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

Okay. Well, good morning, everyone. It is my pleasure to welcome you to the Vesta's Day. I'm Fernanda Bettinger, Vesta's Investor Relations Officer. And on behalf of our management team, we'd like to thank you for joining us both here in New York and via our live webcast. We're pleased to have this opportunity to share our progress in executing our Vesta 2030 strategic plan and discuss the priorities and opportunities shaping our next phase of growth. Throughout today's event, you'll hear directly from management and our leadership team, who will provide an update on Vesta's corporate strategy, financial framework discuss market dynamics and commercial opportunities across our key markets and outline our energy strategy and sustainability priorities. Before we begin, a few housekeeping items. Each session is concluded with a live Q&A. For those joining us in person, please wait for the microphone before asking your question. Webcast participants are also encouraged to submit questions using the Q&A feature on the webcast platform. Today's presentation materials will be available in Vesta's Investor Relations website and the replay of the webcast will be made available following the event. Please also note that today's presentations will include forward-looking statements. which are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. We encourage you to review our forward-looking statement disclosures included in our presentation materials in Vesta's regulatory filings. With that, thank you once again for joining us today. We will now like to share a short video about Vesta. We hope you enjoy it. [Presentation]

Excellent. Welcome, everybody. We're -- it is really an honor to see great friends and a great team that we have all built together and be here today in what is a very nice, bright and shiny day. For many of you that were here 2 years ago, we had also at Investor Day, and think about that day. It was very different than today. That particular day right after the U.S. elections, we got slap with 25% tariffs on Mexican imports Also, right after that, the major uncertainty through the -- in the relationship between the U.S. and Mexico be gone. And then the world has given us one test after the other. The they were in Iran at some point, the shock of liberation that energy market disruptions. And all of these worse and all of these political geopolitical tension happening everywhere. We have not been able to finalize that. But it -- if we put it in cycling terms, the route 2030 was a long right, and it started not on a rainy day. It started with a major storm. However, as many of you are cycles like the Vesta team, there's ways to get out of that particular storm. And the way it's riding together getting to the right pace, having a strategy and definitely showing endurance, showing strategy and showing leadership. And these couple of years having exactly like that. And that's why today is an exciting day where coming from the mouth of the experts of each of the divisions of Vesta, each of the marketing -- each of the markets. This is where we can all understand a little bit better and having more comprehensive understanding on the Route 2030 strategy and also on the overall expectation on the company. We will give you an update on ongoing projects but also, we'll have experts talking about capital markets and how investors perceive the company as well as our peers and the whole ecosystem, which will come from the world of Green Street advisers. Also, we understand what are the drivers of Vesta and what -- how are those impacting the overall operations of the company. We still believe that the demand will rest on 3 main pillars: being the first one still, the manufacturing base of Mexico as well as logistics where we believe that Mexico has shown resilience even in the most complicated times. We have also seen steady growth in e-commerce, where Mexico is still in an early stage of adapting consumer habits. And I think that will continue to grow. Of course, our export manufacturing industry keeps showing new signs of opportunities. And clearly, with a new wave of electronics and AI-related industries, we're just seeing the beginning of what Mexico is capable of. Clearly, this particular diversification is giving the portfolio a very strong resilience. That's why Vesta is not about one region. Vesta is not about one sector. It's multiple regions, multiple sectors, which we believe will continue to drive over the upcoming years. So we come here today with some measure of optimism with the idea to transmit to all of you who have been part of a divested team to transmit the idea where Vesta is heading, how large it has become and how much larger it can go. This is a strong commitment for you as investors, you research analysts. And what you will hear today is not only the direction but it's a strategy towards the last stretch of our route 2030 strategy. With that, I would like to first thank the IR and Communications team for putting this event together. It's really, again, an honor to be at the New York Stock Exchange, which has been -- Vesta has called home since 2023. Having you here it's a great opportunity, not also because we feel like home, but also because it shows the strength of the company and how important it is to understand where capital comes from and where capital flows through. Today, we also I would also like to thank the whole Vesta team that is here today that you're going to be able to lessen from each one of them as to what we think, what we believe might happen in some of these regions, in these areas. You might know me very well. You might know Juan and the IR team. But I think it's more important to understand how they're feeling and how they're then being having the boots on the ground, how the sensitivity that they may have in each of those markets. I'd like to thank you, thank the research analyst teams for being able to understand better the best story and transmitting and communicating very well with investors and the investor community. For all of the investors are here today and are listening also, I would like to thank you for your trust. Vesta has -- would not be here without your participation, your trust and understanding better as to where we're heading and what we are really ready to achieve. With that, I welcome you again. I thank you again for being here today with us, and we will continue with Rodrigo Cueto going over the macroeconomic environment and implications for Vesta. [Foreign Language]. I apologize. It's not Rodrigo Cueto. We're going to have first Nathan Siino from Green Street Advisors, giving us the overall macro perspective on the company, the industrial sector capital markets. And from there on, we'll move forward to the best strategy and the macro content. So Nathan, welcome. Thank you very much.

So I'm going to walk you guys through a few slides that highlight Vesta's recent performance, their long track record and all the value they've created by growing their NAV. My name is Nathan Siino. I'm a Senior Vice President with Green Street's Advisory Services Group. And yes, we've got about 15 minutes of slides here, followed by 10 minutes of Q&A. So please take down some questions, so I don't have to stand up here for another 10 minutes on my own. First, I'd like to highlight the long-term total returns here. This line chart on the right. As you can see, Vesta in the dark blue has strong historical performance, especially leading up to 23% following the success of the ADR listing. And more recently, on the right-hand side, we've highlighted the 3-year annualized total return. And you can see that volatility off the high watermark of the ADR listing really has impacted recent performance with that volatility. As you all know, Vesta does have a large development portfolio, and so they do have a heightened volatility relative to some of their local peers. Looking to Mexico versus the U.S. industrial segments, you can see the U.S. industrial REITs have historically traded at a 3% -- yes, 3% average NAV premium over the long term. More recently, that's been slightly depressed. But over the long term, you've seen some NAV premium there. In Mexico, it's a much different story discounts are more persistent and companies and management teams are forced to create value, really emphasizing or during times where their stock is trading closer to NAV. And looking to vest versus their two major peers in [ Fiber Monterey ] and [ Fibra Prologis]. You can see they've traded roughly at a similar discount over the long term. and currently trade at a slight discount -- Vesta trades at a slight discount to both peers. And really, that appears to be driven by the scale that both Fibra Monterrey and Fiber Prologis have achieved with their recent M&A. However, the recent trend and performance of Vesta has helped close some of that gap. Over -- so we just went over the NAV premium and discount on the far right. As you can see, Vesta's trade over the last year has traded at roughly a similar discount to what they have been over the last 10 years. What's really interesting is this middle chart, specifically these two bars, where you can see how much value they've created by growing NAV per share. So accretive value creation and that's been a long-term trend of management in the company. Looking over to the right, the recent total returns over the last year have been great. Again, that 3-year period is a clear outlier in terms of lagging performance off the high watermark. But really, they've outperformed the market over the long term, which is great. But that -- going back to that NAV discount, it still feels like the market doesn't fully appreciate the value that the company has created over that time. One, as I mentioned, the ADR was a very formative kind of evolution or a large event in the evolution of Vesta and how they've been able to kind of change their strategy and their investor base by appealing to a more globally diverse investor base. So you can see some of the countries on the right-hand side that have increased ownership -- what's really interesting to us is looking at their U.S. exposure, highlighting BlackRock and Vanguard as proxies for U.S. investment exposure. And you can see that they have a higher ownership stake in Vesta relative to their local peers. And we believe we'll go over it in the next slide, but that's helped or not helped. It's hurt recently where sentiment in the U.S. towards Mexico has -- it was more negative following Trump's election and leading up to it. And you can see this is 1 of the nectars in my mind. You can see that exposure to North American investors decreased fairly significantly after trending around just below 70% to south of 50% at 1 point, that large sell-off definitely didn't help in terms of performance and likely triggered some of the underperformance. And so there's more diverse -- globally diverse investor base although it's great for the long term, it may have caused some volatility in the near term, which is fascinating to us, again, relative to their peers. Looking at the ADR relative to U.S. REITs. Again, you can see the heightened volatility. As Lauren mentioned, a lot of the geopolitical noise that we've seen over the recent years has caused larger swings in Vesta than what you've seen in the U.S. industrial REITs. But at the end of the day, you've seen, especially with the last month's performance, Vesta is near the top of the pack over the last 3-plus years since the ADR listing, which again, is fascinating and speaks to the institutional quality of the portfolio and management. Highlighting some of the capital allocation decisions that management has made over time One thing that jumped out to us in our analysis was looking at their historical lack of exposure to Mexico City and Monterrey and how management has adapted following the rent signals that they've seen and the demand in those markets, and they're growing that segment of the portfolio, focusing on some of the major metros. This, again, helps highlight the value created by management despite not being in those 2 major markets where you had over 15% rent growth annually in those two markets. Fibra Prologis benefited from it and was able to grow their NAV. Vesta over this time period, 2020 through 2024 was able to grow their NAV at a higher rate despite not being in those high rent growth markets. And so again, that's -- that speaks to the higher beta model that they have with the development alpha and their ability to create value despite not being in those high rent growth markets. looking at route 2030, you can see a small portfolio shift, and this might be dated. I believe this is from the 2024 route 2030 that was put out by management. And you can see a shift to the north is clear on the right-hand side, the Central, there's a larger focus in Mexico City as they continue to grow that. What really jumps out to me is the land that they control in the North and [indiscernible]. There is a drag on performance by holding those nonperforming assets. But in Mexico by controlling land that has power, water and the ability to develop is something that helps enable Vesta's growth engine. And Mexico City not having land there. I'm sure you all know it's a tighter development time line, more infill development. And so you don't need to procure a large land bank in order to be able to create value there. Speaking more about capital allocation. You can see the historical growth in the portfolio that management has been able to deliver and what they proposed to reach by 2030 was 63 million square feet. And one thing at Green Street we like to see is nobody growing for growth's sake. The ability to adapt your business model depending on market dynamics. And based off of the current pace of growth of the portfolio, you can see management may fall short in terms of growing the portfolio to $63 million, currently projected at $57 million based off of the recent growth pace. And that's something that we like to see. Again, you don't want somebody to just grow the portfolio and dilute existing shareholders or a building that's going to stand vacant for too long. And so adapting the business plan is speaks to management's capital allocation decisions and how they see the portfolio in the long term. looking at development and the ability to create value over the long term, this is impressive from a U.S. perspective. When you look at the development yield spreads that they've been able to achieve, just because they're so high. What's fascinating for anybody is how consistent it is. It's a pretty tight range, delivering roughly 340 basis points of yield spread with their development pipeline, and that speaks to their expertise in the space. Cap rates have compressed slightly over the years and likely or have compressed at a gradual pace over the long term, over the last 10 years. But still, management has been able to meet those spreads in part thanks to that. Additionally, fascinating is looking at what's happened on the cost side of developments. And you've seen costs nearly double here from $49 a square foot to $86 a square foot. However, they've been able to hold that profit margin steady, thanks to increasing rents. And so again, that speaks to their expertise and ability to create value via development. Looking at the pipeline. Historically, you can see it does swing fairly from time to time. But in aggregation, the long-term average is about 10% of total asset value has been held between land and construction in progress. And right now, it's roughly in line with that. And you can see as the land bank would get high or we would get larger than the long-term average, those land sites eventually would be activated and transfer into development. And we've seen that here, too, where the land bank peaked last year or 2 years ago, but management has begun activating those and you're seeing the development pipeline increase. Looking relative to peers, it's clear that Vesta is a developer and the largest on the industrial side. But it isn't anything that really warrants too much caution in the eyes of Green Street. Again, this is from the perspective of a U.S. investor analyst. You know that you're getting that additional alpha and the additional risk that comes with it, but it's not an alarming amount. Looking -- and I believe this is the final slide here and perhaps the most important that speaks to management's ability to follow the public signal. And so in Green Street, we view the public signal is you have a green light to grow, issue equity when you're trading at a premium to NAV and buy back shares or shrink when you're trading at a discount to NAV. Invested is one of the few Mexican real estate companies that has traded above NAV at times historically. And they took advantage of that issuing equity in '23 and '24 through the ADR raising a substantial amount at a premium to NAV and then in '25, buying back shares at a significant discount. You want to see that nimboism from management and the lack of an ego to say, hey, we're trading at a discount, buying back shares. That's the best risk-adjusted return that we can achieve right now. And so being able to do that over the long term, really helps enable value creation and speaks to the institutional level that management has in terms of following the public signal and meeting the needs of investors to help garner outperformance. So that's all the slides I've got. I can go back if any question -- anybody has questions directly related to it. I'm going to hand it off to Fernanda here, and thank you.

Not yet. Thank you, Nathan. We will now begin the Q&A session for those joining us in person. [Operator Instructions]. And now we will take questions from the audience.

Gordon Lee from BTG. Two questions. The first is, you referred a lot to NAV, but I was wondering whether you have any comment on how sort of properly comparable the NAVs are between the different Mexican entities in terms of the -- whether the appraisal are consistent when with the other. And then the second question is when you look at the NAV premium or multiple in the U.S., is there a discernible difference between portfolios or companies that are more stabilized versus those that grow more of your development?

Good question. And I'll answer your second one first. What we've seen in the U.S. has been historically REIT investors did not prefer development. They were risk averse. They wanted your dividend. Do they wanted something safe that would grow. What's changed really over the last 7 years, I'd say, is you -- so those REITs that had development would trade at a larger discount to their peers. What's changed over the last 7 years, that discounts disappeared. And really, I believe it's because you have this track record of those development REITs that they've really proven, hey, we can develop through cycles. Yes, there will be times we'll underperform but we were experts in this field. We know what we're doing, and we're not going to put up 20% of our portfolio in shovels in the dirt. And so -- that's something that's really helped reduce their penalty and being overly penalized for having development. Going to your first question, we did not review the appraised numbers that the companies have for their NAVs. We did look at S&P Capital IQ aggregates some of the consensus NAVs out there. And there were some periods of volatility, specifically for Vesta, for instance, it jumped out with the ADR listing, the NAV spiked. I don't know if that was a new analyst being included or not in that aggregation. But one thing that seemed true would be the long-term trend appeared like they were fairly consistent with each other. I know there's a lot of questions about the appraisal process for internal NAVs in Mexico, but I don't have much to share on that.

And now we will take one question from the webcast. From Francisco Suarez from Scotiabank. To what extent the shares liquidity may explain the discounts you mentioned on the industry's NEVs?

That's a great question. And historically, that's been a big issue. And that could be, again, going back to Fiber Monterey and Fiber Prologis as that discount is closed, that could be the increased liquidity that they have, where it's sufficient. Vesta at their current size and with their globally diverse base doesn't have as much of liquidity concerns of those companies. Additionally, not having a huge legacy shareholder that controls 20% to 50% of the company, like some of the Fibras in Mexico. And so it definitely historically has hurt those discounts. But going forward, I'd expect it to be less of an issue.

And a follow-up question. To what extent discounts or premiums to NAV might relate to the difference in funding costs between the players in the U.S. and the funding costs of Mexican players?

That's a great question. And again, for Vesta in particular, I don't see it being too much of an issue. They have sufficient liquidity that traders can get in and out. And you can look at the debt spreads in Mexico for people forget Fibra Monterrey and Vesta, spreads are incredibly tight. And so I think that speaks to really the creditworthiness of the company. And in addition to that, the liquidity for the equity holders to be able to get in and out.

Perfect. Yes, Adrian.

Adrian Huerta from JPMorgan. What do you think is a -- remains the biggest challenge or difference of the Mexican say, Fibras or real estate companies versus the U.S. ones? Is it in the accounting? And where do you see the biggest difference in turn?

That's a great question. And I'd say, right now, it seems like infrastructure might be one of the largest ones. And looking at the U.S., it's a challenge right now as well for the data center segment, but that the energy needs to need water needs for those are multiples of what's needed for industrial development. In Mexico, still, it is more limited, especially in certain markets when you looked at Tijuana or Monterrey. And so I think being able to answer that would go a long way. I don't know if that would be at the national level or at the state level. Looking at the companies themselves, it might be a trade agreement, frankly, where -- and part of this could be the midterm elections in the U.S. recently with people are the segment more open to free trade, where I'd expect that to kind of be penalizing putting the group in the penalty box for the time being. But it seems like until we get a little more clarity there that could hold them back. But again, right now, I see the whole market is well positioned to kind of take advantage of a new trade deal once that's resolved.

Great. Yes Francisco Chavez from BBVA. I would like to know whether you think about corporate governance and in explaining the NAV discount. It seems to me like a few years ago, the internalized or externalized factor was very important. But looking at FIBRA Prologis and FIBRA Monterrey, for example, the spread has closed, and one is externally advised and the other note. So what do you think about that?

No. Great question. And if you know much about Green Street, we love questions about corporate governance. So yes, that definitely was a larger factor previously. Prologis is unique, where they enjoy, I believe they call the Prologis halo, but they have the relationships, the management. And so that's a unique case study. And now they have such scale where they're near and possible to ignore if you're going to allocate money down there. From a more general perspective, taking a step back with the Fibra Macquarie acquisition, I believe that Fiber Monterrey's internal structure was one of the preferences is why the Board voted that way or why shareholders went that way, specifically the [indiscernible]. And so I think it's something that's still top of mind for investors. As you've seen this consolidation in the market and with Prologis being the large loan externally managed entity, I don't think you're going to see too much of a difference there. I think liquidity for a long time was the bigger limiting factor there. but it's still something that should be focused if you're investing money for a long term, you want to make sure your partners internally managed, reduce any conflicts of interest Fibra NEXT and Fibra who knows an interesting case study and how they're trying to mitigate that. And so as they get more liquidity and start trading more, I'm going to be interested to see if there's a discount there just because of the related entity transactions that they have.

Great. Perhaps one last question. When global investors compare Vesta with the U.S. industrial REITs, which 2 or 3 metrics matter most.

Sorry, one more time.

When global investors compare Vesta with U.S. industrial REITs which 2 or 3 metrics matter most?

For me, the biggest at this point with Vesta's track record and you have a number of public fibras with 10-year-plus track records. So I think looking at historical performance and making sure that they're doing all the right things. forward growth and looking at expected IRRs going forward, not just for development, but for the existing portfolio, looking at your lease spreads and same-store NOI growth is the big one. REIT universe where everybody is so focused on that operating portfolio and being able to create value from it. And yes, I think lastly, it's not a problem until it is, but leverage levels and making sure the balance sheet is well managed, and there aren't any and pending maturities that are really going to cause concern for investors of management?

Great. Well, thank you, Nathan. That concludes our Q&A session. Thank you all for your questions. Now we will continue with our corporate strategy, starting with Rodrigo Cueto. Thank you.

Good morning. My name is Rod Cueto, and I oversee the company's investment program. So let me start with the macro backdrop because the cycle is turning. On the left, you can see the relationship between the GDP growth of Mexico versus the U.S. And while growth is still comparatively modest, forecast point to recovery with Mexico finishing the year at 1.6% and 1.9% projected. On the right chart, you can see historical gross fixed capital formation for machinery and equipment investment in Mexico, which is just a fancy title for how much businesses are investing in the tools that will let them produce more tomorrow. We see this as a forward-looking confidence measure. Companies commit to equipment purchases only when they see more clarity on demand and financing policy. CapEx leads the cycle. Then it's followed by production. So a turn in investment tends to show up before it appears in GDP and industrial real estate demand going forward. The graph shows the last 10-year cycle identifying key investment trends along the way and political and trade catalysts. Investment was choppy from 2016 to 2019, and amid election and trade uncertainty and fell sharply with COVID, then from '21 to '24 around nearshoring, demand lifted investment to a multiyear high. Then again, it declined in 2025 around policy uncertainty built around the Mexican presidential election, the Trump reelection and dearation day tariffs. The importance today is the latest reading which shows stabilization and investment ticking up. It suggested uncertainty is easing and although rebound is early and investment levels are still below its peak this supports the signs of recovery, the improving backdrop supports three drivers shaping Mexico's industrial real estate market. So over the next minutes, we will walk you through on how growth is concentrated across industries and regions how industries are growing at different rhythms and how those regions overlap with best positioning in the market. The first driver is traditional manufacturing exports. This is the largest export base, and it's diversified across a range of industries, which mainly cater to the U.S. market. And although trade uncertainty has delayed investment decisions fundamentals for long-term growth remains strong. Mexico's proximity to the U.S. has helped build a deeply intermingled North American supply chain at a competitive cost base, and this advantage is going nowhere. The second driver is electronic exports to the U.S. led by artificial intelligence. Currently, this is the fastest-growing source of demand. The U.S. demand for AI servers has been an immense growth and Mexico has emerged as a key player in this space. Mexico represents 25% of this growth as we will show in the numbers in the next slides. We will also show you how this growth is not evenly spread and how it's concentrated in key markets where Vesta is already well positioned. And last but not least, is e-commerce logistics, the third driver. E-commerce will continue to grow, especially in Mexico's large metropolitan areas like Mexico City, Guadalajara and Monterrey, which concentrate the majority of spending power in the country. Discontinued growth is embedded in the fundamentals of the e-commerce business, and let me explain why. As consumers, expectations escalate towards same-day delivery companies are seeking faster delivery times and fulfillment networks will continue to expand. So this slide shows the Mexican manufacturing exports. Mexico's exports are seeing unprecedented growth from electronics. On the left, you can see total exports for the main manufacturing industries. In light blue, you can see how electronics has grown significantly, around 59% over the last 2 years with the inflection coming after the launch of Chat GPT in 2024. In dark blue, you can see transport equipment with a 6% decline during the same period. And in gray, all other industries with a 2% overall growth. And on the right, we will do assume on all other industries with electrical equipment and machinery, both growing at 3% per annum, which is comparatively higher to historical figures. So in conclusion, both electronics and electronics-related exports have proven to be a significant driver of Mexican export mix. And most of these experts are going to the U.S. market. So this slide shows apparent consumption for the main U.S. manufacturing industries which is also a fancy title for how much a product that a country absorbs, whether it was made at home or brought from abroad. As you can observe also in light blue on the graph in recent years, electronics has clearly emerged as a main driving engine of U.S. manufacturing consumption. For more than 10 years, electronics demand remained flat. And from 2024 to date, it grew at a 66% levels to almost $1.3 trillion. Nearly matching chemicals and transports which has been historically the largest two manufacturing industries in the U.S. So for me, this points to a structural driver. It's not a cyclical one. And AI and data center build-out is at its core, no matter the pace of development of these data centers. So now let me show you how Mexico is already capturing the slides of this growth and how Mexican assembled servers account for 25% of the growth in U.S. electronic consumption. On the chart on the left, you can observe the buildup of the U.S. electronic consumption between '24 and '26. As you can see in dark blue, it was mainly fueled by imports. 79 billion worth of imports versus $30 billion in U.S. local production. On the right, you can observe how AI servers represent more than 50% of total electronic imports of which Mexico supplies 41% or $126 billion. So the news here is this is not a future opportunity for Mexico. It is already happening, and it's already -- it's just showing up in trade data AI goes beyond chips, motherboards and servers. Other subindustries tied to AI infrastructure are also growing and benefiting. So the chart shows the estimated value across U.S. industries versus their growth from '24 to '26. As you can observe among the 156 industry subset, that the industries highlighted in blue are related to AI infrastructure and have been experiencing the highest growth. These industries include fiber optic cable, turbine generators, power transformers, air refrigeration, semiconductor machinery and switchgear and switch ports, all of them growing above a 10% compound annual growth rate. So the bottom line is data centers need equipment to power, cool and connect its infrastructure. And Mexico is already manufacturing much of this equipment, widening the opportunity beyond electronics. And now transitioning to the third driver, e-commerce. E-commerce adoption in Mexico continues to grow steadily and has a long runway. The graph shows e-commerce sales as a percentage of total retail sales. On the left are countries with advanced adoption like South Korea with 50% commerce sales. China with 40% and followed by the United States and United Kingdom with 30%. On the right, our countries in the early adoption stages like Mexico, standing slightly below 20% estimates, which will tend to grow to 25% by 2030. So this e-commerce space is commended by several individualities. The first product inventory is moved from retail stores to warehouses and those warehouses can store more variety of products, needing more space. The second, logistics operations need picking and packing. So they receive the goods and pallets and send individual package units to consumers. Third, they must plan for reverse logistics space as online product return rates run well above traditional brick-and-mortar return rates. And last, e-commerce capacity needs to be sized for seasonal peaks. So overall, the continued adoption of online shopping will continue to drive demand for industrial space in Mexico. So now let me show you where all of this intersects Growth is happening in markets where Vesta has a strong presence and mostly important where its development program is concentrated. The graph shows the top 10 industrial markets in Mexico by leasable area, and their exposure to each of the 3 demand drivers. The states proceeded by a V represents best participation in the market. So now from top to bottom, you can see Monterrey, which has a great diversification. It leads in traditional light manufacturing exports and its metro area has the second largest population in the country with 5.3 million people. driving e-commerce and logistics. Secondly, you can see Mexico City, which is a consumption powerhouse. It almost has 24 million people in metro area. It follows by Tijuana, which it's a great manufacturing market, Borden, California and Arizona, supporting the Western U.S., then Juarez, driving the majority of the electronics exports search from Mexico to the U.S. Cadet a diversified market close to Mexico City and Guadalajara, also great diversification. It's the second most important market, supporting electronics exports. And where many of the most important electronic contract manufacturers have been heavily invested in the last 5 years. And finally, the Bajio markets, which are the bottom 4, which cater to the OEM automotive sector, serving the production plants in the region. So Vesta's footprint is well poised to capture industrial demand. So now let me switch to Vestas leasing activity. Leasing activity has shown strong signs of recovery in 2026. Year-to-date, 3.4 million square feet of space has been leased in the third quarter, up from 1.9% during 2025. The company is working on additional leases before the -- and before the end of the year, we will surely surpass 2024 leasing levels. So first look at the historical cumulative industry mix. And this is the balance we want to highlight. Vesta's leasing activity has rotated across 4 engines. All of them sometimes all of them important, sometimes when accelerating more than the other one. No single category exceeds 1/3 over the cycle, with e-commerce representing 31%, electronics 27%, all other 23% and automotive 19%. For 2026, as you can see, Vesta's leasing activity has recovered after a slower 2025. Considering the last 5-year cycle from '21 to '26 absorption to the third quarter has already matched the 5-year average of 3.4 million square feet per year, and we'll still have 1 quarter left. So roughly, and of this growth, roughly 56% came from all other and 41% of that growth from 2025 to 26% came from e-commerce. So this points to a diversified economy. So now for my closing remarks, I would like to underline that Vesta is well positioned for the years ahead. Economic activity and growth is concentrating in the industries and markets where Vesta is well positioned. E-commerce continue to be a robust driver of demand and AI infrastructure demand is an opportunity for Mexico that is already being captured. Thank you. So now let me introduce you to our next speaker, Lorenzo Berho, the CEO of the company.

I think many of these numbers are really mind-blowing. I think that more than -- we kind of all get this -- have the sense of what's going on in Mexico, but getting into the need and credit the detail and the data on how all of this changes all of this disruption is affecting impacting our business is the most important part of the analysis and the discussion. And that's why I'd like to thank you for the deep analysis, and I'm glad to hear that the macro as well as the numbers show to a potentially good future. Nathan, thank you very much for your presentation. I think one of the things I wanted to highlight is that Green Street has one of the things that I are most is how vocal they are to best practices in the industrial -- I'm sorry, in the real estate sector, particularly in the public markets. I think that having Green Street being part of the real estate story in Mexico for the public markets has been key so that we can not only be able to attract investors, but we can attract qualified investors global investors, but even the opportunity to bring along, of course, the this who have recently, I said, the last 15 years being a very important investor in our country. I think that this education has been critical in an industry in a sector which is very capital intensive. So for that, I would like to thank you to continue to be vocal on it, focus on corporate governance. I think that's important for all of us. I think that Vesta continues to have a true north, which still is the net asset value per share FFO per share. As you mentioned, and our objective as management is to continue to work hard to drive net asset value per serve growth, but also to close the gap to what we may be trading in terms of at a public listed company to what we believe should be the right valuation represented at the net asset value lever. Well, thank you. With that, I will continue to go over the overall strategy of Vesta and give you some updates on the Route 2030 strategy, which we believe are more like calibrating the overall strategy, more than changing it, which requires no major changes, but give you a detailed update on where we are. But before that, I will walk you through what we have been going in the past. And I will go all the way to the back to 2012. So some of you have known this graph from before. 2012 was a year when we IPO in the Mexican Stock Exchange. Back then, have close to 11 million square feet. We were a company that had approximately $700 million of assets under value. And we had a very strong focus to certain regions who you all know very well, which is basically Queretaro in Bajio, Toluca, other markets like San Luis [indiscernible], some presence in Tijuana, and our opportunity back then was to focus on growth. We had a smaller scale, and we thought it was important to focus on the markets where we could be able to grow in terms of having more presence but also be able to participate in the most dynamic industries back then, it was the auto industry, the one that was growing the most together with some other ones. And I think that led us to be able to grow the company in some years on the Vision 2020 plan to a company of almost 30 million square feet or $1.1 billion in terms. And I will talk more about the asset value of the company since we -- this is when we started focusing more on profitability, on the value of the assets and less on GLA. GLA more as a consequence rather than the main driver. Profitability was the main objective at the Level 3 strategy. And that together with positioning the company in certain regions where we wanted to enter Mexico City, Guadalajara and Monterrey, and particularly sectors which were growing on top of the traditional manufacturing and export-related industries like e-commerce and logistics. So literally by little, we were able to focus on buying the land executing on our strategy and be able to those markets. That back then, we also set financial objectives for the Level 3 strategy, which was to get to $3 of net asset value per share and $0.20 of pretax FFO per share. We were able to meet those objectives, even undergoing a lot of uncertainty, a lot of presidents here, presidents there, pandemic anyways, we can go along with all the issues that we have to face over that time. But we were able to grow and to particularly to gain presence in certain regions and certain markets where we wanted to get. 2024, we ended up the company with $3.7 billion of assets, 43 million square feet. But that gave us the opportunity to define the Route 2030 strategy. I think that Vesta was able to execute well in the markets we want to penetrate stronger have -- back then, we kind of run out of land in some of the markets because of the success of the projects that we developed in particularly Guadalajara, Monterrey, Tijuana, Juarez and some others, Mexico City even. And today, we can pretty much continue with the same objective, which is to focus on the route 2030, which is to be able to develop in those markets Mexico City, Monterrey and Guadalajara, which by the year 2030 will represent more than 30% of total GLA and maybe even a larger portion in terms of asset value, but continue to have strong presence in dynamic markets such as [indiscernible] and Tijuana and continue taking advantage of very resilient markets like [indiscernible] and other markets where we have had good presence in the past. But going forward, we believe that the portfolio will be better diversified. We'll be having a better presence at an attractive size. Let me focus on our The True North of Vesta, and this is something that also Nathan was very vocal about. We continue to focus on net asset value per share growth as well as FFO per share growth. The initial stage of the Level 3 strategy starting in 2018, and we were able to grow net asset value per share at a consistent pace over 8% per annum growth. that going forward will continue to lead us to our main overall objective, which is to get to $5 of net asset value per share by 2030, which is basically a 6% growth per annum. But the same happens on the FFO per share. even that at some point, we have some minor impacts, some impacts, particularly due to dilution effects as well as some increase in interest at some point. We believe that, that particular growth will continue over time. And we think that going forward, we will grow and get to $0.30 of net of FFO per share, which is basically a growth of more than 10%. How do we get that? We'll give more detail going forward. The Route 2030 strategy is focused on two main pillars and tumor avenues of growth. The first one is the existing portfolio. We believe by being able to mark-to-market rents, being able to lease up our existing portfolio, being able to get better lease agreements, U.S. dollar long-term leases that will continue to drive value from already a very strong and very valuable portfolio. Today, that particular portfolio represents more than $4 billion of assets. We estimate that, that portfolio in 2030 will be close to $4.5 billion or a value increase of $400 million. That strategy will continue to be focused on rent growth, occupancy and better and very proactive asset management on the existing high-quality portfolio. The second avenue of growth. The second avenue is growth, which is basically new development projects, new investments, and that will contribute to another approximately $400 million of asset value. $1 billion of investment, which we're going to give a bit more detail, which is basically getting to by the year 230 million to 60 million square feet and a total value of $6.5 billion. Very importantly, the operating metrics of the company. We understand cycles. We understand -- we talk about the volatility that we have experienced. But even with that, when you have a good quality portfolio in the right markets, you can go over periods of time. As you all know, we are developers. Part of the opportunity is that we might anticipate to demand. Sometimes that lease-up period could be very short. We can even be able to lease up buildings even before being built, we are being finalized. But in some cases, we need to give a little bit of downtime. But overall, we have been over periods, and we believe that in these last particular years, we saw a slow 2025 slow demand lower demand, but very much more active 2026. With our leasing activity that Rodrigo just showcased where we are see a very well-diversified base of industries where that continue to grow and continue to require space. And for that reason, we believe that occupancy will continue to uptick going forward. That together, so the existing portfolio together with the growth portfolio will contribute to an important part of the revenue of the existing -- the revenue of the company growing at -- with sustained numbers and getting to approximately $470 million by the year 2030. That is -- even that it seems like an aggressive growth, I think that's something that we have been able to do in the past with the right strategy, with the right projects, that's heading in the right direction as well as asset value which are with the previous explanation, I didn't have any to Avenue 1 and Avenue 2. We believe that the driver for growth is there, and we will continue to be able to achieve those objectives. Very briefly, let me walk you over the overall geographic footprint of Vesta. So going forward in 2030, we believe that the portfolio will be incredibly well balanced and represented among the most dynamic markets, having steel presence in Tijuana, Sugar Juarez, growing rapidly in Monterrey the Mexico, Guadalajara and Queretaro. If you look at the column -- I'm sorry, on the -- yes, the graph on my left, you'll see where is Vesta investing nowadays. We will invest over $1 billion in the most dynamic markets. Monterrey being approximately $500 million with the largest acquisitions of land that we recently did. Mexico City, $367 million; Guadalajara, $268 million and then the rest of the markets. Very importantly, in this particular image graph, you will see that we have done a major part of the investment by doing the land acquisition. So we already know the projects where we're going to invest, and we're going to be sharing more detail when we have the marketing officers talking about this investment. The total investment amount will be $1.5 billion and the investment that we require from here to 2030 will be over $1 billion to be invested. How does this how is this different to what we presented in 2024? Well, we clearly saw that 2025 was slower than expected. You can see that also on the slide behind me, where basically, we were able to lease only -- I'm sorry, to start only 800,000 square feet of construction I think that this shows the discipline of Vesta. When we see a slowdown in the demand, we prefer to be cautious. We prefer to be disciplined. And we -- as we say, we can hit the brakes when needed. But we can accelerate, we need it. And that's the example of 2026. 2026, we have been able to start new projects as was shown in the third quarter report. But that is a result of the strong leasing that we have been having and the strong momentum that we see going forward. So we believe that is the right moment to adjust and calibrate the objectives and forecast on how much development we can do over the next years. But overall, it doesn't change as much as what we expected initially. But today, we can calibrate and just give more detail as to what might be happening in the upcoming years. On the financial aspect of how we plan to invest going forward, we have invested over 500 -- approximately $500 million in the last couple of years, and we will continue investing approximately $1 billion in the next 4 years. But if you look at this particular slide, you'll see that 2025, we did major investments in land. This was strategic. This was key. We were able to find land in the right markets. we were able to actually, in 2025 with so much uncertainty and volatility to get better terms than even expected by a cent to the dollar in some cases. And I think that's given us today the firepower in terms of being able to capture potential demand coming in these dynamic markets. I'll give you a brief overview. We are going to start 7 new industrial parks. Some of them we have recently started, basically, same markets that we have targeted meant in Tijuana, a product that already will already benefit from the existence of mega Region 1 with energy, with infrastructure, and we will continue to be focused in a good location in Tijuana, Guadalajara too, we have a very successful project in Guadalajara. We continue to buy land and to repeat the success that we have had, particularly electronic sector as well as e-commerce. [indiscernible]. Again, another great piece of land right next to the border, very close to the border crossing. I'll let my colleagues give more detail on it. And Monterrey, a project right next to the to the airport, the app, the new Vesta Park, Monterrey as well as San Nicolas and Mexico City, where -- it's harder to get larger plots of land in the best locations, but we have been able to identify a strategy where we can have a smaller plots of land in the right locations and being able to list to the best companies. So each of the regions, as you can see, has a different strategy, but we have a thorough understanding of each of them, and we can identify the opportunities that we see in each of them. To give you a bit more perspective in terms of returns and in terms of numbers, we have this what we call the new Vesta parks just to differentiate them a bit from land that we had previously owned. So we will invest approximately $1.5 billion. We have invested $ 500 million already. And what is interesting about these projects is that we have started them and they will be developed, most of them by the year -- in some cases, in some lines, we will continue to buy some land, which is going to be important, but I believe that 80% of the land has already been acquired to execute now on a plan. Return on cost continues to be an important -- a very important part of our strategy. We continue to see strong spreads to stabilize assets. Overall, our development yields are in the to 11% range, in some cases, a little bit lower than 10%. But in some markets, we believe that the spread continues to be strong. As long as we continue to see stabilized assets for high-quality assets in the 6%, 7% range. We believe that those 300, 400 basis points as Nathan mentioned, are key to be able to continue driving value creation and value growth. We estimate 14x of value to CapEx which is similar to what we have done in the past. And actually, we brought in the last 50 projects that we have done, we have in all of them been able to drive major value, 1.4x value, which has been strategic for the value creation. And in some cases, we have had a little higher in some cases, lower. But I think that This, again, shows the discipline of Vesta whenever it comes to a new investment and a new decision. Well, 2030 will be a key year for us too. We think that there's going to be a lot of work. There's going to be a lot of development, a lot of leasing. However, we think that this particular portfolio is just around the corner to be a very unique portfolio, the most modern portfolio in Mexico in the best locations and with the strongest management team to be leading and to take advantage of opportunities. And to finalize, I will -- I'd like to highlight these metrics that we have used in the past for Sanofi are very useful. Vesta will continue growing in terms of GLA. It will -- we will grow the portfolio from 2024 to 2030, 1.4x. But this is a good example of GLA becoming more a result of all the efforts, but not necessarily the only objective. It's not a matter of growth as Green Street mentioned. It's about profitability. So just with 1.5x growth in terms of GLA, we're going to be able to almost double revenue, double FFO, almost double asset value and have a major growth in net asset value in the end of the period, Vesta will continue to have a strong focus in net asset value per share and FFO per share -- and by doing and executing on the strategy the right way, we believe that we will continue to be driving growth and value for shareholders, growth and value for shareholders. With that I'd like to thank you, and I would like to present Juan Sottil to go over financials and numbers and the main question. How are we going to be able to finance this one? Okay. That's your job.

Hello, everybody, and thank you for being here and -- and thank you, Loren, and Rodrigo, Green Street for setting the stage to see how the numbers will come out to be over the next couple of years. I think that one thing that should be striking to all of us is, we take good care of the balance sheet. For us, taking care of the balance sheet is one of the key things that we do. Look at the growth in size of the company from $2 billion to almost $6 million by 2030. But the debt level of the company remains quite constant. And that's not an accident. That's actually an objective -- we are very mindful of the balance sheet. We use the levers of financing carefully. We do that when needed. We started doing bank debt, then we switched to private bond market, then we have recycled properties when it's appropriate. We have issued capital when it's appropriate, but debt levels remain very low, and this is by the sign. This is not an accident. Here we go. Look, looking at our at our profitability. Profitability is key for Vesta. Look at how stable NAV growth -- NAV -- I'm sorry, NOI has been over the years. basically stable at 94%. We work a lot to achieve that. And more than that, we work a lot to have EBITDA margins about 84% constant over the last 10 years. exchange rates, markets happenings have been wide over the last 10 years. However, our profitability has been stable. That takes a lot of effort and a lot of work. And that's what we do invest. We work hard to achieve financial objectives constant, easily. Okay. On this graph, we want to show what the growth plan underlined by Loren has the implications of in this position of investing. We plan to invest about $275 million looking forward. This is not new. We have been doing that over the past years. we're used to that, the pace of $300 million to $175 million of investment per year. And we have been successful doing that, and we will continue to do that. To do that, we have to -- we have to finance those needs. We plan to invest looking forward just a little bit over $1 billion. That $1 billion is primarily go into income-producing properties, about $700 million -- there is some lands that we will need to buy. There are some attractive markets that we will continue to grow. But the vast majority of the funding will go to income-producing properties. That the funding of that is primarily due from where we come from some debt, about $500 million. A lot of it will come from retail earnings after dividends, taxes and what have you of cost of debt. We will get about $300 million and the balance, about $200 million with some asset recycling and some asset recycling and some equity when the conditions guaranteed. I'm going to come back for a second. Please take a look on the net debt to EBITDA and our loan-to-value we take care a lot of net debt-to-EBITDA and loan to value. Look at how we have grown the balance sheet, how we will grow the balance sheet over the next years and how constant our ratios are. We really are very proud of having a BBB rating by the rating agencies. But if we achieve or when we achieve this performance, I think that we will require a new upgrade, and we're looking forward for that. we will take care of the balance sheet to continue to have the best credit ratings and to grow that credit rating as the plan gets done. This is the type of debt maturities that we have. Please take note that there is not impeding that maturity in the upcoming years. And looking forward, we have only two bonds, we will complement the funding in the future, probably by issue and other long-term bond. But it's a very comfortable maturity profile. Please take note about my average of that cost is below 5%. That's great. So very comfortable debt maturity profile and great historical funding cost for the company. And this graph, I like a lot. It looks like a very complicated graph in TV is not. It basically shows that it basically shows that as we grow as we grow GLA from -- in the past, we have always grown profitability dramatically better than my peers than our peers. When we grow, we grow NAV per share. When we grow in size, we grow FFO per share, not our peers, the rest of the Mexican peers do not necessarily do that. And this is something that takes a lot of effort and a lot of work, and that's how we manage the company. Well, with that, I will invite Loren and Rodrigo to answer your questions.

Well, thank you, Loren and Rodrigo and Juan. And now we will begin the Q&A session. [Operator Instructions]. Okay, a lot of questions. Let's start with Anton.

We don't talk about our peers.

Hi, guys, thank you so much for the presentation. Two quick but large questions. I mean, if anything good or positive surprises could happen, where do you think those could come from? And also on the negative side, I mean if something bad could happen, what could it be?

Well, as I mentioned, we've been listing since 2012 we have seen so many things. And I think we will continue to be seeing -- we're going to be -- continue to be having a lot of headwinds. I think that geopolitical tensions will continue to be there. They present challenges, but they present opportunities. The macro -- I'm sorry, the internal market is still a bit challenging. I think that for a consumer base, it's -- we would like to see Mexico growing a bit faster or way faster, way more or way more. The U.S. economy is normally an important driver of our growth. We're very much linked to it. So -- but in the one thing it's cycles, I think that in the end, I think that we are -- we are in the right place of the world. I think that the U.S. and Mexico will continue to drive together. I think that India, North America is presenting a major opportunity. Yes, the world is not perfect. The region is not perfect. But I think they complement each other quite well. But definitely, I think that the main drivers will continue to be more on the economic drivers coming from the U.S. and Mexico. And of course, the U.S. right now is -- the growth is coming mainly from technology companies as well as data center and AI related. However, that is helping and supporting the growth of Mexico very strong in a moment where we have seen a lot of uncertainty in other regions coming from the particularly USMCA starting in 2025. So going forward, I think that, that will prevail somehow. But Mexico has shown to be very resilient, very, very resilient, and we believe in that resilience. We believe more on the opportunities that Mexico has. Our bet is -- our debt is clearly not a an incredibly bullish case. I think it's a very base case. That's why we wanted to walk you over what we have done in the past. So all those challenges and all those opportunities. I think that will continue to be ahead of us. So being well prepared to take advantage of the opportunities is what we're going to do tactically be different having -- we will talk about the leadership teams in each of the regions and each of the areas. Those are the key advantages that Vesta has to some of the real estate investors and industrial estate investors and developers. So we'll continue to focus on that.

Alejandra Obregon Morgan Stanley. So I think the adaptability message is clear where it's in your CapEx and your strategy in the balance sheet. So I was hoping to hear what that means, what adaptability means in your product, the type of building that you're building today? We compare it -- I'm sure if you compare it to the first building that you built. It's very different today. And you spoke about reverse logistics, the seasonal peaks, next-gen logistics tech hardware. What do you think is the product that will win going forward? How are you adapting the building? What is sort of the demanded product and the demand building that you think will win going forward? And if I can squeeze in where do you think rents your construction cost and your funding needs to go so that you remain confident on building those products?

Sure. Let me finalize -- let me start by the second one. We analyze carefully, by the way, today, we also have opportunity to have Board members with us and the Head of the Investment Committee is [indiscernible], who is back there. Raise your hand, Doug. He's the Head of Investment Committee. So every time we either buy a piece of land, and we started construction of a building. We analyze carefully on the demand drivers, but also the costs and the implications on the overall return. I did present an overall summary of the projects and what we believe might be the stabilized return on cost of them, understanding that, that's ahead of us. But we believe that the returns -- the costs are even with some adjustments, we'll continue to be in competitive levels, particularly because of the base that we got on the land which has already been acquired. So we won't see major movements in the land value on the land cost because we already acquired what I think is a discount to par. And secondly, construction costs, I think the most -- the main impact on construction costs in our analysis is the FX. So even that there are some adjustments because of inflation for construction materials and labor, I think it's the FX that has a major implication. So as long as we're not below MXN 16, I think that's something that would be manageable. And where is the peso going to go? Don't ask me. There's plenty economist around the room that can answer the questions maybe or not. But I think that has a major impact. Technically, on the projects, I think that Vesta is way ahead of our peers, frankly, in Mexico, even ahead of some projects in the U.S., but I would like that when we get to each of the markets to let them please present to each of the price that we have, the attributes that each one of them has because they all represent greater features. All of them mostly focus to AI-related industries, technology base that requires high energy. We high intensive in labor, so you need to prepare the parks for a lot of trucks and also cars and parking and so on. We have also focused a lot on e-commerce and logistics. So all of those projects are very well thought so that they are not catered to this -- today's requirements but for even future requirements, understanding how things have been shifting. So -- but each project has different -- a little bit of differential risk according to the market. But maybe I'll let that later out in each of the presentations going.

Carlos Peyrelongue from Bank of America. Exports are exploding. They're growing 30% year-to-date. Machinery and equipment is now twice the size in terms of value than the automotive industry. So the question is your clients, do you see them operating close to full capacity? Are you having discussions with them that they want to increase capacity? A lot of people are questioning whether this growth in exports is structural or cyclical? Meaning will it last several years or the CapEx cycle in AI is going to come off at some point, and there's no need to have a material increase in capacity? So any anecdotal evidence of conversations with your clients in general as to are they thinking increasing capacity or not would be helpful.

Yes. It's an interesting question and has of our idea of answers. But we do tend to stay close to our clients to anticipate their future needs and their future expansions. So what we are seeing in the market is that there are some there's a pause. Many of our clients are making a pause on their next steps of investment. Nonetheless, it's a pause, not a stop. And that gives the flexibility for them to grow or put on the gas when needed. So I think it's really important just to underline that there's a variety of industries behind our portfolio. in each of those industries is growing or stopping at different rates. So it's difficult to -- it's difficult to answer.

So on the case of tech -- on the case of -- related to AI, again, they're growing 30%, some sectors, 90% -- if next year, we continue to see growth, they have capacity to service that? Or are they thinking of expanding.

Yes. So I think that it depends industry by industry. But clearly, I mean, we're fully leasing Guadalajara and the majority is AI related. That's why we are starting new construction. They, for sure, they will need more space. There's new projects upcoming. The same for electric equipment focus for AI data centers even that we might see that, that pace might be adjusting just because of the recent elections and what have you. But I think that will adjust, but that will require a lot of demand and more space. So that I think that will continue to grow. I think there are certain other industries that interestingly, that particular pause Rodrigo mentioned, I think that happened, particularly starting in 2025 without so much uncertainty. But little by little, I think that companies are having the green light to move forward. We just saw that in this particular quarter, what we saw leasing not only, of course, e-commerce, which is a little bit different, but export-oriented industries we saw in auto industry with electric vehicles with Tier 2 suppliers. Mexico has a very strong supply chain of the auto industry, which has headwinds and challenges. But still is very, very well footprinted, Secondly, we also see aerospace industry continue to grow. Medical device industry. We recently did another important transaction with industrials for air conditioning units and wind comes ventilators for again for data centers. So we see major growth. So I think that Mexico has been integrating the supply chains for 30 years. And that's why I think that eventually, if we get more clarity on USMCA, just more clarity. I think that's going to be very helpful for new base companies to continue investing in Mexico. Think about it in relative terms. The world is a mess. And these companies cannot go easily to the U.S. There's no labor in the U.S. They need to go somewhere to be caring to North America. And interestingly, North America with Mexico will continue to thrive. Not everything can go to Taiwan or everything can clearly not Taiwan. Not everything can go to Vietnam. Not everything can go to other Southeast low-cost countries. Mexico is pretty well prepared.

Perfect. Thank you, Gordon.

Just a quick question. You spoke a lot about demand. You spoke a lot about absorption. But you do speak about supply aside from mentioning that you yourself were disciplined when you saw a change in conditions. And I guess, vacancy in some markets suggest that not everybody is too disciplined as that. So how do you feel about supply overall at this moment?

Sure. All markets are a bit different. There are some markets where which have very low vacancy rates right now, and there might be a bit more supply coming. But in overall terms, I think that numbers are healthy. I think that maybe there was a bit of oversupply by 2024, 2023, some of it has been absorbed. But market was slow in 2025. Things are kind of adjusting -- so going forward, I think that today, there's going to be -- there are less projects under construction. So if we continue to see the trend of what we've seen in the last quarters, maybe this year, maybe with a good start in two I think we will eventually see that absorbed. It's hard to start a building because to start a building, you need to identify land, you need to acquire the land. You need to do the improvements, you need to get the energy and the infrastructure to it. So it's -- I think that it takes time for some developers to start. Yes, there's some right now available for the previous period. So whenever somebody wants to get back to develop, I think that's going to be a little bit harder in our opinion. Land values have increased. They will continue increasing. So that's another important challenge that other developers might have. So the way I see it is that there's always smaller local developers that have a building or to which normally is some of the competition. But for example, the large-scale and well-capitalized companies, many of them do not have very strong development capabilities or they don't have the land -- or that's why many of them who you know well, they have been focusing on acquisitions. And I think that in that case, I think that Vesta is in a sweet spot, where we can model very well how much we can develop, anticipate when needed, but also kind of manage through the cycle in a better way.

Thank you, Priscilla?

Thank you, Vesta team for having us here. My question is given the potential tighter data center regulations in the U.S., how far do you think Mexico is to attract data center investments considering all the infrastructure constraints and do you see enough government support to make this happen?

That's a good point. I think that some of it will benefit Mexico somehow. There have been some data centers being built in the [indiscernible] region, for example. There's a few in the West of [indiscernible]. We don't own them, Equinix and Microsoft and [indiscernible] owns them. We sold land, which was helpful to attract power to our park in Queretaro. So we have power ready land to attract and develop more. However, I think that I think that the U.S. will continue to be -- I mean, just look at what Anthropic is doing right now. They're raising capital will continue to be invested somehow. That particular capital cycle, capital will continues to fly rapidly and growing. So I think that it's a matter to adjust to current conditions, but the AI requires huge data-centric computing capacity, not Mexico has its restrictions in terms of energy, even that there are some markets which current take some data center, I think the vast majority of data centers will continue to be in the U.S. They will have to probably change states or they will take a little bit longer I think that we will figure out maybe at a later stage, but I think that Mexico will benefit, in my opinion, more from manufacturing for electronics as the case that we have seen in Guadalajara from electrical and industrial equipment, which will go towards data centers in the U.S. will continue to grow.

Perfect. Thank you, Jorel, and later Rodolfo and we're finish.

Jorel Guilloty from Goldman Sachs. So I wanted to go back to the 3 pillars of demand that you were talking about as traditional manufacturing, AI exports, e-commerce and logistics. Now when I look at Route 2030, there's 60 million square feet to be developed between the current pipeline and what's coming. So I just wanted to get a sense of how you see these -- the future demand, like if you were to split it by bucket, is it 1/3, 1/3, 1/3 from those 3 verticals? Are you expecting more from AI? Just wanted to get a sense of how you see absorption in the future.

Good. The 60 million square feet estimate is going to be the final total portfolio. So we don't have to develop $60 million in the next 4 years -- we will be -- we believe we might be developing approximately between 2 million to 4 million square feet per year. That's a pace that we have been able to do in the past. So how we estimate demand without having the crystal ball of how we estimate it according to the parks and according to the total portfolio. We believe that it could come from maybe 1/3 from AI-related industries, maybe another 1/3 from e-commerce and logistics and the other 1/3 from other traditional industries, which again, encompass auto industry, medical device industry, home appliances in some cases, seems recreational vehicles, medical device industry. So Mexico is well diversified in that regard. So I think that for that reason, we will believe that we have the right projects in the right markets to balance out quite well. If we focus in each of the markets, we have a little bit of difference. Mexico City will focus on logistics and e-commerce, almost 100% of it. Monterrey, very well diversified. The best example is the [ Apodaca ] project that we recently did. Where we had clients such as Walmart, Mercado Libre, bought Polaris, but air conditioning units. So this is a very good example of Monterrey and Guadalajara, the same electronics as well as e-commerce. So I think that if you go into each of the projects, we have well identified how it will -- what the outcome will be, but probably it's a little bit, let's say, we feel comfortable with estimating 1/3 of each.

Perfect. And lastly, Rodolfo.

Thank you. Rodolfo Ramos, Bradesco BBI. Holding in a little bit on the e-commerce side, where do you think we stand in that cycle has been one of the main drivers in the past. So -- but where do you think we stand at that cycle going forward? And when you think about what the market has gone through in terms of tightness and a little bit more lags, conditions, et cetera, in the recent years. Do you foresee us going back to that market where it's very difficult to find line in key spaces, if we are to see this electronic demand come in, perhaps more constructive headlines around the U.S., Mexico negotiations around Section 232 tariffs or the USMCA review itself. Do you foresee that? And maybe how does that could affect that your route 2030 route planned?

So e-commerce, we continue to see that growing. I think that Mexico, as we saw in one of the graphs, we are still lagging many of other emerging markets or even clearly developed markets where the adoption of e-commerce has been -- was done many years before. Mexico, I think that took a step forward, particularly in the pandemic, but we were lagging badly and players like [indiscernible] Liberty, like Amazon and many other omnichannel type of players like Liverpool and Walmart, they're expanding rapidly. They have a strong bet on it. If you look at developed economies like the U.S. And I'd like to use the example of Nordstrom and Liverpool. I think that Nordstrom omnichannel represents total retail sales like -- I'm sorry, online sales like 40% of total sales. If you look at currently, Liverpool is below 30%. So I think they still have a gap to get to a larger size. But all of the other companies are still in the total retail sales online [indiscernible] still at 16% where it can go to 30%. So I personally -- I think there is major growth. There's a necessity in Mexico to get to get more financing and get more credit cards to the broad base of the population. That's a focus at financial groups have today in Mexico to have that particular -- to increase the formal economy, and that will represent a major opportunity. It does have its challenges. Logistics has its challenges. But I think that -- and land has also its challenges. However, I think that we have shown and we will share a little bit more examples of how Vesta has been able to identify land identify the demand for that particular project and how that translates into opportunities. So I think that there's clearly great opportunities on logistics and e-commerce. And remember, the logistics is e-commerce is about large fulfillment centers, but also sortation centers, but also last mile. And all of them have a little bit of different attributes. But in the end, all of them have a little bit of different attributes. But in the end, they want to be closer to the market, to their clients and they want to get faster to their client. So I think that will continue to Mexico requires still more infrastructure for e-commerce in the end.

Perfect. Thank you. That concludes our Q&A session. Thank you all for your questions. Now we will -- now we will continue with the market outlook, starting Mario Chacon.

Thank you, Feranda. Thank you, guys. It's good to see familiar faces over here. For those who don't know me, I'm Mary Chacon. I'm the Chief Commercial Officer. And I, with the commercial team with Adriana, Cesar, Adalberto and Juan Carlos will present the new strategy for the following years in the different bridges we are. I'm going to start with the Juarez market. And here's a quick video so you can appreciate what we are doing. [Presentation]