Macquarie Mexican REIT Announces Fourth Quarter and Full Year 2013 Earnings; Fourth Quarter Distribution of Ps.0.47 Per CBFI

• Funds from Operations of Ps.233.2 million reported in the fourth quarter including contributions from recent acquisitions
• 100,000 square meters (1.1 million square feet) and 355,000 square meters (3.8 million square feet) of new and renewed industrial space leased in the fourth quarter and full year 2013 respectively
• Portfolio wide occupancy rate of 90.9% at year end
• MMREIT expects to make cash distributions to investors of Ps.0.475 per CBFI, per quarter for 2014

MEXICO CITY--(BUSINESS WIRE)--Macquarie Mexican REIT (MMREIT) (BMV: FIBRAMQ) today announced its financial results for the fourth quarter and full year ended December 31, 2013.

Fourth Quarter & Full Year 2013 Financial Results

MMREIT reported total property rental income of Ps.476.9 million for the fourth quarter of 2013 and Ps.1.71 billion for the full year ended December 31, 2013. Funds from Operations totaled Ps.233.2 million for the quarter and Ps.927.0 million for the full year of 2013. MMREIT’s initial global offering occurred on December 19, 2012 and as a result MMREIT has not reported prior comparable period data. There were 604,750,917 MMREIT real estate trust certificates (Certificados Bursátiles Fiduciarios Inmobiliarios or CBFIs) outstanding as of December 31, 2013.

	Fourth Quarter 2013	Full Year 2013
Net Operating Income (NOI)	Ps.426.4 million	Ps.1.53 billion
Net Profit	Ps.15.6 million	Ps.1.07 billion
Funds from Operations (FFO)	Ps.233.2 million	Ps.927.0 million

FFO per CBFI for the quarter and full year ended December 31, 2013 was Ps.0.395 and Ps.1.62 respectively, based on a weighted average number of CBFIs outstanding during the quarter and year ended December 31, 2013 of 590,043,825 and 570,508,006 respectively.

NOI includes rental income, plus maintenance recoveries and parking income, minus property operating expenses (including property administration fees). FFO is equal to NOI minus corporate general and administrative expenses, debt service and management fees.

“We are pleased with our first full year performance as a publicly traded trust,” said Jaime Lara, Chief Executive Officer, MMREIT. “We were able to deliver results that were in line with guidance and remain encouraged by the favorable market trends that we are seeing. While there was some uncertainty over proposed Mexican government reforms, which impacted economic activity through the year and contributed to reduced leasing activity in the second half of 2013, we remain optimistic about the year ahead. With the resolution of the reform issues, we expect to see solid operating results driven by a continued improvement in operational efficiencies and market fundamentals in 2014.”

Industrial Segment Operating Results

As of December 31, 2013, MMREIT owned 259 industrial properties located in 21 cities across 15 Mexican states, with a total of approximately 2.7 million square meters (28.5 million square feet) of gross leasable area. Industrial segment operating highlights as of the quarter ended December 31, 2013 include the following:

Industrial Segment Metrics	Fourth Quarter 2013	Third Quarter 2013	Fourth Quarter 2012*
Occupancy Rate	90.3%	89.6%	92.1%
Rolling Occupancy Rate (YTD Average)	89.5%	89.4%	n/a
Avg. Monthly Rent per Leased m^2	US$4.49	US$4.53	US$4.58
Rolling av. Lease Rate per Leased m^2(YTD Average)	US$4.55	US$4.57	n/a
Customer Retention Rate	58%	65%	85%
Weighted Average Lease Term	3.2 years	3.1 years	3.5 years

* In February 2013, MMREIT reported fourth quarter 2012 results for the period from December 19 to December 31, 2012 during which MMREIT operated as a publicly traded trust following its listing.

Occupancy rates across the industrial segment increased 70 basis points in the fourth quarter of 2013 to 90.3% versus 89.6% in the third quarter of 2013. Occupancy rates at year end 2013 declined to 90.3% from 92.1% at year end 2012. As of January 1, 2013 the industrial segment’s occupancy rate was 90.2% due to the previously announced early termination that occurred on January 1, 2013. MMREIT’s industrial segment’s weighted average remaining lease term (based on annualized base rent) as of December 31, 2013 was 3.2 years, up from the previous quarter reflecting longer leases entered into in the fourth quarter.

Industrial Segment Leasing Activity

New and renewed industrial leases totaling approximately 100,000 square meters (1.1 million square feet) commenced during the fourth quarter. Highlights include:

• 7 year agreement for an approximately 21,000 square meter (226,000 square foot) new lease in Reynosa;
• 10 year agreement for an approximately 19,000 square meter (208,000 square foot) lease renewal and an approximately 2,800 square meter (30,000 square foot) build-to-suit lease expansion in Matamoros;
• 6 year agreement for an approximately 9,000 square meter (100,000 square foot) lease renewal and an approximately 2,800 square meter (30,000 square foot) expansion in Reynosa;
• 5 year agreement for an approximately 8,000 square meter (86,000 square foot) new lease in Chihuahua;
• 4.7 year agreement for a 7,000 square meter (75,000 square foot) new lease in Hermosillo; and
• 5 year agreement for a 6,500 square meter (70,000 square foot) new lease in Ciudad Juarez.

Overall, MMREIT’s industrial segment had 355,000 square meters (3.8 million square feet) of new and renewed leases commence during the full year 2013.

“New client wins continued throughout the year, and we were able to bring on new corporate customers across a broad range of industries including logistics, consumer products and medical,” said Lara. “Our Manager’s leasing teams acted quickly to fill vacated space and worked closely with prospective customers to tailor solutions to match their needs. We also saw a number of existing customers expanding and adding more space in 2013. These are all positive indicators, and we are seeing the trends continue into 2014.”

Rental rates slightly declined to an average of US$4.49 per square meter per month in the fourth quarter versus US$4.53 in the third quarter of 2013. Excluding the impact of the 15 property industrial portfolio acquired on October 17, 2013, industrial rental rates would have remained flat at US$4.53 for the fourth quarter. The 15 property portfolio, which was 100% occupied when acquired, has an average remaining lease term of 2.0 years (based on annualized base rent), and MMREIT expects to be able to increase rents for these properties subject to continued favorable market conditions.

MMREIT’s industrial customer retention rate was 58% in the fourth quarter of 2013 based on leased area. Excluding the impact of early lease terminations over the course of 2013, MMREIT’s industrial customer retention rate for the fourth quarter of 2013 would have been 68%. For the full year ended December 31, 2013, MMREIT’s industrial customer retention rate was 60%, or 72% adjusting for the early terminations.

Retail / Office Segment Operating Results

As of December 31, 2013, MMREIT owned 7 retail/office properties in two cities with approximately 237,000 square meters (2.6 million square feet) of gross leasable area. The fourth quarter 2013 marks the first quarter during which the MMREIT portfolio included retail/office properties. MMREIT closed on a two-property portfolio on November 4, 2013 and a subsequent five-property portfolio on November 6, 2013.

Retail/office segment operating highlights as of the quarter ended December 31, 2013, include the following:

Retail/Office Segment Metrics	Fourth Quarter 2013*
Occupancy Rate	97.3%
Rolling Occupancy Rate (YTD Average)	97.3%
Avg. Monthly Rent per Leased m^2	US$9.67
Rolling Avg. Lease Rate per Leased m^2(YTD Average)	US$9.65
Weighted Average Lease Term	6.4 years

* Abbreviated quarter; 4Q13 is the first quarter in which MMREIT has included retail/office properties

Occupancy rates for the retail segment averaged 97.3% at the end of the fourth quarter of 2013. The retail segment’s weighted average remaining lease term (based on annualized base rent) as of December 31, 2013, was 6.4 years, and rental rates were equivalent to US$9.67 per square meter per month.

“Diversifying our portfolio beyond industrial properties is a key part of our growth strategy, and we are pleased to be reporting strong retail/office segment results in our first quarter of owning properties of this type,” said Lara. “These properties are located in prime retail and office locations that we expect to continue to benefit from the long-term growth of Mexico’s middle class. Our portfolio is anchored by top-tier, brand-name customers, and we see no shortage of interest from other prospective tenants.”

Distribution for Fourth Quarter 2013

On February 25, 2014, MMREIT declared a distribution for the quarter ended December 31, 2013 of Ps.0.47 per CBFI. The distribution includes an ordinary distribution of Ps.0.36 per CBFI and an extraordinary distribution of Ps.0.11 per CBFI corresponding to the fourth and final 25% of the Founder’s Grant reinvestment on closing of the initial global offering. MMREIT’s current distribution policy is to pay quarterly cash distributions.

MMREIT has declared total distributions of Ps.1.94 in 2013, which is at the upper range of MMREIT’s guidance.

Distribution Guidance for 2014

MMREIT expects to make cash distributions to investors of Ps.0.475 per CBFI, per quarter for 2014. The payment of a cash distribution is at all times subject to the approval of the board of directors of the Manager, the continued stable performance of the properties in the portfolio, and prevailing economic conditions.

Webcast and Conference Call

Macquarie Mexican REIT will host an earnings conference call and webcast presentation on Wednesday, February 26, 2014 at 7:30 a.m. CT / 8:30 a.m. ET. The conference call, which will also be webcast, can be accessed online at www.macquarie.com/mmreit or by dialing toll free [phone]. Callers from outside the United States may dial [phone]. Please ask for the Macquarie Mexican REIT Fourth Quarter and Full Year 2013 Earnings Call.

An audio replay will be available through March 2, 2014, by dialing [phone] or [phone] for callers outside the United States. The passcode for the replay is 37110768. A webcast archive of the conference call and a copy of MMREIT’s financial information for the fourth quarter and full year 2013 will also be available on MMREIT’s website, www.macquarie.com/mmreit.

About Macquarie Mexican REIT

Macquarie Mexican REIT (MMREIT) (BMV: FIBRAMQ) is a real estate investment trust (fideicomiso de inversíon en bienes raices), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico, with a primary focus on stabilized income-producing properties. MMREIT’s portfolio consists of 259 industrial properties and seven retail/office properties, located in 22 cities across 17 Mexican states (as of December 31, 2013). MMREIT is managed by Macquarie México Real Estate Management, S.A. de C.V. which operates within the Macquarie Infrastructure and Real Assets division of Macquarie Group. For additional information about MMREIT, please visit www.macquarie.com/mmreit.

About Macquarie Group

Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie’s main business focus is making returns by providing a diversified range of services to clients. Macquarie acts on behalf of institutional, corporate and retail clients and counterparties around the world. Founded in 1969, Macquarie operates in more than 70 office locations in 28 countries. Macquarie employs approximately 13,900 people and has assets under management of over US$359 billion (as of September 30, 2013).

Macquarie Infrastructure and Real Assets, a division of Macquarie, is a leading global alternative asset manager specializing in investments across infrastructure, real estate, agriculture and energy. Macquarie Infrastructure and Real Assets manages 49 funds with US$106 billion of assets under management across 25 countries (as of September 30, 2013).

Cautionary Note Regarding Forward-Looking Statements: This release may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ significantly from these forward-looking statements.

THIS RELEASE IS NOT AN OFFER FOR SALE OF SECURITIES IN THE UNITED STATES, AND SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED.

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2013
CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE STATED)
	3 months ended	12 months ended	Period ended
	Dec 31, 2013	Dec 31, 2013	Dec 31, 2012
	$’000	$’000	$’000
Property rental income	476,891	1,706,321	156,070
Property expenses	(56,822)	(188,168)	(4,659)
Net property income	420,069	1,518,153	151,411
Management fees	(35,400)	(150,860)	(4,558)
Transaction related expenses	(185,941)	(258,870)	(564,530)
Professional fees, legal fees and general expenses	(24,456)	(59,260)	(9,580)
Total expenses	(245,797)	(468,990)	(578,668)
Finance costs	(156,792)	(554,782)	(21,345)
Interest income	17,019	101,453	1,628
Other income	286	110,597	-
Foreign exchange gain/(loss)	38,908	(17,581)	(76,952)
Net unrealized foreign exchange (loss)/gain on foreign currency denominated investment property measured at fair value	(89,783)	458,905	(201,173)
Revaluation of investment property measured at fair value	31,675	(80,413)	-
Profit/(loss) for the period	15,585	1,067,342	(725,099)
Other comprehensive income
Other comprehensive income for the period	-	-	-
Total comprehensive profit/(loss) for the period	15,585	1,067,342	(725,099)
Earnings per CBFI
Basic earnings per CBFI (pesos)	0.03	1.87	(1.42)
Diluted earnings per CBFI (pesos)	0.03	1.86	(1.27)

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2013
CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE STATED)
	Dec 31, 2013	Dec 31, 2012
	$’000	$’000
Current assets
Cash and cash equivalents	2,118,348	1,324,884
Restricted cash	119,730	-
Trade and other receivables	85,963	144,934
Value added tax receivable	663,452	2,418,952
Other assets	75,142	-
Total current assets	3,062,635	3,888,770
Non-current assets
Restricted cash	109,854	75,878
Other assets	14,145	319
Investment properties	23,514,719	17,544,898
Goodwill	931,605	931,605
Total non-current assets	24,570,323	18,552,700
Total assets	27,632,958	22,441,470
Current liabilities
Trade and other payables	198,936	14,286
Interest-bearing liabilities	663,013	886,794
Other liabilities	153,559	-
Total current liabilities	1,015,508	901,080
Non-current liabilities
Other liabilities	277,306	465,706
Interest-bearing liabilities	12,324,100	9,677,860
Total non-current liabilities	12,601,406	10,143,566
Total liabilities	13,616,914	11,044,646
Net assets	14,016,044	11,396,824
Equity
Contributed equity	13,673,801	12,121,923
Retained earnings/(accumulated losses)	342,243	(725,099)
Total equity	14,016,044	11,396,824

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE STATED)
	Contributed Equity	Retained earnings/ (accumulated losses)	Total
	$’000	$’000	$’000
Initial contribution at November 14, 2012	50	-	-
Issued CBFIs, net of issue costs	12,121,873	-	-
Total comprehensive loss for the year	-	(725,099)	(725,099)
Total equity at December 31, 2012	12,121,923	(725,099)	(725,099)
Total equity at January 1, 2013	12,121,923	(725,099)	11,396,824
Issued CBFIs, net of issue costs	2,385,612	-	2,385,612
Distribution to CBFI holders	(833,734)	-	(833,734)
Total comprehensive profit for the period	-	1,067,342	1,067,342
Total equity at December 31, 2013	13,673,801	342,243	14,016,044

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
CURRENCY AMOUNTS EXPRESSED IN THOUSANDS OF MEXICAN PESOS (UNLESS OTHERWISE STATED)
	12 months ended	Period ended
	Dec 31, 2013	Dec 31, 2012
	$’000	$’000
	Inflows / (Outflows)	Inflows / (Outflows)
Operating activities:
Profit/(loss) for the period	1,067,342	(725,099)
Adjustments for:
Net unrealized foreign exchange (gain)/loss on foreign currency denominated investment property measured at fair value	(458,905)	201,173
Revaluation of investment property measured at fair value	80,413	-
Straight line rental income adjustment	(11,191)	(319)
Leasing commissions amortization	7,114	-
Net foreign exchange loss/(gain)	17,581	(3,097)
Finance costs recognized in profit for the period	554,782	21,350
Other income	(110,597)	-
Movements in working capital:
Decrease/(increase) in receivables	1,725,503	(2,563,886)
Increase in payables	176,769	239,124
Net cash flows from operating activities	3,048,811	(2,830,754)
Investing activities:
Investment property capital expenditure	(5,587,251)	(18,235,636)
Net cash flows from investing activities	(5,587,251)	(18,235,636)
Financing activities:
Proceeds from interest-bearing liabilities, net of facility fees	3,248,575	10,362,372
Repayment of interest-bearing liabilities	(893,942)	-
Interest paid	(440,775)	(17,404)
Proceeds from issue of CBFIs, net of capital raising costs	2,385,612	12,121,923
Distribution to CBFI holders	(833,734)	-
Net cash flows from financing activities	3,465,736	22,466,891
Net increase in cash and cash equivalents	927,296	1,400,501
Cash, cash equivalents and restricted cash at the beginning of the year	1,400,762	-
Effect of exchange rate changes on cash and cash equivalents	19,874	261
Cash, cash equivalents and restricted cash at the end of the period	2,347,932	1,400,762