Good morning, and welcome to FIBRA Macquarie's first quarter 2024 earnings call and webcast. My name is [Shamali], and I will be your operator for this call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If at any time you require operator assistance, please press star followed by 0, and an operator will be happy to assist you. I would now like to turn the conference over to Nikki Sacks. Please go ahead.
Thank you and good morning, everyone. Thank you for joining FIBRA Macquarie's first quarter 2024 earnings conference call and webcast. Today's call will be led by Simon Hanna, our Chief Executive Officer, and Andrew McDonald-Hughes, our CFO. Before I turn the call over to Simon, I'd like to remind everyone that this presentation is proprietary and all rights are reserved. The presentation has been prepared solely for information purposes, not a solicitation of an offer to buy or sell any securities. Forward-looking statements in this presentation are subject to a number of risks and uncertainties. Our actual results, performance, prospects, or opportunities could differ materially from those expressed in or implied by the forward-looking statements. These forward-looking statements are made as of the date of this presentation.
We undertake no obligation to publicly update or revise any forward-looking statements after the completion of this presentation, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, on this conference call, we may refer to certain non-IFRS measures as well as to U.S. dollars, which are U.S. dollar equivalent amounts unless otherwise specified. As usual, we've prepared supplementary materials that we may reference during the call as well. If you've not already done so, I would encourage you to visit our website at fibramacquarie.com and download these materials. A link to the materials can be found under the Investors Events and Presentations tab. With that, it's my pleasure to hand the call over to FIBRA Macquarie's Chief Executive Officer, Simon Hanna. Simon?
Thank you, Nikki. Good morning, everyone, and thank you for joining us. On today's call, we will discuss our first quarter 2024 results, our growth initiatives, and discuss our proposed tender offer for Terrafina. Andrew will also provide an update on our balance sheet, robust capital position, and guidance for 2024. In the first quarter, the positive momentum we experienced last year, coupled with the successful execution of our strategy, has converted into earnings growth. In underlying U.S. dollar terms, our NOI was up 10.2%, driven by a record quarterly print for consolidated revenue. This top-line driven performance has translated into a 10.1% increase in our first quarter cash distribution when compared to the prior comparable quarter. We also continue to advance on the execution of our industrial development program.
I'm excited to announce that in the past few days, we closed on a strategic 25 hectare land parcel in the core industrial market of Monterrey for a total consideration of $12.4 million, representing an attractive acquisition price. This well-located site is less than 2 km from our premier Apodaca Industrial Park that has been successfully built out. With this multi-building project, we look forward to delivering another class A industrial park in one of Mexico's top industrial markets, with initial works to commence later in the year. As of quarter end, we have 1.5 million sq ft of GLA under development or in stabilization, with NOI contribution to flow in coming periods as beneficial occupancy of recently leased buildings and expected lease ups are completed within our underwriting timeframe. We're positioned FIBRA Macquarie to grow alongside the ongoing demand for well-located, high-quality industrial space.
In addition to what we have already and what we have in process, we have another 4 million sq ft of potential development GLA, which we intend to complete in a phased approach over the coming years. We particularly value the strategic land bank located in the core industrial markets of northern Mexico, where we believe the long-term nearshoring tailwinds will preferentially benefit. Overall, market conditions have a favorable outlook. Energy and infrastructure availability remain a challenge for the broader industry, which in certain cases is slowing the development process and timing of new starts. We anticipate this dynamic should keep new supply constrained, providing us with additional pricing power while we utilize our development expertise to progress through our pipeline in a measured way. In terms of our operating portfolio, we delivered another strong quarter in our industrial segment, and we're seeing a sustained recovery in retail.
In our industrial portfolio, our same-store NOI growth was 6.7% in underlying U.S. dollar terms, as we realized double-digit re-leasing spreads and high occupancy. We closed the quarter with occupancy at 98.2%, and with continued momentum in lease spreads, where we achieved an 11.8% increase on commercially negotiated renewals. Highlights of leasing activity in the quarter include the U.S.-based industrial logistics supplier, MH Kali, and a South Korean-based auto parts manufacturer in Saltillo, taking that market to full occupancy for our portfolio. Turning to our retail segment, we're pleased with the sustained progress we have seen and are reporting positive data across our key metrics. In the first quarter, foot traffic was up 18% from last year and has now returned to pre-pandemic levels. Continuing with this positive trend, NOI was up 2.6% sequentially as we achieved solid leasing spreads.
Cash collections were again stronger, and weighted average lease term continues to extend alongside real increases to average rents, indicating the ongoing improvements in leasing conditions. We feel constructive about our retail leasing pipeline and the outlook for our properties, which mainly provide a range of essential services in high-density urban areas. An additional highlight in the quarter included obtaining our recertification as a gold level Green Lease Leader, which recognizes our industry-leading initiatives around sustainable practices. At the end of the quarter, approximately 38% of our industrial portfolio was green building certified, which is in line with our target and ahead of the target KPI of our sustainability-linked loans. Finally, I want to comment on our recently announced non-binding tender and certificate exchange offer for Terrafina.
As I have discussed and as we have demonstrated, FIBRA Macquarie has a portfolio and a platform which positions us to achieve attractive growth and realize the opportunities presented by the favorable backdrop of the Mexican industrial market. We believe the proposed transaction represents a superior alternative for Terrafina CBFI holders, as well as an attractive strategic acquisition for FIBRA Macquarie. There are compelling reasons for a combination of FIBRA Macquarie and Terrafina, including the transaction being AFFO and distribution accretive on a per CBFI basis. It will also enhance the CBFI trading liquidity. The complementary portfolios will create a more compelling footprint, allowing the combined platform to serve additional demand driven from the favorable market tailwinds. The transaction will also allow Terrafina to benefit from FIBRA Macquarie's scalable, vertically integrated, full service development and operating platform.
Furthermore, we see a potential to realize meaningful synergies through the combinations of portfolios, scale, and broader SG&A costs. We are confident that this combination has the potential to create an unmatched platform, benefiting from our expertise and demonstrated track record of accretive capital deployment, and which we believe would significantly accelerate both FIBRA Macquarie and Terrafina's long-term growth strategy for the benefit of all certificate holders. Our proposal is a merger of equals that would create the largest industrial FIBRA in Mexico and bring superior value creation opportunities for both sets of investors. We have provided additional details about the benefits on our proposal on our website, fibramacquarie.com, and we encourage those interested to review them. We remain optimistic regarding our outlook and are encouraged by the market backdrop, and I want to thank our entire team for their continuing commitment.
With that, I will now ask Andrew to discuss our financial results, balance sheet, and liquidity position and guidance for 2024.
Thank you, Simon. For the first quarter, we delivered AFFO per certificate of MXN 0.6368 . Our balance sheet remains well positioned with prudent leverage metrics and strong liquidity to support our growth strategy. As of March 31, our real estate net LTV was 33%, and our net debt to EBITDA multiple was 5.1x . Our weighted average cost of debt was 5.7%, and we have no scheduled maturities until 2026. Taking into account committed undrawn credit lines and surplus cash, FIBRA Macquarie has available liquidity of approximately $340 million at quarter end. We remain well positioned to fund our developments and thoughtfully commence new buildings in our existing projects, as well as selectively pursue land acquisitions to execute on our growth pipeline.
We declared a first quarter distribution of MXN 0.5250 per certificate in line with guidance, representing an annual increase of 10.1% in underlying USD terms and a prudent 82% AFFO payout ratio. Additionally, during the quarter, we paid an extraordinary distribution of MXN 2.27 per certificate, which was comprised of $30.7 million in cash and $71.7 million paid in CBFIs to comply with FIBRA regulations. We are reaffirming our full year FY 2024 guidance. We continue to expect a full year 2024 AFFO per certificate range of MXN 2.55-MXN 2.6 or $116 million-$120 million in U.S. dollar terms, representing an annual increase of between 6% and 8%. In line with our established guidance, we expect a 2024 cash distribution of MXN 2.10 per certificate to be paid in equal quarterly installments.
Our outlook anticipates solid NOI growth in both our industrial and retail portfolios, which will be partially offset by a combination of the impact of an assumed peso appreciation, as well as the financing cost of near-term investments in FIBRA Macquarie's industrial growth CapEx program, which we expect to meaningfully contribute to additional revenue and AFFO growth over time. We believe Mexico is well positioned to capture growth opportunities arising from global and regional trends as nearshoring continues to drive demand for real estate in Mexico. With FIBRA Macquarie's portfolio positioning and our track record of disciplined capital management, we expect to be a key beneficiary. Furthermore, we believe we have an exceptional opportunity to create meaningful value through a potential combination with Terrafina. Along with Simon, I want to thank all of our stakeholders for your ongoing support.
With that, I will ask the operator to open the phone lines for your questions.
Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. And our first question comes from the line of Juan Ponce with Bradesco BBI. Please proceed with your question.
Hi, Simon, Andrew. Thank you for taking my question. Regarding your bylaws, I understand that there are hurdles in place that make you an unlikely target for consolidation in most cases. However, given the activity in the sector, how do you guys see this possibility? Could there be room for any type of negotiation? Just wanted to hear your thoughts on this scenario, just hypothetically speaking. That would be great. Thank you very much.
Yeah. Hey, Juan, it's Simon here. Thanks for the question. Yeah, look, we're not contemplating any change at all in our bylaws and we're happy with the setup of our business model. So, I think with that puts us in a good position to maximize performance and to allow us to continue with our business strategy. So obviously, we're monitoring what's going on in the market. There's a lot of important themes with regards to consolidation, internalization. We're monitoring that. But at the moment, we feel we're well-placed with the structure that we have.
That's fair. Thank you very much.
Thank you. Our next question comes from the line of Alejandro Justo with [Actinver]. Please proceed with your question.
Hello, Simon, Andrew. Thank you for the space for questions, and congratulations on the results. Sorry, my connection was a little bit bad, so if I repeat something. I wanted to ask two very quick ones. The first one is, on the land that you purchased in Monterrey, what kind of yield on cost are you thinking about this project? The second one is, how are you seeing the availability of land overall in the regions that you currently have when you did this project in Monterrey? How are you seeing those dynamics playing out? Thank you.
No. Thanks, Alejandro. We can hear you. I think the land acquisition that we just announced, 25 hectares, it is in a fantastic position where very close to the airport, very close to our existing Apodaca Industrial Park, which as I mentioned earlier, we are in the process of building out, and it is very successful. We think that the land site location is fantastic. With regards to what that means on yield on cost, it is very much within range of our 9%-11%. We think we are set fair on that, as you can tell by the purchase price, sort of getting to around the $50 level on a square meter basis, which is attractive certainly for that part of Monterrey.
Look, I think with regards to broader availability of land in Monterrey, and other parts of the country, as we can appreciate, it is only getting harder, with regards to getting access to good land where you also have access to utilities, et cetera. That is the business we are in. We have a very good pipeline, I would say, off the back of this to consider other opportunities, whether it is in Monterrey or our other target markets. We have a very core focus looking at markets beyond Monterrey, which includes Tijuana, Mexico City, Guadalajara and Juárez. I think there are promising opportunities that we are seeing in our core markets, and we think we can follow this up with other purchases as well. Yeah, not getting any easier, but something which I think we have a good outlook on. Thanks, Alejandro.
Great. Thank you very much.
Thank you. Our next question comes from the line of Alejandra Obregón with Morgan Stanley. Please proceed with your question.
Hi. Good morning, FIBRA Macquarie team. Thank you for taking my question. I have one on your development pipeline. As I look at some of your projects, it seems that some of your LEED certified projects have some of your higher and perhaps least recently raised yields. I guess, the question and I am wondering if you can help us balance both the additional investment that you need to make in order to have a fully certified asset versus perhaps the incremental rent that you can get from placing an asset that is fully certified. I do not know if there is a correlation to both things.
No, thanks, Alejandra. I think, you are looking at it the right way. We fundamentally believe that additional investment, which we are making, ultimately translates into additional value creation. I think when it comes to green building, what we certainly appreciate is aligned with what the tenants appreciate in the sense that there is a direct correlation on utility savings. Whether that be energy or water, that translates into bottom-line savings ultimately for the customer. That certainly does have an element of value creation there, which we think ultimately is getting recognized. The reality is that as time goes on, when we are building Class A buildings and up to the LEED Platinum standard, the only developer in the country doing that at the moment, we are basically able to present those properties to the best types of tenants, multinationals, who really value that type of certification and sustainability benefit.
You are definitely playing with the best type of customer profile, credit profile, when you are able to deliver the best product into the market and certainly ESG and LEED benefits as part of that. That is demonstrated in the recent track record. We are delivering best-in-class green certified buildings. We have been printing closer to 12% in the recent developments, certainly north of 10% over the last couple of years. But we think with that focus, the 9%-11%, even with that additional investment, we will be realizing additional value. So we are confident in that strategy.
Perhaps just to complement what Simon was saying there as well. I think, we are developing armor for long-term resilience of these assets, and it's only going to become increasingly more important as our customers and the broader community work towards their own net zero and sustainability goals to partner with them and to provide a premium product in premium markets that delivers those solutions to the customers. I think as a result, we are able to attract a premium price for those particular opportunities and projects.
Got you. That is very clear. Perhaps a follow-up. If there is demand and there is upside to rents from a LEED-certified product, does that justify potentially running out to all the other assets that you have, if that is possible, is that something that could make sense?
Yeah. So what we are doing there, Alejandra, we are applying our EDGE certification, which is, if you like, the sort of the retrofitting green building certification. It has been very successful in progressing for north of 30% of our portfolio in applying that retrofitting. That is basically getting energy and water enhancements, at least 20% above base with some of those enhancements. So that is certainly creating, I think, an opportunity as well to have those savings being pitched to our tenants, whether existing or potentially new. We are doing that alongside the LEED certification, which is something that can only be done as a core and shell certification as part of the development angle with that certification that we are running. So between the LEED certification for development and the EDGE certification for existing properties, I think we are getting good coverage over time.
Yeah, we have actually made further commitments on that front as well with respect to green building certification, with a KPI over the next 10 years to receive 75% of our overall industrial GLA to be certified. Which is also, as Simon mentioned, driving the benefits for the customer, as well as the environment. It also supports our green financing and savings that are coming through by achieving that KPI with annual step-ups and increases over time. So as of today, we are at 38%, so already halfway there to achieving that. Incrementally more challenging as you work through the portfolio. But certainly, we see a path there and there is a real quantifiable benefit to our interest cost by doing that as well.
Yeah, just to finish off. I have said this a couple of times, but very proud, but I think it is very impactful for the broader market to understand. We have delivered, in our Monterrey project, a 10.4% yield on cost for LEED Platinum, 90-point score. It is a world record for the point score on LEED Platinum. It is one of only half a dozen buildings in the world which have been developed in the industrial sector to that LEED Platinum certification. But we have shown in Mexico you can deliver that to the market with a yield on cost of 10.4%. We know that the stabilized value is a lot tighter than that. So that is just so much evidence, I think, to ourselves, but importantly to the broader market, that you can do this with great returns.
Excellent. That was very clear. Thank you so much for taking my question and congratulations on the numbers.
Thank you. Our next question comes from the line of Gordon Lee with BTG Pactual. Please proceed with your question.
Hi, everybody. Thank you very much for the call. A couple of questions, actually, on the retail side. 18% is a lot in terms of foot traffic growth, even considering the two fewer working days this month, which I guess would have benefited foot traffic in some of your properties. So I was wondering if there is a common theme driving some of this. Could it be cinemas that are finally back? Or what is it that you are seeing that maybe prompted that increase? Then the second question, just very quickly, where is your retail portfolio marked on appraisals as per the end of the quarter on a cap rate basis? Thank you.
Gordon, we are happy to see the foot traffic levels get back to pre-pandemic levels. It has been a bit of a journey, but I think great to get there. I do not think that there is any sort of a silver bullet there. There is a little bit of cinema and gym activity certainly coming back. To be honest, I think there is still more upside when it comes to cinema activity. Numbers, I would say, are still not where they necessarily were pre-pandemic. So there is a bit there. Gyms are doing better, for sure. But still, I think, working through some formats, being more successful than others. But we have signed a new gym format in the quarter, so we are seeing different gym models, if you like, better capitalized players coming in and taking some investment. So that has been fantastic.
Actually, when I think about the last 12 months, we have done quite a lot of new leasing on gyms. So that is definitely a segment that is coming back. In terms of what that means, though, for underlying performance, I think what we have seen now for a number of quarters is that the foot traffic itself is not necessarily a direct driver of NOI or leasing activity. I think there has been a little bit of a divergence over time and the fundamental drivers for profitability for our tenants. It is not as, I would say, dependent so much on the foot traffic would perhaps. But behavior changing with which family members or how many family members are going to the supermarket, et cetera, for their shopping trips.
The important point that we have seen is that same store sales are consistently up, that we are seeing better capitalized tenants coming into the sector, and that the mixed format, the format that we have, necessity-based with a very attractive mix of cinema, gym, restaurants. It is working particularly well, and we think there is still upside opportunity to come.
Picking up on your second question in terms of the retail valuation, we have currently got the retail portfolio marked at a 9.8% cap rate on in-place rent. That comfortably steps up north of 10% once you take into account the stabilization of those properties, as Simon mentioned, which continues in terms of that NOI growth. So we did take a little bit of heat out of those valuations. So they are still 11% below the 2019 levels, and we think very fair given the current market environment. Importantly, we continue with our external valuation on a biannual basis, so those are validated by CBRE every six months.
Perfect. That is super helpful. Thank you very much.
Good.
Thank you. Our next question comes from the line of Isabela Salazar with GBM. Please proceed with your question.
Hello. Thank you for taking my question. I was wondering if you could give me a little bit more detail on what the timeline of development for the new Monterrey acquisition is.
Great. Thanks, Isabela, for the question. Look, we have just acquired in the last week, so we are straight away working on the initial permitting, contracting, earthworks. So that is in line with our usual processes. In short, we would not be expecting anything from an income addition, if you like, certainly this year or the next. But we will be looking to basically be performing the execution of that going vertical, once we get through those basic phases and really looking closer to 2026 as real income contribution.
I think particularly we will continue to be disciplined on that front. We do have 200,000 sq ft just down the road at our Apodaca development under construction at the moment, due for delivery before June 30th this year. So certainly, we have got a healthy pipeline and the capacity for an additional building in that particular development project as well. So we are well-positioned to keep bringing product to market in Monterrey over the coming quarters.
Perfect. Thank you very much.
Thank you. Our next question comes from the line of Francisco Chávez with BBVA. Please proceed with your question.
Hi. Thanks for the call and congrats on the numbers. I understand your rationale for your bid for Terrafina, but in case that your bid is not the successful one, is there another plan to unlock value and increase liquidity of your CBFI? Thank you.
Yeah, thanks, Chávez . We think FIBRA Macquarie today is very well positioned with the platform that we have, the portfolio positioning and the growth that we have, particularly through our industrial CapEx program, or growth CapEx program. We think actually we are set very well today to execute on that. We fundamentally believe that with the model that we have and the growth prospects that we have, if we can execute on that, continue to deliver the total returns that we have been delivering in the last few years, that is ultimately got to translate to market recognition and continued re-rating, if you like. We had a fantastic year last year, a 45% total return in U.S. dollars for investors, and we think that with the opportunity we have in front of us this year and beyond, we can continue to drive the total return in a similar manner.
We are looking forward to that. The tender offer that we presented at the start of this week, that is really an important opportunity to go beyond that, of course. We think it is a disciplined offer from a FIBRA Macquarie perspective. It is also a very fair offer for our investors and one that is uniquely accretive. I would like to also take the opportunity to reinforce that we think it is certainly something where we are not making up the numbers and we believe we have a very compelling offer. The accretion on day one is compelling. Certainly something that should not be ignored when you think about the fact that, yes, we do have some accretion, but our other alternatives have important dilution on an earnings basis, ultimately dividend basis. That total swing factor from day one could be as high as 30%.
That ultimately makes a big difference in terms of that cash coupon you are collecting every quarter. That is an important consideration. The ability to rerate immediately or in the shorter term, I think it is there as well, just with the combination and the trending liquidity that we will have. We are actually up to $3 million at the moment, which has been an important improvement over recent quarters. But adding that with Terrafina, the important thing is we are cracking the $5 million number, which we know is an important entry-level number for a lot of investors who are very much attracted to the story, but would even be more attracted on that combined market cap basis and the liquidity there that as of today, they are a bit shy on.
That is more, I would say, a silver bullet, if you like, in changing some of the trading fundamentals that are not there today on a liquidity basis, and that will be the benefit for both shareholders. The other aspect I would like to call out, we do see this very much as a merger of equals. We have roughly 50% shareholder base for both sets of investors coming into the combined entity. But it is more than that. It is a similar portfolio when it comes to size and scale, and very much a complementary portfolio when you think about the highest exposure that we have in the market to those northern near-shore markets, complementing that with what the Terrafina portfolio is, that will basically consolidate to the strategic footprint for both sets of shareholders.
That is quite attractive and something, as I say, starting with the point of us having that highest exposure in the northern part of the country. Then with that, upon that combination, the long-term value creation, we think, is also compelling. The fact that we have that business model where we are doing the development inside the FIBRA, we can accelerate that development program, and we have the proven track record and capability of driving those superior total returns through the strategy. We have talked about the yield on costs we have been delivering, what that means in terms of 10%- 7% revaluation profits for shareholders. We can accelerate that, and we can do that using our in-house platform, which we think is the leading property management platform in the country. It is vertically integrated. It is scalable, 90 people strong.
It is not just property management, it is full service, including the ability to drive our development program, the growth CapEx program. That will continue to deliver compelling same-store performance, which we are seeing this quarter, and for a while now, but also deliver on the development program. Overall, we certainly think this is a compelling offer and something that makes sense. To come back to the original point of your question, yeah, we are in a fantastic position today, but it would be fantastic if we were able to move forward with the tender.
Yeah, I think the other thing to complement Simon Hanna there is, it is Andrew here. We are getting a real recognition from a wide range of investors of the disciplined track record that we have, particularly around capital management, which is something that really stands us apart from a number of our peers. You can see that when you look at our NAV per certificate growth over the last few years, which is just shy of 60%. We have delivered FFO per certificate growth of 25% since the fourth quarter of 2020, and 33.5% distribution growth over that same period. That is a really powerful value creation story that the market is really, I think, responding to. I think at the attractive entry level that FIBRA Macquarie provides today, we will see that as a compelling offer for investors more broadly.
Great. Thanks so much.
Thank you. Our next question comes from the line of Francisco Suárez with Scotiabank. Please proceed with your question.
Hey, gents. Hi, Andrew, Simon. Thank you so much for the call, and congrats on the numbers. I follow up from [Paco's] question too, on your options to unlock value and close the valuation gap. Considering that there are six bidders for Terrafina, would it make sense to actually cancel Sorry, to cut your termination fee because that may trigger, attract some of those five bids, might be willing to invest with you or partner with you or do something else. Would you consider that to be an option? My second question is a related question. Assuming that you are not able to close the valuation gap and tap the equity markets, and then if you are unsuccessful in your merger with Terrafina, your overall leverage has declined over the last years. I like to see you guys be playing more offense.
Roughly speaking, you are at 5x net debt to EBITDA. What level of leverage would you be comfortable with in order to keep unloading property development on your own without tapping the equity markets? Thank you.
I might take the first question there. Look, we have been quite consistent saying that we believe that the business model that we have and the structure that we have, we are happy with that. It provides a great platform for success. In that respect, we are not considering any changes to our structure. More to the point, when we think about what is driving that discount historically, we do not think it is anything so much to do with those factors that you have mentioned. We think it is more to do with factors around low trading liquidity, and basically how you can solve that over time and the total returns, how you can execute on total returns, building that story with the great program that we have, and continuing to deliver on that.
We remain focused on executing the business plan, as I say, as the key focus, and we will continue to do so. With regards to the balance sheet question, I will hand the one over to Andrew.
Yeah, happy to take that one. Thanks, [Paco]. I think you are absolutely right. We have trended down in terms of the positioning of the balance sheet, combined with increasing our liquidity and available sources of capital. Ultimately speaking, we have historically guided the market to an LTV target in the range of 30%-35%, we are comfortably at the lower end of that range, particularly given the market backdrop and tailwinds that we are seeing, we are very comfortable in terms of seeing that trend up and use a little bit more of the balance sheet to execute on that development program.
However, we will not do that at the cost of being undisciplined. We will continue to ensure that we are delivering high quality product, attractive returns, and investing in a measured manner. But certainly, you are absolutely right. Where that means today is, I think we would be comfortably having firepower in the order of $ 350 million or thereabout to deploy, which would interest up to, call it, 36% or thereabout, without considering any other revaluation gain or uplift on our investment property valuations there. So very well positioned to continue to execute, and we will continue to do so where we see those attractive opportunities.
Perfect. Thank you so much. Congrats again. Take care.
Bye, Francisco.
Thank you. Our next question comes from the line of Alan Macías with Bank of America. Please proceed with your question.
Hi, Simon and Andrew, and thank you for the call. Just a question on the retail portfolio. Would you consider divesting it at this point in time? Do you see FIBRA Macquarie being an industrial pure player, I guess, in the medium long term? Just your thoughts on this. Thank you.
Thanks, Alan. Look, when it comes to retail, we haven't really changed our views from our recent quarters where I'd say that we're very happy with what we own today. It's a fantastic portfolio that's performing very well. We think there's upside opportunity where we see the current metrics and the outlook. We have a very constructive outlook on retail, so we think there's value generation to come. That's our immediate focus, is optimizing the value generation, the operational performance, and we'll be working on that through the year. Alongside that, though, I think you make a valid point in the sense that investors increasingly prefer specialized FIBRA's or specialized REITs and particularly being in industrial, at least in Mexico. So we do see that, and we see the merits of potentially one day that being specialized.
We don't think right now is the moment just because, as I say, we think we'd be leaving important money on the table. Our current focus is maximizing the value of our retail portfolio and in line with that, we will be monitoring how market conditions evolve.
Thank you.
Thanks, Macías.
Thank you. We have reached the end of the question and answer session. I will now turn the call over to Simon Hanna for closing remarks.
Thanks, [Jamari], and thanks everyone for participating in today's call. We look forward to speaking with many of you over the coming days and weeks, and we'll be updating you very soon again at the end of the third quarter. Thanks very much, everyone.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.