FIBRA Macquarie Mexico ((MX:FIBRAMQ12)) has held its Q3 earnings call. Read on for the main highlights of the call.
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FIBRA Macquarie Mexico’s recent earnings call showcased a robust financial performance marked by record revenues and growth. The company demonstrated effective capital allocation and celebrated significant sustainability achievements. However, the discussion also highlighted concerns regarding economic deceleration in Mexico and specific market challenges, such as occupancy declines in Monterrey and Juarez.
Record-Breaking Revenue and Growth
FIBRA Macquarie reported record consolidated revenues, achieving an 8.4% increase in underlying U.S. dollar terms over the previous year. The quarterly U.S. dollar AFFO rose by 6.6% annually, and the quarterly distribution saw a remarkable 17% increase from last year, underscoring the company’s strong financial performance.
Industrial Portfolio Performance
The industrial portfolio showed impressive results, with average rental rates increasing by 6.8% year-over-year. The company achieved a 17% renewal spread on negotiated leases and maintained a high quarterly retention rate of nearly 90%, reflecting the strength of its industrial assets.
Capital Allocation Success
A strategic acquisition of a 250,000 square foot logistics facility in Mexico City for $35 million was highlighted as a key move. This acquisition is expected to contribute positively to NOI and AFFO, positioning the company for future rental rate growth.
Retail Portfolio Recovery
The retail portfolio achieved a post-pandemic record occupancy of 93.6%, with NOI growth of 4.1% annually. The strong operating cash flow indicates a solid recovery in the retail segment, although some areas, like cinemas, continue to face challenges.
Sustainability Achievements
FIBRA Macquarie’s commitment to sustainability was evident as the company achieved 3 green stars in the 2025 credit assessment, scoring 94 points for the development benchmark. This achievement places the company ahead of regional and global peers.
Economic Deceleration Concerns
Despite the positive financial performance, there are concerns about potential economic deceleration in Mexico, particularly affecting industrial light manufacturing and retail tenants. This remains a key area of focus for the company moving forward.
Occupancy Declines in Certain Markets
Occupancy declines were noted in Monterrey and Juarez, attributed to the delivery of new unleased Class A products. Juarez, in particular, is experiencing softness in the market, which the company is monitoring closely.
Cinema Struggles in Retail Portfolio
The cinema sector within the retail portfolio continues to struggle compared to other tenants like gyms, supermarkets, and restaurants. This sector’s underperformance is a notable challenge for the retail segment.
Forward-Looking Guidance
FIBRA Macquarie provided forward-looking guidance, reaffirming its FY ’25 AFFO per certificate guidance of MXN 2.8 to MXN 2.85 and an AFFO range of $115 million to $119 million in U.S. dollar terms, indicating potential annual growth of up to 5%. The company’s strong balance sheet, including a USD 375 million sustainability-linked credit facility, enhances liquidity to approximately USD 625 million, maintaining a debt service coverage ratio of 4.6x.
In summary, FIBRA Macquarie Mexico’s earnings call highlighted a strong financial performance with record revenues and strategic growth initiatives. While the company faces challenges such as economic deceleration and market-specific occupancy declines, its robust capital allocation and sustainability achievements position it well for future growth.