NOVEMBER 2017
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 It may not be reproduced or redistributed to any other person, and it may not be published, in whole or in part, for any purpose.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. None of the Company or any authorized underwriter or any of their respective affiliates expects to update or otherwise review the information contained herein except by means of a prospectus, offering memorandum or other customary disclosure document with respect to the offer of any securities of the Company. 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 certificates. 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 (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 certificates 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 (“CNBV”) or any offering memorandum delivered to you in due course in relation to any such offering, and not on the basis of this presentation. 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 forward- looking 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. Neither the CNBV nor any other authority have approved or disapproved the information contained in this presentation, or the accuracy or the veracity of the information contained herein. By attending this presentation or by accepting to view any of the materials presented, you agree to be bound by the foregoing limitations. 2
Key investment highlights Proven track record delivering consistent and stable operating and 1 financial results Best-in-class industrial portfolio in strong growing markets and 2 sectors Stable and resilient portfolio with diversified high-quality tenant 3 base 4 Investment grade with access to main sources of capital World-class corporate governance, experienced internal management 5 team and strong sponsorship from PGIM Real Estate 3
Delivering results enhancing our growth strategy 1 Key milestones that propelled and supported our growth story 2017 Current GLA: • ~US$317MM FO offering to 37.8MM ft 2 support growth strategy • Acquired in September 2017, 8 industrial properties with a GLA of 1.1MM ft 2 • Signed binding document in October 2017 for a 3.4 MM ft 2 2016 portfolio acquisition to be close by • Refinancing of US the end of 2017. $150MM at LIBOR + FO GLA: 200bps with a 5 year- 31.0MM ft 2 loan 2017 (1) 2014 IPO GLA: • ~US$460MM FO offering 2016 19.9MM ft 2 2003 – 2007 • 2003 à PGIM closes Industrial 2013 2017 2015 Fund I for ~US$73MM • ~US$713MM IPO • Completed portfolio acquisitions • 2005 à PGIM raises Industrial of 51 industrial properties / 2014 Fund II for ~US$280MM 6.3MM ft 2 2015 2013 • Succesfully concluded Initial GLA: • ~US$101MM asset recycling 1.2MM ft 2 refinancing of US$150MM with strategy 2008 a 10-year secured credit loan • Acquired 10 industrial properties 2013 2003 with a fixed interest rate of 4.75% with a GLA of ~1.1MM ft 2 • AI/Kimco acquisition, 84 • New 5-year unsecured term • Achieved “Investment Grade” properties with a GLA of loan for US$350 million used for 2008 credit ratings from Moody’s and ~11MM ft 2 • PGIM completes liability management; total Fitch payment of unsecured credit loan Funds’ I & II • Debut in international debt of US$150 million and US$196.5 deployment to generate capital markets with a 7-year 19.9MM ft 2 industrial million of revolving credit. unsecured bond issue of US portfolio $425MM with a fixed interest rate 4 of 5.25% Source 1. PGIM Real Estate (“PGIM”) is the global real estate investment business unit of Prudential Financial, Inc.
Op7mal growth strategy supported by acquisi7ons and 1 selec7ve development Growth Strategy Business Model Execute accretive acquisitions • Take advantage of long-term institutional relationships and Execute Selectively JV partnerships to source off-market deals in fragmented Accretive Pursue Acquisitions Development market Opportunities • Execute accretive acquisitions while maintaining a sound balance sheet Proactive Selectively pursue development opportunities Portfolio • Focus on ongoing expansion demand of existing and new Optimization tenants who require additional capacity and Build-to-Suit (BTS) developments • Selectively access current land reserves to unlock embedded value of Terrafina’s land at high development Business model supported by experienced property managers yields Proactive portfolio optimization Active and Close Foster Merchant Local Expertise Tenant Management Development • Assets divestiture strictly to improve Terrafina’s operating metrics, leverage profile and financial position • Strengthen Terrafina’s balance sheet and overall financial Generating Synergies: position • First hand opportunities and repeated business • Leverage Terrafina’s platform and scale • Increased tenant retention • Maintain high occupancy levels and rental rates 5
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