Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the FIBRA Prologis third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. I would now like to turn the conference over to Alexandra Violante, Head of Investor Relations. You may begin. Thank you, Desiree, and good morning, everyone. Welcome to our third quarter 2024 earnings conference call. Before we begin our prepared remarks, I would like to remind everyone that all the information presented in this conference call is proprietary, and all rights are reserved. The information has been prepared only for information purposes and is not a solicitation of an offer to buy or sell any securities. Forward-looking statements during this call speak only as of the date of this call. Our actual results, performance, prospects, or opportunities may differ materially from those expressed in or implied by the forward-looking statements. Additionally, during this call, we may refer to certain non-accounting financial measures. The company does not assume any obligations to update or revise any of these forward-looking statements in the future, whether as a result of new information, future events, or otherwise, except as required by law. As is our practice, we had prepared supplementary materials that we may reference during the call as well. If you have not already done so, I will encourage you to visit our website at fibraprologis.com and download this material. Today, we will hear from Héctor Ibarzábal, our CEO, who will discuss our strategy and market conditions, and from Jorge Girault, our CFO, who will review results and guidance. Also joining us today is Federico Cantú, our Head of Operations. With that, it is my pleasure to hand the call over to Héctor. Thank you. Thank you, Ale, and good morning, everyone. Today, I would like to start by talking about the most important transaction that FIBRA Prologis has made to date. In early August, we successfully closed the initial tender offer for FIBRA Terrafina's outstanding certificates, resulting in our acquisition of 77% ownership. Since then, we have taken control of Terrafina's governance and have been working to take the buildings to our operational standards. The integration of the company is on track and moving as expected. We will continue with the strategy that FIBRA Prologis has followed, which has proven to be successful, and we expect to unlock important value creation from Terrafina's assets of providing service and solutions for customers. Early next year, we will enter into an accretive process of asset recycling. We will sell non-strategic assets in order to continue investing and enhancing our market participation within our six markets. Moving into another topic, I'd like to provide some highlights of the quarter. Occupancy in our portfolio remains at great levels, above 98%. The Terrafina portfolio is 95% occupied. We continue to have an impressive rent change on rollover of 56%. Additionally, since our last call, we acquired properties in Mexico City and Tijuana, adding 2 million sq ft, evidence that our teams are advancing goals even as we integrate Terrafina. Describing market conditions, I will start by addressing the broader macro environment. Volatility increased in the quarter as the judicial reform in Mexico was approved and U.S. elections are at peak intensity. These factors has slowed down decision-making from clients, particularly in the manufacturing markets. On the other hand, domestic consumption continues on a favorable trend, with year-to-date retail volumes up 2.4% and retail sales for the quarter up 3.2%. In alignment with this, we have seen robust leasing activity from logistics, e-commerce, and retail players, which are clearly showing an interest in increasing and improving the quality of the footprint. Net absorption in our 6 markets was 7 million sq ft, in line with the average of the last 4 quarters. Leasing activity was robust at 9.5 million sq ft, benefited by pre-leasing activity in Monterrey, taking the year-to-date figure to almost 34 million sq ft. Still, as we mentioned, we have observed a decline in energy, in urgency from tenants to get space, causing vacancy rates to marginally increase in some markets. Overall, vacancy increased 30 basis points versus last quarter, reaching 3%. Despite lesser speed on decision-making, market rents increased 1%, a number slightly below our expectations. We are adjusting our market rent growth expectations for 2024 to mid-single digits, still a very healthy rate for our business. Let me provide some additional color per market as we are seeing different trends at local level. In Mexico City, vacancy remains exceptionally low at 2.2%, with moderate absorption of 1.3 million sq ft due to the lack of adequate space. We continue to see a strong underlying interest from clients, particularly in the CTT corridor, where vacancy is less than 1%. Mexico City now represents almost half of FIBRA Prologis' assets value, with 90%, 90% of such exposure in this main CTT corridor. Monterrey is showing mixed trends. New leasing activity of 4.2 million sq ft was in the high end of the range of recent years, mostly from manufacturing and e-commerce. However, vacancy increased 80 basis points to 2.7% because of limited and speculative leasing. We are taking a more cautious approach on this market, considering elevated construction activity from non-institutional landlords. In Guadalajara, a strong demand pushed vacancy down to 1.3%, with minimal new supply and rising pre-leasing activity. This tech hub is attracting more tenant interest, and we are optimistic about its continued growth. Regarding Tijuana, vacancy declined 50 basis points to 2.5%, benefited by healthy absorption and a slow progress on completions. The few buildings that were delivered have been quickly absorbed, which is a positive read-through of our portfolio. Regarding Juárez, vacancy reached 7.6%, impacted by elevated completions. We believe vacancy should stabilize gradually as the construction pipeline has declined to less than half from peak. Similarly, Reynosa vacancy increased 70 basis points to 5%. We think these markets have been particularly impacted by slow decision-making, and should start posting healthier figures once that there is more clarity in the macro environment. A brief comment on the non-Prologis markets, such as El Bajío and Saltillo. We have seen a decline in vacancies well below the historical average, as some demand from our key markets has flown to these markets, aiming from energy availability. These solid trends should support our asset recycling strategy going forward. In closing, we remain confident in our portfolio's resilience and our ability to navigate these fluctuations. We are seeing a strong fundamentals in key markets that represent 80% of our portfolio. In addition, our best-in-class balance sheet leaves us well positioned for growth in any environment, as Jorge will discuss. Finally, as you all know, we remain committed to our shareholders and always placing their interests first. With that, I will pass the word to Jorge. Thank you, Héctor, and good morning to everyone. As Héctor mentioned, last August 6, we closed on the 77% acquisition of Terrafina. In these lines, and before beginning with our financial results, I would like to mention the following: Since we effectively acquired Terrafina on August 6, from an accounting perspective, the first 5 days of August are not reflected in our numbers. Because of some financial metrics require full quarter comparison, we are presenting EBITDA as if we had Terrafina for the full quarter. With this, let me start with the results of the quarter. FFO was $63.4 million, or $0.044 per certificate, an 11.5% decline in a per certificate basis compared to last year. This is driven by the following factors: decrease in interest income due to the use of the cash in the recent acquisitions, a 35% increase in number of CBFI versus last year, and one-time expenses related to the Terrafina transaction. AFFO reached $52 million for the quarter, a 13% increase on nominal basis, mainly driven by the rent change and rollover, annual bumps, and the share of the Terrafina transaction. Moving to our operating metrics, which include only the Prologis portfolio. Leasing activity for the quarter was 1 million sq ft, with a period-end occupancy, an average occupancy around 98%, in line with expectations. Net effective rent change on rollover was 56.2% for the quarter and 52.5% for the last twelve months, in line with expectations. In terms of same-store cash and GAAP NOI for the quarter, we had an increase of 4.4% and 3% respectively, mainly due to the rent change and annual bumps, which was offset by peso movement during the quarter. Moving to FIBRA Prologis balance sheet. It remains strong. We have used available cash to close on our first tender for Terrafina, and for the acquisition we announced for approximately $255 million in the last months. Our balance sheet is a unique feature in the space, with a total capacity of around $1.5 billion to get to 35% loan to value. Rating agencies have ratified FIBRA Prologis credit rating, which is a sign of the strength of the balance sheet, an equivalent of BBB+. On the ESG front, we were awarded sector leader by GRESB. Additionally, we have achieved 3 new green certifications, equivalent to additional 3% of the portfolio, reaching 88%. Let me update you on what we see for the remainder of the year related to guidance. Following our strong leasing record rent change and effect on peso valuation, we expect same-store cash NOI growth to range between 8.5% and 9.5%. G&A to range between $50 million and $55 million, including Terrafina's portion. On the capital deployment front, we expect to acquire between $250 million and $350 million. Putting all this together, we are setting our full year FFO per certificate range between $0.19 and $0.195. The rest of the guidance remains unchanged, which you can find in page 9 of our supplemental financial information. Let me update you on Terrafina's second tender offer. Our second tender offer is at 0.58 exchange ratio, in line with what we offered when we launched the first tender earlier this year, and is set to expire on November 1, unless extended as required by law. Before I finish, I want to say that we are very pleased to announce a second reduction on our administration fees in the last 12 months. As we grow, our sponsor focus has been to improve operational leverage with investors in line with local market trends. This new fee structure, which will come effective starting 2025, is unique. Having Prologis, the largest global industrial real estate owner and operator, as manager of FIBRA Prologis, is an important benefit for investors, as it aligns interest with its 35% ownership and brings to the table irreplaceable benefits from an operational perspective. Also, from a total G&A cost point of view, this change further improves our expense efficiencies relative to peers, including internally managed structures, giving holders the opportunity to co-invest with Prologis in a top-quality portfolio with top-class management and governance. In summary, our strategy is straightforward: continue to deliver value to our stakeholders as clear industry leaders. I want to finish by thanking our people on the ground, in our offices around Mexico and in Prologis around the world, for doing a great job on integrating Terrafina into FIBRA Prologis systems and making it part of our operating excellence. With that, let me turn the call to the operator for Q&A. Thank you. Thanks. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and requeue back for any additional questions. Again, press star one to join the queue. Your first question comes from the line of Pablo Monsiváis with Barclays. Your line is open. Hi, good morning. Thanks for taking my questions. I have two questions. The first one is in terms of the acquisition with Terrafina. What has been your overall experience in managing this portfolio? What is the conversation that you have with tenants? Because you are very focused on rent increases, and perhaps some tenants were not that used to that approach. Is there any read-through of what you are expecting on that front? That's my first question. My second question is on the fees structure. I would like to have a little bit more color on why you are putting this structure, and if you thought about any different structure, and why you're choosing for this. Thank you very much. Thank you, thank you for your question, Pablo. Let me try to answer how we are finding Terrafina, which conceptually is what you are asking, and I will let Jorge respond the part of the fees. You know, what we are trying to establish in Terrafina is take the properties as soon as possible to our operational standards. What I can say in these couple of months that we have had access to more information to customers and to some of the properties, is that we are seeing more opportunities than what we were anticipating. What you should expect is a process. We're commencing to have a close relation with customers. We're starting to understand what are the needs that they have. We're finding, in some occasions, some lack in maintenance of the buildings, that we were expecting. And in the overall, the relationship that is being built with the customers, is gonna take some time, but it is starting with solid grounds since day number one. Once that we do all this process, we will be able to take the assets to the operational standards that we are used to, the relation with our customers as a very trustful relation. And then, as a consequence of having done all this work, we will be able to take all the leases up to market. Jorge was establishing that, in our market, we see a 50% increase opportunity of the in-place rent to market conditions. So on the overall, I think, that opportunities are there. We are feeling every day more in control of the operations, and looking forward to a bright 2025 on this regard. Pablo, this is Jorge, and thank you for your question. Regarding the fees, let me start by saying that if you remember, when we launched the last tender for the first tender for Terrafina, we announced publicly that Prologis and FIBRA Prologis were revising the fees to improve operational leverage. So that's part of the question. We see FIBRA Prologis as a co-investment vehicle with an exclusive arrangement with the best-in-class sponsor, like I said in my opening remarks. This is extraordinary value in being aligned with Prologis. It brings not only extraordinary expertise in Mexico, but also benefits from a global scale, customer relationship, capital market expertise, and culture of innovation. When you put this into context and you relate this to a, you know, potential internalization, for example, what we have found out or agreed to is that the cost would be prohibitive, perhaps impossible, to replicate Prologis platform into FIBRA. So we think this new fee arrangement position us quite well relative to peers once all costs are considered. So I encourage you to put the whole G&A cost of our peers and us, and compare us on a per asset base, assets under management basis, and you will see that we are in the, not the lowest maybe, but in the low parts of the range. Our next question comes from the line of Gordon Lee with BTG. Your line is open. Hi, good morning. Thank you very much for the call. Just a quick question on capital allocation. Looking more into 2025, and I know you haven't provided guidance, so I'm not sort of thinking about specific numbers, but just in terms of the process. Should we expect you, at least when it comes to maybe looking at third-party deals on the buy side, to sort of take your foot off the accelerator as you execute on the sale portfolio of the Terrafina assets that you're gonna dispose? Or will these two things sort of happen on parallel tracks and be managed separately? Thank you. Thank you. Thank you for your question, Gordon. We have been working since day number 1 on the disposition and execution plan for the disposition strategy. I feel very confident because it's amazing the number of calls that I have received from potential investors willing to understand what our process are, and even some off-market proposals of investors that are willing to anticipate any potential disposition. I feel very confident that by early next year, we will be out of the market, and I can see a couple of dozens of investors potentially participating in the process. This disposition strategy is not necessarily tied or linked to the investment strategy that we have. On an ideal world, would be the day that I sell is the day that I'm buying. But we have a very strong balance that can help us to take care of the opportunities, even if the dispositions had not happened. This process, I think, is gonna take around 18 months. Hopefully, we can execute it with higher speed. But you know, so far, the price that we pay for the properties, the investment that we are making on them, the improvement on KPIs on the different assets, and the interest from investors, make me be very positive about the potential outcome of this recycling process. Next question comes from the line of Francisco Chávez with BBVA. Your line is open. Hi, thanks for the call. I have two questions regarding EBITDA margin. The first question is, I understand that EBITDA this quarter is distorted by full quarter adjustments and some expenses relating to the acquisition of Terrafina. What will be an adjusted EBITDA margin that reflects the profitability of the fibra? And the second question is, what is your medium and long-term goal for EBITDA margin? Gracias, Paco, for your question. It's... You're right. This quarter is a little bit funky in the sense that we have a Terrafina transaction. We didn't buy it for the whole year, for the whole quarter. There was five days that are not considered from an accounting perspective, et cetera. No, this is a little bit of a dirty quarter from that perspective. So we had to put it a full quarter, and you'd see a high margin in the 80% range. I think that the normalized level, at least in the short term, is gonna be between in the 70%, in the high half of the second half of the 70%, between 75% and 80%, it's gonna be around that number. I think that going forward, I'm looking to numbers around 77% and 80% closing the gap. That's where I see EBITDA numbers going forward. Next question comes from the line of André Mazini with Citigroup. Your line is open. ... Hi, Héctor, Jorge, Ale. Thanks. Thanks for the call. Congrats on the results. So the first question is on what we will be doing with the proceeds after the divestment that will start in 2025, right? Of a portion of the Terrafina assets. Should we expect dividends or redeployments of money back into the real estate market? Which will be maybe the bigger portion, dividends or plow back of money back into the real estate market. And the second one, if I heard correctly, you did say that you noticed that some Terrafina assets need more investments. So if you could, you know, talk a little bit about what those investments would be, tenant improvements or general maintenance CapEx. And if you would be investing probably on the assets you wanna keep on a long-term basis, right? If that makes sense, or you have to invest also in the assets that are up for the investments. Thanks. Thank you, Andre, for your question. I will, I will answer the second question, and I will let Jorge answer the first one. You know, the standard that we have on CapEx on the properties is 14% related to net operating income. We anticipated, because we were following closely how much the previous administration of Terrafina was investing in the properties. And, because of the difference between our standard and Terrafina's former standard, is that in an underwriting and in our business pitch, we always have a CapEx number in order to take care of a potential lack of maintenance. Eighty percent of this maintenance is gonna be related to the assets that we are holding, but we need to place the interest of customers first. So even in dispo assets, if we see that there's urgency to take care of some CapEx situations, we will do it, because we cannot set a building, where the customer is not in peace or is not having a right relation with the customer. So no surprises, the money was expected, was part of what we were anticipating, and, you know, it's a lot of work. We have increased, probably 25%, the personnel that Prologis has in the ground in order to take care of all these type of situations. Andre, this is Jorge. Regarding your question on the investment and use of proceeds. The main use of proceeds for the sales or disposition of assets that we will do in Terrafina will go to two parts. One is to reinvest, as Héctor said, into new real estate in our markets. And two, to pay down short-term debt that we have under Terrafina and restructure a little bit the balance sheet. But those are the main two uses of proceeds. Next question comes from the line of Jorel Guilloty with Goldman Sachs. Your line is open. Good morning. Thank you for taking my questions. The first one is just a broader, more macro question. If I understood correctly, you mentioned earlier that you expect headwinds for northern markets to persist, but I just was wondering, how long do you expect these headwinds to persist? And what could be a catalyst to drive a positive inflection in performance going forward? And then, the second question is a little bit more mathematical. If I look at your same-store NOI guidance, compare, you know, second Q to three Q, it did go down 50 basis points. If I read it correctly, it went down 50 basis points at the midpoint, as you tightened the range. And I was kind of wondering what drove that? Is that the inclusion of the Terrafina portfolio that drove this or something else? Thank you. Thank you. Thank you, Jorel, for your, for your question. This is the first time that, that we buy Terrafina, but, this is not the first time that we are facing U.S. elections. Every four years, we experience, this situation. And, you know, what we have, seen many, many times is that, a lot of the stuff, a lot of the political talking that regards to Mexico, to disruption of the treaties, to closing borders, et cetera, you know, the most of it, doesn't happen. And after the election is completed, you know, they need to find the right way to have the right trading with Mexico. I mean, Mexico depends a lot on the U.S., but the U.S. depends a lot on Mexico, on the manufacturing front. Mexico is the big factory of the States. The headwinds that we see are short-term. Players that are already in Mexico and that had experience in the past, these political elections, you know, they understand it, and they keep on moving according to their plans. The new companies that are willing for first time to be in Mexico are the ones that get a little bit scared about all this political talking. What we have seen in the past is that once the dust is settled, the election is defined, now they feel with the courage to present their expansion plans, plans in Mexico. It's natural that if you are willing to come for the first time to Mexico, and you're in the middle of all this political talking, you would probably defer your proposal to your investment committee until you have more certainty. That should be happening within the first and second quarter of next year. Joel, this is Jorge. Regarding the same store question on my question, the two main drivers here are your average occupancy. If you compare—and this is without Terrafina, our same store doesn't include Terrafina. There is a drop of around 100 basis points on the average occupancy, if you compare to last year. Also, the FX. The FX has a big component in the same store. I mean, the even previous quarter was at 16 pesos, almost 17 pesos. Last year was the same case. This year we were in average closer to 19 pesos, and those are the two main factors. Again, if you would like to ask a question, press star then number one on your telephone keypad. Please limit to one question and queue for any additional questions. Our next question comes from the line of Francisco Suárez with Scotiabank. Your line is open. Thank you. Good morning, thanks for the call. The question is the same that I made on the last quarter. Can you give us an idea on how the utilization rates on your buildings are, just like PLD discloses this information for the U.S. assets? Thank you. Hola, Paco, this is Federico. Thank you for your question. So, we have very close communication with all our customers. And, you know, we've seen very good activity this year. We don't have the actual survey that Prologis in the U.S. has. We expect to implement that soon. But, in conversations with our customers, we see that space utilization is, I would say, in line to a little bit above what the U.S. is seeing. I would point to very marginal subleasing across our six markets, and practically non-existent in Mexico City. So with all that put together, we feel very good about space utilization, which, again, is driven by the two main factors we've talked about. You know, manufacturing, nearshoring into the U.S. and logistics companies supporting that engine, as well as domestic consumption and e-commerce, mainly in central Mexico, Mexico City, which again are seeing good activity across all our buildings. Our next question comes from the line of Anton Mortenkotter with GBM. Your line is open. Hi, guys. Thank you for taking my question, and congrats on the results. I have just two quick questions. The first one, I mean, I was wondering, how should we think about the dispositions regarding the assets from Terrafina you're looking to recycle? I mean, is it valid to think about the investment property appraisal as a base scenario, or maybe shall we assess through comparable cap rates, or what should we be expecting from that? Thank you. Thank you, Anton, for your question. As you can imagine, we have a very close follow-up to everything which is happening in the capital markets. Investment sales during 2024, I could say, were extremely low. There is an expectation to have higher activity next year. We do see a lot of investors that have been funded, either by public and private monies. It could be optimistic to say that, cap rates are gonna be compressed, but I have a lot of elements to think, because of this ratio between supply and demand, that cap rates at least are gonna be flat. What is the benchmark that we have? The benchmark that Prologis always uses is related to market. We believe that the appraisals that we have of the properties, not from Terrafina and from FIBRA Prologis, because I need to highlight that the company doing the appraisals for both companies is the same, so there is a trustful relation. So we have a good watermark with the appraisals that we have from third party of the assets. We have our own appraisal, but bottom line, market is our objective. Because of this ratio between more modern than gone, I'm expecting hopefully to have a positive outcome on the disposition starting in the first quarter of next year. Thank you. That is very clear. And if I may, related to the fees, the reduction of the fees that you mentioned today. I mean, you are adjusting the ranges to which you collect a certain amount of fees. But just to clarify, I understand that in Terrafina shareholder meeting, you're also proposing to change the advisory contract, and on that you only collect 50 basis points, right? So just wanted to understand if Prologis portfolio is going to be separated from what, the advisory fee is in Terrafina's portfolio also, and also from these ranges. Thank you, Alan. Thank you, Anton, sorry for the question. This is Jorge. You have to... Right now, you have to divide it into two separate companies. FIBRA Prologis will collect its fee, Prologis will collect the asset management fee, as we announced it today, on only-... FIBRA Prologis assets. So if you look at the balance sheet right now, on a consolidated basis, we have about $8.5 billion or $8.7 billion, out of which around $5.5 billion are in FIBRA Prologis. So on that number, you have to apply the fee structure that we announced today. Terrafina is paying to, and we announced this publicly, that we got an agreement with PGIM, and we also called for a Terrafina called for a holders meeting for next November eleventh. We called yesterday to just put this into writing, whereby Terrafina is paying PGIM the current fee, which is 50 basis points on AUM. Once the PGIM terminates the agreement, which will be at the end of the year, Prologis will take the asset management of Terrafina, and the fee will be the same, the 50 basis points, until it's integrated into FIBRA Prologis. So we're keeping the same fee as it's paid to PGIM. So you have to. For now, you have to do it as, see it as two companies. Obviously, we will consolidate in the fourth quarter, as we did in this third quarter, but you have to differentiate these two numbers. Probably, an additional clarification on this regard, the 50 basis points is lower than the 60 basis points. But Terrafina had some payroll expenses and some other expenses that are not gonna be happening going forward. As a reminder, everything that Fibra Prologis pays to Prologis is related to this advisory fee, and there's no additional expenses. And this is why, particularly, Jorge always suggests to make a full G&A analysis and not to remain just comparing the numbers of the fees that could be a little bit misleading. Next question comes from the line of Alan Macías with Bank of America. Your line is open. Alan, probably you're on mute. And again, if you would like to ask a question, press star then number one on your telephone keypad. There are no further questions at this time. Mr. Héctor Ibarzábal, I turn the call back over to you. Thank you very much. I want to thank all of you for your valuable time dedicated to this call. I'm really excited about the opportunity that we have for leading the efforts on the great market momentum of the largest FIBRA in Mexico. Please do not hesitate to contact Alexandra for any additional information that you may require. Muchas gracias. Gentlemen, this concludes today's conference call. You may now disconnect.