Key Takeaways

Strong demand in key cities and pre-leasing for new projects support higher rental revenue and sustained long-term portfolio growth.
Investments in mixed-use and industrial assets, plus sustainability initiatives, are diversifying revenue streams and improving operating margins.
Persistent office vacancies, weak retail pricing power, concentrated geographic exposure, large development outlays, and potential financing needs all pose risks to stability and earnings growth.

Catalysts

About Fibra Danhos

We are a Mexican trust constituted, primarily, to develop, own, lease, operate, and acquire iconic and premier-quality real estate assets in Mexico.What are the underlying business or industry changes driving this perspective?

The rapid expansion of urban centers and increasing consumer demand in Mexico's key cities, exemplified by strong occupancy (94% in retail and 90% overall) and robust pre-leasing interest for new projects (notably the large Oaxaca and EdoMex III developments), is likely to drive higher rental revenues and long-term portfolio growth.
Rising disposable incomes and a growing middle class are translating into higher foot traffic and tenant demand for Class A retail and entertainment properties, supporting above-inflation lease spreads and resilience in tenant performance, which should positively impact net operating income and margin stability.
The company's ongoing shift toward mixed-use and industrial assets, including major investments in logistics (EdoMex III) and hospitality (Cancun hotel), aligns with evolving retailer strategies to integrate physical locations with e-commerce, setting the stage for diversified revenue streams and longer-term earnings growth.
Significant energy efficiency investments, demonstrated by solar panel installations across nine major properties, are lowering operating expenses and enhancing margins, which is becoming more important as ESG and sustainability standards increase for both tenants and investors.
A conservative balance sheet (12.2% leverage) and disciplined reinvestment of retained cash flow are enabling self-funded development and expansion, reducing financing risk, and supporting future distributable earnings and potential upward adjustment to payouts.

Fibra Danhos Earnings and Revenue Growth

Fibra Danhos Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Fibra Danhos's revenue will grow by 6.7% annually over the next 3 years.
Analysts assume that profit margins will shrink from 65.7% today to 55.5% in 3 years time.
Analysts expect earnings to reach MX$4.9 billion (and earnings per share of MX$3.01) by about July 2028, up from MX$4.7 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting MX$5.6 billion in earnings, and the most bearish expecting MX$4.1 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 13.1x on those 2028 earnings, up from 8.5x today. This future PE is greater than the current PE for the MX REITs industry at 8.1x.
Analysts expect the number of shares outstanding to grow by 1.16% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 14.17%, as per the Simply Wall St company report.

Fibra Danhos Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The office segment continues to struggle with only 76% occupancy and management notes weak tenant demand due to businesses being slow to make leasing decisions, which could lead to persistent high vacancy rates and pressure revenues and net operating income from office assets.
Lease spreads in the retail portfolio were at their lowest in three years (4%), despite strong occupancy, suggesting weaker pricing power that may limit the company's ability to raise rents in the future, potentially impacting revenue growth and net margins.
Significant capital expenditures are planned for major new development projects (Oaxaca, EdoMex III) and large hotel projects with completion timelines stretching several years, increasing risk of cost overruns or delays and potentially straining near-term cash flows and earnings if returns do not materialize as expected.
Heavy concentration of flagship assets and expansion projects in Mexico City and proximate areas, combined with limited geographic diversification, leaves the company more exposed to local economic, security, or regulatory shocks, which could introduce volatility to net operating income and revenue streams.
The combination of expanding development pipeline and the need for ongoing property upgrades (evidenced by recent investments in solar panels and maintenance), paired with only modest current leverage, may necessitate additional debt or equity fundraising in a higher interest rate environment, potentially increasing financing costs and impacting distributable earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of MX$25.85 for Fibra Danhos based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of MX$30.6, and the most bearish reporting a price target of just MX$22.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be MX$8.8 billion, earnings will come to MX$4.9 billion, and it would be trading on a PE ratio of 13.1x, assuming you use a discount rate of 14.2%.
Given the current share price of MX$25.12, the analyst price target of MX$25.85 is 2.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Mexico Urban Expansion And Mixed-Use Assets Will Create Future Momentum

Shared on01 May 25Fair value Increased 4.19%

Shared on24 Apr 25

Shared on17 Apr 25Fair value Decreased 2.61%

Shared on01 May 25
Fair value Increased 4.19%

Shared on17 Apr 25
Fair value Decreased 2.61%