FibraHotel Day 2014 November 20, 2014 @FibraHotel
Disclaimer This presentation has been prepared by FibraHotel (or the Trust ) for informational and discussion purposes. It does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Certificados Bursátiles Fiduciarios Inmobiliarios (or the CBFI ) in the Trust, nor shall any part of it nor the fact of its dissemination form part of or be relied on in connection with any contract or investment decision relating thereto. Any such offering may be made only by an offering memorandum and the information contained herein will be superseded in its entirety by such offering memorandum in final form. This presentation does not contain all the information you should consider before investing in CBFIs of the Trust and no representation or warranty, express or implied, is made by any party as to the accuracy, fairness, completeness or materiality of the information furnished in this presentation, which remains subject to verification, completion and change without notice. Investors should review the offering memorandum (including the information therein as to risks) prior to making an investment decision and should rely only on the information contained in the offering memorandum. The Trust has not authorized anyone to provide you with information different from that contained in the offering memorandum. The securities mentioned in this document have not been registered under the U.S. Securities Act of 1933, as amended (the Securities Act ), and may not be offered or sold in the United States absent registration or exemption from registration under the Securities Act. The information in this presentation includes forwardlooking statements which are based on current expectations, beliefs, and predictions about future events. These forward looking statements are subject to known and unknown risks, uncertainties and assumptions about the Trust, its prospects and the economic environment in which it operates that may prove to be incorrect. Accordingly, the events described in such forward-looking statements may not occur and the Trust s objectives may not be realized. By attending this presentation you agree to be bound by the foregoing limitations and not to distribute, disclose or provide any information discussed today to any other person. 2
FibraHotel day 2014 objectives 1 Continue leading investor communication, transparency and corporate governance Yearly investor day event to overview results and strategy 2 Business plan execution Fully committed with clear pipeline Continue diversifying our portfolio of leading business hotels in Mexico with new operators, brands, cities and segments Developments have been delivered in time and on budget 3 FibraHotel s strategy Disciplined cash deployment to maximize dividend per certificate in the long term Overview of near-term and long-term growth expectations Asset management to maximize cash-flow 4 Review of financial results 3
FibraHotel in November 2012 hotel growth 4
FibraHotel in November 2013 hotel growth 5
FibraHotel in November 2014 hotel growth 6
FibraHotel in November 2012 brand and operator growth 7
FibraHotel in November 2013 brand and operator growth 8
FibraHotel in November 2014 brand and operator growth 9
Operations Growth Execution Overview of 2014 2014: Fully committed cash on hand, invested >Ps.2.5bn and added a new operating partner Cash deployment In 2014 to date, 12 hotels with 1,715 rooms acquired for a total investment of Ps. 1.7bn ~Ps 500mm invested in developments during the year Signed additional Ps. 1,000mm credit line agreement for firepower Developments on time and budget Announced 15 new developments with 1,981 rooms and an investment of ~Ps. 2.0bn Opened 4 hotels with 306 rooms on time and budget Strategic partnerships New operator - partnership with Sheraton to operate FIHO hotels in Mexico Development agreement with Grupo Favier and Grupo Plan Diversification Addition of extended-stay and full service hotels to complement segments New states such as Baja California, San Luis Potosi, Veracruz Added Starwood s international brands to portfolio Organic growth Same store ADR growth in 9mo 2014 y-o-y of 3.9% Same store RevPAR growth in 9mo 2014 y-o-y of 2.5% Management team and information systems Efficient team in place to manage 100 hotels Integrated systems with all operators. Conectum systems platform (Oracle) Asset management and margin expansion Focus on same store managed hotels operating margin (40 bps improvement y-o-y) Increased ancillary rents (celular towers, etc.) ~10% y-o-y Distributions To date in 2014 Ps. 0.63 per CBFI in distributions 10 Note: Company estimates
Overview of recent announcements 1 Development of a select-service hotel in Guadalajara. The 189-room hotel will be located inside the iconic mixed-use project Torre Americas 1500. Total investment of Ps. 246mm October 21, 2014 2 Development of the 144-room limited-service One Perisur hotel. Located adjacent to Fiesta Inn Perisur hotel in Mexico City. Total investment with Courtyard Toreo of Ps. 285mm October 22, 2014 3 Development of the 130-room select-service Courtyard Toreo hotel in Mexico City. Total investment with One Perisur of Ps. 285mm October 22, 2014 4 Agreement with Grupo Plan and Grupo Favier to acquire five Aloft hotels to be developed over the next 24 months and delivered turn-key. The hotels will have between 140 and 170 rooms and could represent a total investment of over Ps. 900.0 million - October 28, 2014 11
Overview of recent announcements (cont d) 5 Development of a 175 room select-service hotel in the mixed use project Antea Lifestyle Queretaro. The hotel will be an AC by Marriott and will be operated by Marriott International and will open in by the end of 2015. Total investment of Ps. 212mm October 31, 2014 6 Opening of two hotels in Monclova, the 66-room One Monclova and the 37-room Fiesta Inn Lofts Monclova, on time and below budget - November 4, 2014 7 Opening of the 50-room extended-stay Fiesta Inn Lofts Queretaro hotel on time and budget - November 14, 2014 8 Acquisition of the 229-room full-service Sheraton Ambassador Monterrey hotel from Starwood for US$13.5mm (including full renovation). Announced partnership with Starwood including the 5 Favier/Plan hotels to be Aloft and operated by Starwood - November 18, 2014 12
Overview of recent announcements (cont d) 9 Announces international brands in three hotels. The 139-room limited service Saltillo hotel currently in repositioning to be a Fairfield Inn & Suites, the 189-room select-service Torre Americas 1500 hotel to be an AC by Marriott and the 130-room select-service Toreo hotel to be a Courtyard by Marriott November 18, 2014 10 Acquisition of the 60-room full-service boutique Cacao hotel in Playa del Carmen for US$15.0mm (plus a potential earn-out). The hotel recently opened for operations and represents a strategic investment in a boutique hotel in Mexico - November 19, 2014 11 Development of a 125-room select-service hotel in the mixed use project Paseo Los Mochis. The hotel will be a Fiesta Inn and will be operated by Grupo Posadas and will open in by the end of 2015. Total investment of Ps. 112.5mm November 20, 2014 13
Devel. Operat. Cash committed 100% Clear pipeline with cash on hand fully committed Additional acquisitions 14 hotels 1,714 rooms 64 hotels 8,694 rooms 9 hotels 1,369 rooms 73 hotels 10,063 rooms 13 hotels 1,870 rooms 86 hotels 11,933 rooms 49 hotels 6,962rooms Q3 Operating portfolio + Q3 Development portfolio = FibraHotel Q3 Portfolio + Announced transactions = FibraHotel current Portfolio + Commitments by year end = FibraHotel pro-forma Portfolio 49 hotels 6,962rooms 49 hotels 6,962rooms 2 hotels 289 rooms 54 hotels 1 7,404 rooms 1 2 hotels 280 rooms 56 hotels 7,684 rooms 14 hotels 1,714 rooms 15 hotels 1,732 rooms 7 hotels 1,080 rooms 19 hotels 2,659 rooms 11 hotels 1,590 rooms 30 hotels 4,249 rooms Cash of ~Ps. 3.1bn Investment of ~(Ps. 1.3bn) PF cash of ~Ps. 1.9bn Investment of ~(Ps. 1.6bn) PF cash of ~Ps. 0.2 bn Investment of ~(Ps. 2.2bn) PF net debt of ~Ps. 2.0bn 14 Note: Company estimates. Current portfolio includes the opening of three hotels after Q3 2014; 1 Includes the opening of the Monclova hotels and the FI Lofts Queretaro.
Execution based on core tenets Invest in a disciplined manner Solid balance sheet to take advantage of market opportunities Asset management. Working with operators to maximize property level cash flows Quality of assets demonstrated in operating indicators above market Open architecture to work with the best available operator and brand 15
Discipline in cap rates and replacement costs FibraHotel transactions Initial portfolio Acquisition date Category Investment ( Ps. mm) # rooms Price / key ( Ps.) Total portafolio inicial FibraHotel Dec 2012 / Feb 2013 3,671,814 4,242 865,585 Additional acquisitions Acquisition date Investment ( Ps. mm) # rooms Price / key ( Ps.) FIHO acquisitions in 2013 05/07/1905 882,647 1,024 861,960 Fiesta Americana Aguascalientes 15/01/2014 full-service 227,329 192 1,184,003 Fiesta Inn Xalapa 27/03/2014 select-service 140,917 119 1,184,178 One Xalapa 27/03/2014 limited-service 80,000 126 634,921 Fiesta Inn Cd Obregon 07/04/2014 select-service 148,000 141 1,049,645 Fussion 5 Leon (Gamma) 16/05/2014 select-service 120,000 165 727,273 Gamma Valle Grande Cd Obregon 30/05/2014 select-service 110,000 135 814,815 Fairfield Inn Los Cabos 20/06/2014 limited-service 110,000 128 859,375 Fiesta Inn San Luis Oriente 21/07/2014 select-service 126,000 140 900,000 Gamma Lausana Tijuana 24/07/2014 select-service 120,000 140 857,143 Microtel Saltillo (to be repositioned) 25/09/2014 limited-service 112,000 140 800,000 Sheraton Ambassador Monterrey 17/11/2014 full-service 182,250 229 795,852 Cacao Playa del Carmen 19/11/2014 Boutique / full-service 202,500 60 3,375,000 Sub-total acquisitions 2, 561, 643 2, 739 935, 247 FibraHotel total portfolio 6, 233, 456 6, 981 892, 917 Other market announced transactions Acquisitions announced in 2013 and 2014 to date Investment (Ps. mm) 1 # rooms Price / key (Ps.) Hilton Centro Historico Jun 2013 full-service 1,170,000 458 2,554,585 Marriott Puebla Jul 2013 full-service 370,000 192 1,927,083 Mexico Plaza Irapuato Aug 2013 limited-service 102,590 102 1,005,784 Camino Real Guanajuato Aug 2013 full-service 230,000 105 2,190,476 Holiday Inn Coyoacan Dec 2013 full-service 381,000 214 1,780,374 Melia Reforma Ciudad de Mexico Dec 2013 full-service 910,000 489 1,860,941 Mexico Plaza Leon Jan 2014 limited-service 156,900 126 1,245,238 Mexico Plaza Celaya Jan 2014 limited-service 139,000 150 926,667 Aloft Guadalajara Jan 2014 select-service 220,000 142 1,549,296 Holida Inn Tampico Altamira Mar 2014 select-service 110,800 98 1,130,612 Mexico Plaza Silao May 2014 limited-service 87,500 143 611,888 Microtel hotels Sep 2014 limited-service 432,000 667 647,676 Crown Plaza Monterrey Airport Sep 2014 full-service 358,000 219 1,634,703 Market transaction average 4, 667, 790 3, 105 1, 503, 314 Continue investing at the right cost. FIHO s Interests are aligned with investors 16 (1) Estimated investment based on public disclosure including acquisition fees
Discipline in cap rates and replacement costs (cont d) FibraHotel announced developments FibraHotel developmen ts Category Investment (Ps. mm) 1 # rooms Price / key (Ps.) Fiesta Inn Lofts / One Monclova limited-service / ext. stay 80,000 103 776,699 Fiesta Inn Lofts Queretaro extended stay 45,000 50 900,000 Microtel Saltillo (reposicionamiento) limited-service 115,000 139 827,338 Fairfield Inn & Suites Villahermosa limited-service 110,000 134 820,896 Courtyard Ciudad del Carmen select-service 255,000 130 1,003,937 Fiesta Inn Lofts Ciudad del Carmen extended stay 124 One Perisur limited-service 285,000 144 1,040,146 Toreo servicios selectos select-service 130 Fiesta Americana Grand Monterrey full-service 600,000 180 2,654,867 Live Aqua Monterrey Boutique / full-service 46 Torre Americas 1500 select-service 246,000 189 1,301,587 Courtyard Vallejo select-service 230,000 121 938,776 Fairfield Inn & Suites Vallejo limited-service 124 AC Antea Queretaro select-service 212,000 175 1,211,429 Fiesta Inn Los Mochis select-service 112,500 125 900,000 Negociacion con Plan/Favier select-service 900,000 780 1,153,846 FibraHotel developmen ts 3, 190, 500 2, 694 1, 184, 298 Development at the right prices as core strength 17 Note: Company estimates
Takeaways and 2015 Path 1 Cash fully committed. Strong room growth in the near-future Development hotels to represent an important driver of 2015 and 2016 growth Continue to be active in acquisitions. We have an attractive pipeline of opportunities Available credit lines for short-term growth 2 Diversification as a core strength of the Fibra Open architecture as core tenet. Added leading international operator and brands Presence throughout the country to get full economic exposure Continue to focus on select-service. Selectively add full-service, boutique and extended stay segments 3 Development continues to be a core focus Mixed-use projects with high quality developers (Vallejo, Torre Americas 1500, Trebol Monterrey) 4 Organic growth - focus on increasing ADR and operating margins Expected tail-winds from an improved Mexican economy in 2015 Optimize results with hotel campuses (such as Queretaro, Monclova, Xalapa). Better customer segmentation, cost sharing, ability to service groups, etc. Asset management to increase profitability at hotel level 18
Developments and key strategic partnerships 1 Development is a core focus and strength of FibraHotel Access to markets with lack of supply with investment discipline Ability to grow with international brands in unique mixed use projects 2 We continue to grow through strategic partnerships Partnership with Grupo Plan and Grupo Favier for 5 Aloft hotels in Mexico Partnership to grow Starwood hotels in Mexico Currently negotiating a partnership with a leading shopping mall developer to acquire eight hotel pads in leading shopping centers (existing and new) 3 Expertise to minimize development considerations Understand and supervise the development process, from planning and land acquisition to hotel opening Local contacts and real estate know-how to achieve results Strong focus on project cost and efficiencies Leading execution team focusing on structuring and supervision 19
Development continues to be a core focus Access to selected markets with higher returns, international brands and new hotels Why development? Development characteristics Business lodging in Mexico is a growth market currently offering attractive development opportunities and returns Prime assets in strategic locations and unique mixed-use projects Proprietary deal flow - access to best real estate projects Maintains price discipline 20 year development expertise the cost is right Access highly dynamic cities at the right price Balance portfolio with new assets Ability to build efficiencies to maximize returns and margins Criteria for development Prime assets in unique projects At least ~150-200bps higher return than acquisitions All projects are bid out to third parties with FIHO supervising the process Considerations After permits and licenses, proper construction time of 9-15 months and ramp-up of 12-18 months Preference of acquisitions vs. developments Develop in locations difficult to penetrate through acquisitions (i.e. Villahermosa) Growth with international brands 20
Development partnership with Grupo Plan/Favier Agreement with Grupo Plan and Grupo Favier to acquire five Aloft hotels Five Aloft hotels turn-key with ~780 rooms and a total investment of ~Ps. 900mm Two hotels have permits and licenses and are expected to begin construction in 2014. The remainder is expected to begin construction during 2015 Partner with well-known developers with extensive hotel experience including projects such as the W hotel Mexico City, the Aloft Guadalajara hotel, the Torre Americas 1500 project (FibraHotel recently acquired the hotel component) and the Haciendas among others Agreement expected to be FIHO s developer of Aloft hotels in Mexico The Aloft brand provides a select-service brand with a style designed to accommodate today s trends and the lifestyle of tomorrow s traveler. 21
Starwood as new operating partner to FibraHotel Partnership with Starwood to collaborate on hotels in Mexico General agreement for FibraHotel to develop, acquire or convert hotels to be operated by Starwood under their international brands with a long-term management agreements Agreement anchored by (i) five hotel deal with Grupo Favier/Grupo Plan; (ii) Sale by Starwood to FibraHotel of the Sheraton Ambassador Monterrey hotel (closed November 14 2014) Second partnership with an international operator looking to grow their presence in the country with a recognized partner 22
Overview of development process 1 2 3 4 5 6 7 FIHO strategic growth plan. Site monitoring in target markets Strategic relationships with developers Independent third party market study Technical committee authorization Land acquisition &/or development agreement Design: segment, number of rooms, room-mix, amenities Detailed budget and operator/brand estimates Brand and operator decision. Maximize the value of the property Licenses and permits (time dependent on location) Development bidding process with third parties Hotel construction. Between 9 and 18 months Hotel opening and delivery to operator Stabilization period. Between 12 and 24 months depending on the location 23
FibraHotel s development pipeline 24
FibraHotel s development pipeline Solid progress on development pipeline execution to date on time and budget Overview of FibraHotel developments Hotel Name Total rooms Cash Investment (Ps. mm) Under 2015 2016 Opening Total Remaining constructio Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Microtel Saltillo (full repositioning) 139 Q1/2 2015 58.0 58.0 103 139 139 139 139 139 139 139 2 Fairfield Inn & Suites Villahermosa 134 Q3 2015 110.0 96.9 0 0 134 134 134 134 134 134 3 Courtyard Ciudad del Carmen 130 Q3 2015 255.0 205.8 4 Fiesta Inn Lofts Ciudad del Carmen 124 0 0 254 254 254 254 254 254 5 One Perisur 144 Q3 2015 285.0 165.5 0 0 144 144 144 144 144 144 6 Toreo servicios selectos 130 Q4 2015 0 0 0 130 130 130 130 130 7 Fiesta Americana Grand Monterrey 180 Q4 2015 600.0 348.0 8 Live Aqua Monterrey 46 0 0 0 226 226 226 226 226 9 Torre Americas 1500 189 Q4 2015 246.0 111.0 0 0 0 189 189 189 189 189 10 AC Antea 175 Q4 2015 212.0 212.0 0 0 0 175 175 175 175 175 11 Fiesta Inn Los Mochis 125 Q4 2015 112.5 112.5 0 0 0 125 125 125 125 125 12 Courtyard Via Vallejo 121 Q1 2016 230.0 193.5 13 Fairfield Inn & SuitesVia Vallejo 124 0 0 0 0 245 245 245 245 14 Hotel en Toluca Tollocan 100 TBD TBD TBD 0 0 0 0 0 100 100 100 15-19 5 Aloft Hotels Favier/Plan 780 2015/2016 900.0 900.0 0 0 0 336 480 480 780 780 19 FIHO s development portfolio 2,641 3,009 2,403 103 139 671 1,852 2,241 2,341 2,641 2,641 25 Note: Company estimates
Fairfield Inn & Suites Saltillo Fairfield Inn & Suites Saltillo (previously Microtel Saltillo) Full repositioning and expansion of a Microtel hotel Opening of 103 rooms and refurbished public areas on Q1 2015, new tower with 36 rooms on Q2 2015 Model room in process Refurbishing and expanding public areas Redeveloping rooms with new furniture, bathroom and AC Second hotel to be operated by Marriott (first conversion) Project overview Investment: Ps. 58mm Opening:Q1/2 2015 Region: Northwest Rooms: 139 Brand(s): Fairfield Inn & Suites Segment: limited-services Operator: Marriott International 26
Fairfield Inn & Suites Villahermosa Fairfield Inn & Suites Villahermosa Construction and foundation preparations in progress Permits and licenses obtained and construction started Given Villahermosa terrain, 24 pillars ~30 meters deep are required First new-build Fairfield Inn & Suites by FIHO to serve as prototype Project overview Investment: Ps. 110mm Opening:Q4 2015 Region: South Rooms: 134 Brand(s): Fairfield Inn & Suites Segment: limited-services Operator: Marriott International 27
Courtyard and Fiesta Inn Lofts Ciudad del Carmen Courtyard and Fiesta Inn Lofts Ciudad del Carmen Currently building foundations of the hotel, with most of the pillars finished Structure to start rising in December with delivery by February 2015 Side-by-side hotels are expected to maximize property returns Project overview Investment: Ps. 255mm Opening:Q3 2015 Region: South Rooms: 245 Brand(s): Courtyard / Fiesta Inn Lofts Segment: select-service/extended stay Operators: Marriott International and Grupo Posadas 28
One Perisur One Perisur Currently building foundations of the hotel, with the pillars finished and pouring the first floor Structure started rising in November with delivery by January 2015 Ahead of time, with potential opening Q2 or Q3 2015 Will help Fiesta Inn optimize rate and groups Project overview Investment: Ps. 285mm (including Toreo) Opening:Q4 2015 Region: Center (Mexico City) Rooms: 144 Brand(s): One Hotels Segment: limited-service Operator: and Grupo Posadas 29
AC by Marriott Torre Americas 1500 AC by Marriott Torre Americas 1500 Construction is currently under way with the foundations finished and cement poured in the parking floors and several hotel floors FIHO to receive the structure finished for all the hotel levels by February/March 2015 Project overview Investment: Ps. 246mm Opening:Q4 2015 Region: Center Rooms: 189 Brand(s): AC by Marriott Segment: select-service lifestyle Operator: Marriott International 30
Trebol Monterrey FA Grand and Live Aqua Trebol Monterrey FA Grand and Live Aqua Construction is currently under way with the foundations finished, and the structure of 11 hotel floors finished Model room in progress FIHO to receive the structure finished for all the hotel levels by February/March 2015 Studying the possibility of growing 2 floors in the Aqua hotel Project overview Investment: Ps. 600mm Opening:Q4 2015 Region: Northeast Rooms: 180 + 46 Brand(s): Fiesta Americana Grand and Live Aqua Segment: full-service / boutique Operator: Grupo Posadas AZOTEA NIVEL 23 NIVEL 22 NIVEL 21 NIVEL 20 NIVEL 19 NIVEL 18 NIVEL 17 NIVEL 16 NIVEL 15 NIVEL 14 NIVEL 12 NIVEL 11 NIVEL 10 NIVEL 9 NIVEL 8 NIVEL 7 NIVEL 6 NIVEL 5 AMENIDADES PLANTA LIBRE PLANTA ALTA PLANTA BAJA 31
AC by Marriott Antea Queretaro AC by Marriott Antea Queretaro The land is currently being prepared to begin foundations Product, rooms and brand defined Second AC by Marriott hotel and first property that can serve as a prototype Permits and licenses in process Synergies with other potential developments near-by Project overview Investment: Ps. 212mm Opening:Q4 2015 Region: Center-Bajio Rooms: 175 Brand(s): AC by Marriott Segment: select-service lifestyle Operator: Marriott International 32
Via Vallejo (Fairfield Inn & Suites and Courtyard) Via Vallejo (Fairfield Inn & Suites and Courtyard) The site is currently being prepared, undergoing excavations and foundation preparations for the shopping center Water tanks for the hotel in process Hotels to be developed in the same building and above the shopping center (solution for column displacement found) Project acquired by Fibra Danhos. Delayed a quarter from FIHO s initial expectations Project overview Investment: Ps. 246mm Opening:1H 2016 Region: Center (Mexico City) Rooms: 225 Brands: Courtyard/Fairfield Inn & Suites Segment: limited-service and selectservice Operator: Marriott International 33
Development case study Hotel cluster in Monclova Investment criteria Strategic location Adjacent to the leading Monclova hotel Campus to maximize returns (also in Puebla and Queretaro) Adequate price and return Land purchased for 10x the ballroom s cash flow New hotel to have synergies and share areas with the new tower High quality and unique assets New extended-stay rooms will improve asset perception, quality and segmentation Portfolio diversification Market with need for extended stay product offering 1 year ago Hotels: 1 Rooms: 96. Extended-stay Budget: 80mm (ex-ballroom) Opening: Q4 2014 Status: Announced Hotels: 2 Today Rooms: 103; 37 extended stay and 66 limited-service Budget: <80mm (including renovation of public areas) Opening: Nov 4, 2014 Status: Operating Hotel campus Pictures of the development FI Public areas Fiesta Inn Monclova Salon Fundicion ballroom Fiesta Inn Lofts Monclova One Monclova 34
Development case study AC Torre Americas 1500 Investment criteria Strategic location Business district of Guadalajara, the third largest city in Mexico Inside mixed-use project Torre Americas 1500 Adequate price and return Attractive lifestyle segment for business district Price per key <US$100,000 High quality and unique assets Inside the 24-floor Sordo Madaleno LEED certified project, including, ~2,000 square meters of retail area, ~14,300 square meters of AAA offices and a hotel Portfolio diversification Expand AC by Marriott brand and presence in Guadalajara Started long-term relationship with quality developer Pictures of the development Hotel overview and strategic rationale 189-room select-service lifestyle hotel located in business district in Guadalajara, Jalisco AC by Marriott hotel operated by Marriott International. Looking to obtain attractive rates with this segment category Budget of Ps. $246mm (Ps. $1.3mm per key) Acquired the structure finished from Grupo Favier. Interiors and FF&E will be subcontracted through a bidding process Opening in Q4 2015 Hotel location 35
Select Service lifestyle brands 36
Overview of 2014 acquisitions During 2014 we have added 12 properties with over 1,700 rooms with an investment of Ps. 1,700mm through a mix of stabilized properties and conversion of independent hotels Overview of FibraHotel s 2014 acquisitions Hotel Name Rooms Investment (Ps. mm) Contribution to results Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Stab. Comments 1 Fiesta Americana Aguascalientes 192 227.3 160 192 192 192 192 192 Stabilized hotel 2 Fiesta Inn Xalapa 119 140.9 0 119 119 119 119 119 Stabilized hotel 3 One Xalapa 126 80.0 0 118 118 126 126 126 18 room expansion in Oct 4 Fiesta Inn Cd Obregon 141 148.0 0 123 123 123 141 141 18 room expansion in Dec 5 Fussion 5 Leon (Gamma) 165 120.0 0 0 55 110 165 165 Reconversion by YE 2014 6 Gamma Valle Grande Cd Obregon 135 110.0 0 0 45 90 135 135 Reconversion by YE 2014 7 Fairfield Inn Los Cabos 128 110.0 0 0 0 128 128 128 Hurricane impact. First Marriott hotel. Re-opening Nov 2014 8 Fiesta Inn San Luis Oriente 140 126.0 0 0 98 140 140 140 Stabilized. Leased during transition 9 Gamma Lausana Tijuana 140 120.0 0 0 0 70 140 140 Reconversion by Q4 2014 10 Microtel Saltillo (to be repositioned 139 112.0 0 0 0 0 35 139 Repositioning. Open Q1/2 15 11 Sheraton Ambassador Monterrey 229 182.3 0 0 0 115 152.7 229 12 Cacao Playa del Carmen 60 202.5 0 0 0 20 30 60 In ramp-up 12 2014 hotel acquisitions 1,714 $1,679.0 160 552 750 1,233 1,504 1,714 Stabilized with full remodelation in 15. First Starwood hotel 37
Acquisition case study Fiesta Inn San Luis Oriente Investment Name Operator No. of Total Per key LTM cap Category Location rooms (Ps. mm) (Ps.000 s) rate Fiesta Inn San Luis Oriente Posadas 140 select-service San Luis Potosi, SLP $125.0 $893 10.0% Investment criteria Strategic location In the industrial corridor of San Luis Potosi, close to the main manufacturing plants Adequate price and return 10% LTM cap rate; Above that with the change to FIHO s management agreement and asset management Price per key of Ps. 893k High quality and unique assets Stabilized and well positioned hotel in San Luis Potosi, where on top of existing demand, important new investment is expected Portfolio diversification Adds presence in San Luis Potosi Hotel overview and strategic rationale 140-room select-service hotel in San Luis Potosi, SLP The hotel has a lease with Posadas, we received lease income during the two month transition period. After transition period, hotel changed to a traditional management agreement Price per key of ~Ps. 893k and cap rate above 10% Adds presence in San Luis Potosi, an important industrial city with strong growth expected, including the announcement of a US$1bn investment by BMW on a manufacturing plant with capacity for 150k cars a year Hotel pictures Location in San Luis 38
Acquisition case study Repositioning of Gamma Leon Investment Name Operator No. of Total Per key Category Location rooms (Ps. mm) (Ps.000 s) Gamma Leon Grupo Posadas 165 limited-service Leon, Guanajuato $120.0 $727 Investment criteria Hotel overview and strategic rationale Adequate price and return Acquired for Ps. 730k per key after repositioning Strategic location In the entrance to Leon, a strategic city in the Bajio region Close to FIHO s Fiesta Inn and also serving the Bajio airport, the Guanajuato in-land port and the Silao area High quality and unique assets Well-built hotel with design opportunities. Attractive room size for a limited-service hotel Portfolio diversification Conversion of an independent hotel into the Gamma brand 165-room limited-service hotel in Leon Guanajuato Acquired by FibraHotel in May 22, 2014 for Ps. 104mm (Ps. 630k per key) Converted from the independent Fussion 5 to the Gama by Fiesta Inn Leon with a budget of Ps. 16mm Hotel did not close during repositioning. Currently in rampup stage with new operator and expected to fully contribute to results by the first quarter of 2015 During the first month after acquisition the hotel had >15% occupancy, by October occupancy was ~50% Fussion 5 Leon Gamma by Fiesta Inn Leon Location 4 1 1 2 3 2 3 4 1 Leon, Guanajuato 2 Bajio International Airport 3 Guanajuato Inland Port 4 Silao, Guanajuato 39
Acquisition case study Sheraton Monterrey Investment Name Operator No. of Total Per key Category Location rooms (Ps. mm) (Ps.000 s) Sheraton Ambassador Monterrey Starwood 229 full-service Monterrey, Nuevo Leon $182.3 $796 Investment criteria Strategic location In the heart of downtown Monterrey, walking distance to the Macro Plaza. Monterrey is an industrial and global business hub Adequate price and return Acquired for Ps. 796k per key after full renovation After renovation, attractive expected cap rate High quality and unique assets Irreplaceable location, construction and available areas (over 13,000m2 constructed in a full city block) Historic hotel in Monterrey, with proposed renovation to bring the property to latest standards Portfolio diversification Expands full-service segment, new brand and operator Hotel pictures Hotel overview and strategic rationale 229-room full-service hotel in Monterrey, Nuevo Leon Acquisition closed in November with transition to the Fibra structure and new operator successfully finished Total investment of US$13.5mm including comprehensive property renovation (~Ps. 796k per key) Over 13,000 ft 2 of meeting space, full-service restaurant, lobby bar, health club, outdoor pool and tennis court Adds a new international brands and operator. Additionally, is part of a broader relationship with Starwood Renovation of the hotel to be executed in 2015 without a closing of the hotel in phases Location in MTY 40 Note: Company estimates
Acquisition case study Cacao Playa del Carmen Investment Name Operator No. of Total Per key Category Location rooms (US. mm) (US.000 s) Cacao Playa del Carmen Cornerstone 60Boutique/full-service Playa del Carmen, QR $15.0 $250 Investment criteria Strategic location In the 5 th Avenue of Playa del Carmen blocks from the beach Inside mixed-use project with shopping center and apartments Adequate price and return Luxury boutique hotel for US$250k per key Attractive real-estate value in the city High quality and unique assets Irreplaceable asset and location in the 5 th Avenue Portfolio diversification Adds a new state, boutique service segment and new operator Hotel pictures Hotel overview and strategic rationale 60-room boutique full-service hotel in Playa del Carmen, Quintana Roo, on the 5 th Avenue 2 blocks from the beach Acquired turnkey for US$250k/key, with a potential earnout of a percentage of the over performance above 10% of cash-flow (EBITDA-capex) in the first three years Property is currently in pre-operation Full-service restaurant, rooftop bar Located in a mixed-use project with shopping center (including high-end restaurants) and apartments Adds boutique segment and operator in strategic location Location Playa del Carmen 41 Note: Company estimates
Capex investments and portfolio renovations Camino Real Puebla Public areas of Fiesta Inn Leon Before After Before After Restaurant Lobby Restaurant Lobby Meeting rooms Lobby Meeting rooms Lobby Public Areas Facade Public Areas Facade Public Areas Facade Public Areas Facade Real Inn Mexicali Public areas of Fiesta Inn Monclova Before After Before After Hallways Lobby Hallways Lobby Public Areas Public Areas Public Areas Facade Public Areas Facade FIHO constantly analyzes investment opportunities in its portfolio with a proper return Above market capex reserve of 5% of sales yearly 42
Overview of investments and deployment FibraHotel pro-forma cash position NOI contribution Cash deployment Room contribution Hoteles Rooms Cash 2015 2016 2017 2015 2016 2017 2014 2015 2016 2017 Q3 2014 operating portfolio 49 6,962 $3,100.0 95% 100% 100% 100% 100% 100% 87% 95% 100% 100% Q3 2014 development portfolio 15 1,732 ($1,226.7) 18% 58% 97% 98% 100% 100% 0% 19% 54% 85% Fiesta Inn Lofts / One Monclova 2 103 27.7 60% 100% 100% 100% 100% 100% 0% 60% 100% 100% Fiesta Inn Lofts Queretaro 1 50 20.3 60% 100% 100% 100% 100% 100% 0% 60% 100% 100% Microtel Saltillo (reposicionamiento) 1 139 58.0 60% 90% 100% 100% 100% 100% 0% 60% 90% 100% Fairfield Inn & Suites Villahermosa 1 134 96.9 20% 60% 100% 100% 100% 100% 0% 20% 60% 100% Courtyard Ciudad del Carmen 1 130 205.8 20% 60% 100% 100% 100% 100% 0% 20% 60% 100% Fiesta Inn Lofts Ciudad del Carmen 1 124 20% 60% 100% 100% 100% 100% 0% 20% 60% 100% One Perisur 1 144 165.5 30% 70% 100% 100% 100% 100% 0% 30% 70% 100% Toreo servicios selectos 1 130 20% 60% 100% 100% 100% 100% 0% 20% 60% 100% Fiesta Americana Grand Monterrey 1 180 348.0 20% 60% 100% 100% 100% 100% 0% 20% 60% 100% Live Aqua Monterrey 1 46 0% 40% 90% 100% 100% 100% 0% 0% 40% 90% Torre Americas 1500 1 189 111.0 0% 40% 90% 100% 100% 100% 0% 0% 40% 90% Courtyard Vallejo 1 121 193.5 0% 40% 90% 80% 100% 100% 0% 0% 40% 90% Fairfield Inn & Suites Vallejo 1 124 0% 40% 90% 80% 100% 100% 0% 0% 40% 90% Hotel en Toluca Tollocan 1 100 0% 25% 50% 30% 70% 100% 0% 0% 25% 50% Q3 FibraHotel portfolio 64 8,694 $1,873.3 77% 90% 99% 99% 100% 100% 70% 80% 92% 99% Announcements since Q3 AC Queretaro 1 175 (212.0) 0% 50% 100% 100% 100% 100% 0% 0% 50% 100% Fiesta Inn Los Mochis 1 125 (112.5) 0% 50% 100% 100% 100% 100% 0% 0% 50% 100% Negociacion con Plan/Favier 5 780 (900.0) 0% 40% 90% 80% 100% 100% 0% 0% 40% 90% Sheraton Monterrey 1 229 ($183.6) 70% 100% 100% 100% 100% 100% 0% 70% 100% 100% Cacao Playa del Carmen 1 60 ($204.0) 50% 100% 100% 100% 100% 100% 0% 50% 100% 100% Additional announcements 9 1,369 ($1,612.1) 14% 56% 94% 89% 100% 100% 0% 14% 55% 94% FIHO portafolio Nov 20 2014 73 10,063 $261.2 66% 84% 98% 98% 100% 100% 60% 71% 87% 98% Cash in developments to be spent in 2015, with NOI contribution in 2016/2017 43 Note: Illustrative estimates
Overview of investments and deployment FibraHotel pro-forma cash position Type Hoteles Rooms Cash Q3 2014 operating portfolio Operation 49 6,962 $3,100.0 Q3 2014 development portfolio Development 15 1,732 ($1,226.7) Q3 FibraHotel portfolio 64 8,694 $1,873.3 Announcements since Q3 AC Queretaro Development 1 175 (212.0) Fiesta Inn Los Mochis Development 1 125 (112.5) Negociacion con Plan/Favier Development 5 780 (900.0) Sheraton Monterrey Operation 1 229 ($183.6) Cacao Playa del Carmen Operation 1 60 ($204.0) Additional announcements 9 1,369 ($1,612.1) FIHO portafolio Nov 20 2014 73 10,063 $261.2 Commited and to be anounced before year end Acquisition of two hotels in Cuernavaca Acquisition 2 280 ($267.0) Development hotel in Queretaro Development 1 134 ($110.0) Development hotel in Durango Development 1 126 ($70.0) Development partnership in shopping malls Development 8 1,200 ($1,500.0) Development hotel in San Miguel de Allende Development 1 130 ($260.0) FIHO pro-forma portafolio 86 11,933 ($1,945.8) On top of cash commitment, solid pipeline of opportunities 44
Portfolio overview - positive trends in ADR 1,000 900 800 700 600 500 2007 / 2013 Yearly KPIs + 3Q 2014 LTM 80.0% 70.0% 60.0% 50.0% 40.0% Since 2012 (FIHO IPO), our stabilized portfolio demonstrated the following: ADR from Ps. $835 to Ps. $898, a 7.5% increase, demonstrating our hotels portfolio s Pricing Power During the period, inflation rate was 6.2% 400 300 200 100 30.0% 20.0% 10.0% Occupancy Rate from 65.6% to 63.6%, a (2.0%) decrease, due to a weakness in the Mexican economy since August 2013 0 2007 2008 2009 2010 2011 2012 2013 2014 LTM ADR RevPAR Occupancy 0.0% RevPar increased 4.3%, from Ps. $548 to Ps. 571 FibraHotel is mainly focused on increasing RevPAR through increase in ADR 45
2014 FIHO s KPI at a glance 1 st quarter 2014 2 nd quarter 2014 3 rd quarter 2014 60.3% 59.7% 872 905 526 540 65.6% 63.6% 891 930 585 591 66.4% 66.2% 855 886 568 587 1Q 2013 1Q 2014 ADR: +4.0% Occupancy: (0.5%) RevPAR: +3.1% 2Q 2013 2Q 2014 ADR: +4.2% Occupancy: (2.2%) RevPAR: +0.7% 3Q 2013 3Q 2014 ADR: +3.7% Occupancy: (0.1%) RevPAR: +3.6% 64.1% 63.2% January to September 2014 874 908 560 574 ADR: +3.9% Occupancy: (0.9%) RevPAR: +2.5% 9M 2013 9M 2014 46
LTM Financials - Results - Total Last 12 months 1,032 Total Revenues (Ps. $ million) 1,164 1,294 1,394 +35% vs. 4Q 2013 LTM Last 12 months Lodging Contribution Total (Ps. $ million - margin) 479 450 411 377 +27% vs. 4Q 2013 LTM 36.6% 35.4% 34.8% 34.4% 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Last 12 months 260 EBITDA (Ps. $ million - % of revenues) EBITDA per room (Ps. $) 277 301 327 Last 12 months 46,838 45,249 45,240 47,092 +26% vs. 4Q 2013 LTM +4% vs. 2Q 2014 LTM 25.2% 23.8% 23.3% 23.5% 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Note: FibraHotel made an equity follow-on on May 2013 (impact on EBITDA, dilution due to CBFI issuance, increase in net cash position ) For more detailed information, please refer to 3Q 2014 Excel Fact Sheet (http://www.fibrahotel.com/news/26_en.xlsx) 47
LTM Financials - Results - Managed Hotels Last 12 months 936 Managed Hotels Revenues (Ps. $ million) 1,073 1,206 1,311 +40% vs. 4Q 2013 LTM Last 12 months Managed Hotels Lodg. Contr. (Ps. $ mm - margin) 396 362 321 281 +41% vs. 4Q 2013 LTM 30.1% 29.9% 30.0% 30.2% 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Last 12 months Managed Hotels Lodging Contribution per room (Ps. $) 59,026 56,974 58,526 62,670 Strong increase in LTM revenues External growth (M&A / Development) Organic growth (increase in RevPAR) Improvement in Contribution Margin and Contribution per room thanks to better 2Q / 3Q vs. last year Improvement while several hotels where acquired over the last two quarters and are in process of brand and/or operator substitution: Gamma León, Ciudad Obregón and Tijuana 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Fairfield Inn Los Cabos 48
Understanding FIHO s NOI margin trend Revenues (Ps. $ million) Net Operating Income (Ps. $ million) NOI margin 1,032 936 1,394 1,311 361 270 458 381 94.6% 93.7% 34.9% 32.9% 96 83 91 78 28.8% 29.0% 2013 2014 2013 2014 2013 2014 1. Fibra Hotel is mainly involved in hotels under management contracts 2. Revenues from managed hotels strongly increased from 3Q 2013 LTM to 3Q 2014 LTM 3. NOI margin from managed hotels increased from 3Q 2013 LTM to 3Q 2014 LTM and despite: Weaker economic conditions (RevPAR increasing 2.5% for the stabilized portfolio) Increased number of hotel under ramp-up period Decrease of NOI margin over the past quarters due to revenue mix change (not operating) 49
Operating Leverage: seeking efficiencies Note: The financial data presented in this slide is for Operating Leverage illustration purpose only, and does not take into account revenues/expenses other that items related to managed hotels and corporate expenses, we assume (illustration purpose) that corporate expenses are only related to managed hotels Top-line growth Asset Management Corporate Structure 936 1,311 270 381 29.0% +19bp 169 249 19.0% +95bp 28.8% 18.1% 2013 2014 1. Internal Growth: RevPAR increase 2. External Growth M&A Development 2013 2014 1. Benchmark between hotels / brands / operator 2. Economies of scale 3. CAPEX deployment 2013 2014 1. Corporate structure almost sized to reach the 100-hotel target Capped advisory fee Increase in administrative expenses but in lesser extent than NOI increase Fuelling FIHO s growth Enhancing value creation for FIHO s shareholders 50
Cash flow generation: Jan. to Sep. 2014 Cash Dec. 2013 Operating Activities (operating / leased hotels, other rents) Investing activities (acquisitions, development, VAT and related expenses) Distribution 4Q-13 / 1H-14 Cash Sept. 2014 4,788 401 (1,748) (318) 3,122 31/12/2013 Operating Activities Investing Activities Shareholders Return 30/09/2014 As of September 2014, Ps. $3.122 million available During the January-September, almost 37% of the end-2013 available cash deployed 51
A healthy financing structure As of September 30 th, 2014, Ps. 3,122 million of cash available Approximately 3,000 million available for the growth of FibraHotel Available cash is placed in debt instruments issued by the Mexican Federal Government Current leverage status No outstanding debt 2 credit line available for a total amount of Ps. $2,000 million at very attractive terms Tranche A: revolving / Tranche B: term loan up to 12 years Spread: les than 200bps over TIIE Indebtedness metrics (Q3 2014) FIHO bylaws FIBRA Regulation FIHO Level Loan to Value Max. 40% Max 50% 0% DSCR Min. 1.2x Min. 1.0x 3.7x As of today, available fire power of Ps. $5,000 million Pro Forma LTV of 17% with Ps. $2,000 million indebtedness 52
Ps. $650 million distributed since 1Q 2013 Quarterly distribution to holders (Ps. $ million) 2Q 2013: CBFIs issuance 4Q 2013: Mexican Central Bank cut rate from 4.0% to 3.5% 2Q 2014: Mexican Central Bank cut rate from 3.5% to 3.0% Distribution from non operating income (mainly interests income) Distribution from operating income 59.0 74.4 18.6 99.5 44.4 105.0 49.2 98.6 50.5 114.3 40.9 100.1 22.4 14.6 44.4 55.8 55.1 55.8 48.1 73.4 77.7 Aver. % of balance sheet held in cash and dev. portfolio 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 37% 32% 50% 49% 48% 43% 39% Distribution / CBFI (Ps. $) 0.2005 0.1512 0.2023 0.2134 0.2001 0.2313 0.2025 53