Prologis Property Mexico SA de CV

OTC:FBBPF

Earnings Call Transcript 2017-Q4

[Operator]

Good morning. My name is Kim, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the FIBRA Prologis quarterly earnings conference call. [Operator Instructions]

Kosta Karmaniolas, Head of Investor Relations, you may begin your conference.

[Kosta Karmaniolas, executive]

Thank you, Kim, and good morning, everyone. Thank you for joining us for our fourth quarter 2017 earnings conference call. Today, we will hear from Luis Gutierrez, our CEO, who will discuss our strategy and market conditions; and from Jorge Girault, our Senior Vice President of Finance, who will review results and guidance. Also joining us today is Hector Ibarzabal, our Managing Director.

Before we begin our prepared remarks, I would like to remind everyone that all of the information presented in this conference call is proprietary and all rights are reserved. The information has been prepared solely for information purposes and is not a solicitation of an offer to buy or sell any securities. Forward-looking statements during this call are subject to a number of risks and uncertainties. Our actual results, performance, prospects or opportunities may differ materially from those expressed in or implied by the forward-looking statements. These forward-looking statements are current as of the date of this call. We take no obligation to publicly update or revise any forward-looking statements after the completion of this call, whether as a result of new information, future events or otherwise, except as required by law.

Additionally, during this call, we may refer to certain nonaccounting financial measures. 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 would encourage you to visit our website at fibraprologis.com and download this material.

With that, it is my pleasure to hand the call over to Luis.

[Luis Gutierrez, executive]

Thank you, Kosta, and good morning, everyone. 2017 proved to be an excellent year for FIBRA Prologis. We delivered operating and financial results that exceeded our expectations despite the political uncertainty present all year.

Let me highlight some of our key achievements for 2017. Leasing was 7.9 million square feet with existing customers, driving 80% of the volume. Our occupancy at year-end was 160 basis points above market, and 3 of our 6 markets had occupancy of 98% or higher. The fourth quarter also marked the 13th consecutive quarter in which our portfolio was above 96% occupied.

Equally important to leasing is to ensure that we realize the embedded earnings potential over the portfolio by capturing market rent at lease expiration. We achieved 11.9% rent change on rollover for the year.

As a result of our internal and external growth as well as interest savings from our debt refinancing plan, we rewarded certificate holders by increasing our distribution 7.3% in 2017 compared with the prior year.

Let me spend a few minutes discussing the microeconomic environment. Economic growth in the U.S. is expected to remain healthy in 2018. As the Mexican economy is very much intertwined with both the U.S. and the rest of the world, this could provide tailwind to our GDP, particularly as it relates to consumption and manufacturing.

NAFTA renegotiations remain unresolved. We continue to believe that a favorable outcome for all countries will be reached, and we're also realistic that it may not happen in 2018.

E-commerce, which has been a bright spot for Mexico, continues to grow rapidly. Online sales increased by 33% in 2017, while headline retail sales slowed. This bodes very well for FIBRA Prologis, given our strong presence in Mexico City and the growing space requirements for e-commerce facilities.

Let me now cover the operating environment and our forecast for 2018. Demand has not slowed down, and we are seeing it across multiple sectors, such as e-commerce, 3PLs, electronics, health care and retailers, just to name a few. Last year, supply equaled net absorption. Importantly, supply remains disciplined, as projects currently under construction remain less than 2/3 of the 2017 net absorption. As a result, the national vacancy declined 20 basis points to 4.3% and was commensurate between global and border markets. Our 2018 forecast calls for balanced supply and demand consistent with 2017 levels. Given the long overall vacancy, net absorption is effectively constrained by incoming supply, providing with the right conditions to raise rents.

Mexico City was the strongest industrial market in 2017 with net absorption of 7.5 million square feet, vacancy of 1%, and market rent growth was 7% in U.S. dollars and 24% in pesos. To put it safely, Mexico City was one of the top-performing markets in the world last year.

At the border, our customers continue to demand high-quality facilities as they move forward with expansion of plants. We have not experienced any slowdown in lease renewals at the border.

Let me now turn to our 2018 plan. In operations, our focus will be maintaining high-average occupancy while pushing rent and lease term. There is a significant embedded organic growth in our portfolio as FIBRA Prologis was 5.3% below market at year-end 2017 and our 2018 expirations are 10% below market. Harvesting this gap between e-play and market rent will drive our same-store NOI growth for the next several years.

Our strategy of prudent balance sheet management and low leverage will provide us with flexibility to execute our capital plan even in an uncertain political environment. However, our preference is to recycle assets, as we have been seeing an increased flow of capital to Mexico as institutional investors look to invest here. With limited product available and growing capital, we think this is the right time to better position the portfolio.

Our sponsor development pipeline totals 4.5 million square feet and was 79% pre-stabilized at year-end 2017.

On the acquisition side of our plan, we will improve the quality of FIBRA Prologis' portfolio by lowering the average age of our buildings and further increasing our exposure to high-growth markets by acquiring brand new, stabilized assets that have been developed by Prologis. Our dispositions are quality assets located in submarkets where we are no longer focused and, therefore, nonstrategic to us in the long term.

Before concluding, I want to highlight that we are increasing our full year 2018 distribution by 5% to USD 0.124 per certificate. The increase is the result of our organic portfolio growth, 2017 acquisitions and the interest savings from our refinancing plan. This marks the fourth consecutive year that we have increased the distribution. FIBRA Prologis has and will endeavor to grow the distribution in a prudent and sustainable manner.

With that, let me turn the call over to Jorge.

[Jorge Girault, executive]

Thank you, Luis. Good morning, and thank you for joining our 2017 fourth quarter earnings call.

2017 was a great year for operations. We [ beat ], we met or exceeded our guidance. Starting with our financial performance.

FFO for the quarter was $26 million and $106 million for the year. Our AFFO grew 10% year-over-year, coming in at $80 million and in line with our expectations.

Moving to operations. Leasing volume was 1.8 million square feet for the quarter. Mexico City and Tijuana drove 75% of the leasing volume during this quarter.

Average occupancy for the year was a record 96.7% and period-end occupancy was 97.3%, up 50 basis points in both metrics over the same period last year.

Net effective rent change on rollover increased 13.5% in dollar terms, exceeding our expectations and marked the second consecutive quarter above 13%.

Rent change was led by Tijuana at 22.2% and Guadalajara at 16.7%. Higher rents, along with elevated average occupancy, resulted in our cash same-store NOI increase of 4.8% for the quarter and 2.9% for the year, exceeding our guidance range.

Turning to acquisitions. During the year, we acquired 2 high-quality logistics properties from our sponsor. The acquisition consisted of one building in Mexico City for the market of Toluca and one in Reynosa.

Let me go through the balance sheet. During 2017, we actively managed our debt maturities by refinancing higher-cost debt which resulted in extending terms and lowering our weighted average cost of debt to 4%. As a point of reference, our weighted average cost of debt at IPO was 5.3%.

Because of the refinancing that took place during the year, 76% of our debt is now unsecured. And with the exception of the line of credit, all of our debt is fixed. This propelled FIBRA's flexibility moving forward while reducing our fixed charges.

As of today, including the accordion feature, our liquidity is a healthy $319 million. In this environment, we will take prudent approach to our liability management and monitor how the geopolitical events unfold during 2018. We will always favor applicable balance sheets with low leverage and substantial liquidity.

Now let me introduce guidance for 2018, which assumes an exchange rate of MXN 20 per dollar and excludes the impact of any potential incentive fee and foreign exchange rate movement.

Given the continued demand for our well-located properties and strong customer relations, we expect year-end occupancy to range between 96% and 97%. We expect cash same-store NOI growth to range between 4% and 5% for the year. Annual CapEx as a percentage of NOI to range between 13% and 14%. G&A to range between $19.5 million and $21.5 million.

As we've mentioned, we continue to see significant capital inflows to Mexico and have decided to sell certain properties in our portfolio. These are good, well-located buildings but are no longer consistent with our long-term strategy. Our building dispositions guidance is in the range from $0 to $200 million.

Depending on timing of dispositions, our building acquisitions are expected to range between $100 million and $300 million. Putting all these together, we expect full year FFO per certificate to be between USD 0.155 and USD 0.165. As we've mentioned, we're increasing our 2018 full year distribution by 5% to USD 0.1240 per certificate. As for our share price, our 2018 distribution represents a dividend yield of approximately 7% in dollar terms and speaks to the high quality of our portfolio and growth prospects.

In conclusion, FIBRA Prologis had a better-than-expected 2017, given the market and several key metrics and positioning us with a stronger, healthier and more flexible balance sheet. Given our track record, asset quality and a strategic focus on strongest logistics and consumption market, we believe FIBRA Prologis offers one of the most durable growth profiles in the logistics sector.

With that, I will turn it to the operator for Q&A. Thank you.

[Operator]

[Operator Instructions] Your first question comes from the line of Sheila McGrath with Evercore.

[Sheila McGrath, analyst]

I had a question on the asset sales, we haven't seen that in the FIBRA's to date. We're big proponents of it if the stock price isn't cooperating. But I was wondering if you could give us a little bit more detail on the potential asset sales? What kind of pricing? And what are the characteristics that you're using to identify that these are the assets to dispose of?

[Hector Ibarzabal, executive]

Thank you very much for your question, Sheila. This is Hector. As Jorge mentioned in his opening remarks, the assets that we will initiate the process of selling are good assets. They have 93% occupancy, 4.4 million square feet. They are located in 5 out of the 6 markets in which we participate. The only market in which we are not selling assets is the Mexico City market. So we have sort of, basically everywhere, 65% of the portfolio is manufacturing and 35% of it is logistics, so we expect to have -- to get a cap rate on the neighborhood of 8%. And we need to be clear on the guidance between $0 to $200 million because we would only conclude the disposition process if, at the end of it, we reach a price in which we feel that we're contributing value to our stockholders certificate. So liquidity is there, there is interest for certain players, and these are transactions that should be concluded between the end of the second quarter and the beginning of the third quarter.

[Operator]

And your next question comes from the line of Vanessa Quiroga with Credit Suisse.

[Vanessa Quiroga, analyst]

I have a question regarding -- the first one is on the interest expense. Can you explain why it increased compared to the third quarter? And the second question is regarding the total CapEx that we saw in the quarter. It was higher -- one of the highest amounts in the quarter in terms of CapEx, even though there were other quarters during the year that had a same amount of leasing activity as in the fourth quarter. So if you can give color on what drove the investments would be very helpful.

[Jorge Girault, executive]

Vanessa, thank you for being on the call. Regarding your first question on interest expense, the reason that we have a higher interest expense in the third quarter is basically because of 2 things. One is because we did the acquisitions, we tapped on our land credit to do the $30 million acquisition, so a little more of debt, a little more of interest. And also, as you can see in our supplemental in the debt section and you compare it to the third quarter, we now have most of our debts fixed, except for the line of credit, as I mentioned, which was not the case in the third quarter. The third quarter was about 33% that was floating. We bought a swap to fix that part of the debt, a small part of the debt, and leaving only the line of credit, which will always increase a little bit the cost of interest. If you compare the weighted cost of interest in the third quarter was 3.9%, now it's 4% and this is the reason of the swap. Thank you, Vanessa.

[Hector Ibarzabal, executive]

On your second question regarding CapEx, Vanessa, this is Hector, nice talking to you. Effectively, the fourth quarter was higher than the previous 3 quarters. I think the size of the portfolio always takes us to the place in which we'll recommend to look at the CapEx on a [trailing] average. In the fourth quarter, there was more activity in property improvements. But at the end of the day, we reached, on a full year view, of 13.7%, which is in the lower range of the international standard approach of 13% to 15%. So it was just a matter of cyclicity and the way the expenditures to place. But we are in line to what we have expected.

[Operator]

And your next question comes from the line of Alan Macias with Merrill Lynch.

[Alan Macias, analyst]

Just one question on acquisitions. Is it a fair assumption to assume that you will be making acquisitions during the second half of the year? Or are you close to closing something during the first half of this year?

[Luis Gutierrez, executive]

Thank you, Alan, this is Luis. Yes, so this pipeline is one of the strongest pipelines we've ever had, 4.5 million feet. We can assume that most of the acquisitions will be closed by the end of the year, as a lot of those property that have already been pre-stabilized are under construction and will be finished during the year and, hence, will start paying rent by the end of the year. Also, important to mention that this pipeline of projects is a great competitive advantage that FIBRA Prologis has as it has access to new products in our strategic markets.

[Operator]

And your next question comes from the line of Cecilia Jimenez with Santander.

[Cecilia Jimenez, analyst]

I had 2 questions, if I may. First, I would like to know how much e-commerce represents today out of the total portfolio. And second, I would like to know if the asset sale is mandatory in order to pursue the M&A. So basically, if you are unable or if you don't find a final price to sell your assets, would you be still willing to do M&A?

[Hector Ibarzabal, executive]

Thank you for your question, Cecilia. As Luis mentioned in his opening remarks, e-commerce represented 32% -- or had a 32% increase on the 2017 activity. We are seeing the most important e-commerce players into the market. This was a business that, 4, 5 years ago, did not exist. And through our relationship with our sponsor, we have been able to participate and to have the right product that this kind of users are demanding. On the Mexico City activity, I would say that close of the 50% of demand is e-commerce related, and we are seeing how traditional retailers are as well increasing its efforts of -- to try to gain a piece of this new activity. We feel very confident that in the future we're going to keep on capturing part of this business. We anticipate that this trend will continue very strong, taking some share from traditional retail. And the strong relations that we have with the main customers makes us think that this is going to be one of the core activities going forward.

[Jorge Girault, executive]

Ceci, on your second question, and this is Jorge, regarding the asset sale, if the M&A program that we have in place is contingent to the asset sale that you mentioned. Let me start by saying that, as Luis mentioned in his opening remarks and my opening remarks, we are looking -- we see our balance sheet from a prudent standpoint, we don't want to overleverage and all those things. So as you saw in our guidance, our disposition range is between $0 and $200 million and we now also have a range for acquisitions. Those both things are embedded in the guidance. Meaning, if we combine -- we can do the M&A with our line of credit, we have the liquidity to do so. We don't want to overleverage. So we want to do these dispositions to recycle capital. So answering your question, yes, we, from a prudent standpoint and from the way that we [ commence ] our balance sheet, we want to do these dispositions in order to do 100% of the acquisitions that we missed.

[Operator]

And your next question comes from the line of Dan McGoey with Citigroup.

[Daniel McGoey, analyst]

Two questions. First is on, I guess, lease renewals for 2018, '19. You have about 40% of the portfolio coming up between 2018 and '19 and leased at an average rent that looks like it's just below $5. With such market strength that, Luis, you were referring to in your remarks, I'm wondering if the strategy is to kind of try and pull those lease negotiations forward and what type of increases we can expect for this year. And then the second question is on the debt financing. Jorge, if I understood correctly, you finished the quarter about 76% fixed debt and a cost of 4%, but you're now at 100%. Can you kind of give an idea of what the cost of debt is at 100% fixed? And over what term is that swap?

[Hector Ibarzabal, executive]

Dan, this is Hector. On -- 2018, we have 8 million square feet of expirations. This is 23% of our portfolio. The average base rent that we have in these expirations is $5.90. While we see the in-place market for this same portfolio of 5.38%. So as Luis mentioned in his opening remarks, we feel that markets are strong, and we are confident that we will have the ability to keep on pushing rents. We do not provide guidance on our rent growth. But I can anticipate that you will be able to see a very similar number on rent growth than the one that we have seen in the last couple of years.

[Jorge Girault, executive]

Dan, this is Jorge. Starting your question on the interest rate. Just to give you a point of reference, if right now, for Mexico, if we do a -- I'm not saying that we will, but for point of reference, we do have bonds for 10 years in dollar terms, we will be between 4.5% and 5% in a 10-year bond. I'm saying this because if we substitute 100% of the debt for fixed, more or less, that would be the range today. That said, our debt -- the part that we don't have fixed is the line of credit. We don't see it as a part for obvious reasons because it's revolving. You pay it -- we pay down with cash, with inflows and et cetera, so it's very hard to predict that part. If we fix everything with swaps, the 4% that you see today would be anywhere between 4.2% and 4.4% today with the type of swap that we get. The swap that we have bought are in line with the terms of the loans that we have in place. And basically, we have term loans that are 5-year term loans in different timings that have come into play. So the swap that we have is 5 years for that piece of debt.

[Operator]

[Operator Instructions] Your next question comes from the line of Pablo Monsivais with Barclays.

[Pablo Monsivais, analyst]

One quick question. We have heard from you that market trends are doing well and that you feel comfortable in pushing rents. Also, taking into consideration the recent acquisition and potential acquisition at some point this year, why is your FFO guidance still growing less than 4% if we can have a case of a stronger rent growth, some savings in interest expense, a little bit more of GLA? So I just want to listen to you and explain a bit why the FFO guidance is -- growth, I think, is not as attractive as perhaps the NOI or the revenue growth.

[Jorge Girault, executive]

Pablo, this is Jorge, thank you for your question and for being on the call. I wanted to -- it's a good question. The reason behind it is that we have embedded in our guidance, obviously, the dispositions that we guided for. And assuming that we guide -- we do dispositions at the end of the second quarter, if you may, we will lose -- and this is a timing thing because you sell a bunch of assets that generate NOI in the year, and as we've mentioned, these are located in soft markets that are no longer strategic to us. And as Hector mentioned, not -- this excludes Mexico City, for our higher-yielding assets. So you're excluding those -- you're taking out of weight those assets, you're selling those assets and acquiring assets throughout the year, right? So that cash flow that comes in comes -- is a timing thing, comes later on. So that decreases your -- our FFO for FIBRA for the year. You don't see that jump in the -- or increase, as you mentioned, in the FFO. That said, because we sell those assets, you'll see a small growth in AFFO, that's why we guided for a higher distribution of 5%, because by selling these assets, we'd say -- these assets are new, our style [life] already leased, so we'd save on tenant improvements, we'd save on leasing commissions and building improvements, so CapEx. So there is a balance there. Answering your question, it's because of the dispositions.

[Operator]

And your next question comes from the line of Adrian Huerta with JPMorgan.

[Adrian Huerta, analyst]

Hector, Luis and. Jorge, my question has to do with demand for logistics or let's say, e-commerce space in Mexico City. Have you done any exercise or study to understand the size of the space today and where it could be in 5 years, 10 years from now? How far it is from other markets that, obviously, are more mature than Mexico City is?

[Hector Ibarzabal, executive]

Thank you very much, Adrian, for your question. I think in Mexico, we are just commencing to realize how important the influence of e-commerce could be. Just a little above of 2% of the retail sales belong to e-commerce in Mexico, while in some other countries, like the U.S., this figure is between 8% to 9%, and you have some other more developed countries in Europe which is about 12%. The customer that leases more space from our sponsor, Prologis, is Amazon. And I think that Amazon has a clear worldwide leadership on commanding this type of activities. We almost have a permanent guy in Seattle taking care of this relationship. And through this relationship, we are able to learn because we are posing as strategic partners, you know what's coming next and what will be the requirements going forward. 5 years from now, what I see in Mexico is that -- something similar and it's not very difficult to anticipate to what has happened in the U.S. We see the e-commerce players trying to get closer to the consumption base. We see the e-commerce delivery trying to be faster than what it is today. And we see some of the important e-commerce players willing to open new facilities in, not only the big cities, but the medium cities. As of today, the most of the activity that Amazon has in Mexico is taken cared from Mexico City, but this needs to evolve. And in this evolution, there's going to be some demand as well for last-mile facilities. That this is a business line that Prologis as a sponsor of FIBRA Prologis, is analyzing. There is a huge potential here. I think that Mexico retailers need to realize that this e-commerce place is so serious. And as the data players, such as Liverpool, Walmart, Palacio de Hierro, are already taking a very active role here, I think that the rest of the small- and medium-sized retailers in Mexico need to realize that this is coming. A bright future in front for e-commerce, and we are very well prepared to take advantage of this.

[Operator]

And your next question comes from the line of Cecilia Jimenez with Santander.

[Cecilia Jimenez, analyst]

Just a follow-up on e-commerce. I would like to know if there's anything or who is e-commerce taking space from? Who is, today, among the tenants that you have, the sector that is not growing much or if it's decelerating? And if e-commerce is actually taking that space and being replaced? That's it.

[Hector Ibarzabal, executive]

Yes, Cecilia. Thank you for your question. In some facilities that already belong to the FIBRA, we see Amazon as taking the lease or setting a pace on these e-commerce activities. Amazon is expanding their footprint in Mexico and they are starting to lease on the space in Guadalajara and Monterrey. We, as well in the FIBRA, we have the e-commerce operation for Liverpool. Liverpool, we see in one of the buildings that we have in Mexicali leased for them, how they have been increasing their activity. Liverpool likes to see the e-commerce and they have a hybrid way of doing it -- of doing this because they like to deliver some of the stuff that they sell online in their own facilities. And I think that, that's a good mechanism that has been providing good geos for them. We have the e-commerce that Walmart has as well in one of the facilities that we have in Mexicali. Walmart uses, through part of this activity, third-party logistics with whom they have a global relationship. We do have a global relationship with these same companies. And El Palacio de Hierro, just to mention another one, El Palacio de Hierro as well, they call their e-commerce activity for one of the buildings that we have in San Martin Obispo leased by El Palacio de Hierro. So what we have seen is even some other retailers that in the past were not selling online, and I could mention probably some liquor sellers, that now they are being active on this e-commerce stuff. I think that all of the retailers and all of the activities that we have related to consumption eventually will need to adapt, evolve and increase the activity that they have on this regard. E-commerce represents to have a higher inventory and to have higher logistic capabilities. And our buildings, they have the international standards to provide with these needs.

[Operator]

[Operator Instructions] Your next question comes from the line of Constanza Garcia with UBS.

[Constanza Garcia, analyst]

Luis, I wanted to ask you, we saw an increase in the line of professional fees. Could you talk a little more about what this line includes and why was the large increase?

[Luis Gutierrez, executive]

Could you repeat the question, Constanza? We barely hear you. You probably -- can get closer to microphone.

[Constanza Garcia, analyst]

Can you hear me better now?

[Luis Gutierrez, executive]

Yes.

[Hector Ibarzabal, executive]

Yes.

[Luiz Garcia, analyst]

I wanted to know what the line of professional fees include and why there was an increase this quarter?

[Jorge Girault, executive]

Got it, Constanza. Sorry, we couldn't hear you first. This is Jorge, Constanza. Yes, as we announced in September last year through our holders' meeting, we asked approval to change the trustee. The former trustee was Deutsche Bank. And Deutsche Bank was selling -- or in the process of selling its business to another investor bank. So we changed -- we asked permission to change from -- there to act in there, which we already have a relationship with and is part of the trust structure or the FIBRA structure. So we prefer to have all into one group, if you want, and take care of that change. That change, which was approved in the holders' meeting, unfortunately, had some expenses related to it. And we have to bear those expenses as we change the trust and there's some register of different municipalities that you have to change the name of the owner if you're the main legal owner of the asset and so on. So those expenses are related to that change of trustee.

[Operator]

[Operator Instructions] Your next question comes from the line of Alejandro Lavin with Citigroup.

[Alejandro Lavin, analyst]

I just had a quick follow-up question on your acquisitions. I'm wondering if the guidance for this year includes Park Grande. And if so, would it be that the second tranche that -- of about $100 million, that depends on the closing of the asset sale?

[Luis Gutierrez, executive]

Alejandro, thank you very much. This is Luis. Yes, so let me give you some color on the acquisitions. So we have 4.5 million feet, 2/3 of that are in Mexico City, the rest are located in Guadalajara, Monterrey and Juarez. And most of the Mexico City assets relate to Grande. So -- and those, as I said in the previous question, will be ready for acquisition because they are under construction by year-end. We're expecting to close the dispositions between the second and third quarter. And yes, our plan guides to use the disposition proceeds to do the full acquisitions with the purpose to maintain a loan -- loan-to-value, which we believe should be around the mid-30s.

[Operator]

There are no further questions at this time. I'll turn the call back over to you, Luis Gutierrez, for closing remarks.

[Luis Gutierrez, executive]

Thank you for joining us on our call today. You know, operating fundamentals for high-quality, well-located facilities, such as those in our portfolio, remain strong. We delivered solid 2017 results and expect that trend to continue this year. Our portfolio has a diversified customer base that spans across industries. This helped us in 2017 against a backdrop of political uncertainty, and it will continue to benefit us in 2018. Our strategy to focus on the 6 most dynamic markets in Mexico as well as the overweight in consumption is really proving beneficial. Our goal is and always has been to deliver sustainable growth in an accretive manner. FIBRA Prologis remains an attractive investment with excellent total return potential. I am proud of our performance and believe we can continue to deliver outstanding results. Thank you very much for joining us. I hope to see you soon. And anybody wanting to visit some of our properties in Mexico City are very welcome. Thank you.

[Operator]

Thank you, ladies and gentlemen, this concludes today's conference call. You may now disconnect.