FUNO Closes Utah`s Portfolio Acquisition 05032015.pub

Equity Research
FIBRA UNO
FIBRA / Diversified
March 05, 2015
Utah’s Portfolio Acquisition Is Completed
Buy
Buy Reiterated
FUNO11
Liquidity:
Change in Recommendation
High
Last Price:
MX$ 42.08
Price Target 2015:
MX$ 60.00
Change in T.P.
Change in Estimates
Dividend Yield 2015:
42.6% E. Return
Quarterly Review
Other
FUNO announced today it has closed Utah’s portfolio acquisition for USD67.9 million.
This portfolio includes a Class A+/A office building with 16,348 sqm of gross leasable area
(GLA), located in a premium location in the Reforma-Lomas corridor (in the corner of Montes
Urales and Volcan streets), in Mexico City. Bancomer is the property’s tenant, with most of
its leasing contracts being triple net (higher profitability for FUNO), denominated in US
dollars. It is worth to mention that this acquisition was already announced by the trust.
Another Accretive Acquisition. The property was acquired with a 100% occupancy and it
is expected to generate USD6.0 million of annual net operating income (NOI), representing a
gross entry NOI cap rate of 8.8%, or 8.3% net NOI to the FIBRA (accounting for the F1, F2
and acquisition fees). The net EBITDA cap rate to FUNO is 7.8% (after the F3 advisory fee),
which implies a 320bps spread against FUNO’s current forward adjusted cap rate. The
transaction was paid 100% with cash and the property has no debt.
6.4%
Total Return:
49.0%
Stock performance
115
110
Return Index
Local Ticker:
105
100
95
90
85
Dec-13
Apr-14
Jul-14
Oct-14
FUNO11
Jan-15
IPC
Market Data:
This announcement is marginally positive for FUNO as we were expecting it to be
closed during 2Q2015. According to FUNO, it takes on average 4 months to close
acquisitions due to their pertaining processes and the corresponding approval from the
Mexican antu-trust authority (COFECE). The Utah portfolio was disclosed during FUNO’s
investor day held in NYC on October 28, 2014, however its purchase agreement was signed
on January 20, 2015.
Buy Reiterated. At current MX$42.00 price levels FUNO presents a new entry opportunity
on its more attractive valuation amidst a year of consolidation of its aggressive investment
cycle, in our view. Our Buy recommendation is reiterated. We will soon release a company
update note.
Market Cap (MX$ MM):
125,352
Firm Value (MX$ MM):
141,243
LTM Price Range (MX$):
(38.44 - 47.86)
Free Float:
Avg. Daily Trade (MX$ MM):
Utah Portfolio (Bancomer Office Building)
Source: Google Earth, FUNO, Actinver.
Pablo E. Duarte de León
Real Estate
[email protected]
+52 (55) 1103 6600 x4334
Actinver
Guillermo Gonzalez Camarena 1200
Santa Fe, Mexico City, 01210
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