Real Estate Update

Industrial real estate companies once again delivered solid operational results in 3Q25, a trend we expect to continue—consistent with the outlook presented in our prior 3Q25 review (link to report). Despite ongoing uncertainty surrounding trade relations and potential tariff scenarios, nationwide vacancy remains low at 5%, according to CBRE, and several markets are beginning to show early signs of stabilization as new construction gradually normalizes. Within this context, Mexico City continues to stand out as the most resilient market.

During the first three quarters of 2025, Mexico City, which is the main market for these three companies, continued to post solid growth. In 2Q25 Mexico City recorded cumulative net absorption of 439,000 m² (+396% YoY growth), with only two months of inventory available. This strong momentum continued in 3Q25, as the industrial market in Mexico City achieved a record-high gross absorption of 725,000 m², the highest level in the past five years, primarily driven by pre-leases and renewals, and a 118% QoQ increase.

The vacancy rate closed the quarter at 2.0%. This represents a 50bp increase QoQ versus 2Q25 but still remains at a very healthy level and way below the national vacancy of 5%. Vacancy rates in Mexico City have remained at or below 2% for over two years, reflecting the strength and maturity of the market. The average asking rent increased 12% QoQ, mainly attributed to the limited market. At just 0.8 inventory years (102k m²/12m m²), Mexico City maintains the shortest absorption timelines in Mexico, reflecting the rapid take-up of new space and the limited presence of speculative development.

Industrial real estate in Mexico City continues to deliver robust results, supported by historically low vacancies and limited inventory— conditions we expect to persist in the coming months. Given that Mexico City represents 36.0%, 59.3%, and 31.8% of GLA for FIBRAPL, NEXT, and FUNO, respectively, we believe these companies are well positioned to benefit not only from the strength of the local logistics market but also from a potential recovery in border markets as trade tensions ease. In this context, we reiterate our Outperform ratings for FIBRAPL and NEXT following the quiet period, as we continue to see meaningful upside. We also maintain our Market Perform rating for FUNO.