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Operator: Ladies and gentlemen, thank you for standing by. I'd like to welcome you to Fibra UNO's Fourth Quarter 2025 Results Conference Call on the 27th of February 2026. [Operator Instructions]. So without further ado, I'd like to pass the line to the CEO, Fibra Mr. Andre El-Mann. Please go ahead, sir.
André Arazi: Thank you, Luis. Thank you, everybody, for your interest in our call regarding the fourth quarter of 2025. I would like to begin that we are very excited again to release these numbers for you of the fourth quarter of 2025, which has been a very busy year for us at FUNO. This is the first report after the drop-down of our industrial portfolio. I would like you to bear in mind that we need to consider -- we are considering only a few days of the complete revenues in this new structure, in this particular quarter. Nevertheless, we make sure that everything goes as planned, as we will be able to report a complete quarter this very first quarter of 2026 in the next few weeks. That would allow us to reveal that all the efforts made last year will pay back, and our shareholders will be able to see the positive impact that the carve-out of our industrial portfolio will have on the future of the company. I would like to express our excitement on the numbers released yesterday that show a consolidated company with assets close to $25 billion. These are the big numbers, but we are also taking care of the little numbers. 95.5%, our historic high of occupancy level across the board. NOI margin growing by more or less 300 bps and looking good for this year. A healthy growth above inflation on all the significant lines of the balance. I would like to remember you about last year's achievements. We made the liability management of the company, having renewed close to $800 million at the beginning of the year of the U.S. bonds -- U.S. dollar bonds. We renewed also MXN 12 billion of the Mexican peso bonds. We made the repayment of close to MXN 10 billion of short-term bilateral revolving lines of credit, with the issuance of an unsecured line long term. We made the exchange of our bonds across the curve to complete the transfers of debt to Fibra Next. We finalized the internalization process and we expect savings in the order of $400 million to $500 million this year. We did the carve-out of our industrial portfolio. First, with the IPO of Fibra Next in which we raised close to $430 million. Then we made a follow-on equity offering of Fibra Next close to $400 million. We did the exchange of the bonds. And then finally, at the very end of last year, we finally made the drop-down of the industrial portfolio of UNO into Next. All of this done last year, during which we managed to maintain and excel in our metrics, mainly total income, total NOI, total FFO, total dividend yield, all of them improving in a healthy way. And also, we improved at the end of the year in an overall NOI margin. I would like to thank all the team here at Fibra UNO because none of this would have been possible. We made last year very difficult choices and very strong efforts in order to get where we are today. I was sure -- I will make sure to be reporting the first quarter this year, which will be much clearer of all the efforts that we did last year and will reflect on the balance and the performance of the company and of course, of our subsidiary company, Fibra Next. Thank you for your attention. I would like to pass the mic to Jorge to go in depth with the numbers. Jorge, please.
Jorge Pigeon Solórzano: Thank you very much, Andrea, and thanks, everybody, for joining our call. As usual, I'll start with the MD&A for the quarter. Fibra UNO's total revenue increased by MXN 348 million or 4.6% compared to the previous quarter, primarily driven by a 50 basis point increase in the total portfolio occupancy, inflation-driven increases on active contracts, rent increases and on lease renewals and this was offset by the peso-dollar exchange rate appreciation and the effect that this has on our U.S. dollar-denominated rents. In terms of occupancy, our operating portfolio stood, as Andre mentioned, 95.5%, which is a 50 basis points increase compared to the previous quarter. If we look at the retail portfolio, we recorded an occupancy of 93.7%, 10 basis points above the previous quarter. The office portfolio recorded 82.9% occupancy, 10 basis points below the previous quarter. The other portfolio recorded 99.3% occupancy remaining stable versus the previous quarter. The industrial portfolio, 97.7%, which is 30 basis points above the previous quarter. And the in-service portfolio recorded 87.7%, which is 330 basis points above the previous quarter. In terms of operating expenses, property taxes and insurance, total operating expenses increased by MXN 97.1 million or 9.8% versus the third quarter of 2025. This is mainly due to increases in the cost of some of our supplies and services that are above inflation. As you know, we've mentioned this before, a lot of our expenses are linked to service providers that have high degree of correlation with the minimum wage. And this has kept some of those expenses higher. In terms of property taxes, fees increased by 6.1% or 3% above the previous quarter, mainly due to consolidation of Fibra Next. Insurance expenses increased by MXN 10 million or 7.6% versus the previous quarter, again, due to the consolidation of Fibra Next. In terms of net operating income, our NOI increased by MXN 498.3 million or 8.9% versus the third quarter of '25 to reach the amount of MXN 6.079 billion. NOI margin calculated over rental revenue was 85.1% and 77.2% compared to total revenues. In terms of interest expense and interest income, the net interest expense line increased by $51.9 million or 1.8% compared to the third quarter of 2025. This was mainly due to Fibra Next debt consolidation and the interest related to this consolidation. And as Andre mentioned, this was not a complete quarter. So we'll see the complete effect on our financials in the first quarter of 2026. This increase was offset by interest rate reduction in pesos and the effect that this had on our variable rate debt. The appreciation of the exchange rate, which went from MXN 18.38 to MXN 17.97 quarter-over-quarter and obviously, the effect that this has on our interest expense line during the quarter, a decrease in the interest capitalization and the impact of the pricing of our derivative financial instruments. The bottom line on our funds from operation as a result of the above, FFO controlled by FUNO increased by MXN 157.4 million or 6.6% compared to the third quarter of '25, reaching MXN 2.55 billion. Adjusted FFO recorded an increase of MXN 121.1 million or 5% compared to the third quarter of 2025, reaching MXN 2.55 billion. A slight difference against FFO is due to the update in the cost of a property that was sold in the third quarter of 2025. FFO and AFFO per CBFI calculation during the fourth quarter of '25, we put circulation, 5.3 million CBFIs corresponding to the ECP (sic) [ EPC]. And with that, we closed the quarter with MXN 3.810 billion CBFIs outstanding. The FFO and AFFO per average CBFI were MXN 0.6690 and MXN 0.6712, respectively, variations of 6.5% and 4.9% compared to the third quarter of 2025. In terms of the quarterly distribution, we reached MXN 2.55 billion or MXN 0.67 per CBFI with a quarterly AFFO payout of 99.8% and a payout of 94% compared to the annual AFFO. Moving on to the balance sheet. In terms of accounts receivable, we totaled MXN 2.131 billion, a decrease of MXN 260 million or 10.9% from the previous quarter. Reflecting the organic growth related to the consolidation of Fibra Next as well as an improvement in collections that we had in the quarter. Investment properties, the value of our investment properties, including financial assets and investments in associates increased by MXN 32 billion or 9.3% compared to the third quarter of '25. This obviously, as you can see, reflects the consolidation of Fibra Next on the balance sheet as of December 31, 2025, CapEx invested in our portfolio and fair value adjustment of our investment properties. In terms of total debt, we finished the fourth quarter of '25 with MXN 152 billion compared to the MXN 147 billion we had the previous quarter. The variation is primarily due to the consolidation of Fibra Next, which included additional debt, the valuation of the maturity effect of financial instruments and the exchange rate effect appreciation that I mentioned before. In terms of total equity, equity increased by MXN 55 billion, almost MXN 56 billion or almost 30%, 29%, including controlling and noncontrolling interest. As you know, this is obviously the effect of the consolidation of Fibra Next, which is one of the things that we wanted to achieve, and we finally have completed that in the previous quarter. This capital includes the consolidation of the Jupiter portfolio, the second part of Jupiter portfolio. Net income generated from quarterly results, the derivatives valuation, shareholders' distribution related to the third quarter results and the employee compensation plan. Moving to the operating results in terms of leasing spreads. Leasing spreads, we had increases of 16.4% or 1,240 basis points in the industrial segment, 8.2% or 820 basis points in the retail segment and 500 basis points in the office segment. If we look at dollar-denominated leasing spreads, we saw 13.9% or 1,390 basis points for the industrial segment, 460 basis points or 4.6% in the retail segment, and we saw negative 320 basis points in the office segment. As you know, this is something that we are very pleased with and something that we have come to expect in terms of what's happened in the office portfolio. In terms of constant property performance, the rental price per square meter for constant properties increased by 5.3% compared to the weighted annual inflation of 3.6%. So we had 170 basis points growth despite a depreciation of the peso about 13%. If we had not seen that this appreciation, we probably would have been closer to about 8.4% constant property performance. So again, very pleased with the performance that we saw in this area. In terms of the NOI at the property level, we saw for the fourth quarter, an increase of 2.9%. It can be divided in Fashion Mall segment NOI decreased by 2.5% Regional segment decreased by 3.5%, stand-alone segment decreased by 3.6%. The decrease is mainly due to extraordinary income recorded in the third quarter of '25, which is obviously a one-off in [ comparison ] to the fourth quarter of '25. The office segment NOI increased 5.2%. And the others segment decreased by 1.2%. The industrial segment NOI increased by 11.2%. And with this, we finalize the MD&A. Now Luis, if we can open the floor for Q&A.
Operator: [Operator Instructions]. Our first question is from Igor Machado from Goldman Sachs.
Igor Machado: My question here is on leverage as we have seen a relevant leverage process for FUNO in the last quarters. So I just want to better understand here how does management view the leverage target for the end of 2026? And what is the long-term strategy for maintaining this improved ratios? That's it.
Jorge Pigeon Solórzano: Well, as you know, part of the -- there were many drivers for the carve-out of the industrial portfolio and the capitalization and the consolidation, let's say, of that industrial portfolio Fibra UNO. One of them is the deleveraging effect that we have by adding roughly $2.3 billion of new equity, which is a combination of the value of the Jupiter portfolios as well as the equity we raised from the market. Ideally, we feel comfortable, obviously, below 40%, and we feel comfortable having an investment-grade credit rating, which is where we are today, both stable outlooks from Moody's and Fitch. And the trajectory that we have for the company will delever it even further based on a couple of events. One is, as you know, this business is inflation indexed. So that will have a deleveraging effect over time. And then the other one is that Next will continue to grow, and we expect that to come with additional equity issuances further down the road, and that equity is going to be consolidated into Fibra UNO. So that's going to delever the company even further. So at this point, we don't have additional deleveraging strategy, so to speak. And we would like to maintain our investment-grade credit rating going forward. So the metrics that we need to be in that world is what we're going to aim to maintain. So let's say, LTV below 40% is where we feel comfortable around 35% to 40%, say, the sweet spot.
Operator: Our next question is from Mario Simplicio from Morgan Stanley.
Mario Sergio Simplicio: I have my question is, well, in 2025, you achieved a lot of milestones of your long-term strategy and you have the internalization, we have Fibra Next. And I wonder what are the next targets that you're aiming for, let's say now '26 and for the future years? Like how is the long-term strategy for Fibra UNO now that it has already achieved so many milestones?
André Arazi: Thank you for the question. We have many, many plans for the future. And I hope that we, first of all, will reduce the gap between the NAV and the price of the share. Once we do that, all of our opportunities will open wise, and we will act on it.
Operator: Our next question is from Diego from Citi.
Unknown Analyst: I have one on my side regarding CapEx. In the fourth quarter, the CapEx reached MXN 2 billion. And how this level of investment support FUNO's growth pipeline, including expansions and asset stabilization? And additionally, what you guys expect for CapEx in 2026?
Jorge Pigeon Solórzano: I think that the MXN 2 billion is a good number for CapEx for the company, let's say, on a normal operating year on the normal status of what we have been doing, which is keeping up or trying to keep up with the demand for new space that we have from our tenants is a reasonable number to expect again for 2026. And obviously, as you know, this does not include any new developments or anything of that nature. Some minor expansions at some of our properties, but not large scale development. For that, I think that's what we need to open the doors for additional capital for the company.
Operator: Our next question is from Pablo Mulas from GBM.
Pablo Mulas: You already answered my question.
Operator: Our next question is from Gordon Lee from BTG.
Gordon Lee: Just a quick question. I was wondering whether you have an estimate or even just a ballpark figure of what the total operating expenses that we saw this quarter that were associated with either the next transactions or the internalization transactions that should be nonrecurring on an ongoing basis, just to get a sense of a more sort of stabilized EBITDA margin for, let's say, the new FUNO.
Jorge Pigeon Solórzano: Not yet. I don't think we we run that number. I'll get back to you on that we'll work on it and get back to you.
Gordon Lee: Okay. Perfect. Just a ballpark is fine.
Operator: Our next question is from Anton from GBM.
Unknown Analyst: Just a quick one. I mean, as everyone mentioned, you reached a lot of milestones for FUNO, mostly focused on the industrial side. So I was wondering what are your plans for the retail and office and the other segments? Do you expect to do any acquisitions there? Or what's the overall strategy?
Jorge Pigeon Solórzano: Well, more than the strategy, let me tell you what we think about what's going on in the retail sector. If you see our logistics portfolio, it's at 98% occupancy and the rents in the Mexico City market have continued to grow. There is very strong demand for logistics assets. Why? Because the companies that demand that logistics, which is basically consumer-driven in Mexico, are -- have been doing well and expect to continue to do well, and there's growth -- a lot of growth coming in that sector. So that means that there's going to be demand for new shopping malls, new stores, new Walmart and so on and so forth down the road. And obviously, we want to be able to capture those opportunities. Opportunities we have been seeing them the last years, and we've had to let those opportunities pass at Fibra UNO because with the deep gap that we have to our NAV, it's -- this is a capital-intensive business. We want to close that gap in order to be able to issue equity. And then as Andre mentioned earlier, that will open up a lot of opportunities for us for acquisitions and for developments, et cetera. So we see a very strong and attractive retail market in Mexico.
Operator: [Operator Instructions]. Okay. We have a question from Felipe Barragan from JPMorgan.
Felipe Barragan Sanchez: I have a question on an update on the office segment. Just want to hear your thoughts on the trends and what's going on in that segment.
Unknown Executive: Actually, as you have seen on the -- our report, we have been increasing the occupancy that we have there. And I think that it's not just us, it's just a tendency already on the market. Obviously, we are above the average of the market in terms of occupancy. But I think the trend is that the offices are getting occupied. And probably we are at 83% occupancy. Once we hit the 85%, we will be seeing increasing the rent levels that we have as of today that has been almost flat in the last 2 or 3 years.
Operator: Our next question is from David Soto from Scotiabank.
David Soto Soto: Just a quick one and a follow-up on the retail side. Should we expect variable rents to start contributing to your portfolio anytime soon?
André Arazi: They are already contributing. We have a very interesting mass of contracts that we changed. If you remember, I've been saying that in the past that we changed our contracts, some of the contracts for a dual rent, one fixed rent, which was lower than the previous rent that the tenant was paying and/or our percentage of their sales, which has been paying off in the last couple of years. But right now, given that we finished the -- for example, the luxury Avenue in La Isla Cancun, we have been receiving the fruits of that, and we have been receiving already percentage of rent. If you add to that, that we exchange many of the regular contracts of regular shopping malls from fixed rent -- pure fixed rent to fixed rent plus a percentage of the sales, whichever becomes higher. So we have been already receiving that in our portfolio. And given that we exchange many of the contracts, we think that we will continue to be receiving those percentages in the near future.
Operator: We'll give it a few more moments for any further questions. Okay. It looks like we have no further questions. I will now hand it to the Fibra UNO team for the concluding remarks.
André Arazi: Thank you very much. Thank you, everybody, for your interest in our call, and I hope to hear from you in the next call about the first quarter of 2026 in the future. Thank you very much.
Operator: That concludes the call for today. We'll now be closing all the lines. Thank you, and have a nice day.