To Acquire Florida`s Portfolio (Office Building) 07012015.pub

Equity Research
FIBRA UNO
FIBRA / Diversified
January 07, 2015
To Acquire Florida’s Portfolio (Office Building)
Buy
Accretive MX$640.1 MM Acquisition
FUNO11
Liquidity:
Change in Recommendation
High
Last Price:
MX$ 44.28
Price Target 2015:
MX$ 60.00
Change in T.P.
Change in Estimates
Dividend Yield 2015:
35.5% E. Return
Quarterly Review
Other
FUNO announced it has signed an agreement to acquire Torre Diamante, a Class-A
office building with 21,755 sqm of gross leasable area (GLA) located in Insurgentes
Avenue #1685 in Mexico City. This property is part of FUNO’s 2015 acquisition pipeline
disclosed in its last Investor Day (October 2014), denominated as the Florida portfolio. The
agreed purchase price is MX$640.1 million and the transaction is still subject to approval of
the Mexican anti-trust authority (COFECE).
Another accretive acquisition at a current 8.9% gross NOI cap rate. With a 100%
occupancy, the property currently generates MX$57.2 million of annual net operating income
(NOI), according to FUNO. This implies an entry NOI cap rate for the company of 8.9%,
which translates into a 8.4% net NOI cap rate (cap rate to the FIBRA) after accounting for
the F1-management, F2-services and acquisition fees, superior as compared to our 7.75%
estimated acquisitions’ net cap rate.
41.6%
Stock performance
115
110
105
100
95
90
85
Dec-13
Mar-14
Jun-14
Market Data:
Positive news for FUNO. We maintain our positive stance on FUNO for 2015, given its
more attractive valuation at current CBFI price trading levels (MX$44.28) and its sound
growth strategy and proved execution capacity. FUNO has been executing faster than
expected its net resources from its June’s 2014 follow-on. With this acquisition, the company
has already invested MX$20,581 MM (82.5% of the follow-on) in accretive acquisitions for its
investors. The company still has available MX$11,125 MM of fire-power to fund new
acquisitions (the remaining of the follow-on and approved CBFIs), which we expect will be
deployed during 1H2015. FUNO’s announced pipeline which comprises the portfolios
denominated as Oregon (Retail) and Alaska (Office) would represent together MX$5,820
million of that amount (pending to be announced). Our BUY recommendation is reiterated.
Avg. Daily Trade (MX$ MM):
2015
2016
2017
8,381
6,999
6,225
4,582
1.71
2.02
13,403
11,544
10,993
8,371
2.77
2.70
15,302
13,113
12,497
9,312
3.07
2.98
16,916
14,475
13,835
10,450
3.43
3.32
Sep-14
FUNO11
Characteristics of Torre Diamante. FUNO describes it as a landmark building in the area
given its location and design (please refer to the exhibit in the following page). It has quality
tenants such as Smartfit and Bancomer (branch) at the street level, among others not
disclosed by the company’s management yet. The majority of the leasing contracts are triple
net, which result in a higher profitability for FUNO, and they have an average term of 7
years.
2014
6.1%
Total Return:
Return Index
Local Ticker:
Market Cap (MX$ MM):
127,455
Firm Value (MX$ MM):
139,409
LTM Price Range (MX$):
(38.87 - 48.40)
Free Float:
Financials (MX$ MM)
Property Operating Revenue
Net Operating Inc ome (NOI)
EBITDA
Funds From Operations (FFO)
FFO/CBFI (MX$)
CAD/CBFI (MX$) [Cash Available for Distibution]
Valuation
NOI Cap Rate (%)
5.2%
6.4%
6.9%
7.6%
EBITDA Cap Rate (%)
4.6%
6.1%
6.6%
7.3%
FFO Yield (%)
3.9%
6.3%
6.9%
7.7%
Dividend Yield (%)
4.4%
6.1%
6.7%
7.5%
Estimates inc lude use of MX$25 Bn from last follow- on, exc lude use of MX$6.7 Bn from approved CBFIs.
Actinver’s Equity Research
Dec-14
IPC
Pablo E. Duarte de León
Real Estate
pduarte@actinver.com.mx
+52 (55) 1103 6600 x4334
Ana Cecilia González
acgonzalezr@actinver.com.mx
+52 (55) 1103 6600 x4130
82%
355.7
Torre Diamante
GBM
Corp. Prisma
Torre Diamante
SFP
Source: Google Earth, Actinver.
Actinver’s Equity Research
2
Equity, Economic, Quantitative and Fixed Income Research Departments
Equity Research
Gustavo Terán Durazo,
CFA
Senior Analysts
Martín Lara
Head of EquityResearch
(52) 55 1103-6600 x1193
gteran@actinver.com.mx
Telecommunications, Media and
Financials
(52) 55 1103-6600x1840
mlara@actinver.com.mx
(52) 55 1103-6600 x4134
chermosillo@actinver.com.mx
Consumption
Carlos Hermosillo Bernal
Pablo Duarte de León
FIBRAs (REITs)
(52) 55 1103-6600 x4334
pduarte@actinver.com.mx
Ramón Ortiz Reyes
Cement, Construction and Concessions
(52) 55 1103-6600 x1835
rortiz@actinver.com.mx
Federico Robinson Bours
Carrillo
Energy, Conglomerates, Industrial and
Mining
(52) 55 1103-6600 x4127
frobinson@actinver.com.mx
Juan Ponce
Telecommunications, Media and
Financials
(52) 55 1103-6600x1693
jponce@actinver,com.mx
Ana Cecilia González
Rodríguez
FIBRAs (REITs)
(52) 55 1103-6600x4136
acgonzalezr@actinver.com.mx
Enrique Octavio Camargo
Delgado
Energy, Conglomerates, Industrial and
Mining
(52) 55 1103-6600x1836
ecamargod@actinver.com.mx
José Antonio Cebeira
González
Consumption
(52) 55 1103-6600x1394
jcebeira@actinver.com.mx
Junior Analysts
Economic and Quantitative Research
Ismael Capistrán Bolio
Head of Economic and Quantitative
Research
Jaime Ascencio Aguirre
Economy and Markets
Santiago Hernández Morales
Quantitative Research
Roberto Ramírez Ramírez
Quantitative Research
Roberto Galván González
Technical Research
(52) 55 1103-6600 x1487
(52) 55 1103-6600 x793325
(52) 55 1103-6600 x4133
(52) 55 1103-6600x1672
(52) 55 1103 -66000 x5039
icapistran@actinver.com.mx
jascencio@actinver.com.mx
shernandezm@actinver.com.mx
rramirezr@actinver.com.mx
rgalvan@actinver.com.mx
Fixed Income Research
Araceli Espinosa Elguea
Head of Fixed Income Research
(52) 55 1103 -66000 x6641
aespinosae@actinver.com.mx
Jesús Viveros Hernández
Fixed Income Research
(52) 55 1103 -66000 x6649
jviveros@actinver.com.mx
(52) 55 1103-6600 x4132
marellanos@actinver.com.mx
Mauricio Arellano Sampson
Actinver’s Equity Research
Fixed Income Research
3
Disclaimer
Guide for recommendations on investment in the companies under coverage included or not, in the Mexican Stock
Exchange main Price Index (IPC)
•
StrongBuywith an extraordinary perspective. According to the analyst, in the next twelve months, the valuations of stock
and/or prospects for the sector are EXTREMELY FAVORABLE
•
Buy. According to the analyst, in the next twelve months, the stock’s valuation and / or prospects for the sector are VERY
FAVORABLE
•
Neutral. According to the analyst, in the next twelve months, the valuation of stock and / or sector ARE NEUTRAL OR
FAVORABLE but with a similar perspective to the IPC
•
Belowmarket. According to the analyst, in the next twelve months, the valuation of stock and / or sector outlook ARE NOT
POSITIVE
•
Sell. According to the analyst, in the next twelve months, the valuation of stock and / or sector outlook ARE NEGATIVE, or
likely to worsen
•
In reviewwith positive outlook
•
In review with negative or unfavorable perspective
ImportantStatements.
a)
Of theAnalysts:
“The analysts in charge of producing the Analysis Reports:
Jaime Ascencio Aguirre; Mauricio Arellano Sampson; Enrique Octavio Camargo Delgado; Ismael Capistrán Bolio; Pablo Enrique Duarte de
León; Araceli Espinosa Elguea; Roberto Galván González; Ana Cecilia González Rodríguez; Carlos Hermosillo Bernal; Santiago Hernández
Morales; Martín Roberto Lara Poo; Ramón Ortiz Reyes; Juan Enrique Ponce Luiña; Federico Robinson Bours Carrillo; Gustavo Adolfo Terán
Durazo; Jesús Viveros Hernández, declare”:
b)
1.
"All points of view about the issuers under coverage correspond exclusively to the responsible analyst and authentically reflect his vision. All
recommendations made by analysts are prepared independently of any institution, including the institution where the services are provided
or companies belonging to the same financial or business group. The compensation scheme is not based or related, directly or indirectly,
with any specific recommendation and the remunerationis only received from the entity which the analysts provide their services.
2.
"None of the analysts with coverage of the issuers mentioned in this report holds any office, position or commission at issuers underhis
coverage, or any of the people who are part of the Business Group or consortium to which they belong. They have neither held any position
during the twelve months prior to the preparation of this report. "
3.
"Recommendations on issuers, made by the analyst who covers them, are based on public information and there is no guarantee of their
assertiveness regarding the performance that is actually observed in the values object of the recommendation"
4.
"Analysts maintain investments subject to their analysis reports on the following issuers: AC, ALFA, ALPEK, ALSEA, AMX,AZTECA,
CEMEX, CHDRAUI, FEMSA, FIBRAMQ, FINDEP, FUNO, GENTERA, GFREGIO, GRUMA, ICA, IENOVA, KOF, LAB, LIVEPOL,
MEXCHEM, OHLMEX,POCHTEC, TLEVISA,SORIANA, SPORTS, VESTA, WALMEX.
On Actinver Casa de Bolsa, S.A. de C.V. Grupo Financiero Actinver
1.
Actinver Casa de Bolsa, S.A. de C.V. GrupoFinanciero Actinver, under any circumstance shall ensure the sense of the recommendations
contained in the reports of analysis to ensure future business relationship.
2.
All Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver business units can explore and do business with any company mentioned
in documents of analysis. All compensation for services given in the past or in the future, received by Actinver Casa de Bolsa, SA de C.V.
GrupoFinanciero Actinver by any company mentioned in this report has not had and will not have any effect on the compensation paid to
the analysts. However, just like any other employee of Actinver Group and its subsidiaries, the compensation being enjoyed by our analysts
will be affected by the profitability gained by Actinver Group and its subsidiaries.
3.
At the end of each of the previous three months, Actinver Casa de Bolsa, SA de C.V. Actinver Financial Group, has not held any
investments directly or indirectly in securities or financial derivatives, whose underlying are Securities subject of the analysis reports,
representing one percent or more of its portfolio of securities, investment portfolio, outstanding of the Securities or the underlying value of
the question, except for the following: * AEROMEX, BOLSA A, FINN 13, FSHOP 13, SMARTRC14.
4.
Certain directors and officers of Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver occupy a similar position at the following
issuers: AEROMEX, MASECA, AZTECA, ALSEA, FINN, MAXCOM, SPORTS, FSHOP and FUNO.
This report will be distributed to all persons who meet the profile to acquire the type of values that is recommended in its content.
To see our analysts change of recommendations click here.
Actinver’s Equity Research
4