Prologis Property Mexico SA de CV

OTC:FBBPF

Earnings Call Analysis

FIBRA Prologis Posts Solid Results

FIBRA Prologis has increased its full-year FFO per certificate range guidance to USD 185-0.19 and its guidance distribution by 8.5%, marking the fourth consecutive annual increase to USD 141 per certificate. The company will also distribute an additional USD 140 million due to a financial gain, primarily from FX on U.S. dollar debt. Lease rollovers are low at 9% of GLA compared to mid-teens last year due to extensive renegotiations in 2020. They anticipate acquisitions toward the year's end and have a committed focus on ESG and sustainable energy initiatives like solar panel installations. Non-core properties have been divested to focus on key markets.

Leadership Changes and Record-Breaking Year

FIBRA Prologis started 2023 with leadership changes, welcoming new CEO Hector Ibarzabal. The company celebrated a record-breaking year with achievements like nearly 100% occupancy and a 42% rent change on leases—unmatched in the sector. Their market capitalization saw a 50% total return, including dividends, and their same-store asset values grew by 21% due to the rental increase. They successfully completed a $400 million follow-on and purchased $330 million in properties, indicating an 8% year-over-year growth and a 60% increase since their IPO. This aggressive growth and strategic capital deployment underpin their confidence in delivering another robust year for 2024.

Market Dynamics and External Growth Strategy

The six markets where FIBRA Prologis operates saw significant net absorption and a record low vacancy rate of 1.4%. The company benefited from nearshoring demands, especially in markets like Monterrey and Tijuana. With a restrictive supply due to infrastructural and entitlement challenges, FIBRA Prologis projects that these conditions will favor its growth and value creation strategy. Along with its strong balance sheet, they forecast aggressive rent increases and the development of 3.2 million square feet to be offered to the FIBRA within 12 to 18 months. They plan to continue vetting third-party opportunities and leverage their position for acquisitions aligned with their business model.

Financial Growth Outpaces Expectations

The company's financials have seen impressive growth, with FFO up by 12% and AFFO growing by 35% for the year, signaling financial stability and operational efficiency. Their operating metrics remained robust, with an average occupancy of 99%. Constantly outperforming market rents, they anticipate their lease mark-to-market to continue driving high rent changes. They've maintained a flexible balance sheet with 100% fixed debt, low weighted interest costs, and ample liquidity. For 2024, they expect conservative acquisitions compared to the previous year, aiming to maintain quality and sustainability of growth rather than pursuing aggressive expansion.

Guidance for Investors

The company has set ambitious targets for 2024, with an expected occupancy range between 97.5% to 98.5% and same-store cash NOI growth of 6.5% to 8%. They've guided for annual CapEx as a percentage of NOI to be from 13% to 14%, and G&A to range between $40 million to $45 million. Despite market uncertainties stemming from global elections, including in Mexico and the U.S., the company's resilient business model and strategic positioning affirm investor confidence in steady growth and value creation.

Commitment to ESG Goals

FIBRA Prologis has made considerable progress toward its ESG ambitions. The company boasts of having 92% certified buildings and aims to achieve 100% by 2025. Its solar initiative is on track with installations in 20 buildings, aiming for a broader adoption across 120 buildings. Sustainability is not only a strategic choice but is becoming intrinsic to their operations and customer relationships. It's evident that ESG considerations are not peripheral but central to FIBRA Prologis' operational strategy and investment appeal.

Strategic Dispositions and Capital Allocation

In alignment with their core market focus, FIBRA Prologis strategically disposed of non-core properties in Matamoros and Hermosillo, which had approximately 66% occupancy. This move highlights the company's focus on optimizing its portfolio and concentrating resources on markets that drive growth and provide competitive advantages.

A Conservative Yet Opportunistic Approach to Growth

Emphasizing the importance of disciplined investment, CEO Hector Ibarzabal outlined the approach towards acquisitions and growth. Rather than adopting a purely aggressive stance, the company intends to keep investments within market conditions and prioritize accretive opportunities that align with FIBRA Prologis' strategy. This conservative but opportunistic approach reflects a commitment to long-term value creation over short-term expansion.

Earnings Call Transcript 2023-Q4

[Operator]

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the FIBRA Prologis Fourth Quarter Earnings Conference Call. [Operator Instructions].I'd now like to turn the conference over to Alexandra Violante, Head of Investor Relations. You may begin.

[Alexandra Violante, executive]

Thank you, Regina, and good morning, everyone. Welcome to our fourth quarter 2023 earnings conference call. Before we begin our prepared remarks, I would like to remind everyone that all the information presented in this conference call is proprietary and all rights are reserved. The information has been prepared only for information purposes and is not a solicitation of an offer to buy or sell any securities. Forward-looking statements are in this call speak only as of the date of this call. Our actual results, performance, prospects or opportunities may differ materially from those expressed in or implied by the forward-looking statements. Additionally, during this call, we may refer to certain non-accounting financial measures. The company does not assume any obligation to update or revise any of these forward-looking statements in the future, whether as a result of new information, future events or otherwise, except as required by law. As is our practice, we had prepared supplementary materials that we may reference during the call as well. If you have not already done so, I will encourage you to visit our website at fibraprologis.com and download this material. Today, we will hear from Hector Ibarzábal 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 Federico Cantu, our Head of Operations; and Alejandro Chavelas, our Head of Valuations and Research. With that, it is my pleasure to hand the call over to Hector.

[Hector Ibarzabal, executive]

Thank you, Ale, and good morning, everyone. I want to start mentioning that this is my first call as CEO, and I'm very excited about the potential our team can accomplish in the near future. Luis was a great partner for more than 30 years. It has been an honor working with him. I want to welcome this new cycle, Federico Cantu, our Head of Operations, who has been with Prologis for 18 years and will be participating in our earnings call as our new FIBRA COO. 2023 has been a record year since our inception. We had good expectations at the beginning of the year, and our results ended up surpassing them. As we move into a new year, we continue to benefit from strong market conditions, a best-in-class portfolio and a unique customer service. We have extraordinary figures, reaching almost 100% occupancy, something unseen for a portfolio of this size, and we accomplished a record 42% on rent change. Regarding capital markets during the year, we also outperformed as we reach a 50% total return, including dividends. We are now part of the MSTI Mexico Index, and we significantly improved our certificate tech liquidity, having a current daily average trading value of $7 million. Last May, we successfully completed a follow-on of $400 million, which was priced at MXN 59 and with our outstanding results combined with positive market conditions allow us to deliver a 37% certificate price return since then. The market is recognizing our ability to raise rents, which brings as a consequence of growth in the value of our assets, a concept that we constantly refer as value creation. Year-over-year, our same-store asset values grew 21%, where most of this delta comes from rental increase. We acquired $330 million in new properties using the proceeds from the follow-on. All of these assets are core product and within our 6 markets. Our current GLA is almost 47 million square feet, which is an 8% growth compared to 2022 and an almost 60% increase since IPO. We made substantial progress on our ESG goals. Prologis energy program commencement last October is a very important milestone in this regard. Jorge will provide more details on this. Now I'd like to talk about market conditions. Net absorption in our 6 markets reached a new record of around 39 million square feet in the year. Interest in the sector has kept investors active in trying to supply new products, both challenges in infrastructure and entitlement are keeping a healthy balance between supply and demand. Year-end, market vacancy ended at a low number of 1.4%. Our rent growth, a key driver of our value creation continues to outperform. While market rents grew 22%, we were able to surpass a 40% range change on rollover. This number is by far the highest in the sector. Let me provide a bit more color about our markets. Energy and infrastructure availability for new development remains very limited. We believe this condition is preventing customers from having even a more accelerated expansion plan. Monterrey was again the most active market with 15 million square feet of net absorption and 4 million square feet in new completions, nearshoring is driving most of the demand. Mexico City low vacancy is evidence of the complexity of finding suitable land and the big challenge of endowment consumption, including e-commerce, this is still one of the main engines of demand. Several e-commerce players have aggressive plans for the following 2 years. Tijuana is the most constrained market on the supply side, mainly due to electricity availability. We expect Tijuana market trends to keep on growing during this year. Paris and Reynosa remain with a healthy supply-demand balance with a strong pipeline of customers. Before I finish, I would like to mention the fact that 50% of world population will go through elections, including Mexico and the U.S., events that we do not control and that could bring some market volatility. To summarize, we expect favorable market conditions will remain allowing more significant listing power to continue increasing the value of our portfolio. As it relates to internal growth, we will continue to push rents up, which will generate higher cash flow. We believe that this year, we will see significant increases on rent change on rollover. On the external front, we will remain active and opportunistic. Prologis currently has 3.2 million square feet under development that we offer to FIBRA in the next 12 to 18 months. We will continue to evaluate as well third-party opportunities that are accredited and are aligned to our business model. In terms of our balance sheet, we will view it as a competitive advantage. It is the strongest in the sector and will allow us to play offense. We are looking forward to another great year of 2024. With that, I will pass the call over to Jorge.

[Jorge Girault, executive]

Thank you, Hector, and good morning to everyone. I want to start welcoming Hector Ibarzábal as the new CEO of FIBRA Prologis with whom I've worked for the last 30 years. I'm very excited of what we can do together in the years to come. With this, let me go through the results of the quarter and full year. FFO was $54 million for the quarter, a 12% increase and $207 million for the full year, or $0.181 per certificate at 3.6% growth. AFFO reached $42 million for the quarter, a 30% increase and $159 million for the year, a 35% growth and above our expectations. These results were driven by, once again, record rent change on rollover, acquisitions and a stronger peso compared to last year. Moving to operating metrics. Leasing activity for the quarter was 1.8 million square feet with an average occupancy of 99%, which is a testament of the strong conditions of the sector and the exceptional performance of our teams on the ground. Net effective rent change and rollover reached a record high in the quarter and 12 months of 47.8% and 41.8%, respectively. Our portfolio lease mark-to-market is now 45%. What this means is that we could generate more than 70% of additional AFFO as leases roll over time, assuming current market levels. In terms of same-store cash and GAAP NOI for the quarter, we had an increase of 8.8% and 8.4%, respectively. Going to our balance sheet. We have kept a strong and flexible balance sheet. We are [indiscernible] proloprating the highest in the sector and above Mexico sovereign with a stable outlook. Let me go through some of the metrics. 100% of our debt is fixed with 4% weighted interest costs and no expirations until '26. On the liquidity front, we have about $200 million in cash in balance plus committed and unsecured sustainable line of credit of $400 million, which is on used. Let me move to the guidance for the year. We keep on seeing high demand on the market. In this sense, we expect year-end occupancy to reach between 97.5% and 98.5%. Following our strong leasing and record rate change, we expect same-store cash NOI growth to be between 6.5% and 8%.Annual CapEx as a percentage of NOI to range between $0.13 and $0.14, G&A to range between $40 million and $45 million. On the capital deployment front, we expect to acquire between $100 million and $300 million, asset dispositions between $0 and $50 million. Putting all this together, we are setting our full year FFO per certificate range between USD 185 and USD 0.19. Given our excellent results, we keep on adding value to our investors by increasing our guidance distribution 8.5% versus last year, reaching USD 141 per certificate, making it the fourth consecutive annual increase. I would like to spend a minute on our 2023 dividend distribution resulting from a financial gain, mostly triggered by FX on our U.S. dollar debt. Given 2023 exceptional 13% best appreciation versus the U.S. dollar, in line with local tax rules, FIBRA Prologis will do an additional distribution, which could reach $140 million above our 2023 nominal guidance. In this sense, FIBRA Prologis has the capacity of distributing in-kind cash or both, any amount above our nominal guidance. Thanks to this distinctive feature, we can limit the use of funds or additional debt as most of this difference will be covered in CBFI, therefore, protecting our balance sheet and liquidity. Turning to ESG. 2023 can be summarized as Fallows. In terms of our baseline GLA, we reached 92% of certified buildings. And 81% of LEED lighting are gold being 100% by 25. Regarding Prologis solar initiative, we have initiated the installation of solar panels in 20 buildings equivalent to 10 megawatts with our goal being 120 buildings or 17 megawatts by 25. We have been recognized for third certificate year as sector leader by GRESB. On the social side, through our Prologis workforce initiative in the Mexico City area, we now have 240 students graduated from our training programs. To finish, I would like to say that last year was a record year in many fronts. Our business is thriving. We keep on looking beyond real estate into our clients' needs and market evolution in order to add value to our operations. In summary, we have positioned FIBRA Prologis in the past to drive continues to fit growth in 2024. This said, in line with Hector’s remarks, we will be prudent. I want to thank our people on the ground who have executed our strategy flawlessly, adding value to our operations and the continued trust of our stakeholders. With that, I pass it back to the operator for Q&A.

[Operator]

[Operator Instructions]. Our first question will come from the line of Rodolfo Ramos with Bradesco BBI.

[Rodolfo Ramos, analyst]

And congratulations on the results. I'll limit myself to one question here. given how tight some of these nearshoring markets have been and how competitive some of these transactions are getting, how feasible do you believe it is for you to be a consolidator in the FIBRA sector, especially considering the premium at which your certificate trade versus perhaps a smaller, less liquid peers?

[Hector Ibarzabal, executive]

This is Hector. I think that we have been able to build a very well-recognized platform. We have a very good cost of capital. We have access to very good cost of debt. We have a great relation with our customers. And as you mentioned, in some cases, in the markets, customers are the same, and there could be some synergies. We permanently analyze all the different alternatives that Prologis has. And consolidation is one of the alternatives that actually we have been studying in the past, and we will keep on studying. It's not easy to find the right target, it's not easy to put together all the pieces that are needed for these purposes. But what I can tell you is that, that's part of what we constantly are analyzing.

[Operator]

Your next question comes from the line of Alan Macias with Bank of America.

[Alan Macias, analyst]

Just a question on your acquisition guidance. It seems to me it is more conservative versus last year's guidance. And if you just can provide the drivers behind, I guess, a slower pace in acquisitions. What's behind that, just given that markets continue to have very strong demand?

[Hector Ibarzabal, executive]

Current conditions were infrastructure constraint and complexity of the entitlement processes are making very low development cycles. In the past, development cycles used to take from 10 to 12 months and now development cycles at least take 36 months. I think that's the main reason for not having more activity in the market. Having said this, Prologis as a sponsor of the FIBRA has realized this situation several years ago, and Prologis is anticipating on acquisition of land and doing everything that needs to be done in order to have infrastructure in place for the project. So the final consequence of this is that investments are taking more time. FIBRA Prologis has the exclusivity to see everything that Prologis develops, and that provides a very interesting benchmark. So we permanently post analyze and compare what is coming from the Prologis pipe and what is in third-party acquisitions. And everything that we do needs to be accredited and in line with the strategy of the FIBRA. This is a long answer to tell you that it's becoming very hard to grow the business and very hard to do new development. We will not accelerate because we know that we need to do the right investments and not the bad investments.

[Jorge Girault, executive]

Alan, just to add to Hector's point. Remember, in 2023, we started the year with a guidance of $100 million to $300 million. And then during the year, we adjusted up. So bear in mind, at the beginning of the year is 17, 18 days after the beginning of the year, we put what we think could happen, but I think we will adjust if the case may be.

[Operator]

Your next question comes from the line of Alejandra Obregon with Morgan Stanley.

[Alejandra Obregon, analyst]

Congratulations to all the new appointees. I guess my question is quite simple. Can you provide some color on what you're seeing with regards to tenant sentiment and, let's say, your dialogues with customers for new proposals and renewals? Has that changed since last quarter? You were talking about record absorption rates. So if you can just talk about the soft market and the sentiment there, that would be very helpful.

[Unknown Executive]

This is Federico Cantu. We are seeing very good sentiment from customers and actually towards year-end, our pipeline of prospects substantially increased across our 6 markets to over 20 million square feet. So in our conversations, we feel very optimistic. We're seeing good activity on the nearshoring front as well as driven by domestic consumption. We're pretty much sold out across our 6 markets, and we're confident that we'll be able to renew our customers and again, good sentiment across our 6 markets driven by these trends.

[Hector Ibarzabal, executive]

Pipeline as of today at the beginning of the year, Alejandra is more robust, is bigger than the pipeline that we had 1 year ago.

[Operator]

Your next question will come from the line of Francisco Chávez with BBVA.

[Francisco Chávez Martínez, analyst]

Congrats on the strong results. My question is regarding the guidance for acquisitions. Can you give us more color on the timing of these acquisitions and also on the mix of those acquisitions by how much it will be from third parties and your sponsor?

[Hector Ibarzabal, executive]

I think that you should expect that most of the acquisitions to take part in the second half of the year. I would be expecting at least 75% of this number coming from Prologis pipeline. And regarding the way market behaves on 2022 and 2023, the most of these acquisitions are going to be related to manufacturing and not tied to this near-shoring phenomenon that everyone talks about.

[Operator]

Your next question comes from the line of Jorel Guilloty with Goldman Sachs.

[Wilfredo Jorel Guilloty, analyst]

It's a really quick one. I just wanted to focus on the guidance, particularly on the same-store cash NOI. So at the midpoint, you're about 7.25%, which you look at the same-store cash NOI growth for 2023. That's a bit of a downshift of nearly 300 basis points. I was just wondering, if you can help us think a little bit more about the framework around the same-store cash NOI guidance. Is it starting conservative? Is it perhaps an impact of lower inflation? How should we be thinking about this difference in same-store cash NOI, was that actually happened '23 versus what's forecasted in '24?

[Jorge Girault, executive]

Remember, same-store cash NOI driven by 2 main items. One is rent change. And as you've seen, we have 45% mark-to-market, as I've mentioned, which is important. And two, obviously, for the rest of the portfolio, the annual bumps. Now this year, we have about 9% of the GLA will be rolling versus last year, which was more in the mid-teens. So we have very low from a relative perspective, roll over this year, which obviously, you don't capture all that 45% or that mark-to-market in the same store. So that's the reason why the same story is where it is. We have a low role this year versus the previous year. This comes from 2020 because there was a lot of renegotiation of leases. So that's the reason why we're not being conservative. It is just what it is.

[Operator]

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

[Adrian Huerta, analyst]

Congrats Hector. My question has to do with the guidance on FFO per share. The low end seems to be at the same level as the one for 4Q on an annualized basis, the one we just reported. Why this limited growth? What other assumptions we should be taking into consideration to see the low end of the guidance for this year?

[Jorge Girault, executive]

And honestly, I will get this question at the beginning of the year. Honestly, it has to do with the way that our petition as Hector said, is the timing of the acquisitions, which are more back of the end of the year loaded. We have issued more certificates, as you know, from the follow-on. We are distributing more certificate this year in the FX gain. So per certificate basis, everything is put in into the mix. And the fact that we are acquiring at the end of the year gives you this in your words, low FFO per share. But I think it's a sustainable growth. You still see growth. And at the end of the day it's reflected in the dividend per share, which is 8.5%. It's the mix of things, and most of it had to do with the timing of guidance of acquisitions.

[Operator]

Your next question comes from the line of Francisco Suarez with Scotiabank.

[Francisco Suarez, analyst]

A question on ESG. I noticed that you are offering trading a new position on ESG as your company. Can you walk us a little bit towards the strategy behind that? Is it going to -- capital allocation is going to be much more directed towards ESG futures? And on that note, what kind of returns and investor in figural can expect from the deployment on your solar panels in your rooftops?

[Jorge Girault, executive]

Let me start with the last piece of your question. On the solar panels, FIBRA Prologis is going to get 2 things. One, on the economic side, where we're going to get additional rent. This additional rent is not going to move the needle. So I wouldn't focus on that. It's additional rent. It's going to be direct to FFO, but it's not a significant amount. And the second thing is stickiness. We're giving to our clients clean energy, and there's going to be batteries also in some cases. So you have sustainable energy, and that creates a stickiness because some of our clients you can imagine, require this type of energy to reach their ESG goals. Regarding the first part of your question, for us, ESG is a strategic thing, we need to put more resources into this. Previously, Monterrey was doing ESG and FP&A. And we need to have someone dedicated to ESG, who is more knowledgeable about the thing. Now the evolution because it's evolving every year. And it's part of our strategy. So more to come, but putting new resources into the ESG should put FIBRA in a new position in this regard also with regulatory needs or requirements. It is very important we need someone to take care of them for [indiscernible]. That’s basically.

[Hector Ibarzabal, executive]

At least, I would say, 50% of our customers, they have similar goals of net zero than what we have. So that's why we are anticipating our customers will require this, yes or yes. And they're extremely happy that they’re starting to have the opportunity to have clean energy in their buildings. Some of them are ready to pay more for the electricity. As you know, FIBRA cannot have those revenues by regulation. But I think we're becoming a strategic partner of our customers about these important goals. And you can only expect FIBRA Prologis to keep on increasing our focus on this regard with this dedicated person that Jorge missed.

[Operator]

Your next question comes from the line of André Mazzini with Citigroup.

[André Mazini, analyst]

Congrats again to Hector in his first reporting quarter as CEO. Two questions. The first one, if you could explain why the disposition cap rate was on the higher side, \ right, 10.2% for the year, like 2023, which is some 400 bps higher than the acquisition caps. So what you guys were selling, I would imagine maybe it's a noncore property. There couldn't such the same caps as the high-quality stuff that you buy or if it's that or something else? And then the second question, if you guys could provide an update on the next fiscal reform. I know it's not the short term, but I've been hearing clients asking and some of the newspapers about the next fiscal reform in the likelihood there will be an increase in real estate taxes in the next fiscal reform, likely in the next administration.

[Hector Ibarzabal, executive]

The answer to your question number one, you already provided it. There were no core properties located in Matamoros and Hermosillo, old buildings. And actually, we are pleased that we were able to focus in our core markets that were outside of our markets, a completely different product than the one that FIBRA is acquiring. And they were part of portfolio acquisitions made several years ago that they had that ingredient. They were not developed by us. Regarding the next fiscal reform, property taxes actually are increasing, have been increasing every year, and we should expect the situation going forward to keep on growing. As a general comment, these taxes, some people could feel that they are too expensive because there's a sentiment that you do not receive a lot of exchange. But compared to international standards, those property taxes are just catching up with the international level.

[Jorge Girault, executive]

This is Jorge. Let me just touch on this position, but you will see this going forward. Imagine having 3 buildings in Matamoros and Hermosillo, it's not our core market. We don't have people on the ground, moving people there or assets or resources to see how things are doing. It's expensive and it's just distracting, et cetera. So these were, as Hector said on the core, and we're had a round of 66% occupancy when we sold them. But before that, they were making and it took a long time to leave them. So sometimes, it doesn't move the needle, $25 million, sometimes from strategic reasons and for a good resource of capital, you sell them in number wise, it might not make sense, business-wise, makes all the sense in the world.

[Operator]

Your next question comes from the line of Ernst Mortenkotter with GBM.

[Ernst Mortenkotter, analyst]

Congrats for your results. Understanding your new acquisition pipeline, could a quicker downturn in rates drive you to be more aggressive in terms of deployment and maybe even acquisition cap rates? Or how could this shift your capital allocation strategy?

[Hector Ibarzabal, executive]

I think that this is a good opportunity to define a little bit of what we think as aggressivity. All of the acquisitions that we do, we try to make a very strict comparison to market conditions. For us, it's very hard to make an investment, buying an asset, making any type of investments above market conditions. Why to pay above market conditions if you could buy from Prologis at market conditions? So I think one of the strengths that FIBRA Prologis has is that we have that visibility. We have the visibility of how much does it take, how much time does it take to develop. We have the best specifications in the market, and we can do a straightforward comparison between our assets and third-party acquisitions. So I would say that we are not aggressive. Actually, we participate in almost every process that takes place in the market, some of them with high interest on getting them some other ones just to get market intelligence. But I don't think that we are lacking of aggressivity. I think that what we are doing is to try to do the right investments that eventually could create value to the company.

[Operator]

[Operator Instructions]. And your next question will come from the line of David Soto with Scotiabank.

[David Soto Soto, analyst]

Just a quick question related to the last [indiscernible]. We have seen various private developers taking more important on the last night strategy. So if you could provide some color about the last [indiscernible] strategy and if we should expect any keys or align with logistics companies in Mexico City.

[Hector Ibarzabal, executive]

I think that last mile and first mile and last one [indiscernible] as we call this program is something that we have permanently starting. We have periodic conversations with our customers. So we understand the needs that they have today, the future needs that they will be having. And today, Mexico City has been capturing almost all of this activity. Vallejo has been the most active market in the pipeline. And these are investments in which FIBRA Prologis those straight from our third parties without Prologis sponsor participating. I think that this year, we will have at least 3 or 4 investments in this regard. All of them are going to be in Mexico City. Some of them are adding value because we are having the ability to buy properties adjacent to the current properties that we have, taking care of the requests from customers that they want to expand their operations. It's a business that will keep on increasing. The big e-commerce operator, each one of them, they have at least between 4 facilities in this regard in Mexico City. So that gives you an idea of how important is these facilities to have access to better customer service to them. I think this program creates a stickiness, increases the trust with our customers and take us to where we want to become a strategic partner and not just a transactional partner to our company.

[Operator]

And we have no further questions at this time. I'll turn the call back over to Hector the CEO, for any closing remarks.

[Hector Ibarzabal, executive]

Thank you very much for your interest in FIBRA Prologis. I think that we are delighted about the opportunity that the market is putting in front of us. We have all the conditions to keep on taking care of the different opportunities that we are having in near shoring, in e-commerce and in consumption, where we're prepared. We have a good balance, and I'm very optimistic about replying and replicating the good results of 2023 in 2024. Hope to see you soon in the field. We have several conferences that we will be attending. And hope to see your bond.

[Operator]

Thank you very much. That does conclude today's conference call. We thank you all for joining. You may now disconnect.