Discussion and analysis of operating results

This section of management’s discussion and analysis of the results of our operations should be read together with the financial statements and the accompanying notes attached to this Annual Report.

Revenues

In 2024, total operating income was MXN6.78 billion, a 9.5% increase compared to 2023. The growth is attributed primarily to three factors: i) an increase in economic activity, reflected in higher footfall in our properties as well as in an across-the-board increase in occupancy rates in our shopping centers; ii) the stabilization of Parque Tepeyac operations, which in turn significantly improved overage; and iii) the start of revenue flows from Phase I of the Parque Industrial Danhos Cuautitlán.

Base rent accounted for about 65.1% of the total operating income of Fibra Danhos, while overage accounted for 7.2%, tenant admission payments 3.6%, parking revenues 7.9%, and revenues from maintenance, operation, advertising and others about 16.8%.

Revenues from base rent totaled MXN4.37 billion in 2024, a year-to-year growth of 8.4%. The increase is mainly attributed to the stabilization of Parque Tepeyac, the start of revenues flows from our industrial project—which began contributing in the last quarter of the year—and a broad-based increase in occupancy levels in our properties. In the retail portfolio in particular, occupancy gained 140 basis points over 2023, and the office segment grew by 250 basis points.

Income from overage totaled MXN487 million in 2024, a year-over-year increase of 27.2%, primarily the result of new flows from the entertainment center and the aquarium at Parque Tepeyac, which experienced solid demand and contributed significantly to the operating performance of this property.

Revenues from Fibra Danhos parking facilities totaled MXN536 million in 2024, a year-over-year increase of 4.4%. This is the result of higher vehicle flow to our properties throughout the year. Revenues from maintenance, operation, advertising and others reached MXN1.14 billion in 2024, which is 11.3% higher than in 2023. The change was the result of an increase in activity footfall in our properties compared to 2023.

Expenses

Operating expenses at Fibra Danhos in 2024 totaled MXN2.37 billion, a 5.7% increase compared to 2023, reflecting strict management control and greater operating efficiency, despite inflation pressures. Operating, maintenance, advertising and other expenses accounted for 46.7% of total operating expenses, advisory fees 29.4%, the representation service fee 5.7%, administrative expense 6.9%, property tax 8.9% and insurance 2.4%.

Operating, maintenance, advertising and other expenses totaled MXN1.11 billion in 2024, increasing 5.0% over 2023. Advisory and representation service fees totaled MXN696 million and MXN135 million, respectively, increases of 3.1% and 10.6% compared to 2023. The main reason for the rise in advisory fees was the incorporation of a new industrial project into our portfolio of investment properties, and in accordance with the planning advisory agreement.

The increase in representation service fees was attributed primarily to an increase in revenues billed and collected, stemming from the recovery of general economic activity, as these serve as the basis for calculating these fees.

Property tax and insurance expenses came to MXN210 million and MXN57 million in 2024. Property tax was higher in 2024 because of a generalized increase in the rates applicable to our properties. At the same time, insurance premiums rose by approximately 9.6%, in line with conditions in the insurance market.

Other income/expenses

Interest income, interest expense, and foreign-exchange gain (net): In 2024, interest income totaled MXN61 million, supported mainly by investment of the cash balance in fixed-income securities. In the same period, interest expense (in accounting terms) totaled MXN630 million. Fibra Danhos entered a foreign-exchange gain of MXN52 million, due primarily to the depreciation of the Mexican peso against the US dollar and its impact on the company’s collections in dollars.

Adjustments to the reasonable value of investment properties as of December 31, 2024 totaled MXN557 million. These adjustments were the result of market value appraisals by independent experts who conducted annual assessments of our investment properties, complemented by quarterly adjustments.

NOI, EBITDA, net income, FFO and AFFO

Net operating income (NOI) in 2024 was MXN5.27 billion, a year-over-year increase of 10.4% compared to 2023, due to strong operating performance in our portfolio. The net operating margin, excluding tenant admission payments, was 76.9%, up from 76.2% in 2023, evidence of efficient operation and strong expense control.

EBITDA in 2024 was MXN4.41 billion, 11.6% higher than in 2023, the result of solid operating performance in our portfolio. The EBITDA margin was 65.0%, slightly higher than the 63.8% reported in 2023.

Net income, FFO and AFFO in 2024 totaled MXN4.20 billion, MXN3.57 billion and MXN4.22 billion, increases of 27.0%, 9.3% and 6.5%, respectively, compared to those of 2023.

Cash Distributions

Because of the solid generation of cash flow from our operating portfolio in 2024, Fibra Danhos reported an AFFO of MXN4.22 billion, which is an AFFO per CBFI with economic rights of MXN2.67. In order to continue making concrete steps in our growth plan, and with the firm intention of maintaining a healthy mix of debt and cash flow for funding our projects, the Technical Committee decided on a policy of fixed quarterly distributions of MXN0.45 per CBFI at least through the fourth quarter of 2024, in keeping with the corresponding legislation. This decision gives our investors a clear picture of the dividend flows scheduled for this period. The Committee’s decision meant a distribution of MXN1.80 per CBFI for both 2024 and 2025, which will allow us to execute our development plan, maintain a conservative capital structure and diversify our project portfolio according to our eligibility criteria.

	DECEMBER 31, 2024 (MXN)	DECEMBER 31, 2023 (MXN)
Net income	4,201,211,086	3,309,204,020
Net foreign-exchange gain	52,217,732	(25,239,939)
Adjustment to reasonable value of properties – Net	557,028,530	118,601,563
Estimate for uncollectable accounts	(25,044,948)	(35,096,563)
FFO	3,570,427,681	3,267,016,889
Tenant Admission payments - Net	66,314,461	(35,631,183)
Upfront rents - Net	43,289,540	(5,602,733)
Straight-line rent - Net	(69,380,803)	(23,760,796)
Unaccrued property tax and insurance - net	488,196	1,988,208
Advisory and Representation Fees -Net	609,445,810	678,781,976
AFFO	4,220,584,886	3,962,178,792