Vesta Q1 2026 Earnings Call - Quality Over Scale Drives Resilient Leasing and Development Rebound

Operator: Ladies and gentlemen, welcome to the Vesta first quarter 2026 earnings conference call. All participants are currently in listen-only mode. A question and answer session will follow today’s prepared remarks, and as a reminder, this call is being recorded. It is now my pleasure to introduce your host, Fernanda Bettinger, Vesta’s Investor Relations Officer. Please go ahead.

Fernanda Bettinger, Investor Relations Officer, Vesta: Good morning, everyone, and welcome to our review of the first quarter 2026 earnings results. Presenting today with me is Lorenzo Dominique Berho Carranza, Chief Executive Officer, and Juan Felipe Sottil Achutegui, our Chief Financial Officer. The earnings release detailing our first quarter 2026 results was released yesterday after market close, and is available on Vesta’s IR website, along with our supplemental package. It’s important to note that on today’s call, management remarks and answers to your questions may contain forward-looking statements. Forward-looking statements address matters that are subject to risk and uncertainty that may cause actual results to differ. For more information on these risk factors, please review our public filings. Vesta assumes no obligation to update any forward-looking statements in the future. Additionally, note that all figures were prepared in accordance with IFRS, which differ in certain significant respects from U.S. GAAP.

All information should be read in conjunction with and is qualified in its entirety by reference to our financial statements, including the notes thereto, and are stated in U.S. dollars, unless otherwise noted. I’ll now turn the call over to Lorenzo Berho.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Thank you for joining us today and for your continued interest in Vesta. The first quarter marked a strong start to the year, with solid leasing momentum and stable portfolio performance despite ongoing global tensions. Importantly, as our results demonstrate, we’re seeing not only continued activity, but growing conviction from our tenants. This was reflected in new leasing and expansions with existing clients, as well as with exciting new clients during the quarter. Our performance reinforces the strength of Vesta’s platform and reaffirms our approach for 2026 and of our Route 2030 strategy, which is centered on expanding a well-curated, high-quality portfolio through disciplined development, leveraging our privileged land bank to capture demand. We believe value creation in our space is driven more by quality than size.

While we are seeing increased competition for stabilized assets, Vesta’s differentiation lies in our ability to develop and operate a selective portfolio aligned with global best practices and the evolving needs of our clients. Let me briefly highlight the key drivers of Vesta’s results. As I noted, leasing activity remains strong, with total first quarter leasing reaching approximately 1.6 million sq ft, including 1 million sq ft in new leases with best-in-class companies. Total portfolio occupancy reached 89.7% by quarter-end, while stabilized and same-store occupancy reached 93.4% and 95% respectively, reflecting the strength and stability of our tenant relationships. During the quarter, we saw strength in the electronics and aerospace sectors and also in AI-related data center infrastructure, which is becoming an increasingly relevant demand driver that will benefit from long-term structural tailwinds.

On the development side, our pipeline continues to convert into active construction, with Vesta projects breaking ground across key markets. This is further evidence of both improving demand visibility and the strength of our land bank, which is expected to support stabilization and gradual recovery of occupancy. Along these lines, as leasing activity continues to gain momentum, we have selectively resumed development. We launched two new projects in Mexico City and one in Tijuana during the first quarter, which brings our total development pipeline to approximately 1.6 million sq ft. Importantly, our approach remains disciplined and demand driven, prioritizing tenant-backed projects in high conviction markets. From a financial perspective, results remain solid. Total rental income increased to $76.7 million, while rental revenues reached $74 million, a 14.1% sequential increase.

Also, we’ve sustained strength across our key profitability metrics, including NOI and EBITDA. Let me now turn to the broader market environment and how we are seeing it reflected across our portfolio. Recent data has focused on rising vacancy in certain regions, particularly in the north. However, what we’re seeing is better characterized as a correction, not a structural slowdown or decline in underlying demand. Markets such as Tijuana reflect more uneven dynamics, but it’s important to note that this is largely due to supply from less experienced developers. Vesta’s high-quality, infrastructure-ready buildings continue to outperform, reinforcing our focus on portfolio quality. We’re leveraging our strength in this market and launched a new project in Tijuana during the first quarter. New construction starts in key markets such as Monterrey have declined significantly year-over-year, reflecting a market that is adjusting quickly. In Mexico City, fundamentals remain strong.

According to CBRE, Mexico City gross absorption reached approximately 6.7 million sq ft during the quarter, with pre-leasing accounting for most of the activity and more than half of new supply delivered already pre-leased. This dynamic reinforces both demand depth and forward visibility across this market. It has also led us to launch the two new projects in Mexico City, which I have described. In Guadalajara, we are seeing healthy demand, particularly from electronics and technology-related tenants, a key driver of activity in the market. During the quarter, we successfully pre-leased the two Vesta buildings under construction, underscoring the strength of underlying fundamentals and the sustained momentum we’re seeing in the region. Let me now turn to how we are executing against this environment. Our strategy remains consistent. Vesta will grow through a high-quality, well-created portfolio developed with discipline and aligned with the long-term demand.

As I have commented, our focus is on portfolio quality, not scale, ensuring that each asset meets the highest standards of infrastructure, energy, and operational performance. This is particularly relevant in the current environment. Despite the competition for stabilized assets we’re seeing, we believe there is greater opportunity in selective development where we can create value and differentiate through product quality and tenant alignment. Before I conclude, let me briefly touch on our capital position and outlook. As Juan will discuss, we continue to operate with a strong and flexible balance sheet, maintaining a disciplined approach to leverage and liquidity, which enables us to execute our strategy while navigating uncertainty. Capital allocation remains selective, with a focus on high-quality projects supporting efficient growth. In closing, we are highly confident in our outlook. While near-term uncertainty persists, the underlying structural drivers underpinning our business are stronger than ever.

Tenant activity continues to be robust. Foreign direct investment is maintaining strong momentum and manufacturing exports are at record levels. At the same time, higher-value industries such as electronics, aerospace, semiconductors, and data infrastructure are accelerating demand for Vesta’s premium properties. We also expect a more favorable interest rate environment together with greater clarity around USMCA to support activity in the quarters ahead. Let me now turn the call over to Juan to review our financial results in more detail.

Juan Felipe Sottil Achutegui, Chief Financial Officer, Vesta: Thank you, Lorenzo. Good day, everyone. Let me start with a brief overview of our first quarter results. On the top line, we delivered a solid start of the year, with total revenues increasing 14.4% to $76.7 million, primarily driven by rental income from new leases and inflationary adjustments across our portfolios. In terms of currency mix, 88.9% of first quarter 2026 rental revenues were U.S. dollar denominated, compared to 89.7% in the same period last year. Turning to profitability, adjusted net operating income increased 13.4% to $74.7 million. Our adjusted NOI margins decreased 52 basis points year-over-year to 95.1%, reflecting higher operating property costs relative to rental revenues in the quarter. Adjusted EBITDA totaled $62.1 million, up 12.4% year-over-year, while margin contracted by 130 basis points to 83.9%, primarily driven by higher operating and administrative expenses during the quarter.

Vesta’s FFO, excluding current tax, was $43.1 million, compared to $45.1 million in the first quarter 2025. The decrease was primarily due to higher interest expense in the first quarter of 2026, compared to the same period in 2025. We closed the quarter with pretax income of $97.9 million, compared to $28.6 million in 2025. This increase was primarily due to higher gains in the revaluation of investment properties, higher interest income, and higher other income. This was partially offset by higher interest expense, reflecting an increase in the debt balance during the period, along with the increased foreign exchange losses and other expenses. Turning to our balance sheet, we ended the quarter with $206 million in cash and cash equivalents and total debt of $1.2 billion. Net Debt to EBITDA stood at 4.1 times, and our loan-to-value ratio was 26%.

Down from the 28.1% at the year’s end, reflecting the prepayment of the remaining $180 million MetLife III facilities. As of the end of the first quarter, we have no secured debt, with 100% of our debt denominated in U.S. dollars and 87.2% of our interest rate exposure on a fixed rate basis. Finally, consistent with our balanced capital allocation strategy, on April 22nd, 2026, Vesta’s shareholders approved a $74.8 million dividend for 2026, representing a 7.5% increase year-over-year. On May 5th, we will pay a first quarter cash dividend. This concludes our first quarter 2026 review. Operator, could you please open the floor for questions?

Operator: We will now begin the question and answer session. Our first question will come from the line of Piero Trotta with Citibank. Please go ahead.

Anton Morten-Cotter, Analyst, GBM0: Hi, Lorenzo, Juan, and Fernanda. Thank you for the call. I have two questions. The first one is about the development in Tijuana. Given this start, could you elaborate to us on the key conditions that supported the decision to move forward with this project in a market where vacancies remain high? More specifically, what metrics or market signals are you monitoring most closely when allocating capital in Tijuana? Just to understand, as we see in the market of Tijuana, around 16% vacancy, and even in Vesta’s portfolio is around 13%. What are you looking at when you are starting a new project in the region? The second one is about leasing spreads that remain positive at around 9%. I would like to understand how should we think about the sustainability of spreads from here as supply-demand dynamics continue to evolve across your markets.

Just to understand on this one. Thank you.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Hola, Piero. Thank you very much for your question and for being on the call. Well, definitely this is a good quarter to start the year. I would like to highlight that, as mentioned before, Vesta will, little by little, start development in certain markets, certain projects. We did good land acquisitions last year, and that’s why we start again with projects in Mexico City, as well in Tijuana, with the ones that we started before in Guadalajara and Querétaro. The Tijuana project, it’s a continuation of our existing project mega region. As you remember, we did a land acquisition on adjacent land to develop the second phase. We did the land improvements last year, and today we’re happy to be able to now start the first building of the second phase.

It will take us pretty much the rest of the year to conclude the building to be developed. The reason of developing it is because we believe we have a good pipeline from either existing clients or potential clients that want to be established in a state-of-the-art industrial park in a good location where you can have good access to labor, good access logistically, and very importantly, good access to energy. That’s what we already have in our park in Tijuana. I understand that there’s other vacant spaces in the Tijuana market. However, we know that none of them are so well located as this one, and that’s a key advantage. There has been some new vacant buildings in other sub-markets of Tijuana. In many places actually, that lack energy, they lack logistic accessibility, and they also lack labor.

That’s why they will probably remain for a longer period of time available until they find the right client. There’s many, I would say, inexperienced industrial real estate developers. That’s why we feel comfortable with the type of buildings that we develop, and we think that eventually these will turn into a successful project in a market that we know quite well. Secondly, on your question on spreads. Well, I think that the spreads will continue to be in a 10%-13% range somehow. This quarter was slightly lower just because of maybe the combination and computation of previous quarters. In the end, I think going forward, and we have stated this before, we think that over time we will continue to see double-digit growth in terms of spreads.

We have had some interesting re-leasing spreads throughout the quarter of projects in the 20%-50% range, which is quite attractive. I think that together with some of the new leases that have been signed also in some cases with rents 30%, 40%, 50%, depending on the market. This trend will continue. We see very strong rent levels in most of the markets, and in some markets, very strong rent growth still. We are confident that that will continue to be the same situation going forward. That continues to be a main driver of value for our existing portfolio with our existing clients and tenants, and we think that going forward, we will continue to see this positive trend.

Anton Morten-Cotter, Analyst, GBM0: Okay. Thank you very much.

Operator: Our next question will come from the line of Gordon Lee with BTG Pactual. Please go ahead.

Gordon Lee, Analyst, BTG Pactual: Hi. Good morning. Thank you very much for the call. Just a quick question, and it’s more of a general sector question. As you mentioned, there’s a potential for pretty significant consolidation in the sector, which obviously, that’s not something that you look at. Your business plan is different. I was wondering generally, Lorenzo, how you feel about consolidation in the sector, particularly this type of consolidation. Would you generally say that’s good for better competitive dynamics or a bit more discipline on the ground? Specifically, do you think that might have also a positive effect in terms of discipline around development? Thank you.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Thank you. Thank you, Gordon, for your question. It’s quite interesting, the market dynamics and what we have been seeing from a capital market perspective. I believe that, in some ways, this is a broader strategy from some global players that are active in Mexico, that actually, maybe their strength is on capital markets more than being on the local ground and having access to tenants as well as access to development at higher returns. That’s why I think that’s a particular strategy for some of them. I think this is an industry that is very intense in capital, and I think that seeing that there’s a lot of capital chasing for transaction, chasing portfolios, even sometimes regardless of the type of assets they hold, because sometimes they don’t even match the original consolidator assets.

In the end, I think it’s more the appetite of having industrial assets and being larger consolidators. I think that we will continue to see that going forward. As long as there’s strong capital chasing for attractive assets, I think that will continue to be the case. Also, I think it’s relevant to consider that it sets pricing to transactions. Even for some assets that I believe are maybe below the quality of the Vesta standards, having those prices, I think it sends a good signal on the opportunity that we see in our own assets. That, remember that Vesta, we selectively define which markets we invest in. We’re very mindful of the quality of assets we develop. We also strategically define the type of tenants. Over long term, we think that that makes our assets be way more valuable.

I think that for that reason, these consolidations create an attractive baseline of reference so that we can have some sort of comparables to our own valuations.

Gordon Lee, Analyst, BTG Pactual: If I could just have a quick follow-up, do you think it has any implications, positive or negative, on competitive dynamics or development discipline for the sector as a whole, or no? Do you think your day-to-day would be unchanged regardless of what happens?

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Frankly, most of these consolidators do not have development capabilities. I think it’s only worth for certain merchant developers, but in the end, I think that we will continue to have our own discipline in terms of development. I think this will keep some of the acquirers more distracted in their own acquisition strategy, and I don’t see them very active on the development.

Gordon Lee, Analyst, BTG Pactual: Perfect. Makes sense. Thank you.

Operator: Our next question will come from the line of David Soto with Scotiabank. Please go ahead.

David Soto, Analyst, Scotiabank: Hi. Good morning, and thanks for taking my question. Just a quick one. It’s related to your microgrids. It would be great if you could tell us in which regions are you currently developing this kind of facility, and what are the challenges that you are facing to develop these kind of facilities within your industrial parks?

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Do you mind repeating the question, David? Thank you.

David Soto, Analyst, Scotiabank: Yes, of course. It’s related to your microgrids. It would be great if you could tell us in which regions are you currently developing these kind of facilities, and which are the main challenges that you are facing?

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Thank you. For which type of assets you mentioned?

David Soto, Analyst, Scotiabank: For the assets that you are currently developing, if you are having this kind of development of microgrids within them?

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Okay, David. Maybe if I understand correctly, the question is on which markets we might be developing. Well, currently we started a few projects in Mexico City in the land acquisition that we did last year. This is in the Cuautitlán corridor, a very attractive market that has shown growth, particularly coming from logistics as well as e-commerce and rental, and we continue to see rental growth. That’s why returns are quite attractive, and for that reason, we believe that developing spec in the area is very appealing. We started a building in Tijuana, and very soon we will start also development in Guadalajara. As you could see in our report, we were able to lease the two projects that we had under construction, and we’re happy to continue to see growth and demand coming in the electronics sector particularly.

Also this market has shown also strong dynamics in the logistics and e-commerce sector. Hopefully soon we’re going to start some spec building similar to what we have done in the past in the Vesta Park, Guadalajara. We’re confident that with the land acquisitions we did last year, we’re going to repeat the success that we have previously in the Vesta Park, Guadalajara 1. Also, we acquired land recently in Monterrey, in La Palma, in Juárez, and these two markets are the ones that eventually we will also start developing spec buildings or build-to-suit projects. We have had good progress in the permitting licensing, and little by little, as long as we start seeing a strong momentum on the leasing, we will start buildings, and will be a strong signal that the markets are permitting again to have some projects.

This is mainly driven by the pipeline that we have been generating. We have definitely seen stronger demand from different sectors, particularly the ones related to electronics, the ones related to AI, to data center infrastructure, as well as e-commerce, logistics, and medical devices, to name a few. That’s pretty much in most of the markets. We see that clients as well as potential new clients have regained confidence in their expansions. Many of these clients have had record high numbers in terms of production, and certainty is coming back again for them to continue expanding and continue opening up new operations in Mexico.

Operator: Our next question will come from the line of Anton Morten-Cotter with GBM. Please go ahead.

Anton Morten-Cotter, Analyst, GBM: Hi, guys. Congrats on your results, and thank you for taking my question. I have two quick questions. One is, you already mentioned a little bit of the dynamic that you saw that made you start the developments, but I was wondering if there is any specific sign that the market gave you in order for you to decide to move now and reactivate so strongly the development. That is one. The other one is, with all of these newly announced developments, it’s getting close to the cash balance that you already have. How are you thinking about funding capacity from here? Specifically, do you see any need or opportunity in the near term to tap either the debt or equity markets?

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Thank you, Anton, for your question. I think definitely we have internal metrics that we monitor in order to identify where we should be starting a project. Maybe just to use a positive example is the projects in Guadalajara that we started construction end of last year. We started without having a lease signed, but we identified that there was demand coming from certain sectors, and that’s why our decision was to anticipate to those clients by starting construction soon, so that in the meantime, while we are under development, we could be able to close with the potential demand that we saw. This quarter, that’s exactly what happened. We closed, again, we pre-leased with two current existing clients of Vesta that continue to grow and require flexible space, the standards that we have developed in the past.

Those particular metrics are the ones that we follow every time we start a building. Again, Mexico City, good dynamics. We have had some good success with the e-commerce clients. We think that there will continue to be demand for that. We feel comfortable with that start for a project that will be eventually developed at some point, end of the year. Again, Tijuana is a similar situation. Even though we have a few buildings available right now, which we are in a marketing stage. They’re both in different regions of different sub-markets in Tijuana, different dynamics, and that’s why starting a new building in this region makes sense because of some potential demand that we are already identifying. I think that this strategy has played out well.

In other markets, we continue to have a few buildings that we are in the marketing stage, but we’re confident that this will continue to be a good year and good absorption, and we think that we’ll continue to see good absorption. This is actually the third quarter in a row that we see strong demand and good absorption. I think that compared to, let’s say, the start of last year, which the uncertainty was incredibly high and projects were pretty much, all of them, on hold. I think that dynamism has changed effectively end of last year and with a strong start of the year of clients looking for high-quality buildings with good reputation landlords where they can establish their new long-term operations and make their own investments in different sectors.

Juan Felipe Sottil Achutegui, Chief Financial Officer, Vesta: As for the balance sheet, well, look, we have a very strong balance sheet, and we will always be flexible and keep our options open. We have $200 million in cash. We have a low leverage, so we will tap the market whenever possible, and we can sell properties. We can do equity. We will always be flexible, and we’ll see, as we continue to grow, what is the best market to tap. Remember, all of this was mentioned on the 2030 plan, and we have a long-term vision, and we will always take decisions that balance out the alternatives and balance out the capital requirements of the company. We’re very flexible.

Anton Morten-Cotter, Analyst, GBM: Super. Thank you very much.

Operator: Our next question comes from the line of Adrian Huerta with J.P. Morgan. Please go ahead.

Adrian Huerta, Analyst, J.P. Morgan: Hi, everyone. Hi, Loren. I have two questions. One is if there’s any opportunities for asset recycling. Are you looking for potential asset sales? The second one is how the yield on cost is today, given movements on construction and land cost relative to what you can charge on rents.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Thank you for your question, Adrian. On the second question, I think that the yield on cost continues to be very attractive in the 10% range, even in some cases, even higher than that. I think that one of the largest benefits to that has been our ability to acquire land at a lower cost basis. I think that we were very opportunistic last year and strategic so that we were able to acquire land at 70 cents to the dollar, and that’s how, together with our ability to get competitive construction costs and with still attractive market rents, that’s how we can be able to close a double-digit yield on cost. We’re doing deals in Mexico City at 9.8% yield on cost, close to 10%. In other markets, even at 10.5%-11%, such as Querétaro, Tijuana, for example.

I think that our experience as developer and managing well the construction process and construction competitive process, I think that that’s giving us an edge so that we can make high returns. More importantly, Adrian, is not the ability to make 10% return on costs, but it’s the spread on the investment that we can make since we believe that properties in the larger portfolio environment that we’re seeing are transacting at 7.5%-8% range. We think that assets similar class to Vesta could be trading closer to a 6%. Developing at a 10% and stabilizing at around 6%, that’s a lot of spread, and this is exactly the value proposition that we have for our shareholders.

Juan Felipe Sottil Achutegui, Chief Financial Officer, Vesta: Look, as far as capital recycling, building recycling, we will always be open to do that. I think that we have been successful in selling parts of our portfolio at a higher than asset valuation value, and we will continue to look at those opportunities.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: We do selectively. It’s different to some of the FIBRA that they need to dump a lot of the assets they have recently acquired because they don’t match their strategy. We don’t need to do that. We sell selectively. Every now and then, we want to only make a scope to our portfolio. Frankly, we invest, we develop to hold, and we invest long-term, and every now and then, opportunistically, we sell.

Adrian Huerta, Analyst, J.P. Morgan: Thank you, Loren and Juan.

Operator: Our next question, we’ll go from the line.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Just to add on that, I think our discipline is a good example. We like to sell above net asset value above valuations where we believe we can actually create a premium and make a good profit. I think a good example has been in the past where we have sold 10%-20% above appraised value in the private market, and then we have been able to develop again at a 10. I think that’s the approach in terms of capital allocation. I think that’s a discipline that we will continue to see going forward, and I think that’s a main differentiator on Vesta. Sorry for the interruption. Thank you.

Operator: Thank you. Our next question will come from the line of Rodolfo Ramos with Bradesco BBI. Please go ahead.

Anton Morten-Cotter, Analyst, GBM1: Thank you, Lorenzo, Juan, for taking my question. I only have one left, and it’s a follow-up on Gordon’s on the consolidation angle here. Just to get a sense of the impact that you could see, if any, particularly in the northern markets, let’s say Tijuana, Juárez, if further consolidation takes place, whether you think that this has any impact on your commercial efforts or on the lease spreads that you’re able to get through. Maybe perhaps on the positive side, whether a more consolidated market might just lead to better discipline on that front. Thank you.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Thank you. Well, I think that industrial real estate in Mexico, it’s a very fragmented sector. There’s really no dominance from any player in any of the markets. I think that actually many of these consolidations, if you look carefully, most of the acquisitions are done in secondary and tertiary markets. Markets where actually we do not operate and are quite small. In the end, some of them, there’s an overlap, but the majority is in secondary and tertiary markets. I don’t think this could have a major impact when it comes to marketing certain regions as the ones that you mentioned. I don’t know exactly what might happen with those secondary and tertiary markets, because in many of them we’re not that active.

Anton Morten-Cotter, Analyst, GBM1: Yeah. Thank you.

Operator: Our next question will come from the line of Carlos Peyrelongue with Bank of America. Please go ahead.

Carlos Peyrelongue, Analyst, Bank of America: Thank you. Thank you for taking my question, Lorenzo and Juan. Total occupancy remains stable at 90% in the quarter. Your expectation for this year is for this level to be maintained, or do you expect some increase? In that case, which markets do you think would drive that potential increase in occupancy?

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Look, well, we generally don’t project occupancy forward looking, which is not a guidance item. However, we’re very optimistic of the market dynamics, as Lorenzo mentioned. I think that we will have good absorption in the quarters to come.

Carlos Peyrelongue, Analyst, Bank of America: In terms of markets.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: In the market.

Carlos Peyrelongue, Analyst, Bank of America: Sorry.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: The market.

Carlos Peyrelongue, Analyst, Bank of America: Mm-hmm.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: To be specific, currently we’re in a marketing stage in Monterrey in our Apodaca project, and that’s gaining strong momentum. We feel confident that we’re going to see some good absorption in the next months, in the next quarters, and that will have a very positive impact in occupancy. As you mentioned, it has stabilized, and I think there’s an opportunity to see an upward trend. We will continue to see demand. That’s Monterrey will recover soon. Also in some markets in the Bajío, which have shown resilience, particularly in Querétaro. Actually, in some of the cases, we have good quality buildings, where sometimes we rather wait until we have a good tenant. We think that our projects as well as our parks are in good locations with good energy, infrastructure, with good quality buildings, again, good access to labor.

We think that eventually that will impact positive absorption and with that, have a positive impact on occupancy.

Carlos Peyrelongue, Analyst, Bank of America: Good. Thank you, Lorenzo and Juan.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Gracias.

Operator: Before we take our next question, a quick reminder. To ask a question, simply press star one. Our next question comes from the line of Igor Macedo with Goldman Sachs. Please go ahead.

Igor Macedo, Analyst, Goldman Sachs: Hi, team. Good morning. Thanks for taking my questions. First one is a follow-up on construction costs. Could you please comment, if given the ongoing conflict in the Middle East, are you seeing inputs already increasing in price, and do you have any means to understand how could this impact your costs? The second question is on the material exit in sales for SLP. Could you comment on what drove this? Is this low enough, and if you could please comment on how you’re seeing the demand on the Bajío region too.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: Excellent. Thank you for your question. Regarding marketing in San Luis Potosí. San Luis Potosí is a smaller market for Vesta. However, we have a project which is next to the BMW plant of San Luis Potosí. This market has a strong dependence on the auto industry, and I think that last year was quite slow. As we start seeing a little bit of some adjustments in the production lines of them, as well as other auto manufacturers, we think that there will be a better demand throughout this year, and with that, create a bit more absorption. We have a good quality project. Again, right next to BMW. We already have good tenants, but definitely, it’s a slower market. It should not have a major impact on the overall strategy for Vesta.

On your construction cost, well, definitely that’s something that we are monitoring carefully. What are the implications of the conflict in the Middle East on the construction cost? However, we have not seen any larger adjustments, so that could have a negative impact on construction. Nevertheless, I think that what is important to monitor is not only construction costs, but also FX, because we calculate everything on a $ per sq ft basis. Even with that, I think that Vesta has been able to absorb well some fluctuations. Also, some of the projects that we have already started construction, we do them on guaranteed maximum price. Even if there’s fluctuations in the pricing throughout the construction process, that is not impacted to our final cost because we have already guaranteed the price. That’s kind of the natural process to it.

Operator: There are no further questions. I’d now like to turn the call back over to Mr. Berho for his concluding remarks. Please go ahead, sir.

Lorenzo Dominique Berho Carranza, Chief Executive Officer, Vesta: [Foreign language]. In closing, we continue to deliver on the important milestones of our Vesta 2030 strategy, anchored in portfolio quality, discipline execution, and long-term value creation. Market dynamics are strong, particularly for high-quality, infrastructure-ready buildings, where demand continues to show resilience. This reinforces our confidence in the near-term outlook and our ability to capture incremental opportunities as activity continues to build. Against this backdrop, we remain committed to executing with discipline and expanding a well-curated platform to capture long-term demand. Along these lines, we look forward to sharing important updates, also on progress related to our Route 2030 strategy at our 2026 Vesta Day, to be held in New York on November 11. As always, thank you for your continued support. Goodbye.

Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.