Terrafina announces Second Quarter 2014 Earnings Report

Terrafina (“TERRA”) (BMV:TERRA13), a leading Mexican industrial real estate investment trust (“FIBRA”), externally advised by Prudential Real Estate Investors and dedicated to the acquisition, development, lease and management of industrial real estate properties in Mexico, today announced its second quarter 2014 earnings results.

The figures in this report have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Figures presented in this report are presented in millions of Mexican pesos and millions of U.S. dollars unless otherwise stated. Additionally, figures can vary due to rounding.

Terrafina’s financial results included in this report are unaudited; as a result, the figures used throughout this report could present adjustments in the future.

Terrafina’s 2Q14 reports financial results for the second quarter of 2014 that comprise the period of April 1, 2014 through June 30, 2014. It is important to consider that comparisons in this earnings report are made to first quarter 2014 numbers since second quarter 2013 results do not include the effects of the American Industries – Kimco acquisition.

Financial and Operational Highlights as of June 30, 2014

Operational

• Occupancy rate at June 30, 2014, was 91.1%, a 53 basis points increase compared to the first quarter of 2014.
• Annualized average leasing rate per square foot for 2Q14 was US$4.78, a US$ 0.04 increase compared to 1Q14.
• The renewal rate up to June 30, 2014 was 82.1%, a 26 basis points increase compared to 1Q14.
• A total of 27 contracts, equivalent to 1.3 million square feet (msf), were renewed in 2Q14; on average 90% of leasing contracts were signed at a 2% above in-place rent, which increase from US$4.42 to US$4.51.
• The weighted average remaining lease term increased from 3.59 years in 1Q14 to 3.67 years in 2Q14.
• In 2Q14, Terrafina reported a total of 30.9 msf of Gross Leasable Area (GLA) comprised of 217 properties and 232 tenants.
• Leasing activity for 2Q14 totaled 1.7 msf, of which 23.5% corresponds to new leasing contracts and 76.5% to lease renewals. Leasing activity was mainly concentrated in the markets of Ciudad Juarez, Ramos Arizpe, Tijuana, Cuautitlan Izcalli, Saltillo and Chihuahua.

Financial

• 2Q14 rental revenues reached US$32.6 million, an increase of 2.8% or US$0.9 million compared to 1Q14. It is important to mention that accrued revenues are not included as rental revenues as this is a non-cash item.
• NOI for 2Q14 was US$31.2 million; NOI Margin reached 88.4%, a 198 basis points increase compared to 1Q14. Moreover, considering expected NOI of US$125 million for 2014 and an average CBFI price for 2Q14 of US$2.04 (Ps. 26.48), the average implied cap rate reached 8.0%.
• EBITDA for 2Q14 reached US$27.6 million; EBITDA Margin was 78.2%, a 198 basis points increase compared to 1Q14.
• Adjusted Funds for Operations (AFFO) for 2Q14 reached US$16.9 million; AFFO margin was 47.6%, a 507 basis points increase compared to 1Q14.
• Distributions for 2Q14 totaled US$16.9 million. As a result of 2Q14 operations, Terrafina will pay distributions of Ps. 0.5769 per CBFI (US$0.0444 per CBFI) in distributions corresponding to the period of April 1 to June 30, 2014. This represents an increase of 11.9% in distributions denominated in dollars compared to 1Q14.
• Annualized distributions per CBFI for 2Q14 is expected to reach US$0.1774; considering the average CBFI price for 2Q14 of US$2.04 (Ps. 26.48), Terrafina reached a dividend yield of 8.7%.

For the complete report, please visit our website at http://www.terrafina.mx/ or contact our investor relations department.