Future Macro Uncertainty Will Erode Nearshoring Rental Revenues

Key Takeaways

• Growing macroeconomic and trade policy uncertainty threatens demand for logistics and manufacturing properties, increasing vacancy risk and pressuring rental revenues and margins.
  
• Market saturation, rising costs, stricter climate rules, and currency mismatches are expected to challenge net operating income growth and long-term cash flow stability.
  
• Strong income growth, disciplined capital allocation, and resilient occupancy rates position the company for sustained expansion and stable cash flows in core markets.

Catalysts

FIBRA Macquarie México (FIBRA Macquarie) (BMV:FIBRAMQ) is a real estate investment trust (fideicomiso de inversión en bienes raíces), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico, with a primary focus on stabilized income-producing properties.

• The unresolved renegotiation of the US-Mexico-Canada Agreement is already causing slower decision-making and macro uncertainty, and if the process drags into 2026 or results in less favorable trade terms, demand for Mexico-based logistics and manufacturing properties could weaken, leading to higher vacancy rates and a decline in rental revenues for FIBRA Macquarie México.
  
• Intensified global supply chain reconfiguration, alongside more protectionist U.S. trade policies and tariffs, may reverse nearshoring momentum and slow the influx of multinational tenants, limiting the company's ability to sustain record lease renewal spreads and ultimately stalling growth in net operating income.
  
• Market saturation in key nearshoring hubs such as Tijuana, Monterrey, and Juárez, combined with recent vacancy increases, is likely to trigger downward pressure on rental rates and occupancy, putting FIBRA Macquarie México's revenue and operating margins at risk after several years of outperformance.
  
• Rising land prices, escalating construction and infrastructure costs, and stricter climate regulations are expected to compress future yields on new developments, eroding the company's long-term net margins, especially as tenant demand for large, capital-intensive buildouts wavers under macro uncertainty.
  
• The portfolio's high exposure to USD-denominated leases against peso liabilities increases its vulnerability to currency fluctuations, and continued peso appreciation-such as that experienced this year-will weigh on the company's earnings and the value of distributions in local currency terms, further challenging cash flow growth and dividend coverage.

FIBRA Macquarie México Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more pessimistic perspective on FIBRA Macquarie México compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
• The bearish analysts are assuming FIBRA Macquarie México's revenue will grow by 2.1% annually over the next 3 years.
• The bearish analysts assume that profit margins will shrink from 87.1% today to 68.7% in 3 years time.
• The bearish analysts expect earnings to reach MX$3.7 billion (and earnings per share of MX$3.91) by about July 2028, down from MX$4.4 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 10.2x on those 2028 earnings, up from 5.7x today. This future PE is greater than the current PE for the MX Industrial REITs industry at 6.2x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 17.68%, as per the Simply Wall St company report.

FIBRA Macquarie México Future Earnings Per Share Growth

Risks

• FIBRA Macquarie México's record revenues, NOI, AFFO and NAV in US dollar terms, coupled with an attractive dollarized cash yield of 8 percent and a prudent payout ratio, indicate strong income growth and capital discipline, which may improve net income and distributions over the long term.
  
• The company continues to achieve industry-leading renewal spreads (28 percent this quarter) and strong lease renewal rates for its industrial portfolio, with additional momentum expected into 2026, supporting robust rental revenue and NOI growth.
  
• Strategic investments in Class A developments in Tijuana and Guadalajara targeting NOI yields of 9 to 11 percent, combined with disciplined capital allocation and ongoing property enhancements, are poised to increase asset values and drive long-term revenue and net earnings expansion.
  
• High portfolio occupancy rates over 94 percent for industrial assets and a post-pandemic high in retail occupancy, alongside sustained rental rate growth, signal resilient demand in key markets, which bolsters cash flows and reduces vacancy risks.
  
• The balance sheet remains conservative with net LTV below 33 percent, USD 420 million in liquidity, active refinancing plans, and access to supportive debt markets, mitigating refinancing risks and supporting stable net margins and AFFO payouts.

Valuation

• The assumed bearish price target for FIBRA Macquarie México is MX$28.86, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of FIBRA Macquarie México's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of MX$44.92, and the most bearish reporting a price target of just MX$28.86.
  
• In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be MX$5.3 billion, earnings will come to MX$3.7 billion, and it would be trading on a PE ratio of 10.2x, assuming you use a discount rate of 17.7%.
  
• Given the current share price of MX$30.99, the bearish analyst price target of MX$28.86 is 7.4% lower.
  
• 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.