FIBRA Monterrey Forecasts 10% Return for 2025

FIBRA Monterrey (FMTY) issued its 2025 guidance, forecasting a return exceeding 10% in US dollars. The company said it is in a good position to continue to expand in the industrial sector despite tariff threats in the United States. 

FMTY announced it approved its forecast for 2025 with Adjusted Funds From Operations (AFFO)/ CBFI target between MX$1.08 and MX$1.09, based on the exchange rate for early 2025 (MX$20.50 to MX$20.74). This is expected to result in a top-end return of 10.1% based on the MX$10.80/CBFI price at the beginning of the year.

For the 10th consecutive year, FMTY achieved the high end of its 2024 results guidance, generating an AFFO of MX$1.01 , with an average exchange rate of MX$18.37 per US dollar throughout 2024. This resulted in an 8.3% return, calculated from the MX$12.27/CBFI price at the beginning of 2024.

During 4Q24, the company repurchased 16.6 million CBFIs, increasing the total repurchased to 37.8 million, about 1.5% of the total outstanding CBFIs following a capital increase earlier in the year. A partial payment of US$119 million was made on Dec. 10, 2024, for six properties in the Batach portfolio. Additionally, FMTY concluded the sale of an underperforming office property previously occupied by Axtel, for US$15 million. The company also received a binding offer for the Fortaleza office property for MX$360 million.

At the end of 2024, FMTY reported a cash position of MX$6.2 billion, largely stemming from its recent capital raise aimed at expanding its industrial property portfolio. The company’s investment properties and total assets amounted to MX$38.1 billion and MX$46 billion, respectively. The debt ratio as of 4Q24 was 25.9%, a slight decrease from 26.6% in 2023. 

With its available cash and debt capacity, FMTY has the potential to invest up to US$600 million in the industrial sector without exceeding its target debt ratio of 35%, the company noted. “The recent discussions about the potential imposition of tariffs by the United States on Mexican exports have undoubtedly generated some concern in the market. However, the demand for industrial spaces in Mexico remains high, driven by the country's competitiveness in manufacturing costs and skilled labor, not to mention the openness and support demonstrated by the government. We will continue to monitor the evolution of these measures, with the conviction that Mexico will continue to consolidate as a strategic destination for industrial investment,” says Jorge Ávalos, Director General, FMTY.

FMTY’s portfolio at the end of 4Q24 included 117 properties, with 93 industrial, 18 office, and six commercial properties. The gross leasable area (GLA) reached 1.9 million m², with an occupancy rate of 96.2%. The company maintained a land reserve of 912,546m². Average rent prices were US$5.9/m² for industrial warehouses, US$19.4/m² for office spaces, US$16.1/m² for operational offices, and US$7.7/m² for commercial properties.

Total revenue for 4Q24 amounted to MX$775.5 million, reflecting a 27.7% increase over the same period in 2023. Net operating income (NOI) and EBITDA for the quarter were MX$707.2 million and MX$656.7 million, respectively, showing year-over-year growth of 28.1% and 29.3%. 

The NOI and EBITDA margins for 4Q24 stood at 91.2% and 84.7%, respectively, exceeding target margins of 90% and 83%. Funds from operations (FFO) and adjusted funds from operations (AFFO) for 4Q24 reached MX$684.7 million and MX$661.3 million, marking a 62% increase from the previous year.