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
[email protected]
+52 (55) 1103 6600 x4334
Ana Cecilia González
[email protected]
+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
[email protected]
Telecommunications, Media and
Financials
(52) 55 1103-6600x1840
[email protected]
(52) 55 1103-6600 x4134
[email protected]
Consumption
Carlos Hermosillo Bernal
Pablo Duarte de León
FIBRAs (REITs)
(52) 55 1103-6600 x4334
[email protected]
Ramón Ortiz Reyes
Cement, Construction and Concessions
(52) 55 1103-6600 x1835
[email protected]
Federico Robinson Bours
Carrillo
Energy, Conglomerates, Industrial and
Mining
(52) 55 1103-6600 x4127
[email protected]
Juan Ponce
Telecommunications, Media and
Financials
(52) 55 1103-6600x1693
jponce@actinver,com.mx
Ana Cecilia González
Rodríguez
FIBRAs (REITs)
(52) 55 1103-6600x4136
[email protected]
Enrique Octavio Camargo
Delgado
Energy, Conglomerates, Industrial and
Mining
(52) 55 1103-6600x1836
[email protected]
José Antonio Cebeira
González
Consumption
(52) 55 1103-6600x1394
[email protected]
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
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Fixed Income Research
Araceli Espinosa Elguea
Head of Fixed Income Research
(52) 55 1103 -66000 x6641
[email protected]
Jesús Viveros Hernández
Fixed Income Research
(52) 55 1103 -66000 x6649
[email protected]
(52) 55 1103-6600 x4132
[email protected]
Mauricio Arellano Sampson
Actinver’s Equity Research
Fixed Income Research
3
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“The analysts in charge of producing the Analysis Reports:
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