3q19 earnings release 3q19cdn.investorcloud.net/fibramty/informacionfinanciera/...redefines real...

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3Q19 Earnings Release


Redefines real estate Profitability in Mexico

Contact: Jaime Martínez Chief Financial Officer T.+52(81) 4160-1403 Email: [email protected]

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Investment Model

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FIBRA MTY ANNOUNCES RESULTS FOR THE THIRD QUARTER 2019

Monterrey, Nuevo Leon, Mexico – October 22nd, 2019 – Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario, as Trustee identified by the number F/2157, (BMV: FMTY14), (“Fibra Mty” or “the Company”), the first real estate investment trust 100% internally managed, announced today its results for the third quarter ("3Q19"). The figures presented in this report have been prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in millions of Mexican pesos (Ps.), unless otherwise stated, and may vary due to rounding.

Third Quarter 2019 Highlights

• Fibra Mty is currently preparing the second placement of CBFIs under its ATM program, for up to Ps. 3,500 million excluding greenshoe, which will be primarily based on the progress of potential acquisitions. The minimum offering price will be Ps. 12.00 pesos per CBFI.

• At the end of 3Q19, Fibra Mty’s consolidated portfolio was composed of 55 properties, including 18 for office use, 31 for industrial use and 6 for retail use. It is relevant to note that, in line with our strategic approach of maintaining our properties at its the best and highest use, we have started the reconversion process of the Cuprum property. Therefore, as of July 1st, 2019, the tenant of such property was relocated to the Zinc building. In consequence, 3Q19 operating metrics exclude the Cuprum building and include the Zinc property.

• As of quarter-end, Fibra Mty’s Gross Leasable Area (“GLA”) totaled 663,537 m2. The occupancy rate as of September 30, 2019, stood at 97.2% in GLA terms.

• In 3Q19, average rent per square meter was US$18.7 for corporate offices, US$13.9 for operating offices, US$4.5 for industrial buildings and US$7.2 for retail properties.

• 3Q19 total revenue amounted to Ps. 302.5 million, up 29.3% when compared to 3Q18.

• 3Q19 Net Operating Income (“NOI”) was Ps. 271.7 million, 32.0% higher than the figure recorded in 3Q18.

• 3Q19 EBITDA reached Ps. 245.4 million, a 32.9% increase versus 3Q18.

• 3Q19 NOI and EBITDA margins stood at 89.8% and 81.1%, respectively, 180 and 210 basis points above the figures reported in 3Q18.

• 3Q19 Funds from Operations (“FFO”) was Ps. 195.9 million, up 7.4% when compared to 3Q18, while Adjusted Funds from Operations (“AFFO”) totaled Ps. 185.4 million, 6.3% above than 3Q18.

• In consideration of the second CBFI placement, explained lines above, Fibra Mty carried out an anticipated cash distribution for Ps. 186.9 million. This distribution was determined based on projected financial results for 3Q19 and was equivalent to an AFFO per CBFI of Ps. 0.293, which was paid on October 11th, 2019, with an annualized yield of 9.8% compared to the CBFI’s closing price of Ps. 11.93 at year-end 2018. The difference of Ps. 1.5 million versus the Ps. 185.4 million AFFO in 3Q19, was due to the negative effect of exchange rate fluctuations on financial expenses, which will be deducted from the 4Q19 distribution.

• Furthermore, considering the tentative date for the placement, a second anticipated cash distribution will be performed for Ps. 60.5 million. This distribution was determined based on Fibra Mty’s projected financial results for October 2019 and is equivalent to an AFFO per CBFI of Ps. 0.095, which will be paid on October 24th, 2019.

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Operating Highlights:

3Q19 3Q18 Δ%/p.p. 2Q19(2) Δ%/p.p.

Number of Properties 54 43 25.6% 54 0.0%

Office 18 12 50.0% 18 0.0%

Industrial 30 25 20.0% 30 0.0%

Retail 6 6 0.0% 6 0.0%

Gross Leasable Area (GLA) m2 663,537(1) 504,534 31.5% 661,175 0.4%

Occupancy Rate (GLA) 97.2% 96.8% 0.4 p.p. 96.9% 0.3 p.p.

Average Rent / m2 Corporate Offices (US$)

$18.7 $19.0 (1.6%)(2) $18.8 (0.5%)

Average Rent / m2 Back Offices (US$) $13.9 $13.4 3.7%(3) $13.9 0.0%

Average Rent / m2 industrial (US$) $4.5 $4.3 4.7%(3) $4.5 0.0%

Average Rent / m2 Retail (US$) $7.2 $7.4 (2.7%)(2) $7.4 (2.7%)(4)

(1) The increase against 2Q19 is attributed to the incorporation of the Zinc property and the removal of the Cuprum building, due to its reconversion

to its best and highest use.

(2) Mainly derived from the depreciation of the Mexican peso against the US dollar, impacted to a lesser extent by rent increases, in accordance

with contract terms.

(3) Largely explained by the Filios acquisition, marginally supported by the depreciation of the Mexican peso against the US dollar .

(4) Primarily due the depreciation of the Mexican peso against the US dollar.

Financial Position:

3Q19 3Q18 Δ%/p.p. 2Q19 Δ%/p.p.

Cash and Cash Equivalents 718,848 1,667,200 (56.9%)(1) 812,011 (11.5%)(4)

Investment Properties 13,532,970 9,997,550 35.4%(2) 13,206,741 2.5%

Total Assets 14,397,144 11,824,226 21.8% 14,161,353 1.7%

Debt 5,178,679 2,865,152 80.7%(3) 5,086,091 1.8%

Total Liabilities 5,843,921 2,979,841 96.1% 5,517,174 5.9%

Total Equity 8,553,223 8,844,385 (3.3%) 8,644,179 (1.1%)

(1) Mainly attributed to the gradual use of cash from 4Q18, for the Filios and Patria acquisitions, as well as for the construction of the Zinc property

(2) Explained by the acquisition of the Filios portfolio and of the Patria property, the construction of the Zinc property, the beginning of the

reconversion of the Cuprum building to its best and highest use, as well as improvements and adjustments to the same-property portfolio

and the recognition of fair value effects, both in accordance with IAS 40 – Investment Property.

(3) Increase due to the partial drawdown from the HSBC syndicated loan for US$ 75.0 million, the credit limit increase of the BBVA loan for US$

11.0 million, the drawdown of the unsecured credit lines subscribed with HSBC for US$ 35.0 million, used to replace the peso-denominated

loans deployed for the Filios acquisition at year-end 2018, and the higher mark-to-market valuation of Fibra Mty’s dollar-denominated debt,

as USD/MXN exchange rate went from Ps. 18.8120 in 3Q18 to Ps. 19.6808 this quarter.

(4) Decrease mainly derived from the payments associated to the completion of the Zinc property and the beginning of the reconversion of the

Cuprum building to its best and highest use.

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Financial Highlights in thousands of Mexican pesos:

3Q19 3Q18 Δ%/p.p. (1) 2Q19 Δ%/p.p.

Total revenue 302,454 233,943 29.3% 296,711 1.9%

NOI 271,739 205,923 32.0% 267,272 1.7%

EBITDA 245,422 184,716 32.9% 241,436 1.7%

FFO 195,882 182,345 7.4% 197,284 (0.7%)

AFFO 185,382 174,430 6.3% 186,784 (0.8%)

(1) A detailed explanation of these changes is provided in the Financial Performance section.

Financial Highlights per CBFI:

3Q19 3Q18 Δ%/p.p. (1) 2Q19 Δ%/p.p.

NOI 0.426 0.324 31.5% 0.418 1.9%

EBITDA 0.384 0.290 32.4% 0.377 1.9%

FFO 0.307 0.287 7.0% 0.308 (0.3%)

AFFO 0.290 0.274 5.8% 0.292 (0.7%)

Outstanding CBFIs (thousands) (2) 638,434.184 636,181.928 0.4% 639,967.331 (0.2%)

(1) A detailed explanation of these changes is provided in the Financial Performance section.

(2) CBFIs outstanding as of the distribution date.

Margins:

3Q19 3Q18 Δ%/p.p. 2Q19 Δ%/p.p.

Total Revenue 302,454 233,943 29.3% 296,711 1.9%

NOI 89.8% 88.0% 1.8p.p. 90.1% (0.3p.p.)

EBITDA 81.1% 79.0% 2.1p.p. 81.4% (0.3p.p.)

FFO 64.8% 77.9% (13.1p.p.)(1) 66.5% (1.7p.p.) (1)

AFFO 61.3% 74.6% (13.3p.p.) (1) 63.0% (1.7p.p.) (1)

(1) Variation explained by the higher indebtedness level arising from the Filios acquisition, from 24.36% in 3Q18 to 36.02% in 3Q19, as well as a

decrease in financial income due to the use of cash for the same transaction. Compared to 2Q19, FFO and AFFO margins both decreased 170

basis points, reflecting the contraction in financial income due to the disbursements made to complete the construction works at the Zinc

property and to the beginning of the reconversion of the Cuprum building to its best and highest use.

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Comments from the Chief Executive Officer

“Promise what you can accomplish and accomplish what you promised”

- Sam Zell

We are approaching the fifth anniversary since we launched this great project. A dream born with a very clear

goal: to create a real estate investment vehicle that becomes the new industry benchmark for its compliance and

transparency. This vision demands a firm resolve and, first and foremost, collective hard work.

Concerning compliance, we have delivered the results we promised to our investors, hand in hand with a growth

and geographic diversification program, centered on adding high-quality real estate assets and tenants. With

respect to transparency, although our corporate governance structure was already a benchmark among publicly-

traded companies, we recently implemented some important improvements, reinforcing the independence of

the Technical Committee’s supporting bodies, incorporating an additional independent member to our Technical

Committee, and endowing Fibra Mty’s Meeting of CBFI Holders with greater involvement regarding control over

the Company.

As you may already know, in October we started the marketing phase of our follow-on offering, whose proceeds

will be used to acquire some properties currently under evaluation that would improve, not only the profile and

quality of our assets, but also our profitability. During this process, we have been very delighted to hear that our

partners and potential investors perceive us as a committed company, that fulfills its promises and has a robust

and trustful, aligned with best international practices.

I am convinced that, with this solid track record of results and growth, we are on the right path to become the

investment vehicle that delivers the most attractive returns to investors in the real estate sector, in an incremental

and sustainable manner.

As always, I am very grateful for your trust,

Jorge Avalos Carpinteyro CEO

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Operating Performance

Property Portfolio and Geographic Locations

Fibra Mty’s portfolio is comprised of 55 properties located in 9 states of Mexico, with an average age of 13.8 years and occupancy rate of 97.2%, in GLA terms. It is relevant to note that, in line with our strategic approach of maintaining our properties at its the best and highest use, we have started the reconversion process of the Cuprum property. Therefore, as of July 1st, 2019, the tenant of such property was relocated to the Zinc building. In consequence, 3Q19 operating metrics exclude the Cuprum building and include the Zinc property.

Total Revenue expressed in thousands of Mexican pesos.

Real Estate Asset Location GLA (m2)

3Q19 Total

Revenue

3Q18 Total

Revenue

Δ% 3Q19 vs

3Q18

2Q19 Total

Revenue

Δ% 3Q19 vs

2Q19

1-3 OEP Portfolio(1) Nuevo Leon 44,971(5) 51,283 51,073 0.4% 50,135 2.3%

4-6 CEN 333 Portfolio(2) Nuevo Leon 36,752 28,161 27,053 4.1% 27,659 1.8%

7 Danfoss Nuevo Leon 30,580 7,787 7,595 2.5% 7,725 0.8%

8 Cuadrante Chihuahua 4,520 3,480 3,437 1.3% 3,430 1.5%

9 Cuprum Nuevo Leon (6) - 3,511 (100.0%) 3,693 (100.0%)

10-14 Casona Portfolio Multiple(3) 38,684 8,123 7,875 3.1% 8,055 0.8%

15 Catacha Nuevo Leon 5,431 1,202 1,216 (1.2%) 1,154 4.2%

16-19 Monza Portfolio Chihuahua 13,679 5,483 5,227 4.9% 5,483 0.0%

20 Santiago Queretaro 16,497 4,697 4,596 2.2% 4,493 4.5%

21 Monza 2 Chihuahua 4,611 1,941 1,853 4.7% 1,941 0.0%

22 Prometeo Nuevo Leon 8,135 13,482 12,731 5.9% 12,906 4.5%

23 Nico 1 Nuevo Leon 43,272 12,200 11,966 2.0% 11,761 3.7%

24-31 Providencia Portfolio Coahuila 82,622 21,736 21,667 0.3% 21,872 (0.6%)

32 Fortaleza ZMVM(4) 15,137 13,325 12,644 5.4% 13,213 0.8%

33 Cienega Nuevo Leon 25,223 5,670 5,455 3.9% 5,455 3.9%

34 Redwood Jalisco 11,605 18,720 18,632 0.5% 18,669 0.3%

35 Catacha 2 Queretaro 5,400 1,438 1,373 4.7% 1,438 0.0%

36-42 Huasteco San Luis Potosi 89,951 28,196 27,824 1.3% 28,305 (0.4%)

43 Cuauhtemoc Nuevo Leon 10,294 8,597 8,215 4.7% 8,663 (0.8%)

44 Zinc Nuevo Leon 19,623(7) 4,079 - - - -

45 Patria Jalisco 7,970 8,425 - - 6,927 21.6%

46-55 Filios Portfolio Nuevo Leon 148,580 54,429 - - 53,734 1.3%

Total / Average 663,537 302,454 233,943 29.3% 296,711 1.9%

(1) Includes the OEP Torre 1, OEP Torre 2, and OEP Plaza Central assets (2) Includes the Neoris/GE, Axtel and Atento assets. (3) Properties located in Chihuahua, Sinaloa and Guanajuato. (4) Mexico City Metropolitan Area (Greater Mexico City). (5) OEP Torre’s common area converted into 91 m2 of GLA. (6) Excludes 17,261 m2 of GLA due to the beginning of the conversion of the Cuprum building, to achieve its best and highest use. (7) As of July 1st, 2019, the lease of the Zinc property began, with a total GLA of 19,623 m2.

Tenant Breakdown by Economic Sector

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As of the first quarter of 2019, Fibra Mty adopted the Global Industry Classification Standard (GICS) to categorize its tenants.

The GICS is a standardized classification system, introduced in 1999 by S&P and MSCI, used to sort business entities by sector and industry groups.

GICS was developed in response to the global financial community’s need for a comprehensive and consistent framework of sector and industry definitions, thereby enabling to perform company, sector and industry comparisons across countries, regions and globally.

*”Other Sectors” breakdown is shown in the following graph:

Key Indicators of Fibra Mty’s Portfolio Performance (% of Revenue)

23.3%

18.5%

14.7%

10.2%

8.7%

7.6%

6.9%

4.1%3.6%

2.4%

Tenant Breakdown by Economic Sector (% of Revenue)

Consumer Durables & Apparel

Capital Goods

Automobiles & Components

Software & Services

Other Sectors*

Commercial and Professional Services

Materials

Telecommunication Services

Banks

Retailing

0.1%

0.2%

0.3%

0.3%

0.3%

0.5%

0.7%

0.9%

1.1%

1.2%

1.5%

1.6%

Health Care Equipment & Services

Entertainment

Food, Beverage & Tobacco

Consumer Services

Technology Hardware & Equipment

Diversified Financials

Insurance

Utilities

Real Estate

Food Retail

Transportation

Personal Products

Other Sectors (8.7%)

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50.7%46.4%

2.9%

By Asset Type(property use)

Office Industrial Retail

62.3%9.5%

8.2%

7.8%

4.9%7.3%

By Location

NL Slp Jal Coah Chih Others

70.1%

29.9%

By Currency

USD MXN

94.7%

5.3%

Occupancy

Leased Vacant

7.3%

30.3%

13.7%13.0%

29.5%

6.2%

By Contract Maturity (years)

0-1 1-3 3-5 5-7 7-10 10+

20.0%

4.4%3.8%

3.8%

3.7%

3.7%

3.1%

3.0%

2.9%2.9%

Main Tenants

Whirpool Crisa Axtel Oracle CSL

Cemex Famsa PWC Accenture Danfoss

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Gross Leasable Area and Occupancy by asset type, in GLA terms

Office 3Q19 3Q18 Δ%/p.p. 2Q19 Δ%/p.p.

Number of properties 18 12 50.0% 18 -

GLA in m2 163,119 134,703 21.1% 163,119 -

Weighted average remaining lease term to Income (in years)

4.6 4.7 (2.1%) 4.8 (4.2%)

Occupancy 88.7% 88.1% 0.6 p.p. 87.6% 1.1 p.p.

Industrial 3Q19 3Q18 Δ%/p.p. 2Q19 Δ%/p.p.


GLA in m2 481,068 350,481 37.3% 478,706 0.5%


5.5 4.4 25.0% 5.6 (1.8%)

Occupancy 100.0% 100.0% 0.0 p.p. 100.0% 0.0 p.p.

Retail 3Q19 3Q18 Δ%/p.p. 2Q19 Δ%/p.p.

Number of properties 6 6 - 6 -

GLA in m2 19,350 19,350 - 19,350 -


10.2 11.1 (8.1%) 10.4 (1.9%)

Occupancy 99.9% 99.9% 0.0 p.p. 99.9% 0.0 p.p.

Fibra Mty Portfolio 3Q19 3Q18 Δ%/p.p. 2Q19 Δ%/p.p.


GLA in m2 663,537 504,534 31.5% 661,175 0.4%(1)


5.2 4.8 8.3% 5.4 (3.7%)

Occupancy 97.2% 96.8% 0.4 p.p. 96.9% 0.3 p.p.

(1) The increase against 2Q19 is attributed to the incorporation of the Zinc property and the removal of the Cuprum building, due to its

reconversion to its best and highest use.

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Contract Maturities

As of September 30th, 2019, Fibra Mty has 1211 tenants, 62.8% in office properties (including OEP’s retail area as it is focused on servicing the office space); 24.0% in industrial properties; and, 13.2% in retail properties.

As of September 30th, 2019, the weighted average lease term was 5.2 years. If current contracts are not renewed and no new leases are engaged, there would be a guaranteed rent flow of approximately 56.7% through the beginning of 2023.

Rent in US dollars per m2 and by property type

Fibra Mty keeps Corporate Offices rents in Mexico, Monterrey and Guadalajara below market levels, representing a competitive advantage when renewing and/or negotiating new contracts, especially against the current backdrop.

1 Market price considers monthly prices per m2 in USD. Corporate Offices Monterrey = Source: CBRE MarketView Monterrey 3Q 2019 Corporate Offices Mexico = Source: CBRE MarketView Mexico, Interlomas submarket 3Q 2019 Corporate Offices Guadalajara = Source: CBRE MarketView Guadalajara 3Q 2019 Back Offices = Research by Fibra Mty Industrial = Source: CBRE Market View, Industrial, 3Q 2019

1 Tenants occupying multiple spaces in one or more properties are counted only once.

2.8%

16.8% 14.8%

8.9% 7.6%4.2%

0.1%

9.9%

3.7%

23.4%

1.5% 2.7%0.5%

3.1%

2.8%

19.6%

34.4%43.3%

50.9% 55.1% 55.2%

65.1%68.8%

92.2% 93.7% 96.4% 96.9% 100.0%

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032

Contract Maturities

Maturity Accumulated

19.5

13.7

19.7

13.9

4.5 4.7

20.223.6

20.5

13.0

4.2 4.1

-

5.0

10.0

15.0

20.0

25.0

Corp Ofc Mty Corp Ofc Mex Corp Ofc Gdl Back Office IndustrialNorthern

IndustrialBajio

Monthly rent per m2 in U.S. dollars1

Fibra Mty Market

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Same-Property Performance:

Same-property analysis excludes the Filios portfolio, as well as the Patria, Zinc and Cuprum properties, the latter due to the beginning of its conversion process to achieve its best and highest use.

NOI

(thousands of Mexican pesos) 3Q19 3Q18 Δ%/p.p.

Number of properties 42 42 -

Same-property revenue 235,521 230,432 2.2%

Same-property operating expenses, net of CAPEX in results

28,822 27,853 3.5%

Same-property NOI 206,699 202,579 2.0%

Same-property NOI margin 87.8% 87.9% (10 p.p.)

3Q19 Same-property NOI increased 2.2% when compared to 3Q18, mainly driven by rent increases due to inflation adjustments at certain properties as per contracts denominated in Mexican pesos and U.S. dollars; and, a minor positive foreign exchange effect. The increase in operating expenses was attributed to: i) higher energy and water consumption at certain properties in which Fibra Mty is responsible for paying these utilities; ii) repairs carried out at some properties due to the damage caused mainly by raining; and, iii) other minor items. The incremental energy consumption was partially reimbursed and recognized in total revenue, in accordance with IFRS.

3Q19 Same-property NOI margin was 87.8%, remaining practically in line with that of 3Q18, by decreasing only 10 basis points.

Occupancy

Same-property

Number of properties 42

GLA m2 487,364(1)

(1) Considers OEP Tower 2’s common area converted into 91 m2 of GLA.

3Q19 3Q18 Ch.

Same-property m2 % m2 % Δ m2 Δ p.p.

Office occupancy 116,434 86.4% 118,736 88.1% (2,302) (1.9%)(1)

Industrial occupancy 333,221 100.0% 333,221 100% - 0.0%

Retail occupancy 19,326 99.9% 19,326 99.9% - 0.0%

Same-property occupancy 468,981 96.2% 471,283 96.7% (2,302) (50 p.p.)

(1) Decrease mainly due to the vacant space at the Oficinas en El Parque Portfolio, which has already been leased and will generate lease income

in 4Q19.

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Capital Expenditure (Capex)

Fibra Mty’s annual CAPEX budget in 2019 amounts to Ps. 42 million.

As of September 30th, 2018, the deployed CAPEX, used to calculate AFFO, was composed as follows:

Thousands of Mexican pesos 3Q19 2Q19 1Q19 2019

Capitalized CAPEX on Investment properties 8,388 10,231 7,584 26,203

- Financed CAPEX (1) 178 107 942 1,227

- Retained and deployed CAPEX in 2019 (2) - - 35 35

= Capitalized CAPEX, net 8,210 10,124 6,607 24,941

+ Remaining CAPEX generated in 2019 2,290 376 3,893 6,559

= Budgeted CAPEX, used to calculate AFFO 10,500 10,500 10,500 31,500

(1) Includes the replacement of an air conditioning system and installation of a wastewater treatment system in the OEP portfolio, which will allow

us to provide a better service, reduce energy costs and save maintenance expenses in the upcoming 3 years due to the guarantees granted by

the supplier. The total cost of this project is estimated at Ps. 35.6 million. As of September 30th, 2019, the accumulated expense incurred was Ps.

32.8 million (Ps. 14.2 million, Ps. 17.4 million and Ps. 1.2 million in 2017, 2018, and YTD19, respectively).

(2) Corresponding to the replacement of the electric transformer at one of our properties. As of September 30th, 2019, the remaining CAPEX to be

deployed totaled Ps. 24.6 million, composed of generated and / or remaining reserves in 2016, 2017, 2018 and YTD19 for Ps. 5.9 million, Ps. 1.1

million, Ps. 11.1 million and Ps. 6.5 million, respectively.

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Financial Performance

3Q19 results were marked primarily by: i) higher revenue from incremental rents and maintenance fees, positive FX effects and revenue generated by the Filios, Patria and Zinc acquisitions; which more than offset the effect of the reconversion of the Cuprum building (in order to reach its best and highest use, as mentioned lines above) and certain vacancies; ii) higher operating expenses due to a significant increase in energy and water consumption costs, which were recovered through refunds, as well as non-recurring expenses associated to the damage caused by raining; iii) higher administrative expenses due to wage increases (associated to annual inflation adjustments), professional fees, technology expenses, reserves arranged to support communities, among others; iv) higher net financial expenses related to the new credit facilities subscribed and cash provision for the Filios acquisition; and, v) valuation effects with no impact on cash distribution, such as: a) the increase in the fair value of Fibra Mty’s portfolio; and, b) unrealized FX gain on U.S. dollar-denominated bank loans.

Thousands of Mexican pesos 3Q19 3Q18 Δ%

1T16

2Q19 Δ%

Total Revenue 302,454 233,943 29.3% 296,711 1.9%

Operating Expenses, net of CAPEX in results

30,715 28,020 9.6% 29,439 4.3%

CAPEX recognized in P&L, in compliance with IFRS

- 335 (100.0%) - -

Administrative Expenses 27,716 22,492 23.2% 27,244 1.7%

CBFI Executive Compensation Plan 8,150 9,079 (10.2%) 9,779 (16.7%)

Income (Expense) for properties measured at fair value

294,539 (230,914) (227.6%) (75,636) (489.4%)

Interest Income 16,986 35,337 (51.9%) 19,131 (11.2%)

Interest Expense 66,957 35,606 88.0% 67,199 (0.4%)

Foreign Exchange (Loss) Gain, net (134,141) 156,081 (185.9%) 56,447 (337.6%)

Income Before Income Taxes 346,300 98,915 250.1% 162,992 112.5%

Income Tax 621 205 202.9% 731 (15.0%)

Consolidated Net Income 345,679 98,710 250.2% 162,261 113.0%

Valuation of derivative financial instruments

(45,120) (657) 6,767.6% (93,570) (51.8%)

Consolidated Comprehensive Income 300,559 98,053 206.5% 68,691 337.6%

Thousands of Mexican pesos 3Q19 3Q18 Δ% 1T

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Same-Property Revenue 235,521 230,432 2.2%

Revenue from Acquisitions 66,933 - -

Revenue from properties undergoing conversion - 3,511 (100%)

Fibra Mty Revenue 302,454 233,943 29.3%

Operating Expenses, net of CAPEX in results – Same-properties

(28,822) (27,853) 3.5%

Operating Expenses, net of CAPEX in results – Acquisitions

(1,719) - -

Operating Expenses, net of CAPEX in results – Properties undergoing conversion

(174) (167) 4.2%

Operating Expenses, net of CAPEX in results – Fibra Mty

(30,715) (28,020) 9.6%

Same-Property NOI 206,699 202,579 2.0%

NOI from Acquisitions 65,214 - -

NOI from Properties undergoing conversion (174) 3,344 (105.2%)

Fibra Mty NOI 271,739 205,923 32.0%

Administrative Expenses (27,716) (22,492) 23.2%

Excluding depreciation, amortization, and accrued leasing commissions

1,399 1,285 8.9%

EBITDA 245,422 184,716 32.9%

Total Revenue

3Q19 Total Revenue amounted to Ps. 302.5 million, representing a 29.3% increase compared to 3Q18.

In same-property terms, 3Q19 Total Revenue increased 2.2% year-over-year, reaching Ps. 235.5 million, mainly driven by: i) rent increases due to inflation adjustments at certain properties, as per contracts denominated in Mexican pesos and U.S. dollars; ii) increase in maintenance revenue resulting from the recovery of higher energy costs at certain properties where Fibra Mty is responsible for paying this utility; and, iii) a minor positive FX effect, as the average exchange rate applied to leases went from Ps. 19.2866 in 3Q18 to Ps. 19.4141 this quarter, resulting in a ~Ps. 1.0 million gain. The foregoing was offset to a lesser extent by certain vacancies, which net of new lease contracts, decreased by 50 basis points in GLA terms.

Revenue from acquisitions contributed Ps. 66.9 million, 28.6% higher compared to 3Q18.

15


The decrease in income derived from the beginning of the conversion process of the Cuprum building to its best and highest use, as mentioned above, was Ps. 3.5 million, a 1.5% contraction when compared to 3Q18. However, it is relevant to mention that the relocation of the property’s tenant to its new location (Zinc) generated an additional quarterly revenue of over Ps. 4.0 million pesos as of July 2019, with a positive quarterly net effect of approximately Ps. 0.5 million, separately from the upside potential reached with the best and highest use of the Cuprum building.

Operating Expenses, net of Capex in results

3Q19 Operating Expenses, net of CAPEX in results, amounted to Ps. 30.7 million, 9.6% higher when compared to 3Q18.

3Q19 Same-Property Operating Expenses, net of CAPEX in results, totaled Ps. 28.8 million, up 3.5% versus 3Q18. This variation was largely attributed to: i) higher energy and water consumption costs at certain properties where Fibra Mty is responsible for paying these utilities; and, ii) repairs performed at certain properties mainly due to raining.

3Q19 Operating Expenses from Acquisitions, net of CAPEX in results, totaled Ps. 1.7 million, a 6.1% increase compared to 3Q18.

3Q19 Operating Expenses from the Cuprum building, currently undergoing conversion to enhance its utilization, reached Ps. 0.2 million, flat versus the same period last year.

3Q19 NOI margin stood at 89.8%, 180 basis points above than that of 3Q18.

3Q19 Same-Property NOI margin was 87.8%, remaining practically unchanged against the figure reported in 3Q18, contracting 10 basis points.

Administrative Expenses

Administrative, trustee and general expenses totaled Ps. 27.7 million in 3Q19, a 23.2% increase when compared to 3Q18, mainly explained by: i) inflation adjustments in wages; ii) increase in professional fees associated to the beginning of the internal audit function by KPMG Cardenas Dosal, S.C., as well as other consultancy services on fiscal, legal, market and risk matters; iii) technology expenses; iv) provision expense to support social and environmental development of Mexican communities; and, v) other minor expenses.

CBFI Executive Compensation Plan

During the third quarter of 2019, Fibra Mty recorded a Ps. 8.2 million provision, down 10.2% year-over-year, which was primarily attributed to the decrease in the Trust’s market capitalization and lower CBFI price at the provision date. In compliance with IFRS, this provision was recognized in the P&L statement; 65% will be paid in securities and the remaining 35% in cash, in order to comply with Mexican income tax regulations.

Fair Valuation of Investment Properties The fair valuation of Fibra Mty’s investment properties is determined with the assistance of qualified independent appraisers unrelated to Fibra Mty. Based on the nature and type of properties included in our portfolio, the administration has chosen the income approach as the most appropriate method to calculate fair valuation, which consists of discounting at NPV the future cash flows expected from leasing income and a terminal value.

16


Compared to 3Q18, the fair valuation of Fibra Mty’s investment properties increased Ps. 525.5 million, to reach a Ps. 294.5 gain in 3Q19. This variation is primarily derived from the Ps. 0.5123 per U.S. dollar appreciation during the third quarter of 2019 and the 2.8% average annual inflation in Fibra Mty’s lease contracts.

Additionally, it is important to note that, since the establishment of Fibra Mty in December 2014 and up to the reporting date, the mark-to-market valuation of properties have generated a Ps. 1,292.1 million fair valuation gain. However, these valuation effects would be only monetized at the time of sale, or throughout the useful life of such buildings due to cash flows obtained by current leasing contracts plus a terminal value and, also, considering that the assumptions used to calculate the valuations, such as inflation, exchange rates, discount and final capitalization rates are subject to changes according to current market conditions at each measurement date. The administration updates the aforementioned assumptions on a quarterly basis to estimate the fair valuation of Fibra Mty’s properties.

NOI & EBITDA

3Q19 NOI amounted to Ps. 271.7 million, up 32.0% versus 3Q18.

3Q19 NOI margin was 89.8%, 180 basis points above than that reported in 3Q18. In same-property terms, 3Q19 NOI margin stood at 87.8%, remaining practically flat versus 3Q18, decreasing only 10 basis points.

3Q19 EBITDA totaled Ps. 245.4 million, 32.9% higher when compared to 3Q18. EBITDA margin was 81.1% in 3Q19, 210 basis points above the figure recorded in 3Q18, mainly explained by the margin contribution from the Filios and Patria acquisitions.

NOI and EBITDA exclude: i) CAPEX recognized in P&L, in accordance with IFRS; ii) provision of the CBFI Executive Compensation Plan, as it is an item that can be settled through the issuance of CBFIs; and, iii) fair valuation gain (loss) of real estate, as it is an item with no impact on the cash flow generated during the year.

As noted in our previous earnings releases, with the acquisition of the Filios portfolio during the second half of December 2018, we completed the conversion of our financial income into rents, propelling our EBITDA margin above the 80% mark.

Financial Result 3Q19 financial income amounted to Ps. 17.0 million, down 51.9% when compared to that of 3Q18, mainly derived from a lower daily average balance of cash invested in short-term securities due to the disbursement of resources for the Filios and Patria acquisitions carried out during 4Q18.

Financial expenses reached Ps. 67.0 million, 88.0% higher than that of 3Q18. This variation was attributed to the interests accrued from the two unsecured credit facilities subscribed with HSBC during 2019, as well as the syndicated loans with HSBC and Bancomer, arranged in December 2018; all used for the Filios acquisition.

3Q19 foreign exchange result decreased Ps. 290.2 million compared to 3Q18, to reach a Ps. 134.1 million loss, largely as a result of the Ps. 0.5123 per U.S. dollar appreciation, vs. the significant Ps. 1.0513 per U.S. dollar depreciation recorded in 3Q18. This foreign exchange fluctuation had a substantial mark-to-market effect on the valuation of Fibra Mty’s U.S. dollar-denominated bank loans, whose average quarterly balance as of September 30th, 2019 and 2018, was US$ 266.5 million and US$ 153.7 million, respectively.

17


Consolidated Net Income

Fibra Mty’s Consolidated Net Income increased Ps. 247.0 million, from a Ps. 98.7 million gain in 3Q18 to a Ps. 345.7 million gain in 3Q19. When adjusted for the variations caused by the effects of fair valuation of real estate, the FX result and CBFI Executive Compensation Plan, Fibra Mty’s Consolidated Net Income increased Ps. 10.8 million, primarily derived from total revenue growth, which was slightly offset by higher operating, administrative and financial expenses, explained lines above.

Derivative Financial Instruments

At quarter-end 3Q19, Fibra Mty holds interest rate swaps to fix the floating rates in U.S. dollars of its Citibanamex (syndicated), Sabadell, Scotiabank, HSBC (syndicated) loans and the additional BBVA credit line (Huasteco) at 4.73%, 5.21%, 5.23%, 4.90% and 5.26%, respectively. The fixed interest rate of the Citibanamex syndicated loan was calculated on a weighted basis as of the date of the maturity extension through the swaps arranged for this purpose.

When compared to 3Q18, Fibra Mty’s derivative financial instruments valuation decreased Ps. 44.5 million in 3Q19, to reach a Ps. 45.1 million loss in 3Q19. The foregoing was largely due to a contraction ranging from 17 to 26 basis points in the expected LIBOR rate for all terms between one and five years during the quarter. It is relevant to note that a lower valuation has no material effect on Fibra Mty’s cash flow.

FFO & AFFO

During 3Q19, Fibra Mty’s Funds from Operations amounted to Ps. 195.9 million, an increase of 7.4% when compared to 3Q18, equivalent to Ps. 0.307 per CBFI. On an annual basis, FFO/CBFI yield for 3Q19, calculated at a CBFI price of Ps. 11.93 as of December 31st, 2018, reached 10.3%.

3Q19 CAPEX totaled Ps. 10.5 million, bringing Adjusted Funds from Operations to Ps. 185.4 million, up 6.3% versus 3Q18, equal to an AFFO/CBFI of Ps. 0.290. On an annual basis, AFFO/CBFI yield for 3Q19, calculated at a CBFI price of Ps. 11.93, reached 9.7%.

18


Thousands of Mexican pesos 3Q19 3Q18 Δ% 2Q19 Δ%

Consolidated Comprehensive Income

300,559 98,053 206.5% 68,691 337.6%

Income from financial derivatives valuation

45,120 657 6,767.6% 93,570 (51.8%)

(Income) expense for properties measured at fair value

(294,539) 230,914 (227.6%) 75,636 (489.4%)

Foreign Exchange Loss (Gain), net

134,537 (157,507) (185.4%) (54,881) (345.1%)

Depreciation & Amortization 562 485 15.9% 571 (1.6%)

Accrued Leasing Commissions 837 800 4.6% 837 0.0%

Amortization of Debt Costs 3,902 1,748 123.2% 4,739 (17.7%)

Valuation effect of amendment to syndicated loan

(1,382) (1,368) 1.0% (1,379) 0.2%

CBFI Executive Compensation Plan

8,150 9,079 (10.2%) 9,779 (16.7%)

Non-monetary straight-line amortization income

(848) 887 (195.6%) 711 (219.3%)

Income from subsidiary (1,016) (1,403) (27.6%) (990) 2.6%

FFO 195,882 182,345 7.4% 197,284 (0.7%)

CAPEX1 (10,500)2 (7,915) 32.7% (10,500) 2 -

AFFO 185,382 174,430 6.3% 186,784 (0.8%)

(1) 3Q18 results include Ps. 335 thousand in expenses, which were budgeted as CAPEX and recognized as Operating Expenses in accordance to IFRS. (2) 2019 CAPEX for AFFO’s consolidation and explanation is available in the Operational Performance section, Capital Expenditure (CAPEX) subsection

of this report.

Distribution per CBFI

In consideration of the second placement of CBFIs under Fibra Mty’s ATM program, currently ongoing, as of September 18th, 2019, by unanimous resolution of the Company’s Technical Committee, an anticipated cash distribution for Ps. 186.9 million was approved. This distribution was determined based on Fibra Mty’s projected financial results for 3Q19 and was equivalent to an AFFO per CBFI of Ps. 0.293, which was paid on October 11th, 2019. The difference against 3Q19 AFFO, specified in the FFO & AFFO section above, for Ps. 1.5 million is explained by the negative effect of exchange rate fluctuations on financial expenses, and will be deducted from 4Q19 distribution.

19


(1) 4Q18 Financial Indicators per CBFI consider 636,181.928 thousand CBFIs in October and 636,167.915 thousand in November

and December.

Additionally, considering the progress of the above-mentioned placement of CBFIs, as well as the possible date of

book closing, Fibra Mty will carry out a second anticipated cash distribution for Ps. 60.5 million, which was

approved by the Company’s Technical Committee on October 9th, 2019. This distribution was determined based

on Fibra Mty’s projected financial results for October 2019 and it is equivalent to an AFFO per CBFI of Ps. 0.095,

which will be paid on October 24th, 2019.

3Q19 2Q19 1Q19 4Q181 3Q18

Total CBFIs Outstanding (thousands)

638,434.184 639,967.331 637,801.637 636,167.915 636,181.928

CBFI Price (beginning of the year)

Ps. 11.93 Ps. 11.93 Ps. 11.93 Ps. 12.6 Ps. 12.6

CBFI Price (beginning of the quarter)

Ps. 11.80 Ps. 11.94 Ps. 11.93 Ps. 12.7 Ps. 11.9

Distributions (thousands of Mexican pesos)

Ps. 186,897 Ps. 186,784 Ps. 169,587 Ps. 166,814 Ps. 174,430

Distributions per CBFI Ps. 0.2927 Ps. 0.2919 Ps. 0.2659 Ps. 0.2622 Ps. 0.2742

Annualized Distribution Yield (beginning of the year)

9.8% 9.8% 8.9% 8.3% 8.7%

Annualized Distribution Yield (beginning of the quarter)

9.9% 9.8% 8.9% 8.3% 9.2%

20


Debt & Cash Equivalents

As of September 30th, 2019, the Trust has 12 credit lines, with a weighted average rate of 4.46%, as detailed below:

Thousands of Mexican pesos

3Q19 Currency Rate Floating

Rate 30Sep19

Fixed Rate

Hedge Maturity 2Q19

Δ%

3Q19 vs 2Q19

Secured Loans Bank Syndicate (“Citi Banamex”)

1,857,486 (1) US$

Libor + 2.5% 4.52% 4.73%* Dec-23

1,825,162 (1) 1.8%

Seguros Monterrey New York Life

80,736 US$ 5.10% - - Feb-23

83,692 (3.5%)

BBVA (“Fagor”)

40,824 US$ 3.98% - - Mar-23

42,007 (2.8%)

BBVA (“Nippon”)

41,001 US$ 4.64% - - May-24

41,564 (1.4%)

BBVA (“CEDIS”) 162,895 US$ 4.60% - - Mar-25

165,297 (1.5%)

BBVA (“Central Star”)

38,389 US$ Libor + 2.50% 4.52% - Nov-23

39,279 (2.3%)

BBVA (Huasteco) 203,754 US$ Libor + 2.50% 4.52% 5.26% Nov-28 203,412 0.2%

Sabadell

254,935 US$ Libor + 2.90% 4.92% 5.21% Mar-27

252,613 0.9%

Scotiabank

376,327 US$ Libor + 2.50% 4.52% 5.23% Apr-23

369,604 1.8%

Bank Syndicate (“HSBC”) 1,476,060 US$ Libor

+2.25% 4.27% 4.90% Dec-24(4) 1,437,638 2.7% Unsecured

HSBC (5) 688,828 US$ Libor + 2.05% 4.07% - Mar-22 670,898 2.7%

TOTAL 5,221,235 (2)

5,131,166 (3) 1.8%

* The fixed interest rate of the syndicated loan was calculated on a weighted basis as of the date of the maturity extension through the

swaps arranged for this purpose. In cash flow terms, 2Q19 interest expenses were paid at a weighted average interest rate of 3.87%, which

will be applicable until December 2020.

(1) Excluding the valuation effect associated to the maturity extension of the Citibanamex syndicated loan. (2) Equivalent to US$ 265,296 thousand, using an exchange rate of Ps. 19.6808 as of September 30th, 2019. (3) Equivalent to US$ 267,687 thousand, using an exchange rate of Ps. 19.1685 as of June 30th, 2019.

(4) The maturity of the HSBC syndicated loan considers a 1-year extension option.

(5) Includes two unsecured credit facilities for US$ 28 million and US$ 7 million, under the same terms and conditions.

21


Fixed Rate 86.1% USD-Denominated 100.0%

Floating Rate 13.9% MXN-Denominated 0.0%

Maturities* 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total

Amount

42,942

177,114

229,920

1,743,532

1,307,053

1,421,066

56,738

36,355

128,833

77,682

5,221,235

Percentage 0.8% 3.4% 4.4% 33.4% 25.0% 27.2% 1.1% 0.7% 2.5% 1.5% 100.0%

* Considers the 1-year extension option of the HSBC syndicated loan

Syndicated Loan (“Citi Banamex”)

The US$ 94.4 million syndicated loan subscribed on December 15th, 2015, with an original maturity due 2020 was successfully extended by Fibra Mty in April 2018, with the primary objective of mitigating the refinancing risk at a single point in time, from a remaining term of 2.5 to 5 years, approximately. The negotiation distributed the payment of the outstanding loan’s balance into two tranches, with new maturities due June 15th, 2022 and December 15th, 2023. It is important to note that the applicable interest rate remained unchanged at LIBOR plus 250 basis points and the remaining term was completely hedged, resulting in a new weighted average rate of 4.73%, calculated at the date of this extension.

Seguros Monterrey New York Life Loan

This US$ 4.1 million credit facility corresponds to the recognition of an outstanding long-term debt balance for the acquisition of the “Redwood” property, subscribed at an annual fixed rate of 5.10%, due February 2023.

BBVA Loans

The five BBVA loans for an aggregate amount of US$ 24.7 million correspond to: i) the recognition of an existing long-term debt related to the acquisition of the Huasteco portfolio, mostly contracted at a fixed rate, with maturities due 2023, 2024, and 2025; and, ii) a credit line increase for an original amount of US$ 11.0 million arranged on December 14th, 2018 with a 10-year term and monthly payments of principal and interest. The variable rate of this credit facility was covered by a swap of the same maturity profile, fixing it at 5.26% in USD.

Sabadell Loan

The US$ 13.0 million credit line subscribed with Sabadell at year-end 2017 has a 10-year term with monthly amortizations of principal and interest. The floating rate of this loan was covered by a swap with the same maturity profile, fixing it at 5.21% in USD.

Scotiabank Loan

The US$ 19.1 million credit facility subscribed with Scotiabank on April 23th, 2018 has a 5-year term with monthly amortizations of principal and interest. The floating rate of this loan was covered by a swap with the same maturity profile, fixing it at 5.23% in US dollars.

Syndicated Loan (“HSBC”)

The US$ 75.0 million balance corresponds to the first arrangement of the syndicated credit line subscribed on December 10th, 2018, for up to US$ 150 million, which was used to partially settle the Filios acquisition. This loan has a 5-year term with a 1-year extension option. The variable rate of this arrangement was covered by a swap with the same maturity, fixing it at 4.90% in US dollars.

22


HSBC Unsecured Loans

Two credit facilities subscribed with HSBC for US$ 28.0 million and US$7.0 million, jointly amounting to US$ 35.0 million. Both loans mature on March 15th, 2022, and has a 2-year term and monthly interest payments at a rate of LIBOR + 205 basis points. The US$ 35 million loan was used on March 20th, 2019, to prepay the Actinver and Banorte revolving credit lines, in order to reduce our cost of debt.

Cash

Regarding cash & cash equivalents, as of September 30th, 2019, Fibra Mty held a balance of Ps. 718.8 million, up 18.0% or Ps. 109.8 million more when compared to December 31st, 2018. This increase was mainly attributed to the cash flow generated from operating activities at Fibra Mty’s portfolio, for Ps. 1,022.2 million, including the VAT reimbursements corresponding to the Filios and Patria acquisitions, which jointly amounted to Ps. 351.6 million. The foregoing was slightly offset by: i) the Ps. 753.3 million cash used in financing activities, such as: debt service costs (net of loans obtained), cash distributions to CBFI holders and CBFI buybacks (net of reissuances); ii) the Ps. 150.6 million cash used in investing activities, such as: payment of taxes on the Filios acquisition, payments for the construction of the Zinc project, occupancy fees at certain properties and capital expenditures; and, iii) other minor impacts, mainly derived from the effect of FX fluctuations on cash balances.

23


Recent Developments

a) On October 3th, 2019, Fibra Mty’s Ordinary and Extraordinary CBFI Holders Meeting adopted certain

resolutions to improve and strengthen the Company’s corporate governance, consisting primarily in:

i) Modification to certain restrictions on the acquisition of CBFIs. With the adjustments implemented, in the

event that a person or group of people intends to acquire CBFIs above certain percentages, they must obtain prior authorization from the Technical Committee, for which a request must be submitted to the Administrator, the Corporate Practices Committee and to the Technical Committee itself. Before the Technical Committee conducts its due diligence, such request must be reviewed by the Corporate Practices Committee which, as a 100% independent body, must express its opinion to the Technical Committee by submitting a report. Subsequently, the Technical Committee will review such request to approve or reject it, considering the report submitted by the Corporate Practices Committee. If the Technical Committee rejects the request, it will be submitted for approval to the Holders Meeting. Concerning the requests for the acquisition of CBFIs that calls for a Tender Offer, in compliance with the terms of the Trust, such requirement would not be enforceable if a prior waiver from the Technical Committee is obtained with the majority approval of its independent members;

ii) Approval of the incorporation of a new member to the Technical Committee. The incorporation of Mrs. Luz Adriana Ramirez Chavez as an independent member of Fibra Mty’s Technical Committee was approved, becoming the first woman to join this corporate governance body. As of the date of this report, 75% of Fibra Mty’s Technical Committee members qualify as independent. Also, the Holders Meeting was informed that currently all Technical Committee’s supporting bodies are chaired by independent members and the Corporate Practices Committee is and will be completely independent; and,

iii) Report on changes to the CBFI Executive Compensation Plan. Seeking to better align the interests of Fibra Mty’s internal manager with those of our CBFIs holders, the Corporate Practices Committee recently approved certain adjustments to the CBFI Executive Compensation Plan, in order to have a more adequate measurement of accomplished objectives, based on the vehicle’s performance, both in the short- and long-term. These adjustments will take effect as of year 2020.

24


Conference Call

Analyst Coverage

Actinver Pablo Duarte

BBVA Francisco Chavez

BTG Pactual Gordon Lee

Signum Research Armando Rodriguez

25


About Fibra Mty

Fibra Mty is a real estate investment trust (“FIBRA”) that initiated operations on December 11, 2014 identified by

the number F/2157 (“Trust 2157”), and also as “Fibra Mty” or “FMTY”. Fibra Mty’s strategy is based mainly on the

acquisition, administration, development and operation of corporate properties in Mexico, predominantly office

properties. Fibra Mty is a FIBRA qualified as a transparent entity under Mexican Income Tax laws; therefore, all

revenues derived from Fibra Mty’s operation are attributable to the holders of its CBFIs, given that Trust 2157 is

not subject to Income Tax in Mexico. In order to maintain FIBRA status articles 187 and 188 of Mexican Income

Tax Law establish that FIBRA such as Trust 2157 must distribute annually at least 95% of their net income to

holders of CBFIs and invest at least 70% of their assets in real estate rental properties, among other requirements.

Fibra Mty is internally-managed by Administrador Fibra Mty, S.C., making Fibra Mty the first investment vehicle

of its kind within the FIBRAS sector in Mexico, supported by an innovative corporate governance structure, aligned

with investor interests, generating economies of scale and taking advantage of the opportunities offered by the

real estate market.

Forward-looking Statements

This press release may contain forward-looking statements or guidance related to Fibra Mty which includes estimates or considerations about the Company’s operations, business and future events. Statements about future events may include, without limitation, any statement that may predict, forecast, indicate or imply future results, operations or achievements, and may include words such as “anticipates”, “believes”, “estimates”, “expects”, “plans” and similar expressions, as they relate to the Company. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. Results may be materially different from the expressed in this report. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

26


Financial Statements

Consolidated Statements of Financial Position As of September 30th, 2019 and December 31st, 2018

Figures in thousands of Mexican pesos ($)

As of

September 30th, 2019

As of December 31st,

2018

Assets

Current assets: Cash and cash equivalents $ 718,848 $ 609,031 Accounts receivable 13,219 2,555 Recoverable taxes 2,050 352,643

Other current assets 12,024 9,090

Total current assets 746,141 973,319 Investment properties 13,532,970 13,247,281 Advance payments for the acquisition of

investment properties 973

481

Derivative financial instruments 5,803 31,192

Other non-current assets 111,257 109,422

Total non-current assets 13,651,003 13,388,376

Total assets $14,397,144 $14,361,695

Liabilities and equity

Current liabilities: Short-term bank loans $ - $ 217,312 Current portion of long-term bank loans 175,068 168,619 Interest payable 7,280 10,677 Accounts payable 298,948 125,711 Allowances 20,945 - Taxes payable 7,600 23,698

Tenant deposits 18,331 10,037

Total current liabilities 528,172 556,054 Long-term bank loans 5,003,611 4,836,740 Deferred income tax 388 690 Derivative financial instruments 199,512 2,203 Long-term allowances 15,188 -

Tenant deposits 97,050 103,647

Total liabilities 5,843,921 5,499,334

Trustor’s Equity: Contributed equity 7,645,001 7,628,397 Retained earnings 1,101,931 1,204,975

Other components of comprehensive income (193,709)

28,989

Total equity 8,553,223 8,862,361

Total liabilities and equity $14,397,144 $14,361,695

27



Consolidated Statements of Comprehensive Income For the nine-month periods ended September 30th, 2019 and 2018.

Figures in thousands in Mexican pesos ($)

2019 2018

Total Income $ 895,549 $ 691,120

Property maintenance and management 66,479 63,419

Property management fees 9,324 7,518

Property tax 8,910 8,626

Insurance 3,260 2,845

Administrative fees 54,630 49,736

Trust services and general expenses 28,636 19,453

CBFI Executive Compensation Plan 22,768 29,008

Gain from fair value of investment properties 38,454 265,870

Net gain on sale of investment properties 151 -

Financial income 50,236 95,866

Financial expense 212,893 126,950

Foreign exchange (loss) gain, net (26,602) 112,124

Income before taxes 550,888 857,425

Income taxes 2,321 755

Consolidated net income $ 548,567 $ 856,670

Other comprehensive income:

Items that may be reclassified to consolidate net income:

Valuation effect of derivative financial instruments (222,698) 13,577

Total other components of comprehensive income (222,698) 13,577

Consolidated comprehensive income $325,869 $ 870,247

28



Consolidated Statements of Changes in Equity

For the nine-month periods ended September 30th, 2019 and 2018 Figures in thousands of Mexican pesos ($)

Equity

Accumulated

Results

Other

Comprehensive

Income

Total

Equity

Balances as of December 31st, 2017 $ 7,609,722 $ 831,519 $ 29,426 $ 8,470,667

Contributed equity from CBFI replacement 2,220 - - 2,220

Repurchase of CBFIs (20,445) - - (20,445)

Distributions to CBFI holders - (504,802) - (504,802)

CBFI Executive Compensation Plan 27,236 - - 27,236

Equity issuance costs (738) - - (738)

Consolidated comprehensive income:

Net consolidated income - 856,670 - 856,670

Valuation effect of derivative financial

instruments - - 13,577 13,577

Consolidated comprehensive income - 856,670 13,577 870,247

Balances as of September 30th, 2018 $ 7,617,995 $ 1,183,387 $ 43,003 $ 8,844,385

Balances as of December 31st, 2018 $ 7,628,397 $ 1,204,975 $ 28,989 $ 8,862,361

Contributed equity from CBFI replacement 47,858 - - 47,858

Repurchase of CBFIs (55,703) - - (55,703)

Distributions to CBFI holders - (651,611) - (651,611)

CBFI Executive Compensation Plan 24,449 - - 24,449

Consolidated comprehensive income:

Net consolidated income - 548,567 - 548,567

Valuation effect of derivative financial

instruments - - (222,698) (222,698)

Consolidated comprehensive income - 548,567 (222,698) 325,869

Balances as of September 30th, 2019 $ 7,645,001 $ 1,101,931 $ (193,709) $ 8,553,223

29



Consolidated Statements of Cash Flow For the nine-month periods ended September 30th, 2019 and 2018

Figures in thousands of Mexican pesos ($)

2019 2018

Cash Flow from operating activities:

Income before taxes $ 550,888 $ 857,425

Non-cash items:

Non-cash adjustment on income from leases (416) (748)

Lease commissions 2,503 2,417

CBFI executive compensation plan 22,768 29,008

Depreciation, amortization and write-offs 2,742 2,451

Financial income (50,236) (95,866)

Financial expenses 212,893 126,950

Unrealized foreign exchange loss (gain) 29,802 (107,550)

Net gain on sale of investment properties (151) -

Gain from fair valuation of investment properties (38,454) (265,870)

Cash Flow from operating activities before changes in operating items 732,339 548,217

Accounts receivable (10,163) 9,466

Other assets (11,250) (4,916)

Recoverable taxes, net 351,624 (78)

Accounts payable (25,335) 5,449

Taxes payable (15,513) (22,840)

Tenant deposits 1,500 815

Cash flow from operating activities 1,023,202 536,113

Income taxes paid (986) (5,968)

Net cash flow from operating activities $1,022,216 $ 530,145

Cash flow from investing activities:

Acquisition of investment properties (202,880) (124,312)

Sale of investment properties 1,902 -

Advance payments for acquisition of investment properties (900) (687)

Other assets 1,662 (20,534)

Interest received 49,664 94,341

Net cash flow used in investment activities (150,552) (51,192)

Cash flow from financing activities: Bank loans obtained 808,737 365,368

Bank loans payments (880,897) (104,974)

Interest paid (204,608) (96,492)

Debt issuance costs (4,022) (15,013)

Distributions to CBFI holders (464,714) (504,802)

Cash obtained from issuance of CBFIs 47,858 2,220

Repurchase of CBFIs (55,703) (20,445)

Equity issuance costs - (738)

Net cash flow used in financing activities $ (753,349) $ (374,606)

Increase in cash and cash equivalents, net 118,315 104,347

Cash and cash equivalents at the beginning of the period 609,031 1,568,703

Effect of exchange rate fluctuations on cash and cash equivalents (8,498) (5,850)

Cash and cash equivalents at the end of the period $ 718,848 $1,667,200

30


Comments on the Industrial and Office Real Estate Market

Office Market 2

Monterrey

At quarter-end 3Q19, the construction of over 14 thousand m2 of office spaces was completed in the metropolitan

area of Monterrey, adding a total inventory of 67 thousand m2 year-to-date. It is expected that 50 thousand m2

will be incorporated into the inventory throughout the remainder of 2019. The vacancy rate closed at 15.7%,

representing slightly more than 196 thousand m2; this metric has remained stable so far this year and is expected

to decrease at the end of 2019 due to the leasing activity recorded in the market over the last months. 3Q19 net

absorption was approximately 13.2 thousand m2, an increase of 36.0% when compared to 3Q18, supporting the

prospect of a more accelerated absorption in the coming months.

The average rent asking price continued to show a moderate contraction, mainly explained by the additional

supply that has been added to the inventory over the last months. At the end of 3Q19, the average asking price

was US$ 20.22 per m2, US$ 0.87 lower than that of the previous quarter.

Regarding office space under construction, this indicator exceeded 303 thousand m2 by the end of 3Q19. The

space under construction was mostly concentrated in the Monterrey Centro (35.0%), Valle Oriente (24.0%) and

Jeronimo – Constitucion (19.0%) submarkets.

2 Source: CBRE Office Outlook, Mexico 3Q 2019.

$21.00 $20.00 $19.75 $19.75 $20.00 $21.00 $20.75 $21.50 $21.75$24.10 $23.90 $23.65 $23.70 $24.08 $24.20 $24.22

$22.42 $22.41 $21.99 $22.04 $21.96 $22.03 $22.01 $22.04 $21.48 $21.09 $20.22

(10,000)

-

10,000

20,000

30,000

40,000

50,000

60,000

1Q2013

2Q2013

3Q2013

4Q2013

1Q2014

2Q2014

3Q2014

4Q2014

1Q2015

2Q2015

3Q2015

4Q2015

1Q2016

2Q2016

3Q2016

4Q2016

1Q2017

2Q2017

3Q2017

4Q2017

1Q2018

2Q2018

3Q2018

4Q2018

1Q2019

2Q2019

3Q2019

Net Absorption of Offices vs. Rents in Monterrey(in square meters and monthly USD per m² of GLA)

Net Absorption in m2 Monthly Rent US$/m2

31


Mexico City Metropolitan Area

At the end of the third quarter of 2019, inventory totaled 6.6 million m², due to the incorporation of 93 thousand

m2 belonging to 8 projects. However, the vacancy rate stood at 14.8%, a 15-basis point decrease compared to the

previous quarter.

3Q19 net demand was recorded at slightly over 90 thousand m2, up 58% year-over-year. On the other hand, gross

demand closed with 157 thousand m2, totaling 306 thousand m2 so far this year.

As of September 30th, 2019, office space under construction amounted to 1.4 million m2, distributed among 60

projects. This indicator has decreased due to the completion of some developments and the updating of

construction regulations, that put the start-up of new projects on hold.

3Q19 asking rent price closed at US$ 23.60 per m2, US$ 0.37 below the level observed in 2Q19. The decrease in

market prices largely reflects the price adjustments performed in response to a lower net demand during the

quarter.

Guadalajara

At the end of the third quarter of 2019, space under construction amounted to 129 thousand m2, with 12 projects

in pipeline. This indicator maintains an upward trend since the beginning of 2018, adding approximately 152

thousand m2 year-to-date.

At quarter-end 3Q19, the vacancy rate stood at 22.2%, the highest level registered in the national office market,

mainly as a result by the addition of new supply. The office inventory stood at 654 thousand m2, an increase of

4.8% against the previous quarter. The most outstanding developments in the market are the Connect project, in

the Periferico Sur submarket, and the Torre Panorama project, in the Puerta de Hierro submarket.

$25.80 $26.40 $25.65 $25.90 $25.80 $25.95 $26.60 $26.55 $27.55 $28.35 $28.30 $28.15 $27.75$26.50 $26.15 $25.17 $24.72 $24.75 $24.49 $24.55 $24.70 $24.64 $24.72 $24.56 $24.26 $23.97 $23.60

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1Q2013

2Q2013

3Q2013

4Q2013

1Q2014

2Q2014

3Q2014

4Q2014

1Q2015

2Q2015

3Q2015

4Q2015

1Q2016

2Q2016

3Q2016

4Q2016

1Q2017

2Q2017

3Q2017

4Q2017

1Q2018

2Q2018

3Q2018

4Q2018

1Q2019

2Q2019

3Q2019

Net Absorption of Offices vs. Rents in Mexico City Metropolitan Area(in square meters and monthly USD m² of GLA)


32


3Q19 and YTD19 net absorption exceeded 15 thousand m2 and 44 thousand m2, respectively. The Connect project

contributed with more than 9,300 m2 to this result as over 51.0% of its gross leasable space was pre-leased. At

the end of the quarter, the average rent price was US$ 20.50 per m2; it is expected that by the end of 2019 the

asking price will remain broadly in line with the addition of new office space.

-

100,000

200,000

300,000

400,000

500,000

4Q2013

1Q2014

2Q2014

3Q2014

4Q2014

1Q2015

2Q2015

3Q2015

4Q2015

1Q2016

2Q2016

3Q2016

4Q2016

1Q2017

2Q2017

3Q2017

4Q2017

1Q2018

2Q2018

3Q2018

4Q2018

1Q2019

2Q2019

3Q2019

Net Absorption Trend - Office Spaces(last twelve months, in square meters)

Monterrey Mexico City Guadalajara

$18.90 $19.30 $18.50 $18.85 $19.15 $19.80 $19.80 $20.30 $19.80 $19.15 $19.45$20.80

$19.45 $18.75 $18.10 $17.90$19.59 $19.53 $19.43

$20.85 $20.27 $20.73 $20.58 $20.80 $20.92 $20.68 $20.50

(10,000)

-

10,000

20,000

30,000

1Q2013

2Q2013

3Q2013

4Q2013

1Q2014

2Q2014

3Q2014

4Q2014

1Q2015

2Q2015

3Q2015

4Q2015

1Q2016

2Q2016

3Q2016

4Q2016

1Q2017

2Q2017

3Q2017

4Q2017

1Q2018

2Q2018

3Q2018

4Q2018

1Q2019

2Q2019

3Q2019

Net Absorption of Offices vs. Rents in Guadalajara(in square meters and monthly USD per m² of GLA)


33


Industrial Market 3

Monterrey

As of quarter-end 3Q19, net absorption reached 295 thousand m2, exceeding the figure registered throughout

2018, primarily driven by the growth of manufacturing industry. Only the third quarter of 2019 contributed 81

thousand m2 to the net absorption of the year.

At the end of the quarter, inventory totaled 10.3 million m2, an increase of 4.7% or 460 thousand m2 over the

same period last year. It is expected that by year-end 2019, approximately 100 thousand m2 will be added to the

industrial space stock, which are under development.

3Q19 vacancy closed at just over 751 thousand m2, a 160-basis point expansion, from 5.7% to 7.3%, over the last

twelve months. This increase was caused by the space added to the inventory, as explained lines above.

At the end of the third quarter of 2019, the average asking price was US$ 4.19 per m2, remaining practically

unchanged on a sequential basis, but increasing US$ 0.06 when compared to the same period last year.

Saltillo

At the end of 3Q19, net demand amounted to 36 thousand m2, 67% higher on an annual basis. Quarter’s inventory

closed at 3.07 million m2, a 4.9% growth when compared to the same period last year.

As of September 30th, 2019, vacancy rate stood at 6.2%, decreasing 28 basis points versus 2Q19.

3Q19 average rent price was US$ 4.24 per m2, in line with the levels recorded in past quarters, but slightly above

the US$ 4.12 per m2 in 3Q18.

Bajio

As of 3Q19, there are 36 projects under construction, totaling more than 495 thousand m2, up 4% when compared

to 3Q18. Guanajuato posted the highest growth so far this year (+5.0%), following by Queretaro (+4.0%).

The vacancy rate in the region stood at 6.5%, which represents more than 791 thousand m2 of vacant industrial

space. This figure has increased as a result of the addition of new supply, with Queretaro recording the highest

vacancy (7.2%), following by Guanajuato (6.8%).

As of 3Q19, the average asking rent price in the Bajio region was US$ 4.04 per m2, remaining stable against the

previous quarter, but slightly below the US $ 4.05 per m2 observed at the end of 3Q18.

Guanajuato added more than 233 thousand m2 of new supply to the region’s inventory during the quarter.

However, its average rent price remained above the regional figure, closing at US$ 4.13 per m2. In 3Q19, leasing

activity in this state amounted to 88 thousand m2.

3 Source: CBRE Industrial Outlook, Mexico 3Q 2019

34


Querétaro recorded the second highest leasing activity in the region, with a net demand of nearly 99 thousand

m2. At the end of September, inventory in this state totaled 4.2 million m2, making it the state with the highest

vacancy rate in the region, at 7.2%.

San Luis Potosi increased its construction pace to primarily provide space to suppliers of the BMW plant. However,

as demand absorption has behaved weaker than expected, inventory increased just 4% when compared to the

same period last year. It is expected that by the end of the year approximately 115 thousand m2 currently under

construction will be delivered.

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