1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. đť•Ź Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. đť•Ź Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
VTMX
Event Date
2023-06-30
Sector
Real Estate
Subsector
Real Estate Management & Development
Offer Range
$31.00
Shares Offered
12.5M
$2.5B
Implied Upside vs Midpoint
Description
We are a fully-integrated, internally managed real estate company that owns, manages, develops and leases industrial properties in Mexico. We have significant development experience and capabilities, focused on a single real estate segment comprised of industrial parks and industrial buildings in Mexico. With an experienced management team, we strive to achieve excellence in the development of industrial real estate, to generate efficient and sustainable investments. We offer our world-class clients strategic locations across fifteen Mexican states located in the most developed industrial areas, with a growing portfolio of our developments built according to eco-efficient standards. As of March 31, 2023, our portfolio was comprised of 202 buildings with a total gross leasable area, or “GLA,” of 33.7 million square feet (3.1 million square meters), and a stabilized occupancy rate of 96.7%. Our GLA has grown 60.6x since we began operations in 1998, representing a compound annual growth rate, or “CAGR,” of 10.8% since our initial public offering in 2012. Our facilities are located in strategic areas for light-manufacturing and logistics in the Northwest, Northeast, BajĂo-North, BajĂo-South and Central regions of Mexico. The quality and geographic location of our properties are key to optimizing our clients’ operations, and constitute a crucial link in the regional supply chain. We are a holding company, and our sole assets are our holdings in our subsidiaries. Since our inception in 1998, we have grown from a private to a public company and evolved from a high-growth industrial real estate developer into an industrial real estate asset manager with strong development capabilities, with a high-quality portfolio and an extensive development pipeline. As we continue to evolve, we seek to become a world-class fully integrated industrial real estate company, striving to adhere to the highest standards available worldwide. We believe that over the last five years, we have created value for our shareholders by implementing our “Vision 2020” strategic plan for 2014 to 2019, and since 2019, our “Level 3 Strategy”. We are aiming to maximize growth in Vesta FFO by implementing this strategy, which establishes our expansion and growth strategy for 2019 to 2024, based on five strategic pillars: (i) manage, maintain and broaden our current portfolio, (ii) invest in and/or divest properties for ongoing value creation, (iii) strengthen our balance sheet and expand funding sources and maturities, (iv) strengthen our organization to successfully execute our strategy, and (v) become a category leader in ESG, embedding our sustainability practices throughout our business model. Our profit for each of the three-month periods ended March 31, 2023 and 2022 was US$30.9 million and US$49.4 million, respectively. Our profit for the first quarter of 2023 has decreased 37.5%, as compared to the first quarter of 2022. Our basic earnings per share have decreased 37.2%, as compared to the first quarter of 2022. These decreases in profit and basic earnings per share were primarily attributable to a decrease of US$27.5 million in gain on revaluation of investment property primarily due to market conditions during each quarter, including an increase in discount rates, exit rates and inflation rates, which was offset in part by a US$7.9 million increase in rental income. Vesta FFO per share has increased 22.3%, as compared to the first quarter of 2022. Our total GLA has grown 7.5%, as compared to the first quarter of 2022. In addition, Adjusted NOI has grown 18.2%, as compared to the first quarter of 2022. --- Our properties provide innovative and customer-tailored real estate solutions to respond to our clients’ specific needs, as well as to adapt to industry trends that we identify in our markets. We selectively develop light-manufacturing and distribution centers through built-to-suit, or “BTS Buildings”, which are tailored to address the specific needs of clients or a particular industry. Our properties allow for modular reconfiguration to address specific client needs, ensuring that a facility can be continuously transformed. Working closely with our clients on the design of these bespoke properties, also allows us to stay abreast of and anticipate industry trends. In addition to tailor-made solutions in proven industrial areas, we also develop “Inventory Buildings,” which are built without a lease signed with a specific customer and are designed in accordance with standard industry specifications. Inventory Buildings provide sufficient space for clients that do not have the time or interest to build BTS Buildings. We adjust our building mix to cater to real estate demands of current and prospective clients by monitoring our clients’ and their sectors’ needs. We believe that we are one of the only fully vertically-integrated and internally managed Mexican industrial real estate companies that owns, manages, develops and leases industrial properties, on a large scale, in Mexico, which we believe differentiates us from our competitors. Our business is focused on developing our industrial properties, seeking to incorporate global quality standards to develop high-specification assets that are comparable with properties in other jurisdictions, with internal processes that minimize delivery times and costs. We focus on the development and management of our properties by outsourcing all construction, design, engineering and project management services and related works to third parties that are both experienced as well as known to us. By using high-quality contractors and service providers with long track-records and awarding contracts through bidding processes, we seek to mitigate contractor risk and foster competition, lowering our costs, increasing the quality of our buildings and providing competitive alternatives for our current and future clients. Our bidding processes are conducted in accordance with procedures that comply with the International Standard ISO 9001-2008, a certification we obtained in 2011 and renewed in 2015. We also obtained the ISO 9001-2015 Standard certification that focuses on risk mitigation. --- Vesta Real Estate Corporation Paseo de los Tamarindos No. 90, Torre II, Piso 28, Col. Bosques de las Lomas Cuajimalpa, C.P. 05210 Mexico City United Mexican States Telephone number: +52 (55) 5950-0070 Our website: www.vesta.com.mx.