$ 1,763
$$ 1,650
$ 192
$ 1,650
$$ 1,842
Forecasted Distributions / Dividends
Distributions / Dividends (MX$ MM)
Period
4Q2013
2013
2014
2015
2016
2017
2018
Taxable Income (Accounting Basis)
+ Depreciation (Accounting Basis)
- Depreciation (Fiscal Basis)
(+/-) Valuation Adjustment to Properties
(+/-) Net Foreign Exchange (FX) Gain / Loss
Taxable Income (Fiscal Basis)
Legal Distribution @ 95%
+ Depreciation (Fiscal Basis)
$ 6,619
$ 1,052
-$ 3,506
-$ 1,073
-$ 727
$ 2,364
$ 2,246
$ 3,506
$ 8,259
$ 1,490
-$ 4,967
$-$ 83
$ 4,699
$ 4,465
$ 4,967
$ 9,030
$ 1,644
-$ 5,480
$$ 87
$ 5,281
$ 5,017
$ 5,480
$ 10,415
$ 1,708
-$ 5,694
$-$ 160
$ 6,269
$ 5,956
$ 5,694
$ 10,599
$ 1,720
-$ 5,732
$$ 240
$ 6,826
$ 6,485
$ 5,732
EBITDA
+ Non-Cash Items
Gross Cash Flow
+ Interest Income
- Interest Expense
- Unused Financing Fees
- Tenant Improvements (TIs)
- Leasing Commissions / Fees
- Development Commissions / Fees
- Maintenance CapEx
Cash Available For Distribution (CAD) / AFFO
- Changes in Working Capital (Exc. VAT Reimbursements)
VAT Reimbursements
- Debt Amortizations (Exc. Est. Refinanced Balloon / Bullet Pymts)
Estimated Refinanced Balloon / Bullet Debt Payments
Adjusted CAD / Free Cash Flow To Equity (FCFE)
$ 6,575
$ 425
$ 7,000
$ 35
-$ 1,699
$-$ 15
-$ 111
$-$ 16
$ 5,194
$ 429
$ 884
$-$ 5,975
$ 4,623
$ 10,993
$$ 10,993
$ 43
-$ 2,665
$-$ 22
-$ 169
$-$ 42
$ 8,138
$ 445
-$ 101
$-$ 1,594
$ 8,583
$ 12,497
$$ 12,497
$ 40
-$ 3,225
$-$ 24
-$ 192
$-$ 67
$ 9,029
$ 166
$ 3,195
$-$ 8,302
$ 9,195
$ 13,835
$$ 13,835
$ 43
-$ 3,428
$-$ 25
-$ 212
$-$ 74
$ 10,139
$ 145
$$$$ 10,284
$ 14,483
$$ 14,483
$ 52
-$ 3,500
$-$ 26
-$ 222
$-$ 78
$ 10,708
$ 70
$$$$ 10,778
$ 5,176
99.7%
3,014
$ 1.9354
4.2%
$ 2,872
$ 1.1036
2.4%
$ 2,134
$ 0.7734
1.7%
$ 8,138
100.0%
3,030
$ 2.6962
5.7%
$ 4,465
$ 1.4793
3.1%
$ 3,673
$ 1.2170
2.6%
$ 9,029
100.0%
3,047
$ 2.9752
6.3%
$ 5,017
$ 1.6532
3.5%
$ 4,012
$ 1.3220
2.8%
$ 10,139
100.0%
3,063
$ 3.3233
7.1%
$ 5,956
$ 1.9522
4.2%
$ 4,183
$ 1.3711
2.9%
$ 10,708
100.0%
3,079
$ 3.4912
7.4%
$ 6,485
$ 2.1143
4.5%
$ 4,223
$ 1.3769
2.9%
$ 47.00
$ 47.00
$ 47.00
$ 47.00
$ 47.00
Total Dividends (MX$ MM)*
% of CAD (/AFFO)
Outstanding CBFIs (MM)
Total Distribution (Dividends Paid) per CBFI (MX$)
Dividend Yield In MX$ (@ Current CBFI Price)
Cash Distribution (MX$ MM)
Cash Dividend per CBFI (MX$)
Cash Dividend Yield (@ Current CBFI Price)
Return of Capital (MX$ MM)
Return of Capital per CBFI (MX$)
Return of Capital (@ Current CBFI Price)
$ 868
$ 3,003
1,809
$ 0.4800
1,809
$ 1.7104
4.2%
$ 1,870
$ 1.0668
2.6%
$ 1,133
$ 0.6436
1.6%
$ 438
$ 0.2423
0.6%
$ 430
$ 0.2377
0.6%
FUNO Last Closing Price (MX$)
$ 41.82
$ 41.82
* Dividends calculated for each quarter are effectively disbursed in the following consecutive quarter.
Source: Actinver.
24
Company Profile: Fibra Uno (FUNO)
Deutsche Bank Mexico, S. A. Institucion de Banca Multiple Trust F/1401
The core
Asset Class / Sector(s):
Fibra / Diversified
Country:
Last Price (MX$):
Target Price 2015 (MX$)
Mexico
Mkt. Cap (USD MM):
10,048
47.00
Mkt. Cap (MX$ MM):
130,517
60.00
IPO Date:
5.7%
Avg. Daily $ (MX$ MM)
311.0
33.4%
Avg. Daily $ (USD MM)
23.9
Dividend Yield 2015
Total Upside Potential
CBFI Holders Structure
GLA Breakdown By Region
BUY
Rating
Control
Trust*
18.5%
18/06/2011
Company Description
Fibra Uno (FUNO) is the largest Mexican real estate investment trust (FIBRA) formed primarily to acquire,
own, develop and operate a broad range of commercial real estate in Mexico, including industrial, retail,
office, mixed-use and other properties. Currently, it has more than 410 properties located throughout the
country, with an GLA of approximately 5.3 million square meters (sqm).
Free
Float
81.5%
Investment Thesis - Positives
1) Fibra Uno is the local Real Estate market leader with the greatest diversification by asset types and
markets. 2) Impressive track record with heavy funding capabilities. 3) Experienced mgmt. team with over
30 years of experience in the RE sector. 4) Strong commitment from its founder eGroup, with relevant skin
in the game (~18.5% of FUNO’s CBFIs). 5) Unmatched growth prospects. 6) Good corporate governance.
7) Highest CBFI liquidity among the Mexican Fibras and largest market cap.
*Contributing Holders of CBFIs
●North
●Bajio
●Central
●South
(Including Directors of Advisor)
18%
12%
60%
9%
Does not include properties from Rojo portfolio.
Corporate Structure
Industrial
55.8%
Income Statement (MX$ MM)
Rent Revenues
Property Operating Revenue
YoY Change
Property Related Expenses
Net Operating Income (NOI)
YoY Change
NOI Margin
EBITDA
YoY Change
EBITDA Margin
Office
10.6%
2014
2015
2016
2017
7,719
12,087
13,720
15,145
3
8,659
13,403
15,302
16,916
9
121.8%
54.8%
14.2%
10.5%
10
-1,502
-2,054
-2,384
-2,636
12
7,352
11,544
13,113
14,475
21
125.0%
57.0%
13.6%
10.4%
22
84.9%
86.1%
85.7%
6,575
10,993
12,497
13,835
85.6% 23
28
123.7%
67.2%
13.7%
10.7%
29
100%
Free Float
Control
Group
F3 Advisor
76.9%
23.1%
Fibra Uno
(F/1401)
Retail
37.3%
F2 Service
Jumbo
Admon.
99.9%
Distribution according to 2014 estimates.
F1
Management
Properties
Cabi Inver
Key Operating Metrics
2014
2015
2016
2017
Total GLA (sqm)
6,531,418
8,653,753
9,016,683
9,169,683
Leased Area (sqm)
6,238,661
8,291,280
8,650,741
8,809,322
95.5%
95.8%
95.9%
96.1%
122
125
136
143
11.3%
2.9%
9.1%
5.2%
75.9%
82.0%
81.7%
Net Income
6,619
8,259
9,030
10,415
40
Implied Occupancy Rate
Funds From Operations (FFO)
5,069
8,371
9,312
10,450
46
Avg. Rental Rate (MX$ /sqm /month)
74.6%
65.1%
11.2%
12.2%
47
5,194
8,138
9,029
10,139
53
2014
2015
2016
2017
146,130
166,968
166,932
167,630
3
Mx Inflation (INPC)
3.9%
3.6%
3.5%
3.5%
20,197
7,562
4,141
4,274
4
U.S. Inflation (CPI)
1.8%
2.3%
2.5%
2.4%
15,738
2,235
1,727
1,614
5
Valuation Metrics / Yields
24
36
36
36
6
1,024
1,603
1,819
2,008
7
NOI Cap Rate (%)
YoY Change
Cash Available For Distribution (CAD) / AFFO
81.8% 30
100%
100%
1) Rich valuation in relation to other Fibras. 2) Short-term impact on dividends from the issuance of new
CBFIs in the market. 3) Interest rates sensitivity. 4) Development / Expansion risk for current or new
properties. 5) Lower market activity in consumer spending (Retail / Industrial), manufacturing and
import/export (trade) (Industrial), as well as in white collar job (Office) could have a direct impact on
demand for space. 6) Difficulty in acquiring new properties at attractive cap rates.
Directors of
Advisor
50%
Contributing Holders of CBFIs
(Including Directors of Advisor)
Investment Thesis - Risk Factors
50%
GLA Distribution by Asset Type
YoY Change
Macroeconomic Assumptions
Balance Sheet (MX$ MM)
Total Assets
Current Assets
Cash and Cash Equivalents
Restricted Cash (Reserve For Lenders)
Trade and Account Receivables
Mx GDP Growth
2014
2015
2016
2017
2.5%
4.0%
3.3%
3.8%
2014
2015
2016
2017
4.5%
5.8%
6.6%
7.3%
Other Current Assets
3,411
3,688
558
615
8
EBITDA Cap Rate (%)
4.1%
5.6%
6.3%
6.9%
Investment Properties
120,662
154,917
158,497
159,257
13
FFO Yield (%)
4.3%
5.9%
6.5%
7.3%
42,796
63,163
62,781
63,012
19
Dividend Yield (%)
4.2%
5.7%
6.3%
7.1%
4,433
11,748
3,762
3,982
20
[After-Tax] Dividend Yield (%)
3.4%
4.8%
5.3%
5.8%
886
1,387
1,574
1,737
21
P/FFO (x)
27.3x
17.0x
15.3x
13.7x
Total Liabilities
Current Liabilities
Trade and Account Payables
1,594
8,237
-
-
23
P/CAD (x)
26.7x
17.5x
15.8x
14.2x
Other Current Liabilities
303
474
538
594
24
P/NAV [Book Value] (x)
1.34x
1.37x
1.37x
1.37x
Non-Current Liabilities
38,363
51,415
59,018
59,030
25
Growth in FFO/CBFI (YoY)
14.1%
47.0%
10.6%
11.6%
37,432
49,956
57,363
57,203
26
Performance: Revenues (MX$ MM) / NOI and CAD Margins
Other Non-Current Liabilities
Shareholders Equity
931
1,458
1,656
1,828
27
103,334
103,806
104,152
104,618
30
Reported Net Income
Changes in Working Capital
Operating Cash Flows
Acquisitions CapEx
2014
2015
2016
2017
6,667
8,259
9,030
10,415
-707
344
3,361
145
6,219
11,142
15,663
13,785
-27,122
-24,961
-
3
9
10
-
14
Capital Expenditures
-4,738
-9,103
-3,364
-523
15
Investing Cash Flows
-30,823
-33,431
-3,345
-521
24
-14,380
-1,594
-8,302
-
27
Financing Cash Flows
38,278
8,798
-12,827
Net Change in Cash and Cash Equivalents
Debt Amortizations / Repayments
-13,377
34
13,674
-13,491
-509
-113
36
Cash and Cash Equivalents at BoP
2,088
15,762
2,272
1,763
37
Cash and Cash Equivalents at EoP
15,762
2,272
1,763
1,650
39
25
18,000
16,000
Cash Flow Statement (MX$ MM)
90.0%
84.9%
86.1%
85.7%
85.6%
14,000
85.0%
80.0%
12,000
75.0%
10,000
70.0%
8,000
65.0%
6,000
4,000
60.0%
60.7%
59.0%
59.9%
60.0%
55.0%
2,000
-
50.0%
2014
2015
Property Operating Revenue
2016
NOI Margin
2017
CAD Margin
Margins
Long-Term Debt
Property Operating Revenues
Short-Term Debt
Investment Strategy
Ernesto O’FarrillSantoscoy
Director
(52) 55 1103-6600 x6645
[email protected]
Gustavo Terán Durazo,
CFA
Head of Fundamental Research
(52) 55 1103-6600 x1193
[email protected]
Martín Lara
Telecommunications, Media and
Financial
(52) 55 1103-6600x1840
[email protected]
Carlos Hermosillo Bernal
Consumption
(52) 55 1103-6600 x4134
[email protected]
Pablo Duarte de León
FIBRAs (REITs)
(52) 55 1103-6600 x4334
[email protected]
Ramón Ortiz Reyes
Cement, Construction and Concessions
(52) 55 1103-6600 x1835
[email protected]
Federico Robinson Bours
Carrillo
Energy, Conglomerates, Industrial and
Mining
(52) 55 1103-6600 x4127
[email protected]
David Foulkes González
Specialized Consumer
(52) 55 1103-6600 x1836
[email protected]
Fundamental Research
Economic and Quantitative Research
Ismael Capistrán Bolio
Head of Economic and Quantitative
Research
Jaime Ascencio Aguirre
Economy and Markets
Santiago Hernández
Morales
Quantitative Research
Roberto Galván González
Technical Research
(52) 55 1103-6600 x1487
(52) 55 1103-6600 x793325
(52) 55 1103-6600 x4133
(52) 55 1103 -66000 x5039
[email protected]
[email protected]
[email protected]
[email protected]
Fixed IncomeResearch
Araceli Espinosa Elguea
Head of Fixed Income Research
(52) 55 1103 -66000 x6641
[email protected]
Jesús Viveros Hernández
Fixed Income Research
(52) 55 1103 -66000 x6649
[email protected]
(52) 55 1103-6600 x4132
[email protected]
Mauricio Arellano
Sampson
26
Fixed Income Research
Disclaimer
Guide for recommendations on investment in the companies under coverage included or not, in the Mexican Stock
Exchange main Price Index (IPC)
•
Strong Buy with extraordinary perspective. According to the analyst, in the next twelve months, the valuations of stock
and/or prospects for the sector are extremely FAVORABLE
•
Buy. According to the analyst, in the next twelve months, the valuation of stock and / or prospects for the sector is VERY
FAVORABLE
•
Neutral. According to the analyst, in the next twelve months, the valuation of stock and / or sector ARE NEUTRAL OR
FAVORABLE but with a similar perspective to the IPC
•
Below market. According to the analyst, in the next twelve months, the valuation of stock and / or sector outlook ARE NOT
POSITIVE
•
Sell. According to the analyst, in the next twelve months, the valuation of stock and / or sector outlook ARE NEGATIVE, or
likely to worsen
•
In review with positive outlook
•
In review with negative or unfavorable perspective
ImportantStatements.
a)
Of theAnalysts:
“The analysts in charge of producing the Analysis Reports:
Jaime Ascencio Aguirre; Mauricio Arellano Sampson; Ismael Capistrán Bolio; Pablo Enrique Duarte de León; Araceli Espinosa Elguea; David
Foulkes González; Roberto Galván González; Carlos Hermosillo Bernal; Santiago Hernández Morales; Martín Roberto Lara Poo; Ramón Ortiz
Reyes; Federico Robinson Bours Carrillo; Gustavo Adolfo Terán Durazo; Jesús Viveros Hernández, declare”:
b)
1.
"All points of view about the issuers under coverage correspond exclusively to the responsible analyst and authentically reflect his vision. All
recommendations made by analysts are prepared independently of any institution, including the institution where the services are provided
or companies belonging to the same financial or business group. The compensation scheme is not based or related, directly or indirectly,
with any specific recommendation and the remunerationis only received from the entity which the analysts provide their services.
2.
"None of the analysts with coverage of the issuers mentioned in this report holds any office, position or commission at issuers underhis
coverage, or any of the people who are part of the Business Group or consortium to which they belong. They have neither held any position
during the twelve months prior to the preparation of this report. "
3.
"Recommendations on issuers, made by the analyst who covers them, are based on public information and there is no guarantee of their
assertiveness regarding the performance that is actually observed in the values object of the recommendation"
4.
"Analysts maintain investments subject to their analysis reports on the following issuers: AC, ALFA, ALPEK, ALSEA, AMX, AZTECA,
CEMEX, CHDRAUI, FEMSA, FIBRAMQ, FINDEP, FUNO, GENTERA, GFREGIO, GRUMA, ICA, IENOVA, KOF, LAB, LIVEPOL,
MEXCHEM, OHLMEX, TLEVISA, SORIANA, SPORTS, VESTA, WALMEX.
On Actinver Casa de Bolsa, S.A. de C.V. Grupo Financiero Actinver
1.
Actinver Casa de Bolsa, S.A. de C.V. GrupoFinanciero Actinver, under any circumstance shall ensure the sense of the recommendations
contained in the reports of analysis to ensure future business relationship.
2.
All Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver business units can explore and do business with any company mentioned
in documents of analysis. All compensation for services given in the past or in the future, received by Actinver Casa de Bolsa, SA de C.V.
GrupoFinanciero Actinver by any company mentioned in this report has not had and will not have any effect on the compensation paid to
the analysts. However, just like any other employee of Actinver Group and its subsidiaries, the compensation being enjoyed by our analysts
will be affected by the profitability gained by Actinver Group and its subsidiaries.
3.
At the end of each of the previous three months, Actinver Casa de Bolsa, SA de C.V. Actinver Financial Group, has not held any
investments directly or indirectly in securities or financial derivatives, whose underlying are Securities subject of the analysis reports,
representing one percent or more of its portfolio of securities, investment portfolio, outstanding of the Securities or the underlying value of
the question, except for the following: * AEROMEX, BOLSA A, FINN 13 and FSHOP 13.
4.
Certain directors and officers of Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver occupy a similar position at the following
issuers: AEROMEX, MASECA, AZTECA, ALSEA, FINN, MAXCOM, SPORTS, FSHOP and FUNO.
This report will be distributed to all persons who meet the profile to acquire the type of values that is recommended in its content.
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