Colors for Charts and Graphs JUNE 2016

Transcription

1 JUNE 2016

2 DISCLAIMER This presentation is strictly confidential and is being furnished to you solely for your information. It may not be reproduced or redistributed to any other person, and it may not be published, in whole or in part, for any purpose. By receiving this presentation, you become bound by the above referred confidentiality obligation. Failure to comply with such confidentiality obligation may result in civil, administrative or criminal liabilities. The distribution of this presentation in other jurisdictions may also be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions. The material that follows presents general background information about Terrafina ( Terrafina or the Company ) as of the date of the presentation. This information consists of publicly available information concerning the Company and the industries in which it participates. It is information in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors and does not form the basis for an informed investment decision. If the Company should at any time commence an offering of securities, any decision to invest in such offer to subscribe for or acquire securities of the Company must be based wholly on the information contained in the offering circular to be issued by the Company in connection with any such offer and not on the contents hereof. This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy any securities in the United States or elsewhere nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment to purchase shares. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended (the Act ). This presentation is being made only to investors that, by means of their attendance at this presentation, represent that they are Qualified Institutional Buyers as that term is defined in the Act. Terrafina has not and does not intend to register any securities under the Act or offer any securities to the public in the United States. Any decision to purchase shares in any offering should be made solely on the basis of the information to be contained in the Mexican prospectus to be registered with the Comisión Nacional Bancaria y de Valores or any offering circular to be published in due course in relation to any such offering. No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. All information in this presentation is subject to verification, correction, completion and change without notice. No representation or warranty, express or implied, is given or will be given as to the accuracy, completeness or fairness of the information or opinions contained in this document and any reliance you place on them will be at your sole risk. In addition, no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, any global coordinator, bookrunner, manager or any other person in relation to such information or opinions or any other matter in connection with this document or its contents or otherwise arising in connection therewith. This presentation includes forward-looking statements. All statements other than statements of historical fact included in this presentation, including, without limitation, those regarding our prospective resources, contingent resources, financial position, business strategy, management plans and objectives, future operations and synergies are forwardlooking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual resources, reserves, results, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business operations and strategies and the environment in which we expect to operate in the future. Forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to release any update of or revisions to any forward-looking statements in this presentation, any change in our expectations or any change in events, conditions or circumstances on which these forward-looking statements are based. By attending this presentation or by accepting to view any of the materials presented, you agree to be bound by the foregoing limitations. 2

3 CONTENTS Performance Update / Investment Highlights Growth Strategy Financial Overview Appendix 3

4 KEY INVESTMENT HIGHLIGHTS High Quality, Geographically Diversified Industrial Portfolio of Significant Scale Diversified Tenant Base Comprised Primarily of Large Multinational Companies USD-Denominated Rents, Supported by Underlying Revenues of Export-Driven Tenants Resilient Business Model with Consistent Performance Through the Cycle Industrial Segment Outperforming Overall Mexican Economy Conservative Financial Strategy with Low Leverage and Ample Liquidity World-Class Corporate Governance and Strong Sponsorship from PGIM Real Estate 4

5 COMPANY OVERVIEW Terrafina at a Glance Terrafina Overview % GLA by State (2) o Owner of high-quality industrial portfolio in Mexico, with market capitalization of ~US$1.0 billion (1) and enterprise value of ~US$1.5 Baja California Sonora billion (1) 3.8% 0.9% 220 developed properties encompassing ~30.1 million square feet ( sqf ) of gross leasable area ( GLA ) plus ~6.4 million sqf of buildable GLA Geographically balanced by region Diversified tenancy with ~70% manufacturing and ~30% distribution and logistics 97% of leases are US$ denominated stemming from our exportfocused tenant base 98% of leases structured as triple-net, the most secure in the Real Estate industry Ability to provide existing tenants with GLA growth through ownership of land for expansion Durango 1.5% Chihuahua 31.9% Coahuila 11.4% Nuevo León 3.9% North 54.6% Bajio 25.1% Central 20.3% Tamaulipas 1.1% San Luis Potosí 9.1% Querétaro 6.6% Portfolio Linked to U.S. Economy o Manufacturing facilities represent 70% of GLA Aguascalientes 2.5% Puebla 0.6% Higher switching costs and longer lease terms, leading to higher renewal rates High exposure to manufacturing for exports: high-quality multinational tenants located in growing markets o Operating performance benefits from a growing U.S. economy Less vulnerable to Mexican economy and emerging markets volatility Jalisco 4.3% Guanajuato 2.6% Estado de México 17.5% Distrito Federal 0.1% Tabasco 2.2% Leases contain contractual and annual rental rate increases, predominantly pegged to U.S. Consumer Price Index Terrafina s geographic distribution closely resembles that of the Mexican Industrial Real Estate market Source: PGIM Real Estate Asset Management, Company filings. (1) Share price as of 03/04/2016. (2) As of 1Q16, based on leased GLA. Cities in North: Ramos Arizpe, Saltillo, Monterrey, Casas Grandes, Hermosillo, Durango, Chihuahua, Delicias, Torreon, G. Palacio, Monclova, Tijuana, Cd. Juarez, Cd. Acuña, San Pedro de las Colonias, Gomez Farias, Camargo, Reynosa; Cities in Bajio: Queretaro, Celaya, Silao, Guadalajara, Aguascalientes, San Luis Potosi; Cities in Central: Azcapotzalco, Atitalaquia, Huehuetoca, Toluca, Cuautitlan Izcalli (Mexico City Metro), Puebla, Villahermosa. 5

6 HIGH QUALITY, GEOGRAPHICALLY DIVERSIFIED INDUSTRIAL PORTFOLIO Terrafina s portfolio is strategically diversified by geography, property type and industry to take advantage of current macro trends Portfolio Distribution by Facility Type Terrafina s Top 10 Cities by GLA 1 (mm sqf) 70% Manufacturing 30% Distribution Ciudad Juarez Chihuahua Cuautitlan Izcalli San Luis Potosi Queretaro Ramos Arizpe Guadalajara Tijuana Toluca Aguascalientes Mexico Market Characteristics Top Competitors GLA by Region 2 North Bajio Central o Manufacturing focus (Electronic Component Manufacturer, Aerospace, Automotive) o Targeted location for exports to US o Potential Build-to-Suit development opportunities o Mix of manufacturing and logistics facilities o Higher concentration of automotive manufacturing for export o Strong growth from new assembly plants o Predominantly logistics facilities; focus on consumer goods o High barrier / high occupancy market o Land scarcity driving highest industrial rate Terrafina s geographic footprint best represents the Mexican industrial real estate market 18% 57% 55% 48% 71% 51% 17% 24% 25% 11% 35% 31% 19% 21% 18% Source: Company filings and Jones Lang LaSalle Mexico 4Q15 Industrial Report. (1) Based on leased GLA reflecting 93.3% occupancy over the total portfolio GLA of 30.1mm sqf as of March 31, (2) Mexico market as of 4Q15. Peer GLA by region as of 1Q16 and as reported. Includes all property classes. 6

7 2.5% 2.5% 2.3% 2.2% 2.0% 1.8% 1.7% 1.6% 1.5% DIVERSIFIED AND STRONG TENANT BASE Tenant base comprised primarily of large creditworthy multinational companies Limited Exposure to Tenant Risk Tenant Base (% of GLA) o Diversified tenant base and lease size reduces single-tenant vacancy risk o Portfolio has 234 leases with 217 tenants o No single tenant represents more than 4.5% of annualized base rent ( ABR ) or GLA o Top ten tenants account for ~23% of total ABR o 29% of properties contain multiple tenants or are set up as multi-tenant facilities o Industry and geographic diversification limits regional and sector-specific risk o Diverse tenant base spread across 7 different industries Top 10 Tenants (% of GLA) 4.5% Kuehne + Nagel La-Z-Boy Flextronics Chedraui Omnilife Labinal Lear Cummins Toro Gabriel Industry Years in Portfolio Logistics & Trade Consumer Goods Electronics Non-Durable Consumer Goods Non-Durable Consumer Goods Aerospace Industrial Goods Industrial Goods Consumer Goods Automotive Source: Company filings, Terrafina and PGIM Real Estate. 7

8 USD-DENOMINATED, STABLE CASH FLOWS SUPPORTED BY HIGH MARGINS Highlights Increasing Occupancy Combined with Rental Rate Growth o Stable rollover with high historical renewal rate o 70% of GLA for manufacturing facilities, which typically have high switching costs and longer lease terms, leading to higher renewal rates o All leases currently contain contractual and annual rental rate increases pegged to U.S. or Mexican inflation o 97% of leases are US$ denominated stemming from our exportfocused tenant base o 98% of leases structured as triple-net o Limited CAPEX requirements due to relatively new properties: ~70% of properties in portfolio are less than 15 years old, resulting in an average portfolio age of 12.6 years $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 $4.62 $4.77 $4.76 $4.74 $4.78 $4.78 $4.74 $4.87 $4.89 $4.90 $4.88 $ % 89.7% 90.6% 91.1% 91.4% 91.2% 85.7% 93.7% 93.1% 93.5% 93.2% 93.3% 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Average Rental Rate ($USD / sqf) Occupancy 100.0% 96.0% 92.0% 88.0% 84.0% 80.0% Consistent High Margins Lease Expiration Schedule as of 1Q16 (% ABR) (1) 100% 90% 88.7% 88.2% 87.9% 88.4% 91.1% 90.1% 91.2% 91.5% 91.1% 87.0% 86.4% 86.1% 50% 40% 3.7 years weighted average remaining lease term 80% 70% 72.2% 68.1% 79.6% 76.2% 78.2% 80.9% 77.8% 76.8% 81.8% 80.8% 79.9% 78.2% 30% 20% 10% 8.9% 13.4% 13.1% 19.9% 20.0% 24.8% 60% 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 0% Thereafter NOI Margin EBITDA Margin Source: Company filings. Past performance is not a guarantee or reliable indicator of future results. (1) Reflects annualized base rent. 8

9 CONTENTS Performance Update / Investment Highlights Growth Strategy Financial Overview Appendix 9

10 GROWTH STRATEGY High-Quality, Pure-Play Industrial Portfolio o Sustain industry leading margins and drive profitability through hands-on asset management o Capitalize on local property management expertise and existing sub-market relationships o Maintain stabilized occupancy around 94% o Maintain superior tenant retention 84.3% historical average retention since IPO 89.6% retention average over LTM o Benefit from contractual rate escalation tied fixed increases and to U.S. inflation Organic Growth Acquisitions Disciplined, Value-Add Investment Approach o Seek stabilized portfolios with strong cash flow characteristics Target markets with existing presence and management infrastructure Strong tenant base o Leverage PGIM Real Estate broad network to access investment opportunities Bought a 10-property portfolio, USD-denominated leases and multinational tenants for US$59.4 Targeting a robust pipeline of stabilized acquisitions over the next 12 months Proactive Divestiture of Non-Core Assets o Enhance portfolio quality through sale of lower quality, non-strategic assets Capital Recycling Expansions, BTS, Developments Selectively Leverage Development Expertise o Focus on the expansion of existing properties where current tenants require additional capacity o Improve Company s operating metrics, leverage profile and financial position o Primarily focused on Build-to-Suit (BTS) opportunities that mitigate leasing risk o Alternate liquidity source for core strategic projects Successful disposal of US$101 million portfolio o Selectively access land reserves for future development following the scrutiny of a thorough underwriting process in 1Q15 o In-process development projects at any given time not to exceed 3%-5% of existing GLA Source: Company filings 12

11 CONTENTS Performance Update / Investment Highlights Growth Strategy Financial Overview Appendix 11

12 STRONG RESULTS SINCE IPO NOI and NOI Margin (US$ mm) EBITDA and EBITDA Margin (US$ mm) 87.6% 89.0% 89.9% 88.7% 88.2% 87.9% 86.4% 88.4% 91.1% 90.1% 86.1% 91.2% 91.5% 91.1% 87.0% $126.3 $ % 78.4% 79.8% 68.1% 72.2% 79.6% 76.2% 78.2% 80.9% 77.8% 76.8% 81.8% 80.8% 79.9% 78.2% $111.2 $109.7 $69.9 $59.2 $17.7 $18.9 $30.9 $30.5 $31.2 $32.6 $32.1 $31.9 $30.3 $30.6 $30.8 $31.8 $28.0 $26.9 $27.6 $28.9 $27.7 $28.5 $27.2 $27.0 $27.0 $28.5 $13.6 $ Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 FFO and FFO Margin (US$ mm) AFFO and AFFO Margin (US$ mm) 65.2% 64.0% 61.1% 53.0% 56.2% 55.8% 57.6% 55.8% 58.3% 60.7% 57.9% 57.7% 53.8% 50.4% 50.1% $79.8 $ % 53.1% 51.8% 51.9% 53.3% 52.0% 48.5% 47.6% 48.4% 43.6% 45.1% $69.3 $ % 41.1% 40.3% 42.5% $42.8 $11.1 $12.3 $17.7 $17.7 $19.7 $20.8 $21.6 $21.4 $21.7 $21.4 $19.5 $19.6 $32.6 $7.7 $9.2 $14.3 $15.1 $16.9 $18.6 $18.6 $19.9 $19.6 $17.5 $16.5 $ Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Source: Company filings. Past performance is not a guarantee or reliable indicator of future results. (1) 2013 results exclude the period from January 1 to March 20, (2) 2015 results exclude portfolio sold in 1Q15 (3) 4Q15 FFO decreases as a result of higher interest expenses from bond issuance concluded in November

13 PORTFOLIO HIGHLIGHTS Quarterly Financial 1Q15 4Q15 1Q16 1Q16 vs. 4Q15 1Q16 vs. 1Q15 1Q15 4Q15 1Q16 1Q16 vs. 4Q15 1Q16 vs. 1Q15 fx Highlights by Region (millions of pesos unless otherwise stated) (millions of dollars unless otherwise stated) Rental Revenues % 18.0% % -2.5% Other OperaRng Income % 6.8% % -12.2% Net Revenues % 21.9% % 0.6% Net OperaRng Income (NOI) % 20.5% % -0.5% NOI Margin 86.1% 90.1% 87.0% -307 bps 89 bps 86.1% 91.1% 87.0% -407 bps 89 bps EBITDA % 21.7% % 0.2% EBITDA Margin 76.8% 77.8% 78.2% 36 bps 134 bps 76.8% 79.9% 78.2% -174 bps 134 bps Funds from OperaRons (FFO) % 11.3% % -8.5% FFO Margin 57.9% 60.7% 53.8% -688 bps -409 bps 57.9% 57.7% 53.8% -388 bps -409 bps Adjusted Funds from OperaRons (AFFO) % 1.5% % -16.6% AFFO Margin 53.3% 51.9% 45.1% -679 bps -819 bps 53.3% 48.4% 45.1% -329 bps -819 bps DistribuRons % 1.5% % -16.6% DistribuRons per CBFI % 1.4% % -16.7% (as of March 31, 2016) North Bajio Central Total # Buildings # Tenants GLA (msf) New Developments 1 (msf) Land Reserves (msf) Occupancy Rate 95.4% 86.8% 95.4% 93.3% Average Leasing Rent / Square Foot (dollars) mm sq. ft. Annualized Rental Base % 54.5% 23.5% 22.0% 100.0% Past performance is not a guarantee or reliable indicator of future results. (1). Includes expansions, BTS and Spec to Suits. Source: Terrafina. 13

14 OUTSTANDING DEBT (as of December 31, 2015) Long Term Debt CiRbank 1 Currency Dollars Millions of dollars 0.0 GEREM 2,3 Dollars Interest Rate Libor % Libor % Metlife 4 Dollars % Terms Maturity Extension OpBon Interest Only Aug 2018 Aug 2019 Interest + Principal Interest + Principal Sep 2018 Sep 2020 Nov Senior Notes Dollars % Interest Only Nov Total Debt Net Cash Net Debt Debt facilibes diligently structured to maximize distribubons to shareholders Credit loans are set at variable interest rates; average cost of debt 4.98% USD denominated debt is 100% hedged with interest rate caps and fixed rate opbons Access to cheaper financial cost; USD denominated financing is cheaper than in MXP 61.3% fixed rate and 38.7% variable Debt / EBITDA (5) LTV (6) 15.0x 51.7% 51.7% 52.1% 50.6% 40.0% 37.0% 34.9% 34.8% 34.6% 36.1% 35.9% 4.3x 8.2x 8.5x 8.1x 7.5x 6.7x 6.0x 6.0x 6.1x 6.5x 6.2x 22.2% 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 (1) Syndicated loan facility with seven banks. (2) Syndicated loan facility with four banks. (3) Interest only grace period until September (4) Debt assumed from portfolio acquisition closed in November (5) Reflects annualized EBITDA figures. (6) Defined as Total Debt / Total Assets. Total Debt at Fair Value. Source: PGIM Real Estate Capital Markets 14

15 KEY INVESTMENT HIGHLIGHTS High Quality, Geographically Diversified Industrial Portfolio of Significant Scale Diversified Tenant Base Comprised Primarily of Large Multinational Companies USD-Denominated Rents, Supported by Underlying Revenues of Export-Driven Tenants Resilient Business Model with Consistent Performance Through the Cycle Industrial Segment Outperforming Overall Mexican Economy Conservative Financial Strategy with Low Leverage and Ample Liquidity World-Class Corporate Governance and Strong Sponsorship from PGIM Real Estate 15

16 CONTENTS Performance Update / Investment Highlights Growth Strategy Financial Overview Appendix 16

17 COMPANY OVERVIEW Company History 2013 o PGIM stabilizes & rolls-up Ind. Funds I & II and completes IPO for US$713 million o Reached occupancy of 89.7% (1) 2015 o Successfully concluded a US$101 million asset recycling strategy o Closed a US$59 million acquisition of 10 industrial properties o Signed US$375 million unsecured revolver facility o Achieved Investment Grade credit ratings from Moody s and Fitch o Debut in the international capital markets with a 7-year unsecured bond issue of US$425 million 2003 o PGIM closes Industrial Fund I raising US$73 million o First BTS project for Mattel 2005 o PGIM raises Industrial Fund II for US$115 million and increases its committed capital to US$280 million Initial GLA: 1.2 Million sqf 2008 o PGIM completes Funds I & II deployment to generate 19.8 million square feet of industrial GLA 2005 o Acquisition of OCPL (5.5 million sqf of developable land) o Cambridge acquisition Terrafina IPO GLA: 19.8 Million sqf o 1.9 million sqf portfolio o AI/Kimco acquisition for US$605 million acquisition o 84 properties/11 million sqf o In-place occupancy of 82.3% o In-place occupancy of 92.3% o Key tenant: GE Q14 GLA: 31.0 Million sqf 2014 o Completed US$460 million follow-on offering in September o Reached occupancy of 91.2% (1) Source: Company filings. (1) Not including signed Letters of Intent. 22

18 INDUSTRY OVERVIEW Industrial Real Estate in Mexico Industrial Real Estate Inventory (mm sqf) CAGR : 4.1% Industrial Market Absorption (mm sqf) % 7.5% 6.8% 5.7% 4.8% 4.2% 6.0% Vacancy Rate 5.6% New Deliveries Average Industrial Annualized Rent (US$/sqf) Industrial Occupancy Rate 97.0% 95.6% 94.4% % Source: Jones Lang LaSalle Industrial Real Estate Report 4Q15. 18

19 RESILIENT BUSINESS MODEL WITH CONSISTENT PERFORMANCE Resilient portfolio managed by a team of real estate professionals, proven in all stages of the cycle 100% 95% PGIM Fund Development Phase Pre-Crisis GLA (mm sqf) Occupancy Same Store 1-Yr Occupancy Automotive / Global Financial Crisis Recovery IPO and AI / Kimco Acquisition Asset Sale / Portfolio Acquisition 93.2% 93.30% Occupancy 90% 85% 80% 82.3% 82.6% 80.4% 81.7% 81.3% 84.7% 88.2% 89.7% 91.2% 93.5% GLA (mm sqf ) 75% 5 70% 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q o Prior to year-end 2008 (year of the economic downturn), effective occupancy was ~90% o The pre-crisis vacancy level was driven by PGIM Funds expansion stage; GLA grew 10.3x faster than the market o During the economic downturn, PGIM focused on Build-to-Suit development to mitigate leasing risk o Despite a challenging global financial landscape, all debt levels remained in line and PGIM successfully refinanced more than US$170mm at competitive rates o Portfolio occupancy improved as industrial activity further recovered o Terrafina consummated its IPO in March 2013 o Occupancy reached peak levels through improved same-store performance as well as the AI / Kimco acquisition (September 2013) o Sale of non-strategic assets for US$101mm (March 2015) o Closed acquisition 10-property industrial portfolio for US $59mm (November 2015) 19

20 PGIM SPONSORSHIP o PGIM is the real estate investment management business of Prudential Financial, Inc. PGIM has an established history in the global real estate investment business since 1970 o More than 650 professionals in 18 locations with gross assets under management of US$65.4bn (1) (US$48.3 net of indebtedness), and approximately 502 institutional clients/investors Real Estate Investors Advisor Property Trusts Management Subsidiary o The Company complements PGIM s global capability through local partnerships with leading industrial developers and managers Premier Institutional Sponsorship Experienced Manager of Institutional Industrial Real Estate in Mexico since 2003 o Through its relationship with PGIM, Terrafina benefits from: Transfer of economies of scale A cost-efficient operating / real estate platform A proven track record of acquiring, selling, developing, financing and managing industrial real estate Deep industry relationships, access to capital markets, market intelligence and execution capabilities Real Estate Tenured Presence in LatAm since 2002 Currently Manages 6 Institutional Funds Specializes in Industrial, Residential and Retail Acquires, Develops and Leases Properties Strong risk management capabilities (underwriting, legal, compliance and environmental) Business continuity and long-term tenant relationships AUM of US$3.0Bn (1) 10 th Largest Investment Manager globally ( ² ) Terrafina Benefits from PGIM s Institutional Model, Global Best Practices, In-House Asset and Risk Management Capabilities Source: Company filings and PGIM Real Estate. (1) Gross value as of March 31, 2016 (2) Pensions and Investments, Top Money Manager s List, May 18,

21 TERRAFINA ORGANIZATIONAL STRUCTURE Internal Management Subsidiary External Advisor - PGIM Third Party Property Managers Alberto Chretin Chief Executive Officer Angel Bernal Chief Financial Officer Francisco Martinez Investor Relations Officer Alfonso Munk Managing Director & CIO of the Americas Rodrigo Meza Vice President & Senior Portfolio Manager, Latin America Enrique Lavín Executive Director & Head of Capital Markets Latin America Fernando Herrera Executive Director & Head of Transactions, Latin America o Property operations o Leasing o Development o Responsible for driving growth and establishing strategic objectives o Ensure appropriate capital structure o Oversee financial performance with external advisor o Communications with investors o Advisory and investment management services o Oversee capital markets activities and financing o Facilities management, system and technology support and human resources services o Financial reporting, treasury and cash management, tax, legal and compliance activities o Maintenance o Invoicing & collections o Identify properties Source: PGIM Real Estate Legal. 21

22 TERRAFINA TECHNICAL COMMITTEE World-Class Corporate Governance and Strong Sponsorship from PGIM Board of Directors Alberto Chretin Alfonso Munk Independent Members (71%) Eduardo Solis o Former Minister of Economy for the state of Chihuahua o 18 years of experience at nationally-recognized industrial real estate companies o Managing Director of PGIM and CIO of the Americas o Former Morgan Stanley head of real estate investing activities for Southern Europe and South America o President of the Mexican Association of the Automotive Industry o Former Head of Promotion of Investment at the Ministry of Economy and Chief Trade Negotiator in Mexico Advisor Investment Committee Audit Committee 100% independent o Comprised of PGIM executives and Terrafina s CEO o Must approve any acquisition or disposition of real estate assets to be carried out by the FIBRA o Carry out internal audits of the FIBRA and related activities o Review the documents prepared by the external auditor Victor D. Almeida Arturo D Acosta Ruiz José Luis Barraza o Chairman and CEO of Interceramic, a leading tile manufacturer in Mexico o Over 30 years of corporate experience in Latin America o Executive Director of Actinver and former Executive Director of Alvarez & Marsal, Mexico o Broad experience in financial consulting, and specializing in M&A, restructurings and financing o Former President of Grupo Aeromexico, S.A.B. de C.V. o Over 30 years of experience in international trading and industrial promotion and development Indebtedness Committee 100% independent Practices Committee 100% independent o Review credit agreements o Assure compliance with indebtedness regulation and financial covenant o Aid the FIBRA Board in making decisions regarding conflict of interest, governance, and best practices Carmina Abad o Chief Executive Officer at Swiss Re Corporate Solutions in Mexico o Former CEO & Chairman of the Board of Metlife Mexico Nominating Committee 100% independent o Responsible for membership and compensation of board members and Terrafina s team 22

23 NET ASSET VALUE CALCULATION NAV Calculation (+)Investment Properties 1,613.6 (+)Land 47.5 (+)Cash (-)Total Debt and Liabilities NAV 1,173.9 Outstanding CBFIs NAV per CBFI (dollars) 1.9 Cap Rate Calculation with NAV results Average Share Price (USD$) 1.9 (x) CBFIs (million shares) (=) Market Cap 1,173.9 (+) Total Debt and Liabilities (-) Cash (=) Enterprise Value 1,661.1 (-) Landbank 47.5 (=) Implied Operating Real Estate Value 1, e NOI Implied Cap Rate 8.2% Source: Company filings. 1Q16 earnings report Figures expressed in millions dollars unless otherwise stated 23

24 IMPLIED CAP RATE CALCULATION Implied Cap Rate Average Share Price (USD$)¹ 1.67 (x) CBFIs (million shares) (=) Market Cap 1,016.6 (+) Total Debt (-) Cash 256 (=) Enterprise Value 1,466.1 (-) Landbank 47.5 (=) Implied Operating Real Estate Value 1, e NOI 133 Implied Cap Rate 9.4% Source: Company filings. Figures expressed in million dollars unless otherwise stated (1) CBFI price as of 31/05/2016: and FX rate Ps

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