Fibra Mty SAPI de CV

BMV:FMTY14

Q2-2025 Earnings Call

[Operator]

Good morning, and welcome to the 2025 Second Quarter Fibra Monterrey's Conference Call. All information presented in this conference is proprietary and all rights are reserved. The information has been prepared only for information purposes and is not a solicitation of an offer to buy or sell any securities.

It is important to note that the presentation related to this conference is available at www.fibramty.com, and recordings of the call will be available on the website of the company in the next 2 hours. If you're connected using our webcast tool, you have the option to download the presentation in order to move the slides at your own pace.

Let me remind you that the information discussed in today's call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risks and uncertainties. Additionally, during this call, we may refer to certain nonaccounting financial measures. Actual results may materially differ and the company advises not to rely on these forward-looking statements. Fibra Monterrey undertakes no obligation to publicly update or revise any forward-looking statement.

With us this morning from Fibra Monterrey, we have Mr. Jorge Avalos, CEO; Jaime Martínez, CFO, and Javier Llaca, COO and CIO; Eduardo Elizondo, Legal Counsel; and Cesar Rubalcava, Investor Relations. They will discuss on the more important strategic financial and operating aspects of this quarter.

I will now turn the call over to Mr. Jorge Avalos.

[Jorge Avalos Carpinteyro, executive]

Thank you, Rob, and thank you, everyone, for joining our second quarter 2025 conference call. I would like to begin with addressing the recent announcement from the U.S. government regarding the imposition of a 30% reciprocal tariff on Mexican imports starting on August 1, 2025. This measure, which increases the previous 25% rate has been justified by the U.S. authorities as a response to what they consider insufficient efforts by Mexico to contain broad trafficking and control its southern border, particularly with respect to fentanyl and cartel activity.

At this stage, it remains unclear whether the exemption for the USMCA compliant goods will continue to apply. However, past precedent, most notably the treatment of Canada under similar measures suggest that such carve-outs could remain in place. Additionally, the effective impact of these new tariffs on Mexico exports may be modest considering that the large portion of trades already covered by sector-specific arrangements, such as those for autos and steel aluminum or complies with USMCA origin rules.

Current estimates indicate that 90% of Mexico exports meet these criteria. Still, the announcement has added a new layer of uncertainty to an already sensitive trade environment. Investment sentiment may remain cautious, both from capital and real estate markets. While the USMCA is not scheduled for review until 2026, these latest developments would bring forward discussions, a constructive approach for both governments, especially from Mexico, which is likely to intensify its cooperation on border enforcement and cartel-related issues could help reduce market volatility and preserve competitive access to the U.S. market.

Against this backdrop, our strategy remains resilient. Most of our leases are long-term U.S. dollar-denominated and supported by tenants with a long-standing operational presence in Mexico. Furthermore, our recent acquisition involving Mercado Libre increases our exposure to e-commerce, a sector with a strong domestic demand and lower vulnerability to external trade shocks that our view is a combination that strengthens our position and enhances our ability to navigate potential disruptions while capturing long-term growth opportunities.

Moving on to our performance and before handing the call to Javier, I'm proud to confirm that based on our estimates, we remain firmly on track to meet our yearly guidance. which despite FX behavior and our price rally in the market remains with an attractive 8% dividend yield. We also recently published our ESG annual report, which is available on our website. If you haven't had a chance to review it, I encourage you to do so. It offers valuable insights into our sustainability strategy and progress.

Having said that, I'll leave the floor back to Javier for the market and portfolio update. Javier?

[Javier Llaca García, executive]

Thank you, Jorge. Before turning to our property performance and quarter-end KPIs, I'd like to take a moment to talk about the recent acquisition and disposition activities. As Jorge mentioned a few moments ago and as you may recall from our first quarter earnings call, early in April, we completed the purchase of an 885,000 square feet industrial facility in León, Guanajuato for $106 million. The asset is fully leased to Mercado Libre, who is now our largest industrial tenant. This transaction not only deepens our relationship with one of Latin America's leading e-commerce companies but also expands our footprint in the Bajío region with a top-tier logistics facility.

The lease is U.S. dollar-denominated and structured on a long-term basis of at least 7 years, consistent with our all-weather strategy of securing high-quality income-generating assets. Post quarter end and within a 2-day window, we executed 2 acquisitions and 1 divestment. First, on July 15, we finalized the acquisition of the last 2 properties from the “Batach” portfolio for $73.4 million. Both properties were recently delivered, are 100% occupied and are already generating revenue.

These additions improved the average age profile of our portfolio while preserving cash flow visibility and avoiding additional leasing risk. This transaction marks the completion of the full 8 property industrial portfolio in Nuevo León. The entire Batach portfolio totals approximately 2 million square feet of GLA with a total investment of $192.4 million. Both the Batach and MeLi transactions were fully funded with proceeds from our follow-on offering.

That same day, we also acquired a 391,000 square feet land plot in Nuevo Leon, adjacent to one of our existing properties. The site has the potential to add approximately 200,000 square feet of GLA through an expansion project, approximately 60% of which is already pre-released to the current tenant. The land like our other expansions was financed through a development specific credit facility.

The following day on July 16, as part of our portfolio optimization strategy, we completed the sale of the Fortaleza office property for MXN 360 million. The transaction was executed at a price consistent with the fair market value determined by our independent third-party appraiser, CBRE.

Proceeds from the sale, we mainly used to prepay our BBVA revolving credit facility, which had previously been drawn to finance the repurchase of shares. In addition to this sale and the Prometeo office building currently classified as held for sale, we have received offers totaling over $70 million primarily for office properties. These offers are currently under review. Additional information will be provided if any of the negotiations reach advanced stages.

We are approximately $200 million short of our investment growth target set in the latest acquisitions. Nonetheless, thanks to our solid balance sheet and ample financial flexibility we have sufficient capacity to reach this goal while remaining below our 30% loan-to-value threshold. Should we extend leverage to our 35% cap. We will unlock an additional $200 million and around $115 million could be added if we successfully complete the asset disposal currently under review, reaching a potential firepower of nearly $0.5 billion without tapping the markets.

Having said that, we'll continue to prioritize stabilized investments in core industrial markets with minimal exposure to current macroeconomic headwinds and with properties and tenants with strong fundamentals, including inflation index, U.S. dollar-denominated leases with long WALTs. Currently, our acquisition pipeline exceeds $850 million and includes 90 industrial properties totaling close to 10 million square feet of gross leasable area.

These opportunities are at different stages of analysis and negotiations on in key markets such as Monterrey, Juárez, Chihuahua and the Bajío area. The scale and quality of this pipeline together with our firepower, give us a unique position to act with conviction and discipline as we continue to build long-term value for our investors. As we've been discussing geographic exposure, I would like to transition into industrial market trends and help them they benchmark against our current portfolio.

Page 5 of the material contains a side-by-side comparison of key indicators from CBRE for the 13 priority markets in Mexico and our portfolio as of the end of the second quarter. Total market inventory rose by 16 million square feet or 2% from the previous quarter, while vacancy rates increased by 50 basis points to 4.8%. Year-to-date net absorption reached nearly 17 million square feet with over 10 million added in the second quarter. Despite ongoing market uncertainty and relatively low demand compared to '23 and '24, vacancy remains low. Net absorption for the first half of 2025 is below that of 2019, and total absorption for 2025 may be around 60% of 2024's level. Tijuana stands out as vacancy rate is now above 10%, representing an increase of more than 200 basis points from the previous quarter.

The new supply grew by over 1 million square feet, including a considerable amount of sublease space, while net absorption rose only by 40,000 square feet. Although speculative construction activity slowed down in the second quarter, overall supply continued to outpace demand with vacancy rates in the East and Rosarito corridors currently at over 33% and 19%, respectively. Although this condition is a cause for concern, it may also offer promising investment opportunities in stabilized properties given the enduring strength of Tijuana's long-term fundamentals.

Our portfolio outperforms the market in occupancy and with rent growth potential when comparing our in-place rate with asking prices. Notably, for those markets where vacancy has been increasing, we stand with long duration in the leases offering stronger short-term defensiveness particularly during uncertainty periods like this one. The company will maintain a disciplined approach to real estate operations, including acquisitions and dispositions market conditions may present additional opportunities and our business model allows for the flexibility to respond to these changes while providing cash flow predictability due to long-term WALTs.

I will elaborate in more detail on both markets and our portfolio conditions later during the Q&A section of the call.

Turning to property performance. During the quarter, we delivered approximately 200,000 square feet related to industrial expansion in Coahuila with 6 out of 7 expansion projects now completed, we've not only increased our GLA organically but have done so at an attractive yield on cost of nearly 10%. As expected, this has translated into incremental NOI as illustrated in the reach on the following slide. Same property NOI increased more than 17% year-over-year in the second quarter.

Excluding FX effects, expansions remain the primary driver of growth, while leasing activity and rent increases have helped offset vacancies currently in the process of being marketed. Notably, same property NOI from the industrial portfolio alone grew by more than 20%. This was further supported by acquisitions, which bolstered our total NOI to MXN 767 million and posted a roughly 91% operational margin, remaining one of the highest of the industry and reflecting strong asset quality, operational efficiency and solid lease structures.

Going to Slide 9 of the webcast material. Investment property volume already includes acquisitions and dispositions carried out in the last 12 months and the reclassification of the 2 office buildings that are available for sale as of quarter end. This effect was more than offset, given peso appreciation against the dollar. This also has implications for our NAV as it will be explained further in detail backed by Jaime later in the call. It is worth noting that the current implied cap rate for the industrial portfolio stands at 7.7%, while the office continues to expand the combined portfolio to 8%.

I'd like to end my piece of the webcast by briefly reviewing the portfolio's KPIs. We continue to increase the industrial share of our revenues while keeping the largest exposure to top-tier markets in the North and Bajío areas. With a highly defensive portfolio with almost 15% of revenues denominated in U.S. dollars. Furthermore, our weighted average lease term remains as one of the longest amongst peers with nearly 5 years, giving enough cash flow visibility, while keeping rent growth potential in the lease maturities in the income 2 years -- in coming 3 years, I'm sorry, being almost entirely from industrial revenue with roughly 20% of revenue.

With that, I'll hand over to Jaime for the next section of the call. Go ahead, Jaime.

[Jaime Martínez Trigueros, executive]

Thank you, Javier, and good morning to everyone. Let me begin by reviewing our financial performance, focusing on P&L and its evolution in the latest equity issuance. As shown on Slide 11, during the second quarter of last year, we saw an increase in AFFO and FFO driven by the proceeds from the follow-on, which were temporarily held in cash and generated financial income. As we gradually deploy those funds into acquisitions and expansion, that financial income has transitioned into NOI and EBITDA. For that reason, we have seen a more moderate increase year-on-year in AFFO and FFO. However, when comparing the follow-on figures to the most recent quarter, the improvement is evident in across all metrics.

Talking about bottom line, AFFO for second quarter 2025 totaled approximately MXN 630 million, an 8% increase year-over-year. Such movements was mainly driven by the Batach and MeLi acquisitions, net of the reduction in financial results that I just explained, the contribution from expansion projects and FX tailwinds mentioned by Javier earlier.

Going back to valuation. As of quarter end, our certificates were trading fairly versus book value, but still at an attractive 8% AFFO yield practically in line with our properties' implied cap rate, which reflects the cost structure efficiency and limited cash flow drainage below NOI. As Javier mentioned, our valuation and cash flow is highly correlated to FX behavior. Therefore, as in previous quarters, we include evaluation sensibility analysis under different FX scenarios for reference.

Moving on to the next slide. I'm proud to highlight that our current market valuation continues to be supported by both local and international investors. Our price experienced a positive shift early in the year and has shown resilience, proving a relatively defensive performance despite broader market volatility. We believe this underscores investors' appetite for vehicles that offer stable inflation-linked cash flow with long-term visibility, primarily denominated in U.S. dollars.

In addition, our average daily trading volume has increased significantly compared to historical levels particularly following last year's follow-on and our inclusion in some FTSE indexes. This momentum reflects not only the successful execution of our strategy, but also our ongoing efforts to maintain clear consistent communication with the market and to broaden our investor base through multiple channels.

Notably, we are proud to have coverage from most major institutions and look forward to welcoming additional firms going forward. I'd like to sincerely thank the analysts who are doing the groundwork. Your efforts have been instrumental and in amplifying our message with diligence objectivity and a high standard of analysis.

Before we move to the Q&A, I'd like to highlight that our capital structure remains solid with a loan-to-value ratio of 26% and net debt to EBITDA at 2.5x. We maintain ample financial flexibility and have drawn credit lines representing nearly 20% of our total assets providing us with the capacity to pursue new investment opportunities for up to $400 million without exceeding our 35% loan-to-value, self-imposed ceiling and without tapping the market or asset recycling. We have already begun exploring refinancing options for our nearest material maturity.

Also, it's still 2.5 years away. Our intention is to be fully prepared to act without placing pressure on our debt maturity profile. In that context, we are confident that our investment-grade rating will continue to be a key advantage in securing competitive financing terms.

With that, Rob, please proceed with the Q&A.

[Operator]

[Operator Instructions] Our first question is from the line of Alan Macias with Bank of America.

[Alan Macias, analyst]

Just I wanted to confirm your leasing spread and renewals during the quarter and your expectations going forward? And the second question is if you can provide us the breakdown in the industrial portfolio percentage in manufacturing and percentage in logistics.

[Javier Llaca García, executive]

Alan, this is Javier. During the second quarter, we only have renewals on automatic renewal leases. So the lease spread was only that of the inflation escalation schedule on the contract. In regards to going forward, we expect between 10% and 20% positively spread in the following few quarters.

And in regards to the second question, we stand around 75% light manufacturing and 25% logistics. And moving forward, we could expect to -- for that figure to switch more to between 60% and 70% on manufacturing, 30% to 40% on logistics.

[Operator]

The next question is from the line of Piero Trotta with Citibank.

[Piero Trotta, analyst]

I have 2 questions here. The first one I would like to know if you could give us an update about the office portfolio with this recent lease agreement. Is it fair to think we might see this portfolio sale being earlier than initially expected.

And the second question, I would like to know if you see a better scenario for business now and if you could tell us the evolution of it? Or you still see some potential tenants on wait-and-see mode. So do you think they will wait for a definitive decision on tariffs? More color on this would be nice.

[Javier Llaca García, executive]

Sure. Thank you for the question. In regards to the recycling or disposition process on the nonindustrial portfolio, it's been moving really good. We closed on the first 2, we're very close to close on another one. And the outlook for the remaining of the year looks really good in terms of the offers that we already received for, I would say, half of the portfolio. I wouldn't venture in saying that we could close on that and become a pure industrial vehicle sooner than expected. But most definitely is going to be within our scenario of '26, '27 to get done with that.

In terms of the second question that you have on the demand, it is funny because it's good when tenants are comfortable being uncomfortable with uncertainty. On that regard, what we have seen lately is that even though they're still in a wait-and-see mode, RFPs or request for proposals from most of the institutional brokerage houses seems to start moving a little bit faster, particularly for expansions and additional properties for existing companies in Mexico, not as much for new companies.

We believe that as we get closer to what Jorge has said before in terms of the renegotiations or the review of USMCA and the cost starts to settle, these existing plans for expansions and new facilities are going to continue to move faster. So we feel positive about that. We have seen a little bit of change in the second quarter in comparison to the first quarter.

[Operator]

Next question is from the line of Antonio Hernandez with Actinver.

[Antonio Hernandez, analyst]

Just as a follow-up, you already provided more -- some information on which markets you're looking for with that extra firepower that you still have. And you also mentioned that going forward, you expect to switch that manufacturing versus logistics breakdown, more towards a little bit more diversified. So just trying to match these different comments. Are you expecting that firepower to be more focused on logistics versus manufacturing or maybe not so much from short-term priority and also considering, of course, the recent trends in terms of the tariffs and so on?

[Javier Llaca García, executive]

Not necessarily. Thank you for the question. Not necessarily. We're not being proactively looking for more logistics than manufacturing. As a matter of fact, on the pipeline that we're currently evaluating, I would say that the composition is pretty close to that 75%, 80% manufacturing. So on the -- at least on the short-term pipeline that we have more clarity on, composition would be probably about around the same.

[Operator]

Our next question is from the line of Jorel Guilloty with Goldman Sachs.

[Wilfredo Jorel Guilloty, analyst]

I have 2. The first 1 is you mentioned you have an acquisition pipeline of exceeding $850 million. But then you say that your total firepower right now is around $434 million. So I was wondering how do you bridge that potential gap if you were to execute. Is the $850 million -- is that gap due to the fact that the $850 million you're assuming that it comes with debt?

And then the other part is on your conversations with your tenants. So I mean, it's clear that you have pretty high retention rates for industrial properties. You mentioned it's north of 80% currently. But I was wondering if you can comment on your conversations with those tenants around potentially expanding capacity. So I just wanted to understand if any of your tenants at this point in time, are looking forward and just thinking like, hey, we might need to expand capacity because we're here in Mexico, and we're here for good. Just wanted to get a sense of if there's any potential investments from current tenants within Mexico. That's it.

[Javier Llaca García, executive]

Jorel, thank you for the question. In regards to the pipeline, we have $850 million under evaluation of potential transactions. We're getting more and more every day. I wouldn't be surprised that the pipeline exceeds $1 billion in the next few weeks. We're going to be far from closing on everything. We're being selective. We're being very disciplined on pricing. As a matter of fact, we have lost a couple of deals in the past few weeks because of pricing. We're not going to overpay for no transactions. So we feel confident that we can fulfill the dry powder that we have with the appropriate transactions. And if we exhaust that amount, well, we're going to think on the next strategy.

In regards to your second question, Jorel, we are currently working on close to $70 million on additional expansions from existing tenants. I can tell you that we are pretty busy on strengthening this type of relationship with our tenants, not only through expansions but some other added value services that we're going to explain in a few weeks on what are this. But this has a positive collateral effect on not only extending the life of the lease and reinforcing the relationship with our tenant, but it allows us to have higher yields on cost of between 9.5% to 10%, and that helps us bolster the overall cap rate of all of our investments, including stabilized assets, expansion and added value services.

So yes, it's been very -- we've been very active with many of our tenants already in talks for new expansions, and we're going to have, I'm sure, more in the future, in the near future.

[Operator]

The next question is from the line of [ Valentina McAllen ] with GBM.

[Unknown Analyst]

First of all, I'd like to congratulate you on the results of this quarter. My question is in regards to the 43,400 square meters planned in Monterrey and Saltillo. Can you share the current status and are the 36,000 square meters already binding? And what's the plan for the remaining space? Thank you and congratulations again.

[Javier Llaca García, executive]

Sure. Thank you for the question, Valentina. Yes, we're working on -- you refer to the land lots, right?

[Unknown Analyst]

Yes.

[Javier Llaca García, executive]

Yes. The one that we closed last week in Nuevo Leon is for the construction of a new building that is going to be 60% an expansion for the adjacent property that we already own and we lease to a U.S. company. As a matter of fact, there's a good chance that this company has end up leasing the whole building. But right now, the commitment, the signed commitment is for 60% of that. So we have no development risk on that. And if the tenant should not occupy the whole building, we're going to have about 40% of that new building available for lease, and we are already working on the marketing on that. In regards to the one in Saltillo.

[Jorge Avalos Carpinteyro, executive]

Just to point out and going further on that question, we remain on a very prudent approach. We only proceed with speculative development locations and format with proven demand and potential tenant interest. It's also very important to mention that we're going to be very active in expansions that are pre-release like the one that Javier just mentioned.

[Javier Llaca García, executive]

Exactly. And the one in Saltillo is a similar situation. We are working, nothing done yet on an expansion for an existing tenant that we have there. It's moving along very well. And we might end up with some excess land that we are going to keep for marketing for a pre-release of a new build-to-suit project. That's our activity right now on land.

[Unknown Analyst]

Okay. Perfect. And just like as a follow-up question. So if the tenant in Monterrey decides that they want to take off the other 40% of the building, would we see that impacting the results of the following quarter?

[Javier Llaca García, executive]

No, because it's a construction that is going to take somewhere around between 12 and 15 months. So what you're going to see once we close or sign on the expansion is going to be the progress on that expansion. But the actual impact on the cash flow is once the rent commences and that's going to happen between 12 and 15 months later.

[Operator]

The next questions are from the line of Enrique Cantú with GBM.

[Enrique Cantú Garza M., analyst]

I just have a quick one -- after recently selling Fortaleza, what's the status of the second office asset held for sale? And how likely are you the current offers to close in the second half of the year?

[Javier Llaca García, executive]

I'm sorry, Enrique, thank for the question, but we cannot hear you very well. You were referring to the sale of the Fortaleza building. We didn't get the rest.

[Enrique Cantú Garza M., analyst]

Can you hear me now?

[Jorge Avalos Carpinteyro, executive]

Yes a little bit better, yes.

[Enrique Cantú Garza M., analyst]

Okay. Just as a quick one. After selling Fortaleza, what's the status of the second office held for sale? And how likely are the current offers to close in the second half of the year?

[Javier Llaca García, executive]

Yes. I would believe that the next closing that we're going to have on the disposition of the nonindustrial assets is going to happen in Monterrey. We expect that to happen within probably -- to have a binding agreement by the end of the third quarter, that's going to happen relatively fast. And the rest of the pipeline on the dispositions or the potential sales that we have might start happening before the end of the year. So we're moving really good on those. I believe it's $100-something million from the following sales that we might have, let's say, within the next 2 to 3 quarters.

[Operator]

The next question is from the line of Felipe Barragan with JPMorgan.

[Felipe Barragan Sanchez, analyst]

I have a couple. One is on inclusion into indices. So for example, you guys were included to the FTSE Small Index for [indiscernible]. And I was looking at the EWW index and the MSCI for Mexico. And there are other companies such as [indiscernible]. I was just curious if you guys have any insight on if that could be a potential catalyst if you guys could potentially join the index.

And my second question is on your $850 million pipeline, if that includes any of the potential asset sales from FIBRA Prologis from the Terrafina assets that they don't want to keep.

[Cesar Rubalcava, executive]

Thank you, Felipe, and this is Cesar. Thank you for the question. So we've been increasing our participation in the FTSE index, which scales down to different passive investors funds more oriented to different sectors. For example, they have emerging markets, excluding China and so on and so forth. So as we continue to expand our participation in this index, we could be included in several sub indices, right? So we don't have any more visibility.

We've been talking to both FTSE, S&P and some other companies to have more visibility. Nonetheless, as you could expect, they want us to pay for their services in order to have more visibility. And we're also working with the banks and the trading desks in order to have more preview. But as of now, we don't expect any more changes going forward.

[Jaime Martínez Trigueros, executive]

And there's another thing. There's some international investors, especially European that they just invest in vehicles that are registered or included in such indices. So that may also help in liquidity. I mean, maybe not as fast as the passive funds, but we have seen more activity of those guys.

[Javier Llaca García, executive]

And Felipe, this is Javier. In regards to your second question, the short answer is no. The legacy -- the Terrafina legacy portfolio is not included on the $850 million pipeline that you saw in the presentation. However, we're starting to look into the first portfolio that was just released last week. We just get -- got the information, and we're looking into it, but it's not considered as part of the pipeline that you saw on the presentation. .

[Operator]

The next question is from the line of David Soto with Scotiabank.

[David Soto Soto, analyst]

Just a quick question related to your land bank. Should we expect further development? Or are you looking to execute opportunistic divestment?

[Javier Llaca García, executive]

Our land bank, I guess you're referring to our land bank in [indiscernible] the bulk of our land bank is. We have no plans for development right now on that piece of land. We are -- we'd rather sell the land than develop it. We have been entertaining a couple of in those buyers, but nothing concrete so far. If we were to sell, I would say, a considerable portion of that land, we might consider them developing the rest. But right now, we have no develop development plans for that land.

[Operator]

[Operator Instructions] We have some questions in your webcast. The first one coming from Bernardo Malpica from Santander.

You mentioned your industry portfolio implied cap rate. Could you give some color on where you see cap rates for the industry overall? Have you seen higher cap rates across the country given the current macroeconomic political uncertainty?

[Javier Llaca García, executive]

Thank you, Bernardo. On -- our industrial portfolio stands at an implied cap rate of 7.7%. What we have seen in the latest bids that we have participated on it's kind of consistent to that, we might be higher cap rate, particularly in some areas of the country. And yes, they have to do in part with the uncertainty and also from some distress from some private developers, but we were expecting to see a little bit of increase on the CapEx.

[Operator]

Our next question comes from [ Alejandro Contreras ] from [ Alpek ]. Does the current environment have created an opportunity to buy properties in Monterrey at lower prices versus 2024?

[Jorge Avalos Carpinteyro, executive]

Thank you, Alejandro. Not necessarily. I would say that Monterrey is a very mature and intensive market. It's not as stressed as some other markets like Tijuana or Juarez. We haven't seen a clear opportunities at a high discount. So I guess that my short answer would be not necessarily.

[Operator]

Our next question comes from Francisco Chavez from BBVA. Can we expect NOI and EBITDA margins to come back to the 92% and 85% marks?

[Javier Llaca García, executive]

I would say I'm going to talk about the NOI margin. I'm going to leave the EBITDA margin to Jaime. But our current NOI margin of close to 91%, we're going to keep or maintain very stable in the next few quarters at around between 90% and 91%.

[Jaime Martínez Trigueros, executive]

And in terms of EBITDA, it might grow marginally because, as you know, we are not growing our assets or the economies of scale in that sense are not going to appear that easy. I mean maybe marginally with some acquisitions or so, but not in a significant way. But if you take out some distortions of this quarter, it might go a little bit up from what we have seen. And I would say that in the short term, between 90% and 92% or 83% or 85% is going to be basically the range in which the margin is going to move.

[Operator]

Thank you. We have a question from [ Edson Munguia ] with [ Signum Cap ].

[Unknown Analyst]

My first one is a follow-up on the pipeline that you have. I know that probably you cannot give us the specifics. But how did you identify those opportunities are relating to a cap rate, a region, a tenant because if we analyze the past acquisitions buy from a specific target. So that will be my first question.

And my second question is regarding on the hedging strategy that you are performed during the second quarter. You mentioned that you extend the deadline of the expiration date of the forwards that you have. But you mentioned in the earnings release that you executed them. So could you give us a little bit more color in order to understand better?

[Javier Llaca García, executive]

Edson, thank you for your question. And I'm going to leave the -- this is Javier. I'm going to leave the second question to Jaime and Cesar. But in regards to the first question on the pipeline, I could tell you that probably around half of the pipeline that we have, has been originated by us. These are off-market deals on developers that we know and visits that we have paid to some of their properties and talking to them in terms of partnering on potential acquisition of their stabilized assets. And the other half would be formal processes, bidding processes from brokerage and institutional brokers, some of them on closed funds, both [indiscernible] and some merchant developers and closed private equity funds.

So we have no specific aim and target. What we do is that our main investment guidelines call for the location, the type of building, the type of tenant and the type of lease. When we run into a portfolio either originated by us or presented to us by somebody else that do not meet that criteria. Most of the times, we discard those from the beginning. But we have no specific targeting process other than the relations that we have, the process that come along and some market intel that we do on specific farms or developers that have a specific investment term on their plan.

[Jorge Avalos Carpinteyro, executive]

And to complement on Javier's answer, Edson, Mexico is still very small. There are only 90 developers in the whole country that account for all the industrial park in Mexico, which are almost 470 industrial parks. So this allows us to be very active or be very proactive as they see us as a financial partner as we don't develop industrial parts. We buy buildings within those industrial parts.

I would say that internally, we know those 90 developers. And as Javier mentioned, most of the process -- some of the process are managed by institutional companies like CB Richard Ellis or Jones Lang LaSalle and those RFPs come up to our desks, and that's where we decide whether we like that market, that tenant and the type of building that they're selling.

[Javier Llaca García, executive]

And to complement on what Jorge has said, and I said and what I said before, something that is very rewarding is that the prestige that we have on the execution and the closing of the transactions, has allowed us for a lot of, I would say, some developers to reach out to us in order to try to do a direct deal with us given the fact that they know that they can close smooth, very smooth and very quick with us. So that also helps a lot on building the pipeline.

[Jaime Martínez Trigueros, executive]

In terms of the forward, if you remember, we did go forward because of different conditions. The first one, the interest rate in pesos were pretty high. We have these resources from the from the follow-on, and we have some committed acquisitions like those of Batach that we just paid a few days ago. So those forwards are already -- they already expired as we have these acquisitions done.

We have some other forwards, which are related with the VAT or another particular function. But at this moment, we are not very active at this market because, I mean, even when the exchange rate is a little bit lower, we don't have a lot of cash in our balance sheet. So we are not that active at this time. I don't know, Cesar, if you want to complement.

[Cesar Rubalcava, executive]

Yes. No, just to complement on Jaime, on the uses of those forwards. As he already mentioned, is the VAT reimbursement from the acquisitions that we just made and the sale of the Fortaleza property, which both were denominated in pesos, and we intend to apply those resources in U.S. dollars.

[Unknown Analyst]

Just because I'm a little bit confused because there are 2 that already expired, which is with the Scotia and BBVA. But there are that around $32.2 million that are extending the maturity, one is from December 2025, if I remember correctly. And the other one is nearby, right?

[Jorge Avalos Carpinteyro, executive]

Yes, correct. But just to be perfectly clear, Edson, we closed those forward with the following proceeds, and we closed nearly $140 million, which have been unwind as we apply those resources and acquisitions. The 2 forwards that we just extended their maturity. One was just applied to the Batach properties that we just bought last week. And we have a remaining forward for roughly $70 million, which expires until late December this year, which could be unwind if we find an acquisition to be closed before that date. If not, we will continue to do the rollover of that forward.

[Operator]

At this time, I'll now turn the conference over to management for closing remarks.

[Jorge Avalos Carpinteyro, executive]

Thank you, everyone, for attending this call, and we'll speak to you next quarter. Have a great day.

[Operator]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.