Q2 2024 Vesta Real Estate Corporation SAB de CV Earnings Call Transcript
Key Points
- Leasing activity reached 2.8 million square feet, with 1 million square feet in new leases, driven by strong demand in the e-commerce and consumer logistics sectors.
- Stabilized occupancy reached a record 97.5%, indicating high demand and effective portfolio management.
- Adjusted NOI and EBITDA margins were strong at 94.7% and 82.3%, respectively, reflecting efficient operations.
- Foreign direct investment into Mexico increased by 35% year-on-year, with significant investments in the manufacturing industry, benefiting Vesta's market.
- Vesta's construction pipeline is robust, with 4.7 million square feet under development, ensuring future growth and meeting market demand.
- Higher rental revenue was partially offset by increased insurance, property tax, and other property costs, leading to a slight decrease in NOI margin.
- Administrative expenses increased due to peso appreciation and higher auditing, legal, and consulting expenses, impacting profitability.
- Some construction projects experienced delays, affecting the timely delivery of buildings and potentially impacting revenue recognition.
- The cost per square meter of the development pipeline increased significantly, driven by higher land and construction costs, which could pressure margins.
- The company faces ongoing challenges in replenishing its land bank in key regions, which could limit future development opportunities.
Greetings, ladies and gentlemen. Welcome to the Vesta second-quarter 2024 earnings conference call. (Operator Instructions) And as a reminder, this call is being recorded. It is now my pleasure to introduce your host, Mariana Dominguez with Vesta's Investor Relations team. Please go ahead.
Good morning, everyone, and welcome to our second-quarter earnings call. Presenting today with me is Lorenzo Dominique Berho, Chief Executive Officer, and Juan Sottil, our Chief Financial Officer. The earnings release detailing our second-quarter 2024 results was released yesterday after market close and is available on the company's website along with our supplemental package.
It's important to note that on today's call, management remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ. For more information on these risk
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