Corporación Inmobiliaria Vesta, S.A.B. de C.V. (VESTA) Earnings Call Transcript & Summary

Hello, good afternoon. Hello, everybody. Good afternoon. Thank you for joining us at our to 2024 Vesta's Day. We're very happy that you are here. And also, we welcome our attendees on the webcast platform. My name is Claudia Medina. I am the Head of Communications at Vesta. And apart from giving you a very heartful welcome, I want to share that during today's event, we will be making statements related to our business that are forward-looking statements under federal securities laws. As we have a disclaimer at one of the slides, so you can see it later. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainty. Our actual results could differ materially from the expectations reflected in any forward-looking statements. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the filings with the SEC as well as the risks and other important factors discussed in today's presentation. Additionally, we will be sharing non-GAAP financial measures today. This information should be read in conjunction with and is qualified in its entirety by reference to our consolidated financial statements, including the notes thereto. A reconciliation of the non-GAAP measures to GAAP measures is provided in the presentation. And I want to share with you our agenda. This speaks about the topics our speakers will cover. We are having first, the presentation of our highlights and achievements of our previous strategy that is ending this year, Vesta Level 3 Strategy and its outstanding results. After that, we'll share our strategic vision for the next phase of our growth as we unveil our new strategic plan called Route 2030. You'll hear first from our CEO, Lorenzo Berho, and then you'll hear from other members of our management team as they each provide a deep dive into the key areas relevant to our business and continued success. Our CFO, Juan Sottil, will close the presentation with our financials. As you see, we're having three blocks of presentation, and then there will be a Q&A section for each of these blocks. So please feel free to take the chance of asking questions, both via our webcast platform and in person. We'll start first with the questions, the persons that are attending this room and then our webcast audience. If you would like to ask a question during the Q&A, please submit your question in the Ask A Question text box on the webcast console at any point during the course of the event. After today's event, we'll be sharing a replay on our Investor Relations website, along with the slide presentation and transcript. Please silence your phones and enjoy the presentations. First, we are having a video, and then I'll welcome our Chief Executive Officer. [Presentation]

Now we welcome to the stage our Chief Executive Officer, Lorenzo Berho.

Gracias, Claudia. Is this on? Perfect. So I don't need this one. I'll just put it aside. Great. Well, welcome, everybody. We are very excited to be sharing today many of the areas what Vesta has been working on. We're incredibly excited, not because we'll be unveiling a new long-term strategy, but we are finalizing also another stage which basically today that we are presenting a new plan. Reminds me of 2019, summer of 2019 that many of you were present at the Peninsula Hotel when we presented the Level 3 Strategy. We thought it was far away, and we thought it was going to be a long time, and we couldn't wait until we'll be able to present the final results of it. And here we are. So we are excited to be again presenting another stage of the company. Clearly, a moment where we have seen a tremendous evolution in a company. And today, we are before talking about the different areas of the company and the focus on the next items we'll be working on. We will gladly go over and walk you through many of the results and many of the achievements this company has done over the last 6 years. So welcome again, and thank you for your attendance. This, the Level 3 Strategy has been well characterized by what we consider the main focus, which was profitability. Back in 2019, we decided to focus the strategy clearly based on growth, but not necessarily having certain milestones in terms of growth. What we did focus is value. And we kind of shifted the strategy of a company of being a more focus towards -- you might remember, net asset value per share growth as well as FFO per share growth. Those were our key metrics, and we selected a whole number of different ways to be able to drive growth in net asset value per share as well as FFO per share. But I will walk all of you just through some of the important milestones that we were able to achieve throughout these years. First of all, yes, the company did continue focusing its growth in terms of GLA. We passed from almost 30 million square feet to what today is 42 million square feet, basically a 40% growth. But the most growth of the company, did not come in terms of GLA. Our dedicated focus and discipline towards rental revenue, FFO as well as value creation through net asset value and asset value has enabled the company to grow in more than double throughout this period of time. If you consider other metrics, we have been able to grow, particularly FFO as well as net asset value by a CAGR of double digits, even almost at 20%, 18% in terms of FFO of CAGR per annum as well as net asset value of 16%. These are major achievements, and this is a well-executed results coming from a different array of disciplines, which I will discuss further. We -- different to other real estate investment vehicles, we set two particular objectives in terms of FFO per share and net asset value per share. It was quite ambitious, but we thought it was the only way to have a right path going forward, and be able to demonstrate that we have a different way to -- on performance, a different focus on performance. As many of the other investment real estate vehicles in Mexico, were mostly focused on yield. We were focused on total return. And we decided to set the targets of $3 of net asset value per share and $0.20 of FFO per share. In terms of net asset value per share, we were able to achieve our target even a couple of years ahead of time, which was an excellent signal that we were on track of delivering strong results. In terms of FFO per share, even that we were shy of the $0.20, we believe that certain adjustments, particularly our entry in the New York Stock Exchange as well as another follow-on event that we had was a great enabler to help us have a stronger balance sheet and was worth considering or taking a minor impact on the FFO per share, but knowing that we'll pave the road better for the upcoming future by having a better balance sheet. Clearly, these particular objectives and these particular targets were well executed and actually well represented throughout the total return of the company in terms of IRR when compared to other major indexes throughout this time. We have been able to deliver outstanding IRRs way above our peers, even understanding that we have overcome major challenging periods of time. We went over a pandemic. We went over several elections. We went over major supply chain disruptions. And even with that, Vesta has followed and executed well strategy that we have had a major net asset value per share growth and share price has actually followed, which was one of the questions at the beginning when we were trading at a major discount to net asset value. Today, what we are seeing is that Vesta has had some periods of time where we have been trading at a discount, sometimes that we have been trading at a premium. But we believe on the medium- to long term, that eventually, the share price will follow what net asset value per share might be, and just using this particular time frame, we can show how this actually happens over time. Well, of course, all of these results have not been able -- we have not been able to achieve them if we wouldn't have a strategy and a plan. And that's why in 2019, when we presented the Level 3 Strategy, we set very well-defined goals and objectives in order to work throughout these years. We practically have five different pillars where we follow carefully and so that we can have the whole company very well aligned in order to be able to meet our overall goals. First, it was to manage and maintain and optimize existing portfolio. Secondly, to have a strong discipline and a strong investment approach. Third, was to strengthen our balance sheet, which was one of our main objectives. The fourth pillar was to strengthen the organization. And the fifth one to become a category leader in ESG. You probably might remember all these five pillars because every time we sit down with analysts, we sit down with investors, we want to make sure that everybody knows what the strategy of the company is. So maybe this is a bit repetitive, but I want to make sure that this has been the way to create value over time. In each of the objectives, we set very clear milestones. This was incredibly helpful not only to send the right message where we want to take the company, but also internally to set the right KPIs internally so that the whole organization can follow through carefully and surpass results and execute in each one of them. I would like to highlight some of the major achievements that we went over these particular 6 years, and you might remember well. Vesta had a very good position in several industrial markets. However, we were missing a couple of industrial markets, which were performing incredibly strong and where Vesta than needed to be in order to be a nationwide platform. So we decided to enter Guadalajara, Monterrey and Mexico City as well as to keep our leadership in some of the other markets, including Tijuana, Bajio, Juarez and other markets. Well, Vesta was able to successfully enter these regions, being Guadalajara, Monterrey and Mexico City, 60% of the investment over this period of time. And today, we can say that Vesta not only was able to have a presence in these markets. But today, we have a leading position in these regions by being able to close the most important transactions recently. And our team, my team will follow up with some of the examples in each of these regions so that you can further understand our focus in the areas. Not only were we able to grow in these markets, we have also been very disciplined and worked hard in order to have a better occupancy in the total portfolio. As you can see, we have been able to increase occupancy in the different types of portfolio, same-store stabilized and total. And even though we know that this is -- sometimes we get only a picture of it, but it's more about the whole movie. We understand when occupancies are low, when occupancies are at the right time, and we believe in being in the right -- we call it, in the right types in order to be able to not only to have available buildings in place in the market so that we can anticipate to demand, but also to be able to start with new inventory buildings, particularly when demand keeps strong. Today, we have been able to surpass in the last 10 years several challenges from having a lower occupancies to being in the need of facing the COVID, the pandemia between 2020 and 2021, and also to being able to achieve record high occupancies in all portfolios. We might see in some of the different quarters that we could have some minor adjustments. But overall, we believe that the portfolio is in the best shape we have ever seen, even understanding that we might have some adjustments over time, but that can give us the advantage that we have the right properties, the right inventory buildings in the right markets to anticipate to potential demand, which has been a key advantage for Vesta. Talking still about our portfolio. We wanted to reach out to other regions. Today, we can say that we have not only grown into other regions, but also, we have carefully been able to craft the portfolio so that we can say that it's the best diversified portfolio in Mexico today. Having presence in most of the markets and no market being a major -- having a major position in the total portfolio. We have no market being more than 1/3, and we think that is very healthy, particularly understanding that not all the markets behave the same way in the same time. And we think that this can give us the right strength in order to continue growing as long as the markets continue performing well. The same for our portfolio diversification regionally works in terms of our sector of growth. We have diversified well in terms of industries and sectors. We wanted to expand our presence in e-commerce and logistics, as you might remember, in 2019. And we have also been able to capture other industries such as electronics and other industries. So that we can have, again, a more robust, more diversified portfolio and particularly being a player in some of those industries that are growing the most in Mexico. E-commerce and logistics together represent almost 40%, which has expanded from less than 28% back in 2018. And transport equipment manufacturing, which is basically auto industry as well as aerospace will continue to thrive, but today is, let's say, it's only 1/3 of the portfolio. So we think it's very well balanced, not depending on one particular sector. You know very well who the main clients of Vesta are. This has actually shifted well, positively considering that we have not only been able to grow with some other sectors and some other industries, but players such as Mercado Libre, which is one of the most important companies in Latin America, as well as Foxconn today are part of the top 10 clients of Vesta. And interestingly, these companies are still growing. We focus on the best companies, and we know that the best companies tend to grow. And that's why we will continue selecting carefully, the type of tenants that we have. We'll help them grow and I'm pretty sure that, that particular growth is going to be very helpful now that we also have presence in different markets. Many of these clients have grown in multiple cities and multiple regions, too. But of course, our discipline has also extended to companies that are not currently in the top 10 list but are very good companies that we believe will continue to grow. These are some of the names of the companies that you know very well that we have -- in this period of time, we have been able to do one transaction or a couple of transactions. And we're pretty sure that we'll help us to shape our portfolio in the future in the right way. Our discipline towards investment-grade tenants will continue to be there, and we will continue focusing on the right companies that will grow. In terms of investment, well, we plan to invest in 2019, approximately $600 million. Well, we did easily surpass that number. We invested over $1.1 billion over these particular 6 years. But interestingly, the first 3 years, even considering the pandemic, the company was investing approximately $100 million per year. So we have almost tripled that amount, and that has helped us not only to continue to be leading in certain markets, but also to be able to get into new markets, which have a higher dynamic. Vesta has also strengthened its management team in order to be able to continue delivering, developing in these particular new regions. And by having the opportunity to identify the right pieces of land to acquire, to invest and anticipate on the development time frame and being able to lease up accordingly in order to continue with the evolution -- to continue developing over time. This $1.1 billion have also being invested accretively. We focus on the development because we believe on spread investment, and we have been able to achieve returns that are way above acquisition cap rates. Just looking at these names of markets and the returns, which are all of them in the double digits, when we compare them with some of the recent transactions we've seen in these markets, this is a strong statement that our strategy will continue to work. As long as we find markets where we can develop at a major spread, we will continue to do so and therefore, deliver higher returns and increase the value to our shareholders. Cap rates, we see cap rates still holding in the 6% to 7% range. And development yields above 10% gives us the right spread to drive net asset value and FFO per share growth. And lastly is the position that we are today. The company has evolved from a $2 billion in assets portfolio in 2019 -- 2018, sorry, almost $700 million of debt. We have maintained debt at a low level while improving and increasing materially the value of our assets, which is our investment properties. So we have almost doubled the amount of investment properties while maintaining a low leverage and low debt amount. This has come basically from the follow-on offerings we have done, some asset sales, and also from being able to manage our debt -- our leverage ratio is low from 35% in 2019 to 22% today, which give us ample room for growth. This has been a great ride over these 6 years, and I would like to appreciate and thank you for the trust you been have giving us, and the trust you gave us in 2019 that we were able to execute a successful plan. And today, I'm happy and honored to say that we have executed very successfully a plan over 6 years. And this, unfortunately, it doesn't end up here because we will listen and hear about the next 6-year plan, which I know that you are all curious about. So thank you very much for your trust. And I would like now, Gonzalo Morales, to talk a little bit about the business opportunities and outlook that will help us to pave the road for the next 6 years. Thank you.

Thank you, Loren. Can you hear me, well? Hello, everybody. It's a pleasure to be here. My name is Gonzalo Morales. And I've been -- I had the pleasure of working with best over the past 10 years or so in consulting strategy projects, one of them being the development of the Level 3 Strategy. And today, I'm going to talk about the outlook and the opportunities for Vesta. And starting with the basics I mean, as you all know, the fundamental drivers for industrial GLA demand are on the one side, manufacturing exports, which Mexico has a very dynamic modern and competitive manufacturing sector; and also consumer goods logistics, which we have also a growing middle class, growing population and still an economy that is still in a formalization process. So these are two robust drivers for long term that also are experiencing specific trends that we think are very encouraging and are here to stay for a while and are driving sustained growth in the markets. One of them, of course, nearshoring, which I'm sure you've heard a lot about. But we think it responds to global dynamics that greatly favor Mexico's location and Mexico's export manufacturing sector. And e-commerce, which along with the pandemic, the world changed, and we saw tremendous growth in e-commerce that will also keep driving demand. So if there's something that I want you to take out -- to take from today is that Vesta is standing on very robust long-term drivers that will continue driving demand beyond short-term concerns that we will also address in a moment. And if we see the most recent -- sorry, it's not working. Here, so if we see what's happening recently in these drivers, Mexican exports that you can see on your left-hand side on the top, have been growing significantly higher than in the past. We like a lot of that trend, and we think that response -- that is a response to strong growth in many sectors. The companies coming into Mexico, but also companies that are in Mexico that are growing faster and in more sectors. And e-commerce obviously, with the demand -- with the COVID pandemic was the largest growth, but it's still growing, and we'll talk a little bit more about that. But what I like the most is the graph on your right that shows that the market has been growing in the last 3 years in terms of GLA stock as much as the previous 7 years. And not only that, but all the while rents have been increasingly growing -- steadily growing at record levels, which at least I have never seen before. Rents in Mexico were always at $4.50 per square feet, and we have seen steady growth across all markets, on average, it's at $7 in Mexico. So going into export, manufacturing exports. There are some concerns. We share them, we are sensitive to them. And that -- but we think that there are reasons for optimism and we are optimistic about the future. We think that in terms of the USMCA, there will be the review when the time comes. But the fundamentals are there for great, for continuity and for a strength in North American manufacturing sector. There are some industries that are even of national security concerns, such as electronics and semiconductor industry. Those -- that's one of the industries that has been showing most promising growth. There is -- Mexico is a competitive market. The inflation is a key concern in the U.S. And we think that Mexico is part of the equation of controlling and having a stronger U.S. economy and controlling inflation and having access to competitive manufacturing. And also on the Mexico side, we think there's positive stands from the new government. There's always concerns or risks when government changes, but we hear the positive -- we think the messages are positive. They've been very vocal about their support for the USMCA continuity. They've been very vocal about the support for industrial parks. They recognize that Mexico's manufacturing activity is a key driver of our economy. And there's also been good signs in terms of energy. We'll hear a bit more about that from Diego. But there are clear rules to incorporate private investment, and that should also help support Mexico's growth. So a bit of information. Mexico is the largest -- the Mexico U.S. trade relationship is the largest in the world. A few years ago, that was not the case, that was China. And so it is a very big relationship only rivaled by that of -- between Canada and the U.S. And more importantly, it's a relationship that has been growing steadily for many years now. The trade in both directions of the border. This is for all goods, which are mostly manufactured goods, grow both ways and benefit both countries, and we have highly integrated value chains that we think will continue to grow in the future. Last piece of information about Mexico's manufacturing sector, which I think is very important to recognize. Not many years ago, transport equipment was the driver of Mexican exports, and it's really what the sector that moved the needle in terms of growth, if you can see between 2012 and 2019, the most dynamic sector was transport equipment. The most -- the largest Vesta clients were in that sector. The Bajio region was the most dynamic region. And that was a great, obviously, but we had a high dependence as a country and as a sector in that part of the economy. And today, we see encouraging growth in what we call the four key nearshoring industries. Why we call them the four nearshoring industries? Because these are sectors or industries that are large -- that represent a large portion of what the U.S. imports from Asia and China, and that they are relevant in this side of the world, but we have ample room to grow the share of Mexico and North America on those sectors. And that's exactly where we're seeing the fastest growth. And we think those are very encouraging signs that nearshoring is here and that it's happening. And in my opinion, we'll continue to do so. So we have structural advantages over China. I'm sure you've heard a lot about this. To me, the bottom line is that today, the total landed cost is lower to source from Mexico than from China, even without tariffs. The range is about 12.5% to 30%. That is the estimate from BCG competitiveness index. And we have a great strategic location. We're still in the same place with access to both oceans, with a large border, with the largest economy in the world. And what do we think will happen in the future? We think we will keep gaining a share in the imports of the U.S. And you can see -- you have here from 2002 to 2024, at the beginning, it was tougher times for Mexico in the early 2000s, China joined the World Trade Organization. And obviously, they were the driving force of the world. But Mexico has been quietly but steadily gaining share in the U.S. imports and more so in the recent years, and we think that will continue to happen. And as long as that happens, our sector will -- manufacturing exports should continue to grow. Approximately, we estimate that for every $1 billion of new exports there is a new demand for 2.2 million square feet, and that's fairly steady along the last years. And what does that imply? That we're estimating the market will grow in the next 6 years, about 226 million square feet that is in response to a growth in exports of about $110 billion that would come from an assumption that the exports from Mexico to the U.S. keep -- sorry, total imports in the U.S. keep growing at around 2%, and we are able to capture 18% of those imports. So lastly, about e-commerce also a big, big trend, I think it's particularly relevant for companies like Vesta because e-commerce -- large players are very relevant in e-commerce, and it is no surprise that they are very relevant clients for Vesta. And the keyword here is adoption. Essentially, e-commerce demands more retail space to sell the same dollar than traditional retail sales. And the information you see on the screen, on the left-hand side, you have countries with a more advanced adoption of e-commerce. This is e-commerce sales as a percentage of total retail sales. And you can see that more advanced economies like USA, China, South Korea have adoption rates of 30% to 40%. On the right-hand side, you have countries with earlier adoption. We have Argentina, Chile, Brazil, Mexico. Mexico is a red line. Currently, we stand at -- well, not currently. At the end of 2023, we stood at 11.5%. And obviously, after a period of huge growth during the pandemic, before the pandemic, we were at about 4%. So this has been great news for the industry. And we think it should continue to grow. I mean it's always hard to predict what will happen in the future, but we see a clear trajectory. And if we compare to similar economies, we think there is ample room for growth. And it's, if at all, conservative to -- we're thinking about a 15% penetration in 2030. And what would that translate to? We estimate that, that will be equivalent to a growth in total e-commerce sales equivalent to what happened in the last 6 years. Obviously, in the last 6 years, we saw a jump from 3.7% to currently 12% of share of e-commerce. So if we reach 15%, we'll have a period of similar growth in terms of sales, and that would translate to roughly a demand for 36 million square feet. So to wrap it up, two big drivers, two strong long-term drivers, which are exports to the U.S. We are projecting about $110 billion increase by 2030. We are projecting about a $30 billion growth in e-commerce sales. And we think these drivers will create about 250 million square feet of demand in the next 6 years. And a final note on that, perhaps some of that growth will be more in the later years. We'll see how things play out. If we're cautious, maybe demand will be -- or the pace of growth will be a bit slower in the short term. But we are very confident that when the dust settles, we are sitting on very strong fundamentals and growth will be in the 40 million to 50 million square per feet per year, which is what we've been seeing in the last years. So that would be all from my side. And I will pass it again back to Loren where he will talk to you about the important thing, which is what's next. Thank you.

Gracias, Gonzalo. Okay. Okay. So getting into the next 6 years. Fortunately, I have my team to help me out. And before getting into Route 2030, I would like to thank again the team for being here. I think that one of the greatest things of the Vesta Days or Investors Day is that not only are you able to see me or Juan or Fernanda, I think it's the ability and the opportunity to be here with different heads of different areas that actually make things happening in the company. We'll talk later about ESG. We'll talk later about energy, commercial efforts, communication. And luckily, you're going to be able to get first-hand information not only to what we will present -- be presenting throughout the slides, but also what you can be -- the information you can get throughout the discussions we can have later. Now how -- what does the next stage of the company look like? Well, first of all, we're happy to be unveiling our new strategic plan. We call it Route 2030. We always like to have names for our strategies and our paths going forward. Some people say, "Well, if it was Level 3, just call it Level 4." We'll say, "Maybe we can change it, maybe we can adjust." And we came out with a route that we'll -- we understand that like many other routes, there might be circumstances that the ride is going to be easier. In some circumstances that it's going to be a challenging, a more challenging ride. But in the end, we will get to 2030, and we want to make sure that we have a right path to get there in the best possible way. You might remember the different strategies we held in the last periods. We had the Vesta Vision 20/20. I think in 2014, it was the first time we presented a long-term plan, which was basically after we had our IPO and a couple of follow-ons, we wanted to focus on the quality of our portfolio. The Level 3 Strategy, we just discussed about the main objective of the Level 3 Strategy, which we were able to execute successfully. And now the Route 2030, the focus will continue to be on profitability. However, we consider that growth will come at a faster pace and will help us and support our growth, particularly in terms of revenues and FFO, where even that we're going to be able to grow from 40 million square feet to a little bit more than 60 million square feet, we're going to be able to double revenue again, as we did in the past, and we're going to be able to double our FFO, which is going to be a major accomplishment in the next 6 years. How are we going to get to those numbers? We have considered instead of the five pillars that I just briefly discussed, we will focus on two main avenues. And we're calling these two avenues the avenues for value creation. The first one being the existing portfolio that we have carefully crafted in order to be able to take advantage of value. Today, rough numbers in the portfolio has an estimated value of $3.7 billion. And we think that with certain adjustments that we will discuss briefly, we can have the opportunity to increase value on the existing portfolio. We estimate $600 million for a total portfolio of $4.3 billion. So the first avenue is existing portfolio, which has material upside potential. Secondly, Vesta's unique position to be able to capture value through development which is quite unique in publicly-listed companies in Mexico. We estimate to invest $1.7 billion throughout these 6 years, pretty much in line to what we have been doing in the last couple of years to get -- to develop 20 million square feet, 63 million square feet will be in total in 2030, and we will end up with $1.5 billion in increased value and $6.8 billion of total portfolio. The first avenue of value creation is clearly the existing portfolio. We believe that Vesta is the most modern portfolio. There is in current listed markets in Mexico. We have been developing most of it. We have selected the markets we want to enter. We have selected even sometimes the clients we want to have through a disciplined approach. And we have a strong focus on U.S. dollar leases, while -- particularly while many of our peers are making a big effort in order to have a bit more leases. We have almost 90% of our leases in U.S. dollars, which is a natural hedge to our international investors mainly. The locations that we have been able to develop have experienced major rent growth. Therefore, we think that a strong rent upside will continue to materialize over this period of time. So for that, we have a dedicated team focusing on the existing portfolio, renewing leases, finding for those vacant buildings, still the best clients and keep the discipline of having long-term leases, adjusted to inflation or above inflation in each anniversary and focusing on the investment-grade companies that will continue to grow through the existing portfolio. We will run over some of the -- so we will show you some examples of the current products we're developing as well as existing portfolio and how we will be -- we're going to be able to extract value through the portfolio. And secondly is, of course, the development program that we have established. Vesta has been very successful in identifying land, developing inventory buildings, developing the infrastructure focusing on the energy requirements that our parks require -- and our potential clients require. And we believe we have an advantage to many of other vehicles. We are very well capitalized. We have identified many of these markets. And we think that we saw only a matter of being able to continue tapping the potential demand there is in the market coming from either existing clients or new clients entering the country. We have been able to identify a strong pipeline on land as well as being able to achieve some land acquisitions, and some of them will be discussed by our team, some acquisitions that we have been able to do recently. These two avenues of growth will definitely generate increased revenue. So if you -- we only use this simple example. We can clearly see that there's two ways to deliver major rent growth. Starting from the right-hand side, Vesta is going to be able to get to almost $500 million in total rental revenue coming from the existing $250 million. The current portfolio, we believe, has the potential to add revenue by $68 million annually. And even we think that there could be a potential over the next years to get the additional mark-to-market. We think that this is a major driver of growth and major driver of value, and we will focus on getting this upside as quick as possible. But particularly, we believe that we will do it and considering that in certain markets, we are still seeing vacancy rates being incredibly low. We see limited supply in the market. But more importantly is limited supply where not only the buildings are state-of-the-art but have energy, and we will discuss about energy and how important it is when it comes to leasing our properties, and we believe we have a major advantage. And of course, part of the -- another important part is the growth plan, which will represent $170 million when stabilized, and both together will get us to the almost $500 million of rental revenue. So we have a clear path to continue increasing revenue through these two avenues. Talking about the second avenue, we will continue to develop similarly to what we have done in the past. And we have carefully analyzed our ability to develop in the -- what we can develop in the upcoming years, being very mindful of current situation, being very mindful of each of the markets dynamics. Some of the markets have experienced major net absorption. Many of them are at still record low vacancy rates. Some of them have had its own adjustments. And that's why we have defined a growth plan, which is particularly well defined in the next upcoming years in the markets where we can start buildings at a quick pace, where we can lease up according to market dynamics, but also considering that eventually, over time, we're going to be able to increase our pace if the market permits and if demand gets stronger. 20 million square feet will be well divided among the different regions that Vesta is currently operating. We estimate that $1.7 billion being still distributed well among the different markets where we think that by 2030, we will have a total portfolio of 63 million square feet, being in Tijuana, one of our main markets, 9 million square feet, 7 million being in Juarez, 7 million, Monterrey, Guadalajara, together with a couple of other markets by 13 million; Queretaro in the Bajio 14 million; and Mexico City and the state of Mexico and other submarkets by 12 million. As previously discussed, we will continue focusing on the largest markets, being Monterrey, Guadalajara and Mexico City, taking the longest -- the biggest part of our total investment plan. Almost 10 million square feet will be in these three regions. But we're still seeing strong dynamics in other markets like Juarez, Tijuana, Queretaro and others where we think that they will continue to see strong demand, strong industrial dynamics. And therefore, we are confident that there will be attractive opportunities in many of these -- in the markets where we are already well established. But of course, in order to be able to have a successful strategy and considering these two pillars or these two avenues, we have very important enablers, which are an advantage between us, other vehicles or even new peers or new competitors trying to enter the market. We already have a strong balance sheet, and we'll continue to strengthen it and I will discuss further. We will talk about energy later. We think that this is key in order to be able to achieve this type of ambitious growth plans. This is actually one of the main differentiators that a player like us might have. Our ESG dynamics are just part of the discipline that Vesta will continue to foster, and we have a very strong program, which will continue to give us not only an advantage when it comes to developing more sustainable buildings, but also in the capital markets. Our track record of more than 10 years will continue to prove that it's very helpful when it comes to overcome this type or to be able to achieve this type of objectives. And corporate governance and the management team. We think that Vesta has a unique strategy in terms of corporate governance. We have a board and corporate bodies that represent well the interest of you, shareholders. We have, not only at the Board, we have differentiated ourselves to many peers, not only in Mexico, but even in the U.S. where we have major -- a big portion of Independent Board members, we have increased diversity through women part of the Board. Also, we have been able to have increased nationalities in the Board, which gave us a better perspective on what's happening, not only in Mexico, not only in the U.S. but also in other parts of the world, which as of today is playing a more important role. Diverse in terms of age, length of service and even the experience of our Board members also in other Boards. This is incredibly helpful when it comes particularly to making important decisions on the company. We have different corporate bodies, and I will talk about the investment committee because I think it's going to be key for the growth going forward. The investment committee has been incredibly active in keeping that discipline where to invest, where we do a land acquisition, when do we -- what are the type of returns we should be focusing on. And we have very experienced real estate and finance experts helping us to shape the strategy going forward in terms of how we want to invest and focus on accretive investment opportunities. But of course, Corporate Practice Committee, being in the New York Stock Exchange, you saw, has been a major, major achievement for the company, a major milestone but requires also a more robust corporate governance, audit committees, ethics committees, debt and capital committees as well as ESG. We are incredibly active in the company. We think we're a reference to other companies in Latin America, and we can even say that we are even a reference into some companies in North America, particularly in the U.S. But of course, our local leadership is going to be -- is still going to be unique. We have presence -- we have had presence for many years in these particular markets. Adriana Eguia in Tijuana; and Mario Chacón, who is here today with us as Chief Commercial Officer in Juarez and Monterrey; and Adalberto Ortega, Guadalajara; Francisco Estrada in Queretaro; Juan Carlos Cueto also today in Mexico City. This is only to give you a reference how well present we are in many of these markets, which many of you have already been able to visit. But on the corporate side, we have a strong team in commercial, asset management, construction, finance investment. This is a very robust team. This doesn't happen from one day to the other. This takes time. And we can only say that today, Vesta has the most professional team there is in the sector. How is Vesta going to look like in 2030? Again, we're going to be able to achieve 50% growth in terms of GLA. We will double in terms of revenue as well as FFO, which is a material change or pretty much the same pace as we have done in the past. We will continue to increase asset value and, of course, continue focusing on net asset value growth. This is a graph that many of you remember, which represents well the main objectives of Vesta, again, will not focus on yield, we'll focus on total return. How do we achieve total return? By being able to grow FFO per share as well as net asset value per share. This is one that we have done in the past. So again, today, we are selecting these two particular metrics for our Route 2030 to be able to target $0.30 of FFO per share by 2030 as well as $5 of net asset value per share growth. This is helpful so that we can communicate where we're heading, where we're taking the company going forward. But also internally, every decision we make, every transaction, every action has to have a positive impact, either in FFO per share as well as net asset value per share. Well, before jumping into questions and answers, and I think Gonzalo, maybe you're going to be able to join me here today. I think that it's also important to say that this is clearly a strong base scenario that Vesta has using our expertise, using our track record, understanding the market dynamics. But of course, today, there might be many questions on tariffs, on USMCA, on what will happen with China and what will happen with even the political situation in Mexico. And we understand that there are many -- there could be potentially many scenarios. However, we think that Vesta has shown discipline in the past. Vesta has shown resilience. We know that things might need to adjust in time. But Vesta has the ability to adjust when needed. Vesta has shown resilience. Vesta has shown its robustness when it comes to making the right decisions and for that reason, we think that we're better positioned than ever. We understand the challenges will be ahead of us, but we're going to be able to overcome different challenges. And actually, in 2030, I'll be standing here and give you fantastic results. So thank you.

Thank you, Gonzalo and Lorenzo. Now we will open the floor for questions. If you have a question, please raise your hand. Pablo?

Pablo from Barclays. I have two questions, Loren. One is that if my math is correct, you are assuming that probably, you're going to spend like $80 per square foot in your development pace. How is that your land bank is going to be used? Because at $80 per square foot, I think you are putting also land cost there. So I wanted to see how much of that is already incorporated. That's number one. And the number -- my second question is about your rent increase. What are you doing differently to see that catch-up in rents? And why are you expecting that rent to happen if you have properties in North Bajio and to what part of that increase is going to be in that area?

Perfect. Gracias, Pablo. Well. Yes, we expect to invest $1.7 billion in the next 6 years. In some cases, we already own the land. But actually, we're going to be buying land in the near future. I think that Juan will present sources and uses for the whole plan. But I think that out of the $1.7 billion, maybe in the next 6 years, we might require about approximately $300 million of land acquisitions, which we have already identified. Maybe the number is not exact, but the point is that we will continue to buy land in the markets that we currently do not own. The reason in some markets that we do not own is because we have developed all the land that we have. And -- but clearly, as we have defined the markets where we want to be in some of these markets, we will continue to buy land, which is part of the total calculation. We currently have like $110 million of land. It's not a very big number. So that's why the most important number is from land that we're going to be able to buy in this period of time. In terms of rent increase, yes, we have seen major rent growth in all of the markets in Mexico. And we'll give you some -- Mario will give you some more detail on where we're standing today in terms of rent growth. But more importantly, we think that there will continue to be rent growth in some markets that have lacked the rent increases as some more mature markets like Mexico City, Monterrey, which have experienced major rent growth. So we know that there's going to be some adjustments in some of these markets. We think that some markets like Bajio could be representing between 10% to 20% rent growth in the next few years. That is quite significant. And that's coming mostly from a stronger pipeline that we are seeing in terms of demand and limited supply. And that immediately has an impact on rent increases. So the challenge is now to be able to get the mark-to-market on the existing portfolio as long -- as well as when to expect that the rents will continue to -- market rents will continue to increase in some of these markets. Yes, I think that, together with the rent increase question together with Bajio was kind of the explanation, Pablo. Gracias.

Perfect. Jorel?

Jorel Guilloty from Goldman Sachs. I have two questions, kind of follow-ups from what Pablo asked. So just digging a little bit deeper, and maybe I'm just jumping ahead from Juan's presentation. But the $1.7 billion, how is that split between debt equity and cash flow?

He'll give you the detail.

Okay. Great. So I'll wait till Juan. Looking forward to it. And so the other part is just digging into the contract structure. Is that changing in any way? Because I know that you have renewals on your contracts, and then those go at basically the same rent. So as you build out and you expand on the Route 2030, could we see that changing where like you go to 5 years and then automatic mark-to-market? Or just basically, will you change your contract structure?

Good. That's a good question. Well, it's not necessarily major adjustments. I think that there are certain adjustments that are kind of helpful, as you just mentioned, sometimes having the ability to get to mark-to-market. But I think that the main objective of Vesta is to continue to have great tenants and have long-term leases in U.S. dollars that are going to be adjusted to every anniversary, sometimes inflation, sometimes even higher than inflation. I think that will, in general terms, that will continue to be the same case. If there is a possibility to have certain clauses in the contract where we can jump in case the market rents increase too much. We try to achieve those, but not necessarily has been a major a change in the contract seed. And those type of clauses are more based on market dynamics. So I think that in general terms, we will continue to have the same focus on long-term leases. Thank you.

Anton? Yes.

Anton Mortenkotter from GBM. I mean if I'm right, I think, the number you're expecting for next year, at least in terms of GLA, I mean CapEx is going as expected. But in terms of GLA, it's slightly slower from the previous expectations we had. So I was just trying to understand. Does this attempt to maybe a different strategic approach towards where you are developing some of the properties, maybe you change a little bit your focus from the North to South Bajio, or is there any relevant change on that? And the other question will be, which do you think is the biggest risk about access going ahead for your development program?

Sure. Well, I mean, it doesn't change materially. I think that what we just wanted -- what we wanted to illustrate is that we feel more certain in the long term in terms of development pace. These numbers are not necessarily each year until 2030 very precise. But we understand how the next coming years might look like, and we just want to take a more conservative approach, considering that there will be some uncertainty, particularly next year. But still, we know that there's major demand, and we have a strong pipeline and we will continue to see some growth. So actually, so the plan, I think that it's more to focus on the long term without the necessity of focusing too much particularly on the short term. But being able to develop 4 million square feet in the later stage of the plan, we think it's something more doable. And however, if things improve and we need to develop more, we will continue to be active. As you might remember, we started building. It takes some time. We lease it up, then we try to start another one, and it's kind of a cycle. So if that cycle kind of gets faster than expected, we can address that particular pace as we have also done in the past. But we rather go the other way around, which is just lay a plan and if things go well, you can increase it later on. So that's why even the model looks a little bit more that way.

Gordon?

Gordon Lee from BTG Pactual. Two from quick questions, Loren. The first is, given the -- your geographic mix is very different from what it was or somewhat different from what it was 10 years ago. And if you look at your projected CapEx, it's going to shift a little bit more. Is it still reasonable to expect Vesta to develop a 10% yield on cost? Or is that changing just given the different geographic focus and what's happened to land prices and materials prices? And the second question is I'm curious, if we had held this event in May before the Mexican election, before last month or the election in the U.S., how different would these numbers have been? Or maybe put differently, how has your view on the outlook change in the past 6 months?

Great. So to your first question, I think, Gordon, we have been -- yes, we will continue to focus on development. And clearly, our geographic footprint has changed. Today, we might see each other more often in New York and Monterrey and Guadalajara and even in Mexico City or the Bajio. But it's part of the plan to be more in those markets, which are more dynamic, more robust. And I think that's exactly what we want to keep on achieving. And returns, fortunately, rents have increased a lot. And that's helpful when it comes to buying the right land even at a higher price. And the examples of Monterrey and Guadalajara, where we acquired land, what we thought, well, we're paying a little bit more, but it's the right land. I think that approach will continue to be there, 10% returns we have been able to achieve in the last year. I think this question was raised 3, 4 years ago and returns have been quite well. So we feel very comfortable, particularly knowing that cap rates are -- stabilized cap rates are low. I mean we just saw some cap rates in the 6.5% range, but some cap rates have been in the 6%. And if interest rates drop, there will continue to be spread. So another way to say it is that we'll focus on spread. If it's a 9.5% to 6.5%, it's great if it's in a great market. If we can make returns above 10%, which we have been able to do recently 11%, even fantastic. So I think the discipline of the company in terms of investment is here to stay. And the spreads are a result of that particular discipline. Well, I think our view, like all of you, has changed from May to today. So I think that we just have to be humble enough to recognize that things will change. How are they going, where are they going? We'll have to figure out, and we have to be opening up to adjust when necessary. And even my view today and in a couple of years from today might change, too. But in the end, I think that it's not about -- I think that we'll have to be careful on understanding that there has to be a long-term goal, long-term plan. We'll have to make adjustments over time in the midterm. But understanding that in this particular moment, there are several things happening and it's fair. And I think that Vesta, on that regard, will probably take a more conservative approach when needed, and I think that's what you want us to do so. But yes, definitely, I think our views are a bit different.

Rodolfo?

Rodolfo Ramos, Bradesco BBI. Looking at the 10-year projection that you -- or historical that you showed on occupancy, it's clear that you see an upward trend. When you think about the properties that you're having coming online, of course, all of this volatility around U.S. election and all these concerns, how bad do you think things can get in the short term in terms of that occupancy, given those commercial discussions that you're having? I don't know if you can put it like as a flaw or just on the short term, how much pain we see given all of this volatility that we've seen in the market?

Sure. Well, I think that -- I mean, currently, we're at very attractive levels in terms of occupancy. And that's why it was important to show the slide because I think that Vesta has been much lower occupancy levels. And frankly, it didn't have a major impact. Why? Because eventually, over time, good quality assets get leased up. When you have a good tenant base who constantly requires to expand it's easier to do a deal with a client that you already are dealing with. So over time, we feel very comfortable with the quality of assets we're developing. What happens, maybe it takes a little bit longer to lease. Maybe you need to give -- to adjust somehow or lower a bit the rent. So it's one of the gives and takes. So we have been over challenging times, not only over the last 10 years, over the last 25 years. And I think for that reason, we focus on the quality of our assets. We focus on the long-term leases. And we have a strong leasing team. So maybe ask that question to Mario and to Juan Carlos because in the end I think that having local presence makes a big difference when it comes to being the first one to be commercializing assets.

Perfect. Perhaps one more question Yes, go ahead.

[ Roberto Verthelyi, ASIMCO ]. I have a question. You didn't speak much about the dividend. Can you talk about where does that fit in, in your projections? And I have another question, which is as you see the market grow, do you see that an incremental demand for last mile type structures either in Mexico? And is that something that is a target for you as well?

Sure. Let me leave the dividend side to Juan because he will talk about the strategy on dividends later. And on your question on last mile, which is related to e-commerce, We have seen a tremendous growth in this particular sector, and I think Gonzalo can give a little bit more details. But Vesta has a strong focus on nearshoring opportunities, manufacturing platform and manufacturing and supply chain integration to North America that will continue to thrive a lot. But another strong tailwind is the evolution of e-commerce that we have experienced in just as short as the last 3 years. I mean Mexico, was a country that expanded the most in terms of Internet or e-commerce sales to total retail sales last year. So we think that -- and there's a lack of buildings for last mile, particularly in Mexico City, we just recently leased the biggest building in Mexico City at the highest rent, and that's a signal of how much interest there is from e-commerce companies to enter the market. So we'll continue to grow in last mile. And I think Juan Carlos will give a little bit more detail on what we are doing on that regard.

And just one more. When you lease, how many of those leases turn up that the tenant does significant customization on its own and how sticky are the tenants there for? I mean, you showed in the video a lot of robotic stuff and stuff, I mean, how much is that like prevent from them moving around and stuff like that?

Yes, it's big. It's very big the amount of investment that companies are doing, particularly when it comes to these type of companies. I mean talk about I mean, the Amazons, the Foxconns, Eatons, sometimes it's at least one time the investment on the building, and in some cases, 3 or 4x the investment of the buildings. And in some cases, we don't even get the numbers because of how specialized this equipment is. But definitely, stickiness is key. And that's why our focus in inventory buildings or spec buildings strategic so that we can anticipate on the buildings. The tenants take them, and we don't do any major investment inside of the facilities. We let them do the building. So you have the long-term lease, the U.S. dollars, the corporate guarantee, the investment-grade companies and their investment inside of the facility, which is supports very well our strategy and why we want this type of clients.

And I would add that in Level 3, there was a specific target to do less built-to-suit. So the building per se is very standard and much of the -- all the investment is done by the clients. So the building per se -- so that creates more resilient and more standard properties.

Now we will answer one question from webcast. So the question comes from Francisco Chavez from BBA. My question is regarding competitive landscape. If your peers have the same optimistic outlook for the industry, don't you think that competition will become harder? Any opportunity of seeing Vesta as a market consolidator?

Okay. Good. Well, I think that this is an industry where everyone wants to be in. I was just this last week at the AMPIP, which is the Association of Industrial Parks in Mexico, and there's way more players trying to play in this game. Why? Because out of the different business or asset classes there is in Mexico, the one that is thriving and will continue thriving because of the strong fundamentals in the industrial sector. However, many of our peers, they lack some of the things that we just recently explained. They don't have the track record. They don't have the balance sheet. They don't have the local presence. They don't have a strategy. And I think in that regard, Vesta has an advantage by having all of that. So you cannot only be optimistic in order to be competitive. It's maybe only one ingredient. But in the end, I think that it's a lot of work that is required in order to be well positioned. An opportunity of seeing Vesta as a market consolidator. Well, I think that today, the idea of the Vesta Day is to give more clarity where we're heading in the next 6 years. It has worked out in the past, have a plan, be able to execute, and we think that, that will have to continue to be the main strategy of the company. Execute successfully, and the rest, will only be opportunistic.

Perfect. Thank you, Loren. That closes the first Q&A session. Now we will continue with the commercial presentation.

Perfect. Gracias.

Hi, everyone. I hope you guys are having a good Thanksgiving week. And all right. My name is Mario Chacón. I'm the Chief Commercial Officer. And Juan Carlos and I are really excited to talk to you about the most dynamic and rapidly growing real estate markets in Mexico. And also to what we have been doing and we're going to do in the following years. We're going to start with a quick real estate market snapshot here. And a quick thing it's going to -- very clear, the trend is continuous upwards. And combined with the forecast that the team here just share, we think they're going to continue backwards. We had this little bit the slowdown during the pandemic, but we could -- it continues to go upwards. High absorption in prime areas like Monterrey, Guadalajara, Mexico City, the border cities in key industrial hubs are driven by nearshoring and expansions, expansions by companies that are already there and wants to continue. Tight vacancy rates in cities like Tijuana, Monterrey, Mexico City leads to higher rents and competition for space even though at the high pace of construction. The rise in lease prices and high demand markets like Tijuana, Monterrey, and logistics hubs like Mexico City, it continues and are becoming even more. Demand for high-quality modern facilities with advanced tech features, it's the one that -- are things that we have been seeing, automation, energy efficiency. Another factor that we have been -- that has been pushing up the lease prices are construction cost increases. The steel, concrete, inflation and labor shortages. There has been a segmentation of the market. Warehousing and distribution centers near urban areas have seen higher lease prices compared to more remote manufacturing spaces. The best example is Mexico City. [Presentation]

Monterrey is the largest industrial real estate market. Also know now as the capital of nearshoring. We entered this market at the end of 2019 as part of our Level 3 Strategy. One of our goals was to enter to the largest industrial markets, Monterrey being the largest one. Proximity to the U.S. is essential for the just-in-time manufacturing and supply chain, what some of our existing and future customer needs. Customer and key sectors that drives the industrial demand in a very diversified market, starting with automotive, with a Kia plant in Pesqueria, and a new plant of Volvo that was recently announced in Cienega in north part of Monterrey. Auto parts production for General Motors, Ford and all of them. Electronics, with a plan for LG and another one for Whirlpool. Logistics and distribution for e-commerce. Monterrey is the second most populated city in Mexico. During the last years, this market has been targeted by all the e-commerce players, Amazon, Mercado Libre and the Mexican ones like Coppel. Increasing focus on tech and innovation sectors, biotech, electric vehicles, that diversifies even more Monterrey's economy and drives demand for specialized industrial space. The skilled workers, especially in technical fields like electronics and automotive manufacturing, Proximity to the best universities of Mexico and Technical Institutes. Take the Monterrey, based from Monterrey, our Mexican MIT. It has great connection programs with industry. We are another, but much better, not better, the best real estate solution in the market. Our standards are easily aligned to any global cosmopolitan city, like Monterrey. Customer service with a local team with our own development team, property management team, and commercial team. Energy availability, the best location in any of our two parks for now, now with 0% of vacancy rate. The Vesta Park Apodaca, when we bought this land, and let me tell you how it happened. We found this -- we identified this piece of land. We knew that it was going to be the right one. And the owners, some rancher family, a local rancher family, they were not really convinced on selling. So we sat down. We talked, we negotiated and we convinced them. And we bought the first half in 2020. We immediately know that it was going to go fast and we decided to buy the other half of the land. It's in a very urban infill location, very close to the airport, a great connection to highways to the U.S. It's really the best corridor in Monterrey for industrial. The brokers call it the [indiscernible]. Labor pool right next to it, with 2.6 million square feet in 3 years with clients like Polaris, Walmart, [indiscernible] almost all pre-leased. Building 5, there is not even completely filled there yet. This one here. It was already pre-leased by Mercado Libre. We have been the most fast-growing developer in the area. The investment of this project is $210 million with a return of investment of around 10.7%. The plans of our Route 2030 is to stabilize our Apodaca buildings. Right now, we have three other buildings on construction right now, the three last facilities with a very active pipeline and already negotiated some of them. Developed 3.7 million square feet with around $310 million to get to almost 7 million square feet. [Presentation]

Tijuana is one of the oldest industrial cities in Mexico that adds great expertise in scale of labor, labor force, competitive costs, large supply chain and a very healthy diversification. A modern and efficient cross-border infrastructure. In this diversified market, we have been seeing new economic trends into tech, more specialized, also into tech health care sectors. In a market with scarcity of good land, we have found great locations over the last years. Also in a market with scarcity of energy, we have our own electrical substation, making our park one of the few with capacity to host clients with large energy needs. We are the largest developer in Tijuana. The plans for our Route 2030 is to stabilize the last Mega Region buildings. As we speak, we are negotiating a few of the clients -- of the deals in the last buildings over here. Also start the development of Phase 2 of Mega Region Park that we just recently acquired. Also well, the plan is to develop 2.4 million square feet by 2030 with around $230 million to get to 9 million square feet. [Presentation]

Juarez, also one of the first industrial cities in Mexico with the Maquiladora program, a program that was created for manufacturing factories, we do it in tariff free for their exports to the U.S. Skilled workforce, mostly in electronics, automotive and medical devices. Competitive labor cost compared to the U.S. Four of the five electronic contract manufacturers, Foxconn, Wistron, Pegatron and Inventec are building, the electronics mega here. Huge companies to combine them with the great supply chain that is located in this border land. Also continues to be a great hub for automotive, aerospace and medical devices. Efficient cross-border logistics with fast movement of goods is key for these players. The border markets are more influenced and correlated to the U.S. economy and politics. Despite the fact the industrial real estate market remains robust with a lot of requirements for specialized manufacturing spaces. We are the best park in the city, almost inside of the U.S., with energy capacity available. Now we are in the top 3 leaders in the market. We have been the most active developer in the border land. The plan for our Route 2030 is to stabilize the last Vesta Park Juarez Oriente buildings, which, by the way, a lot of companies, a lot of clients or prospect clients have their proposals on their table and they're ready to trigger the lease agreements. They're doing their maths to do this trigger. Nail down the next plant for the next Vesta Park. We are right now in the process of acquiring more land. Developed 2.6 million square feet with $225 million to get to over 7 million square feet. [Presentation]

Guadalajara has historically been a key manufacturing hub in Mexico, and this sector continues to grow, particularly automotive industry. This city's proximity to key automotive manufacturing hubs like Guanajuato and Aguascalientes has led to the growth of the local supply chain, with Guadalajara becoming an important location for automotive components and electronics manufacturing. Companies like Audi and General Motors have set up plants nearby, expanding further industrial development in the area. Electronics manufacturing, Guadalajara had long been known for its electronics manufacturing, particularly in the production of items such as televisions, radios and mobile phones. The city's facilities host companies like Flextronics, Foxconn and other electronic giants contributing to a thriving tech in the hardware sector. Guadalajara has emerged as Mexico's leading tech hub, often referred to as the Silicon Valley of Latin America. This is driven by the presence of global tech giants. Companies such as IBM, Intel, Hewlett-Packard, have set up operators in Guadalajara, attracted by its talent pool and proximity to the U.S. market. Additionally, new companies like Amazon, Google and Microsoft have been expanding their presence, helping foster the local tech ecosystem. Proximity to skilled labor force, also very well -- universities very known and important universities and technical institutes. In recent years, Guadalajara has transformed into a more diversified economy, transitioning from a primarily manufacturing-based economy to one with strong technology, creative, logistics and service sectors. Online retail has search with companies like Amazon and Mercado Libre expanding in Guadalajara. Being Guadalajara, the third most populated city in the country, the rise of e-commerce has fueled demands for logistics services, including last mile delivery solutions. Rising demand for large-scale facilities and also some characteristics different, a little bit higher ceilings, better docks, high demand for modern facilities, energy-efficient features, automation. With a very recent entrance, we are now one of the most active industrial players. The first developer to offer large-scale buildings, now with 0% vacancy rate. The Vesta Park Guadalajara. We acquired this great location right during pandemic, during challenging moments. But right after, we acknowledge that all the attributes we seek in this location were the correct ones. Mercado Libre took our first building and expansions, then O'Reilly, then DSB, Foxconn, which by the way, they have huge plans for this area. With 3.3 million square feet in the 3.5 years, it's been a great success. Here's the image of the time lapse of how it was developed. And we are very excited to announce that we just acquired a piece of land to develop Phase 3 of Vesta Park Guadalajara. We will start development immediately, two large buildings, two large-scale buildings of around 350,000 square feet each, and that will be ready by third and fourth quarter of 2025. The Vesta Park Guadalajara is an investment of $205 million with a return of investment of around 10.5%. The plans for our Route 2030 is to consolidate Vesta's position as market leader, develop 3.5 billion square feet with $280 million to get to almost 7 million square feet. Now I'm going to let you guys with Juan Carlos who will talk to you about two other very dynamic markets in Mexico.

Thank you very much. My name is Juan Carlos Cueto. I'm in charge of the Central Region. I'm going to talk about Queretaro as well. Francisco Estrada is in charge of that region. And I bring good news for you. Let's start with the video. [Presentation]

Talking about Queretaro market. As you can see, the vacancy rate here in Queretaro is 4.4% The vacancy rate of the Vesta portfolio in Queretaro, it's around 2%. What happened? We're performing better than the market. In this year, we just leased 700,000 square feet with 6 different companies. We took 40% of the market share in Queretaro, was took by Vesta. The 6 companies, two were automotive companies, two were aerospace companies and the two other companies were in the electronic sector. So very diverse portfolio. As you know. We have been here with Aerospace Vesta Park that is just next to the airport. And this park is 2 kilometers away from the airport, like 3 kilometers away from the main highway that goes to Mexico City. And the rent per square here remains in line with what the market has right now. And I think Queretaro, after the pandemic, slowed down a little bit. And then this year is picking up. So we are in a big market right now. The Route 2030, as you can see, we want to develop 1.9 million square feet by 2030 to reach a total portfolio of 8.5 million square feet. And we're going to invest $9 million (sic) [ $90 million ] in new developments. As I mentioned in the video, we have the optionality to buy land adjacent land is disposable, available, and we're negotiating in order to grow our GLA in this park. [Presentation]

I'm going to explain a little bit the dynamism of -- and where are these two parks. As you can see, Vesta Park La Villa is in the middle of Mexico City. Vesta Park Punta Norte is in the North. We're pretty close to San Martín Obispo that has been very successful. It's a public park that has clients such as PepsiCo, Walmart, Amazon, Samsung. Everybody wants to be in San Martín Obispo. But we got a better location than San Martín Obispo. San Martín Obispo has heavy traffic. Sometimes it's hard to enter the park. And we're just in pretty close to the periférico perfect access, and we have perfect visibility. What happened, everybody -- a lot of people commute from North to South Mexico, we're going to be seen in a daily basis for more than 1.5 million people, every single day. For us, this is a flagship, and we have leased these two properties. I'm going to talk about later of the case. The vacancy rate right in Mexico City is a historic vacancy rate, 2.3%. In the region, we have a vacancy of 0% fully leased in Puebla, fully leased in Toluca. And we are right now -- we have four properties in construction, two buildings in Punta Norte, one building in La Villa and another building in Puebla. We already pre-leased the two buildings in Punta Norte, and we have closed LOIs in La Villa and in Puebla. So we're going to be fully leased. So we have great news for the growth further in this presentation. We started this building in -- it was at the end of 2023. This location is known by the outlet, Punta Norte. And as you can see, there is two highways, periférico and [indiscernible] that goes directly to Toluca. That is in the outskirts of Mexico and where we have presence with 20 buildings. We overcame topographical issues because we have to divide the project in two different platforms. We have retaining walls, 30-meter retaining walls. So it was challenging, but we got a good project that we're going to finish in 2 or 3 months, we're delivering to Mercado Libre, the two properties that I'm going to talk about. The building in the bottom is for last-mile project for Mercado Libre. And the biggest building is going to be for a distribution center. They lease these two buildings at a record high rent. As you see in the last slide, market range around $10 per square feet. We leased it at around $12.5 per square feet. So we capture a lot of value. And in the Route 2030 highlight, once we stabilized Punta Norte and La Villa, we want to develop 2.7 million square feet to reach a total portfolio of 4 million. Two years ago, we have 250,000 square feet in Mexico City. We're reaching out today 2 million square feet, and we want to double that in 5 years or triple that maybe. We have an investment of $300 million. We have great news as well. We are in a process to acquire another plot of land in [indiscernible], close to Punta Norte, maybe this year to start construction next year. It's going to be about 25 acres. We're going to develop three buildings right away. And like what I mentioned before, we need to acquire land. The land is costly in Mexico. It's very expensive. And the carrying cost hurts a little. So we have to acquire, start development right away, lease it right away in order to be successful in this kind of primary market. And that would be all. And Mario is coming with some other information. And we're going to pass to the video, no? Yes. [Presentation]

It's our clients who can really tell the story of working with Vesta. Just to mention quick things about these clients we interviewed. Eaton, we have built four buildings in different markets during the last 3 years: in Juarez, in San Luis and Queretaro. Vishey has been our clients since 2006. In 2022, we remodeled their original building. and we leased them in new ultra-modern building right next to the original operation. Sage Automotive by Asahi Kasei in 2022 pre-leased our Building 5 in Vesta Park Juarez Oriente. Jaguar by Sumitomo. Sumitomo has been our client since 2007 in Sinaloa. This division came to Aguascalientes and leased one building in our Vesta Park Juarez Oriente. And a few months later, we replicated it in one more building in the same park. BRP, we have built two build-to-suit campuses from 2014 to 2019. One in Queretaro and one in Juarez. In 2019, they acquired from us these properties. In 2023, they came back to us with a new requirement, and we pre-leased one of our inventory buildings in Juarez for their distribution center. The industrial real estate market in Mexico has been resilient and continues to perform strongly due to a mix of nearshoring, increasing demand for logistics and e-commerce and the countries, the strategic location and trade agreements. Lease prices have been steadily rising, especially in prime locations due to a high demand, limited supply and construction costs. Absorption rates remained strong, reflecting to ongoing need for moderate, flexible industrial spaces in key markets. Our commercial team, Loren mentioned them. Adriana in Tijuana, Cesar in Monterrey, Adalberto in Aguascalientes and Guadalajara, Maria in San Luis, Francisco in Queretaro, Alejandro in Guanajuato and Juan Carlos in Central Mexico. In Vesta, we're working very hard in every phase of the process, from finding the right lot of land, having a unique position to sit down with the right and correct land owners, keeping good relationship with government, strong reputation. Strong connections locally. We become local. We are local. Develop the buildings where the market is thriving. We, our team, worked very hard to be close with the clients to understand their needs, help them start their operations, support their expansions. We are focused on attempt and catch the best deals, not only for our good, but it's for the development of Mexico. Thank you.

Thank you, Mario and Juan Carlos. Now we will open the floor for questions. Anyone has a question? Yes, Jorel.

Jorel from Goldman here. So just I have 2 questions. So we talked a lot about a potential development pipeline, but -- and I'm sorry if you said this before, but how much do you envision that as being build-to-suit versus spec of the locations you talked about? And then I just wanted to talk a little bit about demand. I mean there's been a decline in net demand in border markets like Tijuana, Juarez. And so I just wanted to get a sense of how do you view that demand because you have both GLA increasing because development pipelines are -- everybody is basically done or reducing development pipelines. And then there's the decline in absorption. So how do you think about those 2 markets specifically in terms of where they are in the cycle, when they can potentially inflect. Those would be my 2 questions.

All right. Well, let's start with the build-to-suit projects. Actually, during the last years, most of our projects start as spec buildings, inventory buildings. And we changed it to more like spec-to-suit. So it's not necessarily a custom-made building for the companies. An example is BRP. The BRP, this last building, we started the construction, and we adjusted some slight things on the building, but really still a very standard building. And that's what we do in the rest of the markets. Maybe this slight changes, I mean, are just, let's say, call it, tenant improvements. It's not really different than the standard ones. So that's what we have been doing during the last years. And about the Tijuana, Juarez market, I mentioned and border [indiscernible], border markets are very influenced by the U.S. And we have identified that it's very cyclical. It's very cyclical. And also very influenced by certain industries, let's say, automotive. And what is really interesting about us is how our markets complement because right now, let's say, border markets are not really strong or really active, but we really expect to be very active in the following months. But at the same time, right now, Bahia markets are very strong. Mexico City is very strong. So that's how it is. And we like how all the markets complement each other. So -- but I think we can expect the start of the year having more activity in the border markets.

Pablo.

I was wondering what are the clients telling you about the uncertainty that we're seeing in terms of the U.S. MCA review tariffs, Mexico judicial reform, all that noise that we see in the market, I guess that you have a pretty good sense of do actually tenants care what they're saying about the plans. I don't know if you can share some color would be great.

All right.

Okay. We have great news because we signed a contract, for example, with MAHLE after the Mexico election. We started signing LOIs for [ Lavia ] after the Mexican election. So for consumer goods, logistics and e-commerce, they won't stop growing. They're keeping a pace, and they're going to continue to do that because it's the essence of their business. For example, Mercado Libre leased 5 million square feet in 8 months. We captured 1 million out of 5 million. And rather, we have noises here in the U.S. or in Mexico, I think for the logistics and for the e-commerce companies, I think they don't care. Maybe we'll -- that will impact the manufacturing maybe somehow. So -- but for Mexico City, I think, we're in a good path, and they're just keeping growing.

And to add a little bit more about the manufacturing. What do we hear from the clients, or customers or prospect clients, they -- some of them, they prefer not to say anything. Some of them, they just say that they're under review. And they're -- what I really think and what people inside can tell us a little bit more is that the're analyzing and seeing all the scenarios of what is happening for them to manufacture some goods and bring them to the U.S. How it's going to impact there's some -- changes in tariffs. And by the way we lived it already when the President Trump came to the first time of the -- his administration. And it ended very well for Mexico. And I think right now, we think it's going to be similar. The war with China still helps Mexico. But -- and what -- and we can share what we can feel, and that's part of what we see.

Lisa Campbell, [ Louis ] Corporation. I have 2 questions. One was just from the video, I noticed that one of the -- one of your clients commented on having the power source near that particular facility. So thinking data centers, I know it's different, but how much of a factor is that power source for some of the others, if you're buying new land or developing something new. How does that play into local municipality and so forth and how big of a deal is that? And then the second question is from a design perspective, I know these are boxes, and they can be tuned in. I mean, I'm not trying to -- some has 2 floors, some not. But how do you think that design has changed from, say, 10 years ago? And how could it potentially change going forward with AI and different ways of manufacturing. In other words, I'm getting at obsolescence at what point, even though it's a really young portfolio, does the tweaking to it changed enough that it makes it more difficult out into the future.

Okay. Let's start with the energy one. And we'll have Diego talking about our energy program in a bit. But I mean, either way, I think it's very important. We -- it is -- we consider and we started the assessment since we are looking at the land. And we start the -- all the investigation about if there's an energy visibility for that piece of land, since before we acquired that land. And if there is or if there's not, we start the process with the CFE or [indiscernible], which are the government entities for this item. And we definitely are very focused on that part. We know how important it is for our clients to be ready for them to start their operations. So in some parts -- in some land lots that there's not, we start the process before even we acquire the land. So in most of our projects we invest a lot on energy. And definitely, it's one of our advantages from being in some of the markets. We see that in Tijuana, it's more difficult to find, but that's why we built our own substation. In Monterrey, there's some we've invested to bring the grid to the park and have the energy there. And same thing in Guadalajara in Mexico City. So it varies a little bit. But I mean, at the end, it's -- we're very focused on that, okay. Second -- designs. Yes. And also Diego can explain to you a little bit more on the design, the development part of it. But I mean, what I think it has been changing through the years. It's -- I mean the height is definitely one of the things. Companies are -- I mean, we've seen that companies are trying to store and put their goods in a higher ceilings. But either way, it's not that different from the years back. One thing, it's automation. Automation is one and what takes you to -- I mean, that bring us to more energy. So maybe more energy to the future. We will need more. We will need more. And I think that's one of the things that Diego will probably can explain a bit more on that.

And regarding your first question, what we do right now is we signed a contract with CFE in order to keep the KVAs. And we just gave it away for temporarily for the term of the lease. And then the client, it was back the KVAs. 10 years ago, it was the opposite. They hire everything, and they just signed the contract with CFE and sometimes we're still losing the KVAS. So right now, we have control over the KVAs. So I think we cover certain areas with that.

Thank you very much for having me here at the event. I just came back from Miami, can't get the away with Genesis Ventures. I think actually, Mexico is going to benefit a lot. Just coming back from Cantor Fitzgerald event in Miami. So I think this is a positive movement in your direction. I was happy to see you're doing some work in medical industry, medical technology, as well as AI. Two-part questions. Actually, I want to piggyback from the [ Cali ] question earlier. In terms of what we're seeing from our client base across supply chain, how are you able to digitize your operations -- and when I say digitize the operations, a lot of clients are looking at big data, mainly behind location intelligence. And two, the other part of the question is what industries are you getting more involved in? What we're seeing on our end other than the energy and the big data centers, we're seeing a lot in the space technology area. So some of the discussions were whether or not we use operations outside of the U.S., Mexico is a logical location. What are you doing in that area? And do you get clients in that particular industry?

Sure. Starting with the information we have about -- of the supply chain and it's -- and for medical devices, I mean what we see is definitely a more robust supply chain in certain markets. And let's say the ones who has more history, you definitely have more supply chain. And in terms of -- I don't know if it's true that -- but in Querétaro, we have sold some pieces of land for data centers. And we supply the energy for them. And it is inside of our park in the Vesta Park Querétaro. And we have Microsoft, S&T and one more. But I mean that's -- I think that's one of the things that we've seen. They're not really our clients because it's -- they're not our wiliness because they are too specialized, are too specialized, and we prefer to sell the land to them and so they can build their own buildings, okay. I don't know if that's part of what you're referring to. But I mean that's what we see from our side as developers. Okay. And the other question was -- what was the other sorry.

Yes, the types of industries in terms of advanced technology, space technology, artificial intelligence.

Electronics. We are seeing a lot of electronics in certain markets, Guadalajara, Tijuana, Juarez and some of them -- and you probably heard of it, but we haven't seen companies that are trying to manufacture semiconductors in Mexico. So that's one of the things that we're looking at right now in Guadalajara, and there is a big project there right now. So we hope we can foster one of these projects. So yes.

John Haskell from Atla Capital Management. Good you see you Mario, and the whole team. I have a question about rent rate growth. So there's been astounding increases in rent for the system and for you in particular. And so what is your feeling on the ground with clients as to their ability to absorb these price increases in the future? If I think of another asset class like retail, there's occupancy cost, right, as a metric that is a pretty good guide of whether the developer is taking kind of the right share of the value chain overall. So where do you see as a developer and industrial sort of rents stabilizing at a more -- at the right equilibrium, is the client base stretched or not just from what you see in your conversations? And how does Mexico rent rates now compare to kind of key comp markets, either domestic U.S. or other EM markets?

In terms of the lease prices, right during the pandemic, we noticed that companies were very analyzing what was the impact on those increases. And it took longer to decide back then. Right after, it changed, and they knew that they had to, they had to. So -- and I think that's what we keep seeing right now. They have to. And it continues, but not as the jump we had during 2020. But it continues a little bit on the upward trend, yes. But I think that's what the -- and that's what we hear and that's what we see on our leases.

Yes. And regarding Mexico City, in 2022, rents rose maybe 15%. Last year was a huge jump, 40% and -- what the Brooks community is saying right now is that maybe this year, we will get another 10%. And then maybe rents will stabilize in the future. I think so. What we see right now, for example, in the different markets inside Mexico City is because companies are flying to quality. You can -- if you compare, for example, infill locations, to the locations on the outskirts, maybe there is a 60% jump. It's amazing. And companies are willing to pay because they don't have to -- maybe transportation costs are more efficient if they are inside. The traffic normally in Mexico City is heavy traffic. The community is pretty long sometimes. So they are looking for quality products and for quality locations. So -- if you ask for this -- you can provide them with these kind of locations because we have a scarcity of land as well, it's almost impossible to buy maybe 50 acres in Mexico City. You have to buy maybe 25, another 25 here, another 25 there. So we have to be very picky on that. But I think we have a lot of opportunities and maybe also the old facilities like we did in [ La Villa. ] We bought an old facility. We demolished the facility and then we start a new project because you redevelop. So I think this is going to be the business for the next couple of years.

Perfect. Now we will continue with some virtual questions. For our in-person audience, note that our management team will be available for detailed questions in the cocktail session. This question comes from André Mazini from Citi. Would you consider having JV partners at the asset level in order to fund growth with a third-party balance sheet, so to speak.

Juan says he want to answer that later.

Andres, Juan will address your question later on. We will continue with Diego to energy. Thank you.

Thank you so much. Thank you so much, Mario and Juan Carlos, I think that the testimonials were also very inspiring and as one of them mentioned, Mr. Furukawa from Sumitomo, which was a great experience we did, not just we did a first project, they expanded, and then we did another project for them. So I think growing with the tenants and having this great commercial relationship with them has always supported our growth. And well, my name is Diego Berho, I lead asset management development and construction. And today, I would like to walk you through the opportunities that we're seeing in energy infrastructure for industrial real estate in general and in particular, for Vesta as we focus on how we can leverage our ability to access power for tenants to further underscore our competitive advantage. Now in 2016, we led our industry when we established a dedicated team anticipating potential bottlenecks ahead from the surge in demand and also from the restructuring of Mexico's Federal utility company. Today, we have a well-defined energy program that I'll speak about in this presentation as it involves first, anticipating access to power, to propel our continued growth; and second, decarbonizing our portfolio through our clean energy use. Now securing access to power for development projects has become a priority across the world of real estate. And Mexico is no exception. Grid congestions and interconnection queue have been -- have posed challenges to all the underwriting processes that we've had. So Vesta has anticipated these challenges -- and what -- and these challenges we're seeing in the market, ensuring that our tenants have immediate access to capacity through our micro grids, which I will explain a little later. Vesta smart meter solutions, have enabled us to leverage historic data so far. And today, we can monitor and gather data for 100% of our portfolio. Now in terms of clean energy, Renewables play the most important role in our approach to decarbonization. Vesta is benefiting from a first-movers advantage in having already negotiated energy contracts with our tenants. And the media program rollout has factored in the complexity to supersede technical, commercial and legal barriers while aligning Vesta and our tenants' sustainability objectives, within the appropriate regulatory frameworks. We're, therefore, unlocking value through reduced cost of energy, increased attractiveness and leasing volume and also benefiting from Vestas resulting access to sustainable finance. Now I'll try not to get too technical while illustrating how micro grids offer a compelling solution that simultaneously addresses multiple challenges. Today, most of our buildings are within a Vesta Park. This approach has allowed us to cluster properties and provide a unified standard for our assets. At the same time, we're able to integrate the park with an electrical microgrid, which is a small-scale private distribution network, which is connected to the national grid. Now one of the most important benefits of microgrids is their ability to simplify regulatory compliance by aggregating capacity to demand and preserving and presenting as a single user to utility companies, we can significantly streamline the application process as it also -- and it also results in more flexible terms from the utility agreements. From a business perspective, the benefits are also substantial. Picture a tenant moving into a property and instead of navigating a complex process with a utility company, instead, the tenant gets immediate access to our power through our plug-and-play microgrid solution. Moreover, microgrids offer unprecedented flexibility in the capacity allocation across buildings and tenants and adapting to future market conditions. But perhaps most importantly, microgrids preserve long-term value -- long-term asset value because we can maintain the power at an asset level and making properties more attractive also for second-generation leasing. The technical advantages of microgrid are particularly exciting. Through sophisticated management systems, we can maximize the capacity utilization within the grid and more effectively integrate distributed energy resources such as solar and storage solutions. And our submetering systems provide unprecedented transparency, allowing users to monitor and optimize their energy consumption in real time. In our commitment to sustainable development, microgrid serve as an open system, ready to integrate local renewable resources and encourage other initiatives such as electric vehicle fleet adoption. And this infrastructure also positions us to purchase off-site clean energy supply, significantly contributing to Vesta's decarbonization goals. Now Mexico's energy landscape is experiencing a transformative shift. The new administration has unveiled a comprehensive energy plan that at its core, the plan opens door for increased investment across Mexico's transmission, distribution and generation infrastructure. What makes this particularly significant is the administration commitment to renewable energy, targeting an ambitious 45% share in the national grid by 2030. These policy changes will accelerate Vesta's power access capabilities and our clean energy initiatives, ultimately strengthening our ability to serve our clients while advancing in their decarbonization objectives. Now we have identified the key intersections where our energy team supports our development and marketing capabilities. I will use a fictitious Vesta Park X to better illustrate how our process works. Now even before acquiring a piece of land, Vestas preconstruction teams have assessed and anticipated energy demand and timing and immediately engaged with Mexico's utility company to ensure the project's feasibility and the economic viability. For Vesta Park X, with 1.5 million square foot of GLA and probably 6 tenants, we would require roughly 9 megawatts of power. Historic data and site-specific criteria enable us to have a much more granular approach to when and how much capacity should come online. Before even breaking ground, our teams would have already submitted an early application to utility. Now during construction, we prepare for the interconnection process and begin procurement and CapEx for long lead items while ensuring that the interconnection works that apply are properly negotiated with the utility planning division. The utility planning division assesses the project relative to the grid and therefore, assigns the interconnection works and reinforcement work that needs to be done and coordinates with other stakeholders in order to execute these works. For Vesta Park X, our team would have procured the required capacity and coordinated about $10 million in interconnection investments and distribution network, which have been budgeted into the parks infrastructure. The timely delivery of the expected works is key for the pre-leasing stabilization process. Finally, we work with our leasing and our investment teams in order to do the planning, the pricing and the managing of the allocation of the capacity to satisfy the project's immediate needs, but also to guarantee sufficient capacity for future growth and also negotiate signing the power purchase agreements with the tenants. For Vesta Park X, our energy team would have a proactive role in the tenant negotiation, allocating capacity and also proposing ramp-up scenarios for them in order for their production to become live in an effective way. Now usage fees have been very common, but we use them mostly to avoid tenants speculation of capacity needs. And once the project is stabilized, the project goes online, and then we can start generating revenues. As I noted earlier, Vesta's dedicated energy team has over 8 years of experience proactively ensuring tenants access to power. We've secured 146 megawatts of power and invested around $100 million in reinforcement works, transmission lines, interconnection substations and distribution networks as part of Vesta's Level 3 strategy. For Vesta route 2030, we include procuring about 120 megawatts of additional capacity in line with our growth targets. To be more specific, Vesta has allocated 90 megawatts of capacity to date and has 56 megawatts of available capacity dedicated to our immediate development pipeline alone. Importantly, this underscores our ability to ensure energy for sustained logistics and light manufacturing growth. We're committed to our portfolio's on-site solar solutions to achieve 50 megawatts by 2030. We are able to unlock further value with this from our existing assets and this is what our Clean Energy initiative encompasses. We have clearly identified those projects that are prepared for behind-the-meter deployment, and this includes 15 Vesta Park microgrids as well as 25 stand-alone buildings. In terms of operations, today, we have 9 microgrids connected to the utility and 60 power purchase agreements active with tenants. By 2030, we expect to have 25 operational microgrids and 160 power purchase agreements with our tenants. And as we continue on this path, we're building out our energy team and the overall energy-related capabilities across the company. Further, we will build upon our already outstanding reputation, actively engaging in institutional working groups to further strengthen our relationships with local authorities. It is in order to stay ahead of the planning and regulation curve that we foresee in the near future. Data will become increasingly relevant as we scale these projects and providing us insightful information about our portfolio that can help us further with underwriting. Finally, Vesta is always innovating. We're exploring alternative energy solutions such as on-site gas power plants in order to bridge any potential interconnection delays and to serve as future backup for redundancy power. And our qualified supplier status allows Vesta microgrids to access alternative energy suppliers and enables additional offsite clean energy from a greener grid. All of the above optimally positions Vesta to support and facilitate our clients progress towards Scope 3 decarbonization. The program underscores that our platform is uniquely positioned to anticipate market dynamics and also to meet our clients' energy needs. Now let me share with you our Tijuana case study. As Mario mentioned in his video about how the process was. This, I think, is a better way to illustrate how our success in securing power for this specific project can provide a lot of value. So Vesta has the largest footprint of buildings in Tijuana and has active -- has been active acquiring and developing projects for almost 20 years. We are able to anticipate real estate demand and energy requirements through our deep understanding of submarket dynamics. Vesta Park mega region began in 2021 with 6 buildings, which were finished this year. We began the conversation with the utility company even before breaking ground. And given past experiences, we were able to sit down with them and analyze interconnection alternatives, run impact studies and define the reinforcement and interconnection alternatives and the works that would work for the utility, that would fit our development schedule and that would be economically viable for the development of the project. The best solution in this case, as you can see, it was a high-voltage interconnection through a 15-megawatt substation. Our teams were able to accelerate the project's initial phase, simultaneously securing a mid-voltage bridge solution, ensuring immediate availability was critical to our successful pre-leasing of the project. While negotiating with the utility company, we conducted our design and procurement processes, selecting the contractor on time in order to overcome potential supply chain issues, achieve the rights of way in order to get to the substation and have the transformers ready on site to meet with the predefined deadlines with the interconnection queue, followed by commissioning to go online. Successfully securing power also enabled us to confidently increase the project's footprint. We recently purchased land here in order to duplicate mega regions size over the next years. Today, we have 2 available buildings and 6 more to come and to be developed with ensured immediate access to power. This next case study is a pilot project for clean energy. For this pilot project, we wanted to demonstrate Vesta's on-site solar solutions rollout, creating immediate value. We chose a small-scale Vesta Park located in Monterrey, of slightly less than 500,000 square feet, which Mario presented because it's very urban infill and has 4 tenants, 2 of which are e-commerce tenants. The project is fully leased and Vesta manages the meters within the microgrid. And they already have power purchase agreements in place. Now we wanted to simplify the complexity of renewable energy supply for tenants. And therefore, their energy contracts will remain unchanged. We planned our leases to ensure roof access in order to deploy solar. And these 2 buildings are LEED Silver certified, which, among others, guarantees the building's energy efficiency performance. We're leveraging smart data from the microgrid for the conceptual design. And after a thorough engineering process, the solution will include a 1.2 megawatts of on-site solar, storage solutions for intermittence and electric vehicle charging stations for the fleets of these e-commerce tenants. The project is expected to be online by 2025 and provides tenants with more than 35% of on-site renewable energy at the same price as their current rates. In economic terms, we are expecting to invest about $1 million to deploy this pilot project, which should achieve immediate returns in line with those of Vesta's investment guidelines. Now Route 2030, therefore, ensures that our strategic approach to energy remains an important differentiator, creating value to our tenants, to our assets and to the communities. And with this, I will leave you with Laura who will talk further on our ESG objectives, and thank you very much.

Thank you, Diego, and good afternoon. My name is Laura Ramirez, I'm the ESG Director for Vesta. There has been growing support and a recognition of the importance of companies focused on ESG, including long-term value. Today, ESG has proven critical and essential to resilience and long-term recovery while also enabling certain companies to take the initiative as leaders, recognizing that their long-term profitability can only be achieved when they invest in people, in environment, and work transparently with a focus on their stakeholders' interests. Vesta was an early adopter of ESG protocols, recognizing our responsibility to elevate the standards. Vesta's ESG commitment is therefore a critical component to our long-term vision, working with our different stakeholders to incorporate ESG throughout our core business as part of our corporate culture. Our areas of focus related to ESG have evolved over time, ensuring that today, these are integral to our day-to-day operations. This process cannot be implemented by just one department of the company. We require all the departments on a daily basis. ESG therefore is deeply embedded throughout aspects of all of the company from the Board of Directors to the smallest department of the company. We've made considerable success since presenting our targets to you at the 2022 Investor Day, and I'm pleased to share updates and to share out our updated ESG strategy. We began implementing Vesta's ESG program and related initiatives 13 years ago and have since built what's widely considered to have a strong ESG program, which we continue to expand and improve based on national and international standards and led the best practice in the industrial real estate sector. Turning to our accomplishments related to Level 3 strategy in the governance and integrity pillar. When we refer to investment, we are aware of the importance of the environment and the community and the relevance in the decision-making process. That's why 80% of our investment decisions by year-end 2024, are based on the UN PRI guidelines, and we have targeted 100% compliance by the end 2025. Our suppliers are also a key component to achieve our ESG strategy targets. That's why we ended 2024 having exceeded this KPI by establishing ESG commitments with more than 50% of our critical suppliers. At Vesta, we are convinced that diversity enriches decision-making, which is why we seek to promote diversity on our Board. As Lorenzo mentioned, we are above our Mexican and U.S. peers regarding Board diversity. It is for this reason that we will end 2024 with 3 women as proprietary members of our Board of Directors. Based on these results and new ESG trends, we define the following: KPIs for 2030. We are aware that ESG topics are the responsibility of all departments of the company, which is why 100% of our senior management and employees' financial compensation will be linked with ESG objectives. ESG topics must be considered from the highest levels of decision making. Therefore, we are going to train in ESG aspects to all of our Board members. And we are going to reduce the salary gender gap by 8% in the executive level and 5% at the management level. For us, people are very important, which is why we promote human rights inside and outside of the company. As well, we recognize the needs of the communities to turn them into opportunities for collaboration. I am glad to share with you what we have achieved in the Level 3 strategy, mainly in the social pillar right now. Strategic partnerships have raised more than $1 million, which has been directed towards Vesta's ESG projects. This includes stakeholder partnerships as well as the Vesta Challenge Charitable Cycling event. With these additional funds, we can multiply the impacts in the communities and we could reach more people. Although we know that we still have a way to go in terms of salary gender gap. We have reduced the salary general gap by 50% in the executive level and 5% at the management level to date. Based on these results and new ESG trends, we define the following: KPIs for 2030, which translate into strength our strategic alliances, the NGOs, by auditing and developing them, involving employees and family members through a professional volunteer program, implementing impact measures in Vesta's social investment projects. And finally, we will develop process where human rights, the community, the vulnerable groups and security are considered in our daily operations. As an industrial real estate company, we know the role we play in caring and reducing our environmental impact. The real estate sector consumes 60% of global energy. And in 2021, it was responsible for 37% of carbon emissions relating to energy production. Therefore, we have developed different activities related to preventing and mitigating our impacts. Among these are regarding our climate change strategy, we've completed our initial emissions inventory, including all 3 scopes. We identify all physical and transitional risks to determine mitigation and preventing actions based on TCFD and IFRS standards. And we are finishing our first biodiversity analysis aligned with TNFD. Regarding Vesta's green certification KPI. By 2023, we have already exceeded our stated commitment having achieved green certifications for 28% of our GLA. And regarding our final 2 KPIs, we remain focused on mitigating energy, water and waste to ensure we meet both objectives by 2025. These actions led to creating the basis to strengthen our initiatives in environmental aspects, among which are, established our net 0 commitment, prioritizing achieving net 0 for Scope 1 and 2 emissions by 2040, and achieve a material reduction in our Scope 3 emissions related to tenant energy consumption as well through increase of use of materials in our construction process with a lower carbon footprint towards 2050. Okay. We are going also to have ecoefficiency operations in 100% of our Vesta Parks. This means that they should comply with ISO 14000. We are going to promote a positive impact on nature in accordance with recommendations of TNFD. And as part of our decarbonization plan, we are going to install 50 megawatts of on-site solar capacity by 2030. Our 2030 ESG strategy also includes an additional sustainable business pillar. This considers specific portfolio actions that strongly demonstrate the extent to which Vesta ESG strategy permits through our business key operations. This translates into the following actions: promote the use of green lease in our new contracts, continue working with our stakeholders, meaning employees and suppliers and we plan to achieve 55% of our GLA with the green certification by 2030. With all these actions and efforts that we have been implementing during all these years, we proudly shared that we have been recognized by different international ratings for our ESG performance. Let me share with you the results of the 3 most important ratings that we were part of in 2024 and Vestas comparison with our main Mexican and U.S. peers. MSCI, Vesta is among the leading companies, having achieved a AA rating for second consecutive year -- well, for the second consecutive year, with AAA being the highest rating. Sustainalytics, we are considered a low-risk company regarding ESG. S&P global provides in a depth assessment of a variety of areas related to ESG. Vesta's grade of 63 points out of 100, 100 being the highest grade, enables our company to be included in the 2024 S&P Yearbook. We also have received outstanding ratings grades from CDP for our climate change strategy, GRESB for our portfolio management and UN PRI for our responsible investment process. ESG actions are no longer an option, but rather requirements for companies to succeed and operate in today's world. Companies that set the agenda for climate resilient growth are more attractive as investment prospects. Therefore, Vesta is probably committed to ESG initiatives. Thank you. And let me turn our discussion over to our CFO, Juan Sottil, who will continue our conversation by sharing his financial perspective.

Thank you, Laura, and thank you for explaining to us the importance of ESG, which is a key component of our strategy. As you may know me, my name is Juan Sottil, I'm the CFO of Vesta. I would try to do this quick and dirty so that we can finalize the presentation. Jorel, you asked about our sources and uses of funds. So let me go deeper into that. As you can see, we plan to invest $1.7 billion over the next 6 years. A significant part of it would be in income-producing properties, which we plan to deploy as the plan goes along. There will be some land purchases that we will do. We're historically low on land. Land has been fluctuating typically between 6% to 9% of total real estate assets. Right now, we're way below that. And I would expect that next year, we'll have a significant investments in land reserves for our business. If you go to the right-hand side of the chart, you can see how we're going to fund that. We basically have a very strong balance sheet, and we will take advantage of that, a strong balance sheet. By issuing about $1 billion in debt. And there will be some -- if you take into account cash on hand and some property recyclings, we will continue to grow the -- we will continue to fund the company. If there is an opportunity, of course, we will issue equity, but right now, our -- we will focus on debt expansion for our funding. Furthermore, about 60% of our capital requirements will be funded by debt, as I explained. We're very mindful of the -- a strong balance sheet that we need to keep. Therefore, we're focusing on loan-to-value of 30% and net debt to EBITDA of 3.5%. We have touched upon -- you asked about a dividend policy. Dividend policy is an important part of the total return for our investors. We have never been the highest dividend payer in Mexico, nor do I expect that to happen, but we will pay dividends as an integral part of the total return that we will offer investors. However, we expect that the stock appreciation will kick in and do that gap. We are a very carefully managed company, we're very conservative, but we're opportunistic company as well. In that respect, if we see the stock market mispricing what we believe is the fair market price of our equity, we will implement as we have been doing so over the last 6 months or 4 months. We have been very active in stock buybacks, and we will continue to do that when we see the opportunity. I think that's a great way to improve the returns to our investors over time. We're very mindful of returns on our investment. And we have shown this graph before. If we update this chart to what we see happening over the next 6 years, we will be investing $1.7 billion. We believe that these incremental investments will be worth about $2.3 billion by year 2030, and therefore, we have a significant value creation over this period. And this is what we are committed to do for our investor base. Really sharp and strong profitability over the next 6 years as we have done in the past. I'm going to double-click on this long-term profitability. You have seen this chart on Loren's presentation. We're showing this again with a twist. We're doing it on a relative basis. So we're comparing Vesta performance on our 2 main metrics, profitability metrics, FFO per share and NAV per share. FFO per share, we compare ourselves to our main peer, and we don't know who that is, I guess. And well, over the last 10 years, we have grown at a 10% CAGR on FFO per share, and we far outpaced what our main peer has done over the same period. Furthermore, if we extrapolate, as we grow the GLA on the horizontal axis, we expect to grow FFO per share on a CAGR of 10% over the next 6 years. That's a significant objective that we have, and we plan to meet it. If we go to NAV per share, again, on a relative basis, we have provided a 7% CAGR growth over the last 10 years, and we expect to provide 8% over this 6-year growth plan. I only will underline that every time we do this exercise, providing a long-term view, we have met the objective and that was the subject of [ Laura's ] presentation. We are very comfortable in achieving these profitability targets because the way we view business is significantly different than the way our peers view the business. We develop our own properties at a significant high cap rate. We -- when we acquire properties, we do it on an opportunistic basis. And basically, when we see the cost of acquisition significantly closer to replacement costs. So if you -- for 6 years, developed properties at above 10% cap rates, if we continue with a prudent funding plan of the company, if we are mindful about dilutions, then we're confident to provide this NAV per share increases as well as the FFO per share increases that we think we will deliver to you over the next 6 years. With this, I end up my presentation. And Laura, Diego and myself, will be open for your questions.

Jorel. Start again.

Jorel, what was your question? How are we going to fund ourselves.

Thank you for answering my question. So I have a question about -- you said something about recycling assets. And one thing I am sort of connecting the dots. There were some markets that you mentioned about expansion. But among them, there is not Guanajuato, San Luis Potosi and Centro. So -- or maybe I missed it. So I just wanted to get a sense, are those the markets that you would consider recycling assets in.

We take a more holistic view on recycling properties. I think that there are several ways to approach that. Either -- the main objective of Vesta is to improve the portfolio that is left after you sell some properties. That is always the main objective. So the first time we recycle properties, we basically sold an average portfolio. If you recall, in 2018, I think. And we sold the average Vesta portfolio, and we were very mindful that whatever was left was at least equal to what we had beforehand. At the time, what we wanted to prove was that the market was valuating the Vesta portfolio wrongly. So we said if the appraisers are saying that the portfolio is value XYZ and we can prove that we can sell it at a significant lower cap rate. And we choose to select a very standard portfolio. And it was across the board. In that particular case, we sold properties from the Bajío as well as from Toluca. So we choose those type of properties for that particular reason. The second time we sold the portfolio -- and we raised significant proceeds, $110 million if memory doesn't fail me. And we sold it at about 7.25% cap rate, something like that, which was significantly low to what our [Foreign Language], to what our development cap rate was at the time, which was 10.5%, give or take. On the second time, we sold a portfolio that was basically had a 10-year average life. We choose properties on Querétaro as well as on Ciudad Juárez and we have a couple of other properties as well. We raised about $107 million. What we wanted to do at that time was to sell stabilized properties with an average maturity of 10 years. We needed some capital, and we use it basically to fund the company. We didn't see any more potential to increase the value of the properties as the land that we have on those properties was fully deployed on the tenants. It ended up happening that the owner of the properties bought back his own properties, which turned out to be better. We have a competitive bidding process. A South American insurance company was the best bidder, but in Mexico, the law requires you to first to give a right of first refusal to the landowner. Significant money proceeds to the company. It was a great transaction. In the future, we might consider either to sell the -- some of the buildings that have gone stale because of aging. We do -- we still have some buildings that were developed some time ago. We may choose to do an average portfolio basis or we may solve any other problem that we see an opportunity on. But I don't see that our recycling opportunities will be focusing on a particular land holding. We take a very holistic view of what's the problem that needs to be solved when we recycle problems, and we will solve for that variable.

Juan, my question is, so 10% of the funding comes from equity in your estimate. That's a convenient sliver because if markets are not good conditions, you probably can figure out another way to hit your goal, right? So my question is really getting to the rate of growth that you're targeting. What is the limiting factor? Are you trying to create a plan that you can execute on with or without equity raising? Or is that the growth rate that the market can fundamentally absorb or that you have the capacity to develop?

I can give you our opinion. I think that when we made this plan, what we -- the guiding purpose was, how -- again, we are a very conservative company. We are a very judicious company. We do not like to take risks. And if we take a risk is only on the development side of the business. So the question that we asked when we did this business plan, we approached bottoms up. We first talked to our commercial division. What do they think is going to happen on their markets? How strong they feel that the markets could grow, could bear? Where are they going to go to the land reserves? Is it profitable to underwrite the land reserves given the substantial price that has risen on land? Taking all that into account we develop the plan. Then the question had to be asked, are we being conservative? Are we being very forward leaning once we felt comfortable on the amount of growth that we were willing to commit to you, then we answered the question, is it fundable? We have the great advantage that we have a very strong balance sheet. We solved that problem last year. I mean we really develop a strong balance sheet. Then we just exercised good judgment in saying how much leverage can we do. We look at the ratios that, that leverage will imply on the company. And we like the results. The result is a good balanced company with not a huge amount of leverage and say, well, Voilà, that's what we will do. Now I am mindful, we are mindful that the stock market, I believe, is not particularly forward-looking in our stock valuation, so I do not want to -- we did not want to over-rely on stock issuance. But I believe that this is a temporary thing. I believe that as we implement this plan and as we deploy the capital, I think that the stock market will take a second look at Vesta. And if that happens, when it happens, we will be ready to issue more equity if that happens when it happens.

I have a question on the PPAs. Who takes the risk for any changes in tariffs and how long are they? I mean, do they match the tenor of the lease? And then I have a question about, again, on the dividend, you said you were...

I apologize. Let me get that clear. Dividends are an integral part of our commitment.

I heard that part. It's just...

Look, we set dividends on a yearly basis, and we recommend to the shareholders to approve them. Typically, dividends are not -- I mean we will grow dividends accordingly to the actual cash flow generated the previous year. I believe, as you saw our FFO, I think that there is sufficient room to pay a good return on dividends. It has never been our policy to be the highest payer of dividends. And I think that, that policy will continue. That means that dividends are going to grow judiciously.

But I mean, you're not prepared to say what percentage of FFO or anything like that? Any sort of...

When you develop at a 10% return on cost, 10% return on cost, where my cost of funds today on a marginal basis are around 6% in dollars. And I do not run -- I am very long dollars after paying my debt. Do you really want me to pay a significant number in dividends?

That's the policy.

I'm not saying that you have to pay a significant number. I just wanted to get some clarity as to what they could be. It could 0.

No. In the past, we have grown the dividends -- I mean in the past, we have grown the dividends a little bit higher than U.S. inflation on the last 4 years.

Okay. And on the PPAs?

Sure. So basically, our PPAs are basically risk-free. We tend to be more conservative on that side in order to have the PPA match the lease. So it's active as long as the lease is active. And basically, what we -- how we structure it is a pass-through unless the tenant wants to elaborate on a more long-term basis. So that's the default scenario for the PPAs.

Gordon?

Diego, just -- actually, that was one of my questions on the -- who takes the underlying risk of energy. But the second question, which was related to that, as you mentioned, that the returns on the power strategy are consistent with the returns with Vesta's capital deployment, so let's call it a 10%-ish type of return. Where is that captured? Is that captured on the surcharge on the electricity charge? Or is that reflected in higher rents over time?

So the way we can structure that can be manyfold. So in that particular case, which is the pilot project that we're doing, that involves really on the PPA. That is where we are getting that and specifically on that specific investment. That is where we're getting those returns. So they're apart from the lease structure in that specific case.

Yes. Great presentation on the green energy, solar energy. But in the video you showed, you had all these gorgeous beautiful long buildings with this huge flat roofs. I didn't see one solar panel. Not one. And then maybe -- and also I think maybe 1 or 2 buildings in that whole presentation, yours and others, what are you got to put the solar panels on? You've got the perfect buildings for it.

Sure. So indeed, that's why we have our energy program in place. So that's -- our commitment is to deploy 50 megawatts of solar. And bearing in mind also what the regulatory framework can allow us to do on a more of a risk-free basis in order to match also the consumption of the tenants and of the micro grids with those of the users and the production that we can do in terms of solar. So today, we have much more visibility in terms of the energy program in place by the authorities, and therefore, we can plan ahead. And that's why we're willing to commit that towards 2030 to have 50 megawatts on installed by then.

Or you can put a lot of solar panels on those roofs for your micro grid. You don't have to look at anything else hardly. Are you guys looking at all at putting at any of buildings in Puebla?

We have a Puebla -- we are in the Puebla market. And if we believe that there's good opportunities from Volkswagen, from Audi, from other people interested there, we will certainly will buy the land and invest properties there. I see it the hottest market in Mexico right now. Well, compared to other markets, it's a good market. It's not the hottest market. So we will allocate capital according to the opportunities that we have on hand at the time we make the decision.

Because I know the workers, the people in Puebla, are very hard workers.

They are, look at...

Why? Because the majority of Mexicans in New York are from Puebla.

It's Rob Colorina, AIAC family office. This might be a question for Laura. This might be also a little bit more education for us, but with respect to some of the ESG policies and some of the incentives, are there are there greater contractual upsides or economics for you all to be in compliance? Could you speak a little bit about that with respect to ESG credits? And then are sort of the authorities sort of more active in terms of governance of this in Mexico? Again, this might be more education because most of us are U.S.-based.

Okay. Well, first, we always try to comply with the local laws in the way we operate, and we work within the environmental part, mainly, but also we take into consideration the social part when we enter into the communities, okay? And sometimes, it helped us to develop a complete -- for instance, in the Responsible Investment part, we work together the environmental and social parts in bylaw and also within the social parts with the community and also in the environmental laws. But regarding -- you mentioned something about -- something about banks or something?

[indiscernible]

Okay. Is this -- well, maybe in that part in energy or something fiscal parts, maybe Juan could help you in that part. But -- okay. But we have -- we've been working with specific banks, for instance, or yes, financial enterprises that we could start working like ESG bonds, sustainable bonds, [ not ] for instance. And we can make it like -- we're evaluating like, for instance, in 2021, we launched SLB bond. And we have -- we are working towards to have another -- this type of facility with the banks.

To give you clarity, on the global bond that we issued a couple of years ago, we had 5 basis points if we meet the hurdle by year #5. It's a 10-year bond. We're going to meet it. We're way beyond the upgrade. On the debt raise that we announced that we were going to do, on which we -- just last week, we had the commitments from the banking sector, several of you are here, we have hiked the bar on the type of ESG commitments, which is, in particular...

GLA certified with the Green certification.

And again, if we -- if it's a bigger hurdle, if it's a higher hurdle, it is a 5-year floater based on SOFR. When we meet on a yearly basis, the path of growth of approved GLA, we will have, again, a 5 basis point lowering of the rate. You will know the details early next month about how much we raise at what rate. I think that it will be -- the market is going to be happily surprised about the commitments that we have, the debt is oversubscribed, the commitments that we have and the rate that we achieved as well as the performance of enhancement given the ESG targets that we committed to.

And I would like to add just 2 things. For instance, in Mexico, we have launched the Mexican Taxonomy, and it's really new. It's pretty new, but it's also really like, well, let's say outrageous because it's one of the only taxonomies in all around the world that has 2 main components: the social component and also the environmental component. It's totally different from the UN Taxonomy that is also like the mother of all taxonomies. But actually, that will help us also to communicate with you all as investors and the ESG department to speak the same language. So that also will help with the SLB, green bonds, social bonds and sustainable bonds that we could launch as a company with your banks, okay? And also, another thing that we're doing is regarding climate change. For instance, when you measure your physical and transitional risk and evaluate financially, according to IFRS and also TCFD, you could see, as banks, also the risk we have as a company if we do not invest in the climate change strategy to make the company more resilient. So I think that's also another key thing that we need to take into consideration more than fiscal incentives because I think it's where we're going to. So that's the 2 things I would like to add.

Perfect. Thank you, Laura. Now we will continue with some virtual questions. I just want to remind everyone that you will have a chance to meet with the management at the cocktail to ask more questions. The first one comes from [ Alejandro Aragon ]. Can you talk about the NOI yields that you foresee for the '25, 2030 plan given the expected rent upside and the land needs? Juan?

Look, I think that we give you enough clarity, given the FFO component on long term as well as NAV. I think that NOI, we guidance on NOI on a yearly basis. It is an aggressive guidance, from my point of view. It is always challenged to meet it. So NOI, I don't think that I'm going to give you clarity for 6 years. I think it's too granular. I think that what investors should focus on is on cash flow, which is represented by FFO per share. And I think that's good enough clarity for the next 6 years, not for a yearly basis, on which I will give guidance on February every year.

From André Mazini, we will revisit the question, Juan.

JVs, I don't forget, André. Sorry. JVs has -- we have explored JVs in the past. Look, I think that JVs is -- the only JVs that we will consider are those JVs where we do not share the development component. That should be our investors' domain. However, if we can explore stabilized portfolios JVs where we keep the management of that portfolio, that could be a route of raising funds in the future. That's what we did just prior to the pandemia. I think that theoretically, we can be open to that idea, but we're not going to share development yields with JV partners. I don't think that's a good idea. The development cap rates are the domain of you, our shareholders.

Perfect. Thank you, Juan. We will go with one last question from Francisco Chávez in BBVA. My question is regarding your energy program. Can you give us an idea on how high are the barriers of entry and what you have done so far, how easy is to replicate Vesta's progress? And finally, this energy plan be a relevant source of profit besides property value in coming years? Diego?

Sure. So I think our focus will remain and -- is and will remain to focus on our core business, which is the real estate. So our strategy is to have access to power in order to satisfy our growth objectives. That is one part of the question. And I mean, how high can the barriers of entry be? I mean, I think it depends for whom, but I mean, at least we already have a head start in terms of having the PPAs already with the contract -- with the tenants in order to deploy solar easily. And that will make up the bunch of the energy program that we have in place.

And how long have you had an energy division?

For more than 8 years, so...

So that's a significant entry barrier. You have the knowledge base for 8 years, which I don't think a lot of people do in Mexico.

Perfect. Great. Thank you, guys. And now we will go to the closing remarks from Lorenzo.

Well, we have quite a day, and we are again, very excited to be able to share with you many of the activities that Vesta has been through in these last years, but particularly to share with you what we see ahead of us. We're very excited to be able to continue being a leader in the industry. We appreciate the feedback that we have received from all of you. We appreciate every time we sit with you either through a conference or a call, we take very seriously your comments. Vesta has been and will continue to be a good steward of your capital. We represent your interest, and we will continue to scale up the opportunities together with you investors, the financial community. And we're pretty sure that with all your support, we will continue to take advantage of what we believe is a very prosperous country, with great opportunities where locals might have a greater expertise and greater opportunity, and collaboration with you is going to make us greater. I will walk through a little bit briefly about some of the important remarks after the presentation. We've been working for more than 25 years to establish a fantastic platform, and I can today say after the presentations of my team that we have really the best team to take advantage of opportunities. Our track record can talk to itself for what we have achieved, and that will help us to be able to achieve better results in the upcoming future. Fundamentals, even with the challenges that we will be facing, we believe are still there: e-commerce, nearshoring, the region of North America per se, even with some of the potential negotiations or revisions that we'll be facing on the trade agreement, we flew over from Mexico, and we're still next to each other, similar to the flags behind me. So there will definitely be opportunities going forward. And of course, our focus on value. We think that Vesta is a vehicle that has been created in order to provide value for our shareholders, and we will continue to do so. We will continue to find ways. We will continue to find means in order to make this happen and make our investors, as always, happy. For that reason, we appreciate again your time. We appreciate your presence. We're very thankful for your support throughout all these years, and we'll be more than happy to continue the discussion and talk through the cocktail in the next hour that we had together with you. So thank you very much, and welcome again.

Just a very short message before we start the cocktail. I would like to invite you to complete our event survey. That will help us a lot to continue improving the way we receive you and the way we interact with you. There is a link in the Resources tab on your webcast screen. If it's not displayed correctly, please click on the cloud icon located on the side bar to the left of your screen. We really appreciate your help, and we were very, very happy to have you here. Thank you for your attention, and let's start to drink.