Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Fibra Uno's 2Q 2024 earnings conference call on July 25th, 2024. At this time, all participants' lines are on listen-only mode. The format of the call today will be presentation by the management team, followed by a question-and-answer session. I would like to pass the line to the CEO of Fibra Uno, Mr. André El Mann. Please go ahead, sir.
Thank you, sir. Thank you, everybody. Good morning. Thank you for being on this call in which we will inform about the results of the second quarter of 2024. I am very pleased to deliver, again, strong results on a company with the recovery transparently on-site. We have been working and facing all the consequences and all the disaster that the pandemic brought to our company, and I think that nowadays we can plainly and bluntly say that the recovery is on-site. We are continuing to grow. We have continuous growth all across the board in the company. We have reached our levels of occupancy pre-pandemic. We are in a very favorable position in terms of income of the rent resulting of all of our properties being leased, and we have been doing a strong effort to maintain the margins that we are used to.
We have been struggling with the continuous increase on the cost of operating the properties, but I think that we have been doing a great job in terms of containing these increases in our company. The renewal increases of the contracts you will see they are very favorable all across the board, starting with the industrial space. We pledged from the beginning that we wanted to have a world-class company. I think that it is evident that we have reached that goal long ago. We can see that in the industrial space in which we participate, we are the largest of the market in that space. I think we are the largest of the market in many spaces, but especially in the industrial space. And we have a portfolio that have no parallel whatsoever in the market.
In our portfolio, we have been seeing growths of double- digits, of course, in the rent. We have, without a doubt, the best portfolio, the best properties, and we will see the appreciation on the value of our properties in due time. I hope that we will continue to have this amount of occupancy. We are above 98%. We do not know how long will this take, but as we see the market conditions today and the dynamics of the market, I think that this can last at least a couple of years more, in which we will not be able to attend the imbalance of supply-demand that the country has today. After that, we will need to rely on the quality of our product in order to maintain a very healthy level of occupancy.
I am sure, I am positive, that we will maintain a very high percentage of occupancy due to the quality and the location, and again, location, location of all of our portfolio, industrial portfolio in the country. In the retail side, you will see also very healthy leasing spreads. We are recovering, and we are continuing to recover also in occupancy. We have been recovering also in the occupancy of the office space. In the office space, the pricing of the square meter, we have been struggling in order to maintain what we had. It is no surprise for anybody that the office market is still struggling. But in our case, we have reached pre-COVID levels of occupancy. We will strengthen our price per square meter in the next few quarters. We are very happy to deliver these results in our report.
The tragedies that we have suffered due to natural causes, like the hurricane in Acapulco, we have been facing them with efficacy in our properties. We have been facing them with promptness, helping our tenants and reacting very accurately and quickly in order to deliver the space again to favor both our tenants and the community in which we participate. In Acapulco, we have a couple of shopping centers with major damages, and we delivered almost immediate, in few weeks time, one of them at 100%. Today, we are with occupancy level of pre-hurricane. We are talking about pre-hurricane. We reached that level of occupancy, and we are 100% operative. The second one, which also had major damages, we have renewed the contracts. We have reconfirmed the contracts with our tenants. We are pretty much at pre-hurricane levels.
We have not reached that, but we are very close to do so. We are operative at 50%. I think in the next few quarters, meaning this year, before year-end, we will be 100% operative, and we are very happy to deliver this news to all of you. Our team, in terms of reconstruction of architecture, et cetera, have been doing a great job, and we have been able to give support to all of our tenants and the community in which we operate. In the ESG front, our commitment is relentless. We are continuing to invest, and we are continuing to put our effort, economic effort, and human effort in order to have the best properties and properties that are world-class. We have been investing in the clean energy and saving energy, especially in the Yucatán Peninsula.
We have a couple of more on the way, and we are very happy to announce that we are doing the job, and we will see that all of our indexes that we are intent to deliver, we will get to them. This is a company that will have the best properties at the best quality and efficacy in the next years. In the macroeconomic front, as you all know, we have been sailing through troubled waters. We have been enduring the turmoil of the macroeconomic and geopolitical problems that we have been facing throughout all the continents. But we think that the job that we are doing, containing the expenses and maintaining the income, it is quite responsible. I think that we will continue to have good results in the next coming months.
Finally, I would like to thank all of our collaborators and all of our management, because without the extra effort that we have been putting in the last few months, we wouldn't be able to talk about these results. Thank you, everybody, for your attention to this. I would like to pass the mic to Jorge to go into the numbers. Jorge, please. Thank you.
Thank you. Thank you very much, André. Thanks everybody for joining our call. As usual, I will go directly into the MD&A. We'll start with the income statement, the revenue line. As you can see, we had growth of 1.4% quarter-over-quarter. After including the support that we are starting to give tenants, especially on that 50% occupancy that André was mentioning, was a decrease of MXN 11.8 million or basically -0.02%, with revenues remaining flat, including the support, but growing 1.4% excluding that support. If we were to look at the year-over-year number, this is a growth of 7.4% for our top line, excluding this Otis support, which is obviously well above inflation. Very happy with the recovery of the revenue line at the top level. Looking into the detail for the quarter.
As you can see, there were MXN 34.6 million of accredited notes and reserve of MXN 74 million related to the Otis support and support for the tenants on the hurricane. The rest of the growth of the revenue service comes from rent increases resulting from inflation pass-through in the active contracts, rent increase and renewals, and the leasing spreads. Obviously, occupancy gains and obviously, the effect of the peso-dollar depreciation on our dollar rents. In terms of occupancy, we are very happy to see that the portfolio's occupancy is at 95.2%, an increase of 20 basis points compared to the previous quarter. The industrial portfolio is 98.3%, 10 basis points below the first quarter of 2024. The retail portfolio is at 92.6%, 40 basis points above the first quarter of 2024.
The office portfolio, we're happy to see that it continues to trend upwards towards that 85% occupancy we'd like to see. We would like to start seeing some pricing tension. We don't see this in the near term, but we are at 82.8% occupancy, 120 basis points above the first quarter of 2024. I'd like to highlight that this is still choppy waters, so we don't expect to have consistent and continuous recovery along the way. There may be some ups and downs, but we are trending in the right direction, which is towards that 85% occupancy that we would like to see. Again, still not enough occupancy in the segment overall to have pricing tension, but definitely, I think we've touched bottom, and we are trending in the right direction. In terms of the office portfolio we are, again, at 99.2% occupancy.
This is a very stable segment of our portfolio, stable against the previous quarter. In terms of operating expenses, property taxes, insurance operating expenses, we are very pleased to see that the cost control initiatives that we have been working on are starting to pay off. We saw a decrease of MXN 16.6 million, or 2%, compared to the first quarter of 2024, mainly due to the seasonality of some expenses as well as I mentioned, some of the cost reduction initiatives. Property taxes increased by MXN 4.9 million or 2.6% compared to the previous quarter. That is mainly due to updates in municipality. As you know, property taxes is a municipal tax. Insurance remained stable. We normally do not include administrative expenses as an MD&A item.
I will just make a comment that given all of the activity that we have had with the carve-out and the internalization, and all of the activities that we had in the sector, there has been an increase, particularly in the service associated with all of these strategic initiatives, and that obviously has affected the administrative expenses line. Therefore, when we look at the net operating income, we are down 1.3% versus the first quarter of 2024, almost at MXN 5.2 billion of NOI, with NOI margin calculated over rental revenues of 83.6% and 75.2% compared to total revenues.
In the interest expense and interest income line, we are pleased to see that net interest expense decreased by MXN 7.4 million or -0.03% compared to the first quarter of 2024, mainly due to the exchange rate depreciation, this effect on the interest payment in the quarter, the capitalization of interest expense of MXN 462 million, and impact of the pricing of our derivative and financial instruments, offset by the reduction of the cost of carry of the new issue 2034 bonds which, if you recall, we issued to repay the existing or the now repaid 2024 bonds that had a maturity in December of this year. We have had about a month of carry of both bonds in our balance sheet, and obviously, this had a negative effect on our interest expense line.
These results in funds from operations controlled by FUNO decreasing 44.8% or minus percent compared to the first quarter of 2024 to reach MXN 2,185,500,000. Adjusted FFO remains equal at MXN 2.185 billion. On a per CBFI basis during the second quarter of 2024, we issued 7,169,829 CBFIs corresponding to the employee compensation plan, closing the quarter with 3.81 billion CBFIs outstanding. Therefore, the FFO and AFFO per average CBFI were MXN 0.5736 per share, a decrease of 2.1% compared to the previous quarter on both cases. In terms of the quarterly distribution, we have decided to distribute MXN 1,979.8 million, which corresponds 100% to fiscal result, the equivalent of a quarterly AFFO payout of 90.6%. Moving to the balance sheet, the accounts receivable total MXN 2.68 billion, a decrease of almost MXN 1 billion or 26.1% from the previous quarter.
This is mainly due to payment of some tenants' past rents. We have been working very hard on those recoveries and continue to work on the collection process. In terms of investment properties, the value of our investment properties, including financial assets and investment in associates, increased by MXN 7.85 billion, or 2.4%, compared to the first quarter of 2024, result of the fair value adjustment that is included in our investment properties and all progress in construction of projects that are still under development. At this stage, in particular, we have Portal Norte as the main one, and capital invested in our operating portfolio. Moving on to the debt, we ended the second quarter with MXN 138.6 billion compared to MXN 128.8 billion in the previous quarter.
The variation is mainly due to the exchange rate, where the Mexican peso went from MXN 16.7 -MXN 18.22 per dollar for the quarter. The sale of some of our U.S. dollar bonds that we have previously repurchased. I'd like to stop here for a second and comment that, as you know, we launched an exchange offer as part of the strategic initiatives to carve out the industrial assets, and there were concerns voiced by a lot of investors about the potential liquidity of these bonds. In anticipation of a potential new exchange transaction happening in the future, we decided to sell those bonds back in the market to increase the liquidity of the bonds that we would like to exchange once we complete the carve-out of our industrial assets. Also settlement of Mitikah mortgage loans for MXN 875 million, and the Portal Norte mortgage loan for MXN 300 million.
This results in an equity increase of MXN 1.9 billion, so 1% compared to the previous quarter, including participation of the controlling and non-controlling interests. This is mainly due, as I mentioned, to all of the above net income generated for the quarterly results. There is valuation, the shareholder distribution, and the employee compensation plan. In terms of operating results, very happy to see that we continue to have solid leasing spreads. We were 1,190 on almost a 12% increase in the industrial segment, almost 8% in the retail segment, almost 5% in others, and 2.9% or close to 3% increase in the office segment. Positive leasing spreads. Obviously, when you factor in inflation, the office sector, for example, was slightly negative, but happy to see that we're being able to increase rents margin.
For dollar-denominated contracts, again, we had almost 12% in dollars in the industrial segment, almost 10% in dollars in the retail segment, almost 6% in dollars in the office segment. So very happy with the leasing spreads that we are being able to see in our portfolio, in addition to the aforementioned recovery in occupancy. In terms of custom properties, the rental price per square meter increased by 5.2%, compared with an annual inflation of 4.3%. That's our peso-dollar mix, so slightly almost 1% above inflation. This is mainly due to the natural lag of inflation reflected in our contracts, in the active contracts that is passed through to our tenants.
At the sub-segment level, the portfolio's total annual rent per square foot increased from MXN 12.1 /sq ft - MXN 12.5 /sq ft , or basically 2.7%, mainly due to increases in current contracts, rent renewals, FX depreciation, as well as leasing spreads. The total NOI at the property level increased almost 1% compared to the previous quarter. Variations are detailed below. For the industrial segment, logistics NOI decreased by 1%. Light manufacturing NOI increased by 5% quarter-over-quarter. Business parks increased almost 9% quarter-over-quarter. In the office segment, NOI increased 5.8%, mainly due to the increase in occupancy level and notably some of the leasing spreads that I mentioned above. In the retail segment, regional centers NOI increased by 5.3%. Standalone segment NOI was almost flat at 0.5%.
Fashion malls increased by almost 10%, decrease almost 10%, sorry, and this is mainly due to the support granted in the case of the Otis Hurricane reconstruction in Acapulco. The other segment's NOI decreased by 0.9%, mainly due to the seasonality of the hotel variable income. As usual, with this, I conclude my segment of the MD&A. Michael, I'll hand you back the mic, and if you can open the floor for Q&A.
Thank you very much, Jorge. We'll now be moving to the Q&A part of the call. If you have a question, please press star two on your keypad. That's star two on your keypad for any questions. Thank you very much. Our first question comes from Mr. Francisco Chávez from BBVA. Please go ahead, sir. Your line is open.
Hi. Thanks for the call. I have two questions. One is regarding the internalization process. It seems that you are in the final stage. So if you can give us an idea of the timing and also what mix of assets and cash do you expect to implement in this internalization process? The second question is regarding the margins. We have seen a decline in NOI margins, and you talk about some initiatives. Can you give us an idea of what kind of initiatives and when can we expect a recovery margin? Thank you.
Thank you, Francisco. I will take the first one about the internationalization process. We are still working on the eligibility of the properties and the mix of the properties and cash that we will use. For sure, as it is our authorization from the assembly and the committee, the majority will be in assets at NAV, but we have not yet reached an agreement in terms of the eligibility and the amount of each. We are always close to finish this process. I thought that we would be able to close in the second quarter, and regretfully, I think that we will be closing for sure this year and the sooner the better for everybody. About the margins. We have been making continuous effort to maintain the margins. Our margins have been pounded by the increase on the cost of everything.
I am just going to give you one line that has been pounding the margin. As you know, in this country, the minimum wage has been increased by a lot. In the last couple of years, it has almost 50% increase, 50%, 50%. That, in some sort of way, would not affect us. But some of our highest services that we hire from third parties, meaning, or just to put an example, the security guards of the shopping malls or the cleaning crews of the properties, which is very intensive in human resources, has been growing at very high levels because basically all the cost of our suppliers is labor. We have been struggling with everybody.
We cannot refrain from recognize the increase on the wages, so we have been working very close with them in order to reshuffle all the needs of the properties and try to bring down the number of people in order to respect the increases that the government put on the minimum wage for the workers that are in that situation. Workers that are not ours, but in some sort of way, directly it is a pass-through of the increase of the wage. This is a line that we have been struggling with, but we are working with creativity and with all of our experience in order to lower the impact that we have been suffering.
This is just one line, but all across the board, we have been suffering increases, and we are trying to contain, and I think that what we have been doing, it is accurate, and we expect that the coming months, we will be able to stabilize. Once we stabilize, we will work on how to get back to our usual margins that we used to work with.
Great. Thanks so much, André.
Thank you.
Thank you very much. Our next question comes from Mr. Rodolfo Ramos from Bradesco BBI. Please go ahead, sir. Your line is open.
Perfect. Good afternoon, everybody. Thank you for taking my question. I have a couple if I may, but let me start with this one. When you look at your stock share price, you are basically back where we started before you announced all of these measures to unlock value, et cetera. So wanted to understand a little bit, where do you stand in this evaluation of different avenues for unlocking this value? We are going to have a new government soon, so I do not know if we can see something on the tax authority side that could expedite that process. So just wanted to see how you are thinking about the different avenues that you have at your disposal and just for us to have a little bit of a better visibility as how you might proceed in realizing this value from your industrial assets. Thank you.
Thank you very much, Rodolfo. As you know, we have different avenues that we are exploring. Of course, one of them is continue to work with the authorities. We are continuing to work. Just yesterday, I was there in their offices. It is a process that we need to respect the timing of the authorities. We cannot control the timing of them. As for the rest of the lines that we are exploring, all of them have different conditions, but we are still working on all of them, and we expect to have them as soon as possible. I acknowledge and I understand what you said at the beginning, that the stock was back where it was. Well, I will try to work on whatever is under our control. Our control is to have the best properties.
Our control is to have valuable properties that should be suitable to be recognized by the market. But whether the market recognize the value or the market distinct our properties from the rest, even though our properties are way better than the rest. And believe me when I say that I do not want to sound arrogant. I know I sound, but I do not want to sound. Believe me when I say it. There are very few experts in the industrial space in Mexico. I have the fortune to belong to a group of people that have been in this business for more than 40 years. I have seen it all, and I know for sure that the quality of our product is way beyond the rest of the market. Now, if the stock market recognizes differently, it is not under my control.
I think with the measures that we are trying to put in, we will help the market to recognize the value of our properties. We will, I am sorry, I misspelled. We will unlock the value? No. The market will unlock the value that we know for sure is there. So we are continuing to work on that. Some things are under our control, some things are not, but we are continuing to do our job and try to finish this as soon as possible. It is in our best interest and the best interest of the company to finally, one way or the other, give the market the opportunity to evaluate and unlock the value.
Perfect. Thank you. I just had-
Thank you.
a follow-up on Tesla's announcement to postpone or at least to put on hold their investment. I know this changes, if you think that this could lead to a disruption in terms of supply demand in that sub-market, in the Santa Catarina market, there might have been some speculation around the announcement. Does this impact your appetite for these northern markets? I know you're stronger in the central logistics markets, but does that change how you look at your geographic exposure in terms of your portfolio? Thanks.
Actually, no. Actually, it just reaffirms our strategy and gives us the reason in the terms of our strategy was the right one. I think that we are working on various ways. In Mexico, it's very difficult, even for Tesla. Imagine that the plant was already there. Imagine that the suppliers are already there in Santa Catarina. Wow, Santa Catarina. Where are the raw materials coming to all these suppliers and to the Tesla factory at the end? All of them, or the majority of them, are coming through our ports or through our airports in the center of the country. They will need necessarily, without a doubt, to come through the [Non-English content] , OSEA, the NAFTA highway. The NAFTA highway goes from Mexico City to Laredo. Everything comes here. Now, some things come and pass through.
The vast majority of the raw materials that come for all of those industries come and stay for a while and then go to the place of origin, meaning the north. So our strategy is to have the best locations, which is a real estate strategy in reality, but it applies to logistics strategy. Logistics also has in account location, location. All of our tenants measure their accuracy with number of kilometers. So if we are in the best location, the number of kilometers is the multiplication for all of these tenants. They will come and store a while the merchandise, the raw materials, because we have in Mexico the largest amount of authorized space for taxes purposes.
The tax authority gives permits for some of the spaces to be tax-free, to store the material without paying the tax until it comes out of the property, of the facility. Mexico City and the metropolitan area has the largest number of those authorizations. The dynamic of the market, it still favors Mexico City metropolitan area by nature. I think that it will hurt especially the Santa Catarina, which Santa Catarina is a small county in Nuevo León, but I don't think it will impact a market that nowadays is sitting on 70 million square meters. It will not impact that. The rest of the dynamic of the market, I think it will still be there. I think that the U.S. dynamic will continue to be there.
I think that the shuffle between coming out of the Far East to the nearshoring will continue to be there, and this will eventually favor our country especially. I think if we have the ability to continue to have and to seek and to acquire at some point the best locations, we will find a lot of value in our business.
Thank you, André.
Thank you.
Thank you very much. Next question comes from Mr. Andre Mazini from Citi. Please go ahead, sir.
Sure. Hi, André, Gonzalo, Jorge, and team. Thanks for the call. My first question is a little bit of a follow-up. Some peers of yours have mentioned that the government of President-elect Claudia Sheinbaum is looking positively to the real estate sector, particularly the industrial real estate sector, as they see industrial real estate as critical for nearshoring to continue in Mexico. It was also mentioned that the new government will take some new measures to benefit the sector. Is there anything concrete on that front? Are the measures in the energy sector, or do you see something more specific to real estate? This is question number one. Question number two, on the office segment, some quarters ago, you were talking a lot about office reconversions into highest and best use. A lot of times those will be hospitals, if I remember right.
Do you see more reconversions going forward? Your views on the office segment overall. Thank you.
Thank you, Andre. Thank you for the question. A ver, as for the statements of the President-elect, most of the input that she has come from our views. We have been working, Gonzalo has been working very hard with the proper associations in order to deliver our views on the market, and the result of our views is what the President-elect has externalized in the few remarks that she has been doing. She talks about measures. I think the best measure that the government can give us is to step aside, to let us work and to allow us to work promptly. I don't know if there will be. Maybe there will be some tax benefits for the Interoceánico, but I don't see much more interest of the government to give some sort of benefits in the rest of the country.
Just stepping aside and let us do our work and be prompt in terms of permitting, in terms of zoning, in terms of allowing the CFE to continue to invest and to give us the necessary energy, and to the water company. It is a company, it is governmental, but it is a company. To be prompt in order to give the permissions, I think that will be a lot of help for everybody. All of us at the sector, I think we are seeing the dynamics. You have seen the dynamics of the country. The country was last year at record-breaking, all-time high, 4.2 million of square meters of industrial built, and we had demand for 5.5 million square meters. This year and the next, we will continue to have this imbalance.
The best thing that the government can do is to step aside and just let us do our work. In the office segment, we converted, if I am not wrong, 110,000 sq m , more or less 10% of our portfolio. We are still missing a couple of buildings that we are going to convert to residential. We are pending on the permits again. I think with that, we will get to close to 12%-13% of our portfolio, and with that, I feel very comfortable. Aside of that, we are, as you see, we are recovering the occupancy. I would like everybody, I encourage everybody to listen to our calls from three years ago. We stated time and again that we will get the occupancy first and the pricing later.
We are at the stage of recovering the occupancy, and we expect that the pricing will follow in the next few quarters. Thank you very much for your question. I hope I answered it correctly, Andre. Thank you.
Thank you very much.
Thank you very much. Our next question comes from Mr. Felipe Barragán from BTG Pactual Asset Management. Please go ahead, sir.
Hey, guys. Good afternoon. Thanks for taking my question, for the call. Mine's also leapfrogging off of Rodolfo and Andre's question. This announcement from Tesla sort of can also make some noise for further potential investors to come into Mexico. I was just wondering, this Tesla announcement is obviously data point of one, so just want to hear your thoughts as you guys have boots on the ground. What sort of demand, or if there's been any changes in demand following the election of Claudia and potentially some changes to the USMCA with the likely election of Trump, right? Just wanted to hear your thoughts on how potential tenants have been coming around these last few weeks. Thank you.
Wonderful. Thank you for the question. That's a very interesting question. Tesla, I said my piece, I think it won't impact a lot. USMCA, this could impact a lot. What I see today, the dynamics have not changed. We have seen a bit of a decline on the Chinese originals demand. In part of, we don't want to lease to many Chinese companies, and in part of the Chinese companies are declining their interest, maybe for pressures from the U.S. Maybe. Aside of that, and this also won't impact the market. Aside of that, should the USMCA go sideways, I think we will rely only on the internal consumption, and this would affect the dynamics of the market. In reality, I don't see that happening. I don't see any other way for the region to continue to sustain the supply chain.
I've said time and again, the supply chain has become of the utmost importance to the U.S., especially. It has become a matter of national security. I don't see how the USMCA could go sideways. Maybe some new conditions will arise, but in general, we were equally worried when the revision took place six years ago. I think we are worried today, but in one year and a half time, everything will go back to normal, and we will adjust to whatever changes the USMCA will bring. I don't see it go sideways, in reality.
Andre, if I may add to your comment, I think there's another couple of important things to take into consideration. Interest rates at the high level that we've had globally for such a long time, at the end of the day, are going to end up breeding more inflation because the cost of financing your production, et cetera, is going to continue to be high, and that's going to lead to high inflation. You cannot have high rates forever. The other way that you can fight inflation is if you're efficient on the production chain. China is not that efficient today. It's more expensive.
Part of the rationale also behind the nearshoring is not just geopolitical and strategic, it's also because it's going to be cheaper to produce things in Mexico and export them to the U.S., both on the production and cost of production, as well as from the efficiency of transportation. That also helps with lowering inflation, which is one of the goals that the U.S. has long term. I think strategically, this means that the USMCA is, again, as André was mentioning, a matter of national security for the U.S., not just because of sustaining the supply chain, but also because you need to fight inflation.
Got it. That was very clear, guys. Thank you.
Okay, thank you. Thank you very much. We have a few text questions. This one comes from Mr. Anton Mortenkotter from GBM. Hi. Could you share some detail on how much of the total costs are related to segregation and internationalization initiatives?
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[Non-English content] I can cover that, André.
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Yes. Around half of the increase on administrative expenses is due to the internal, to these strategic initiatives. We also had an increase on our reserves that explain around the other 50%.
Okay, thank you very much. Our second text question. Can you please share what was the rationale behind selling the $55 million FUNO international bonds, and why on this point on the curve? Thank you.
Yeah, I can take that one. The rationale is basically because we're anticipating completing the carve-out of our industrial assets, which includes an exchange offer or a tender offer for all of the curve. Since we did not buy an identical amount throughout the curve, but we bought specific bonds, we're selling the ones that we have. It's not that we're adding to any specific point of the curve, it's just the ones that we had on our balance sheet. It's to add liquidity to the bonds post-exchange, basically. Being able to do it ahead of time so the market prices the bonds properly.
Thank you very much. Our final question today. In your income statement, we can see a MXN 6.7 billion gain from upward revaluation of properties and investments in associates. What do these correspond to? Revaluation of which properties? Thank you.
Yes. We conducted a revaluation for all of our properties. It is just a recommendation that we got from our external auditors that we should be revaluating our portfolio gradually throughout the year and not expect for the fourth quarter to do the whole revaluation as we used to. This is going to be a more recurrent item that you will see from now on. It is all across the portfolio.
Okay, thank you very much. I will pass the line back to the management team for the concluding remarks.
Thank you very much. Thank you, everybody, for your interest in this call. I hope that next quarter will bring you also very good news and very good results from our company. Thank you, everybody. Have a good day.
Thank you very much. This concludes today's conference call. We will now be closing all the lines. Thank you. Goodbye.
Thank you.