Letter to
Our Shareholders

Despite a perspective of lower economic growth, internal consumption indicators for 2019 continue to show levels of confidence rising, inflation has begun to decline and the exchange rate has been revalued before less restrictive signals from the Federal Reserve and the Bank of Mexico. Consequently, there is an increase in the appetite for risk in the financial markets.

The 2018 results are satisfactory, with increases in our flow generation and stability in occupancy levels. Commercially speaking, we achieved significant closures during the year by leasing an additional 9,852 sqm in the Toreo office towers, we have reached an occupancy level of 71% that represents 88,253 sqm leased in this mixed-use complex. Parque Puebla completed the construction of the business hotel that began operations in the first quarter of 2019. Parque Las Antenas reached an impressive 83% of leased GLA and during the fourth quarter of 2018 the amusement park began operations. Its contribution to the high levels of affluence has been notable.

At the end of the year our financial structure is solid, with a 10% leverage. In the short term, we have scheduled the expiration of the floating rate debt, Danhos 16-2, which we intend to liquidate through the accumulation of undistributed cash flow, which will further improve our debt profile and liquidity index. The rest of our financial liabilities consists of two long-term debts in national currency, with maturities in 2026 and 2027 and a weighted average fixed cost of 8.14%.

The CDMX government restarted activity after a period of partial closure, we have concluded the process for obtaining the necessary licenses and permits for Parque Tepeyac, and hope to resume the work during the first semester of 2019. We will continue with a 24 month development program and an estimated investment of 3,600 million pesos, of which 50% corresponds to us.

About 3,000 temporary jobs will be generated and once completed, 4,000 permanent jobs will be created.

The AFFO of 2018 was 3,710.3 million pesos, including Tenant admission payments (TAPS) of 365.9 million pesos, which represents an AFFO per CBFI of 2.68 pesos. The NOI excluding TAPS was 3,786.4 million pesos in 2018, which represents a growth of 24.6% compared to the previous year. Based on these results, our Technical Committee approved dividend distributions during the year for a total of 2.40 pesos per CBFI, which represents a growth of 5.2% against the dividend distributed in 2017, while the undistributed resources amounted to 324 million pesos, which will be used for various corporate purposes, including debt payment.

We will seek to continue growing selectively, offering the market the best developments, and analyzing investment opportunities that are profitable and viable for our investors. Likewise, aware that our integral business model impacts diverse stakeholders, we included in this report a sustainability section that describes relevant issues in economic, ethical, social and environmental matters. I thank our team of collaborators, advisors and shareholders for the trust placed in us to achieve these results.

Salvador Daniel Kabbaz Zaga
CEO, Fibra Danhos