THIRD QUARTER 2017 EARNINGS REPORT - Amazon S3 · THIRD QUARTER 2017 EARNINGS REPORT Mexico City,...

Contacts in Mexico City: Contacts in New York: Francisco Martinez Maria Barona / Rafael Borja Investor Relations Officer i-advize Corporate Communications, Inc. Tel: +52 (55) 5279-8107 Tel: +1 (212) 406-3691 / (212) 406-3691 E-mail: [email protected] E-mail: [email protected] / [email protected]

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THIRDQUARTER2017EARNINGSREPORT

MexicoCity,October26,2017–Terrafina®(“TERRA”or“theCompany”)(BMV:TERRA13),aleadingMexicanindustrialrealestateinvestmenttrust(“FIBRA”),externallyadvisedbyPGIMRealEstateanddedicatedtotheacquisition,development,leasingandmanagementofindustrialrealestatepropertiesinMexico,todayannounceditsthirdquarter2017(3Q17)earningsresults.ThefiguresinthisreporthavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(“IFRS”).Figurespresentedinthisreportare presented inmillions ofMexican pesos andmillions of U.S. dollars, unless otherwise stated. Additionally, figuresmay vary due to rounding.Terrafina’sfinancialresultsincludedinthisreportareunaudited.Asaresult,thementionedfiguresinthisfinancialreportarepreliminaryfiguresandcouldbeadjustedinthefuture.Thisdocumentmayincludeforward-lookingstatementsthatmayimplyrisksanduncertainties.Termssuchas"estimate","project","plan","believe","expect", "anticipate", "intend", and other similar expressions could be construed as previsions or estimates. Terrafina warns readers thatdeclarationsandestimatesmentioned in thisdocument,or realizedbyTerrafina’smanagement implyrisksanduncertainties thatcouldchange infunctionofvariousfactorsthatareoutofTerrafina’scontrol.FutureexpectationsreflectTerrafina’sjudgmentatthedateofthisdocument.Terrafinareservestherightorobligationtoupdatetheinformationcontainedinthisdocumentorderivedfromthisdocument.Pastorpresentperformanceisnotanindicatortoanticipatefutureperformance.

OperatingandFinancialHighlightsasofSeptember30,2017

Operating

• AsofSeptember30,2017,theoccupancyratewas95.1%,a233basispointincreasecomparedtothethirdquarterof2016(3Q16).Additionally,consideringsignedlettersofintent(LOI),occupancyfor3Q17was95.4%.

• Annualizedaverageleasingratepersquarefootat3Q17wasUS$5.00,aUS$0.10increasecomparedto3Q16.

• Terrafinareportedatotalof37.8millionsquarefeet(msf)ofGrossLeasableArea(GLA)comprisedof268propertiesand287tenantsin3Q17.

• 3Q17leasingactivitytotaled1.7msf,ofwhich31.9%correspondedtonewleases,39.2%toleaserenewalsand28.9%

to early renewals. Leasing activitywasmainly concentrated in theChihuahua, Ciudad Juarez, San Luis Potosi, Tijuana,Monterrey,Toluca,Reynosa,Queretaro,Irapuato,CuautitlanIzcalliandRamosArizpemarkets.

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Financial• 3Q17rentalrevenuesreachedUS$41.2million,a25.3%orUS$8.3millionincreasecomparedto3Q16.

• 3Q17NOIwasUS$41.4million,a22.1%orUS$7.5millionincreasecomparedto3Q16.

• TheNOImarginfor3Q17reached93.3%,a104basispointdeclinecomparedto3Q16.• 3Q17EBITDAreachedUS$37.2million,anincreaseof21.8%orUS$6.7millioncomparedto3Q16.

• TheEBITDAmarginfor3Q17was83.7%,a108basispointdecreasecomparedto3Q16.• 3Q17 adjusted funds for operations (AFFO) reached US$23.0 million, an increase of 24.4% or US$4.5 million

comparedto3Q16.

• TheAFFOmarginfor3Q17was51.4%,a158basispointdeclinecomparedto3Q16.

• 3Q17distributionstotaledUS$23.0million.Asaresult,TerrafinawilldistributePs.0.5188perCBFI(US$0.0291perCBFI)fordistributionscorrespondingtotheJuly1toSeptember30,2017period.

• Theannualizeddistributionfor3Q17wasUS$0.1164;consideringtheaveragesharepriceforthequarterofUS$1.76

(Ps.31.29);Terrafina’sdividendyieldforthequarterwas6.6%.

FiguresindollarsintheIncomeStatementwereconvertedintopesosusingtheaverageexchangeratefortheperiod;fortheBalanceSheettheexchangerateforthecloseoftheperiodwasused.(1)Millionsofsquarefeet.(2)IncludesexpansionsandBuilt-to-Suits(BTS).(3)Occupancyattheendoftheperiod.(4)Indicatestheleaserenewalrateof the leases, includesearly renewals. (5)Excludingaccrued incomeas it isanon-cash item. (6)Earningsbefore interest, taxes,depreciationandamortization. (7)Certificados Bursátiles Fiduciarios Inmobiliarios - Real Estate Investment Certificates. (*) Revenues and expenses have been adjusted for the calculation of the abovementionedmetrics.FiguresindollarsintheBalanceSheetwereconvertedusingtheclosingexchangerateoftheperiod.Pleaserefertothe“3Q17FinancialPerformance"and"Appendices"sectionavailableinthisdocument.Source:PGIMRealEstate–AssetManagementandFundAccounting

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OperatingandFinancialHighlights

Operating Sep17 Sep16 Var.

NumberofDevelopedProperties 268 209 59

GrossLeasableArea(GLA)(msf)1 37.8 30.1 7.7

NewDevelopments2(msf) 0.09 0.43 -0.34

LandReserves(msf) 6.17 6.40 -0.23

OccupancyRate3 95.1% 92.8% 233bps Avg.LeasingRent/SquareFoot(dollars) 5.00 4.89 0.10 WeightedAverageRemainingLeaseTerm(years) 3.57 3.49 0.07

RenewalRate4 89.3% 85.5% 373bps

QuarterlyFinancial 3Q17 3Q16 Var. 3Q17 3Q16 Var.

fx 17.8255 18.7204

(millionsofpesosunlessotherwisestated) (millionsofdollarsunlessotherwisestated)

RentalRevenues5 734.3 615.5 19.3% 41.2 32.9 25.3%OtherOperatingIncome 67.0 40.5 65.6% 3.8 2.2 72.1%NetRevenues 810.3 663.5 22.1% 45.5 35.5 28.2%NetOperatingIncome(NOI)* 737.7 634.8 16.2% 41.4 33.9 22.1%NOIMargin 93.3% 94.3% -104bps 93.3% 94.3% -104bpsEBITDA6* 662.3 570.7 16.0% 37.2 30.5 21.8%EBITDAMargin 83.7% 84.8% -108bps 83.7% 84.8% -108bpsFundsfromOperations(FFO)* 456.8 403.8 13.1% 25.6 21.6 18.8%FFOMargin 57.8% 60.0% -225bps 57.8% 60.0% -225bpsAdjustedFundsfromOperations(AFFO)* 410.4 346.4 18.5% 23.0 18.5 24.4%AFFOMargin 51.4% 52.9% -158bps 51.4% 52.9% -158bpsDistributions 410.4 346.4 18.5% 23.0 18.5 24.4%DistributionsperCBFI7 0.5188 0.5703 -9.0% 0.0291 0.0305 -4.5%

BalanceSheet Sep17 Jun17 Var.

Sep17 Jun17 Var.

fx 18.1979 17.8973


Cash&CashEquivalents 6,658.7 884.0 653.2% 365.9 49.4 640.8%InvestmentProperties 39,048.5 37,393.9 4.4% 2,145.8 2,089.4 2.7%LandReserves 962.9 934.8 3.0% 52.9 52.2 1.3%TotalDebt 19,267.1 18,526.0 4.0% 1,058.8 1,035.1 2.3%NetDebt 12,608.4 17,642.0 -28.5% 692.8 985.7 -29.7%

F

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CommentbyAlbertoChretin,ChiefExecutiveOfficerandChairmanoftheBoardInthethirdquarterof2017,TerrafinasuccessfullyclosedtheacquisitionofeightClassAindustrialpropertieslocatedinthe Northern region for US$59 million – excluding taxes and transaction costs. With this transaction, the Companypurchased1.1millionsquarefeetofpropertiesleasedbymultinationalcompanies,with100%occupancyratesandtheentirety of the leasing contracts denominated in U.S. dollars. Moreover, we continued to improve the portfolio’scharacteristics,withtheadditionofpropertieswithanaverageageoffouryearsandanaverageleasetermof8.1years.Wearepleasedtohaveclosedthisfirstphaseofacquisitions,withinthetimeframeagreeduponwiththemarket,usingthefollow-onresourcesfromtheissuanceconcludedinJuly2017.Additionally,wesignedabindingagreementtoacquire20ClassA industrialpropertiesforUS$220million–excludingtaxes and transaction costs. The closing of this transaction is subject to the approval of the Mexican Anti-TrustCommission (Comisión Federal de Competencia Económica or COFECE). This transaction will be financed with theremainingproceedsofthefollow-onofferingandisexpectedtobeincludedinthefirstquarter2018results.Regardingourmainoperationalmetricsforthethirdquarterof2017,Terrafinaclosedatotalof1.7millionsquarefeetinleasingactivitythroughoutthemainmarketsofChihuahua,CiudadJuarez,SanLuisPotosi,Tijuana,Monterrey,Toluca,Reynosa,Queretaro, Irapuato,Cuautitlan Izcalli andRamosArizpe.31.9%of thesewerenew leasing contracts, 39.2%wereleaserenewalsand28.9%wereearlyrenewals.Theaverageannualleasingrentforthethirdquarterof2017wasUS$5.00persquarefoot,aUS$0.10increasecomparedtothethirdquarterof2016andaUS$0.01increasecomparedtothesecondquarterof2017.Byregion,averagerentsremained stable, atUS$4.88per square foot in theNorthern region,US$5.13per square foot in theBajio regionandUS$5.23averagerentpersquarefootintheCentralregion.Occupancy rate levels for the third quarter reached 95.1% and 95.4% including signed letters of intent. By region,occupancyremainedwithinexpectations,reaching96.6%intheNorthernregion,92.2%intheBajioregionand94.1%intheCentralregion.Finally,withrespecttothemainfinancialindicatorsforthethirdquarter,rentalrevenuesreachedUS$41.2million,NetOperating Revenue reached US$41.4million with a 93.3% OperatingMargin, as well as US$23.0million in AdjustedFunds from Operations. Distributions per CBFI were Ps. 0.5188, or US$0.0291, which represented an annualizeddistributionofPs.2.08orUS$0.1165perCBFI,aswellasa6.6%dividendyield,consideringtheaverageCBFIpriceforthethirdquarterof2017.ThankyouforyourinterestinTerrafina.Sincerely,AlbertoChretin

ChiefExecutiveOfficerandChairmanoftheBoard

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OperatingHighlights

HighlightsbyRegion

(asofSeptember30,2017) North Bajio Central Total

#Buildings 182 56 30 268

#Tenants 188 58 41 287

GLA(msf) 22.4 9.2 6.3 37.8

LandReserves(msf) 2.7 0.2 3.3 6.2

OccupancyRate 96.6% 92.2% 94.1% 95.1%

AverageLeasingRent/SquareFoot(dollars) 4.88 5.13 5.23 5.00

AnnualizedRentalBase% 58.8% 24.1% 17.1% 100.0%Source:PGIMRealEstate-AssetManagement

OperatingHighlights

(continued)

OccupancyandRentsbyRegion MaturitiesandRenewalsbyRegion

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Consolidated

(AsofSeptember30,2017)

OccupancyRate

Avg.LeasingRent/SquareFoot(dollars) (AsofSeptember30,2017)

Maturities(numberofcontracts)

%ofTotalMaturities

Renewals(numberofcontracts)

%ofTotal

RenewalsNorth 96.6% 4.88 North 12 70.6% 10 83.3%BajaCalifornia 100.0% 4.29 BajaCalifornia 2 11.8% 2 100.0%Tijuana 100.0% 4.29 Tijuana 2 11.8% 2 100.0%

Sonora 88.5% 4.53 Sonora 0 0.0% 0 0.0%Hermosillo 88.5% 4.53 Hermosillo 0 0.0% 0 0.0%

Chihuahua 97.5% 4.99 Chihuahua 8 47.1% 7 87.5%Chihuahua 96.9% 5.42 Chihuahua 4 23.5% 3 75.0%CiudadJuarez 98.0% 4.64 CiudadJuarez 4 23.5% 4 100.0%Delicias 100.0% 5.93 Delicias 0 0.0% 0 0.0%GomezFarias 100.0% 3.34 GomezFarias 0 0.0% 0 0.0%CasasGrandes 100.0% 4.15 CasasGrandes 0 0.0% 0 0.0%

Coahuila 92.3% 4.62 Coahuila 1 5.9% 0 0.0%CiudadAcuña 100.0% 6.11 CiudadAcuña 0 0.0% 0 0.0%Monclova 100.0% 5.37 Monclova 0 0.0% 0 0.0%RamosArizpe 89.1% 4.32 RamosArizpe 1 5.9% 0 0.0%Saltillo 91.0% 5.39 Saltillo 0 0.0% 0 0.0%

LeasingActivity 3Q17 3Q16 Var.

OperatingPortfolio(msf): Renewals 0.7 0.8 -0.1

EarlyRenewals 0.5 0.3 0.2

NewLeases 0.5 0.2 0.3

TotalSquareFeetofLeasesSigned 1.7 1.3 0.4Source:PGIMRealEstate-AssetManagement

NORTH - BajaCalifornia- Sonora- Chihuahua- Coahuila- NuevoLeon- Tamaulipas- Durango

BAJIO - SanLuisPotosi- Jalisco- Aguascalientes- Guanajuato- Queretaro

CENTRAL - EstadodeMexico- MexicoCity- Puebla- Tabasco

Terrafina’s3Q17Operations

27.3%

72.7%

ComposiconbyAssetTypeasof3Q17(asa%oftotalGLA)

Distribulon Manufacturing

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SanPedrodelasColinas 89.3% 2.10 SanPedrodelasColinas 0 0.0% 0 0.0%Torreon 100.0% 4.21 Torreon 0 0.0% 0 0.0%

NuevoLeon 96.2% 5.00 NuevoLeon 1 5.9% 1 100.0%Apodaca 100.0% 5.45 Apodaca 0 0.0% 0 0.0%Monterrey 94.9% 4.83 Monterrey 1 5.9% 1 100.0%

Tamaulipas 100.0% 4.54 Tamaulipas 0 0.0% 0 0.0%Reynosa 100.0% 4.54 Reynosa 0 0.0% 0 0.0%

Durango 100.0% 4.71 Durango 0 0.0% 0 0.0%Durango 100.0% 4.86 Durango 0 0.0% 0 0.0%GomezPalacio 100.0% 3.09 GomezPalacio 0 0.0% 0 0.0%

Bajio 92.2% 5.13 Bajio 2 11.8% 2 100.0%SanLuisPotosi 91.8% 4.85 SanLuisPotosi 1 5.9% 1 100.0%SanLuisPotosi 91.8% 4.85 SanLuisPotosi 1 5.9% 1 100.0%

Jalisco 100.0% 6.44 Jalisco 0 0.0% 0 0.0%Guadalajara 100.0% 6.44 Guadalajara 0 0.0% 0 0.0%

Aguascalientes 100.0% 4.61 Aguascalientes 0 0.0% 0 0.0%Aguascalientes 100.0% 4.61 Aguascalientes 0 0.0% 0 0.0%

Guanajuato 88.9% 4.92 Guanajuato 1 5.9% 1 100.0%Celaya 100.0% 5.18 Celaya 0 0.0% 0 0.0%Irapuato 93.9% 5.36 Irapuato 1 5.9% 1 100.0%Silao 84.9% 4.63 Silao 0 0.0% 0 0.0%

Queretaro 85.8% 4.75 Queretaro 0 0.0% 0 0.0%Queretaro 85.8% 4.75 Queretaro 0 0.0% 0 0.0%

Central 94.1% 5.23 Central 3 17.6% 2 66.7%EstadodeMexico 93.1% 5.43 EstadodeMexico 3 17.6% 2 66.7%CuautitlanIzcalli 100.0% 5.41 CuautitlanIzcalli 0 0.0% 0 0.0%Toluca 84.4% 5.56 Toluca 3 17.6% 2 66.7%CiudaddeMexico 100.0% 8.97 CiudaddeMexico 0 0.0% 0 0.0%Azcapotzalco 100.0% 8.97 Azcapotzalco 0 0.0% 0 0.0%

Puebla 100.0% 3.27 Puebla 0 0.0% 0 0.0%Puebla 100.0% 3.27 Puebla 0 0.0% 0 0.0%

Tabasco 100.0% 4.10 Tabasco 0 0.0% 0 0.0%Villahermosa 100.0% 4.10 Villahermosa 0 0.0% 0 0.0%

Total 95.1% 5.00 Total 17 100.0% 14 82.4%Source:PGIMRealEstate-AssetManagement

Source:PGIMRealEstate-AssetManagement

*Overthenumberofmaturedleasesinthequarter

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3Q17OperationalPerformanceCompositionbyGeographicalDiversificationThe geographical diversification of Terrafina’s properties at 3Q17 (based onGLA per square foot)was as follows: theNorthernregionofMexicorepresented59.2%ofGLA,whiletheBajioandCentralregionsrepresented24.2%and16.5%ofGLA,respectively.

GeographicDistributionbyRegionandState

3Q17

asa%ofTotalGLA3Q17

3Q16 asa%ofTotalGLA3Q16

North 22.42 59.2% 16.36 54.5%BajaCalifornia 0.90 2.4% 1.13 3.8%Tijuana 0.90 2.4% 1.13 3.8%

Sonora 0.33 0.9% 0.28 0.9%Hermosillo 0.33 0.9% 0.28 0.9%

Chihuahua 14.27 37.7% 9.55 31.8%Chihuahua 5.83 15.4% 4.07 13.6%CiudadJuarez 7.74 20.4% 5.00 16.6%Delicias 0.52 1.4% 0.29 1.0%GomezFarias 0.08 0.2% 0.08 0.3%Camargo 0.02 0.1% 0.02 0.1%CasasGrandes 0.09 0.2% 0.09 0.3%

Coahuila 3.74 9.9% 3.43 11.4%CiudadAcuña 0.24 0.6% 0.24 0.8%Monclova 0.34 0.9% 0.34 1.1%RamosArizpe 2.00 5.3% 1.94 6.5%Saltillo 0.62 1.6% 0.62 2.1%SanPedrodelasColinas 0.15 0.4% 0.15 0.5%Torreon 0.39 1.0% 0.13 0.4%

NuevoLeon 1.94 5.1% 1.16 3.9%Apodaca 0.50 1.3% 0.32 1.1%Monterrey 1.44 3.8% 0.84 2.8%

Tamaulipas 0.47 1.2% 0.34 1.1%Reynosa 0.47 1.2% 0.34 1.1%

Durango 0.78 2.0% 0.46 1.5%Durango 0.71 1.9% 0.40 1.3%GomezPalacio 0.07 0.2% 0.07 0.2%

Bajio 9.17 24.2% 7.55 25.1%SanLuisPotosi 3.37 8.9% 2.75 9.1%SanLuisPotosi 3.37 8.9% 2.75 9.1%

Jalisco 1.66 4.4% 1.29 4.3%Guadalajara 1.66 4.4% 1.29 4.3%

Aguascalientes 0.75 2.0% 0.75 2.5%Aguascalientes 0.75 2.0% 0.75 2.5%

Guanajuato 1.42 3.7% 0.78 2.6%Celaya 0.12 0.3% 0.12 0.4%Irapuato 0.44 1.2% 0.24 0.8%Silao 0.86 2.3% 0.42 1.4%

Queretaro 1.98 5.2% 1.98 6.6%Queretaro 1.98 5.2% 1.98 6.6%

Central 6.25 16.5% 6.12 20.4%EstadodeMexico 5.40 14.3% 5.26 17.5%CuautitlanIzcalli 4.26 11.3% 4.12 13.7%Toluca 0.91 2.4% 0.23 0.8%

CiudaddeMexico 0.02 0.1% 0.91 3.0%Azcapotzalco 0.02 0.1% 0.02 0.1%

Puebla 0.18 0.5% 0.02 0.1%Puebla 0.18 0.5% 0.18 0.6%

Tabasco 0.65 1.7% 0.18 0.6%Villahermosa 0.65 1.7% 0.65 2.2%

Total 37.85 100.0% 30.03 100.0%TotalGrossLeasableArea/millionsquarefeet.Potentialleasableareaoflandreservesarenotincluded.


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CompositionbyAssetTypeAt the end of 3Q17, 72.7%of Terrafina’s portfolio consisted of properties dedicated tomanufacturing activitieswhile27.3%werededicatedtodistributionandlogisticsactivities.

CompositionbySectorAsofSeptember30,2017,tenantdiversificationbyindustrialsectorwasasfollows:

IndustrialSectorDiversification 3Q17 3Q16 Var.

Automotive 31.6% 30.5% 113bps

Industrialproperties 20.1% 19.3% 79bps

Consumergoods 15.7% 18.6% -297bps

LogisticsandTrade 9.5% 9.9% -40bps

Aviation 10.6% 9.6% 99bps

Non-durableconsumergoods 4.3% 5.7% -145bps

Electronics 8.3% 6.4% 192bps

Total 100.0% 100.0%


27.3%

72.7%

ComposiconbyAssetTypeasof3Q17(asa%oftotalGLA)

Distribulon Manufacturing

CompositionbyAssetType

3Q17 3Q16 Var.

Distribution 27.3% 29.9% -379bps

Manufacturing 72.7% 70.1% 379bpsSource:PGIMRealEstate-AssetManagement

31.6%

20.1%15.7%

9.5%

10.6%

4.3%8.3%

DiversificaconbySectorasof3Q17(asa%ofleasedGLA)

AutomolveIndustrialproperlesConsumergoodsLogislcsandTradeAvialonNon-durableconsumergoodsElectronics

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CompositionofTopClientsTerrafinahasawidelydiversifiedtenantbasethatleaseindustrialpropertiesthroughoutseveralofMexico’smaincities.For3Q17,Terrafina’stopclient,top10clientsandtop20clients,represented3.5%,18.5%and29.9%oftotalrevenues,respectively.

TopClients

(AsofSeptember30,2017)

LeasedSquareFeet(millions)

%TotalGLA %TotalRevenues

TopClient 1.24 3.4% 3.5%

Top10Clients 6.75 18.7% 18.5%

Top20Clients 10.83 30.1% 29.9%Source:PGIMRealEstate-AssetManagement

Occupancy3Q17occupancyratewas95.1%,a233basispointincreasecomparedto3Q16.IncludingsignedLOIsforthequarter,theoccupancy ratewas 95.4%. It is important to note that occupancy rate indicators presented in this report reflect thequarterlyclosingrate.For3Q17,Terrafina’s leasingactivityreached1.7msf,ofwhich31.9%correspondedtonewleasingcontracts(includingexpansions),39.2%forcontractrenewalsand28.9%forearlyrenewals.

LeasingactivitymainlytookplaceintheChihuahua,CiudadJuarez,SanLuisPotosi,Tijuana,Monterrey,Toluca,Reynosa,Queretaro,Irapuato,CuautitlanIzcalliandRamosArizpemarkets.Inadditiontothisleasingactivity,Terrafinasignedanadditional96,000squarefeetinLOIs.

LeaseMaturitiesTerrafinahad287tenantsunderleasingcontractsattheendof3Q17.Theleasingcharacteristicsofthesecontractshavean average maturity of three to five years for logistics and distribution properties and of five to seven years formanufacturingproperties.Annualaveragematurities(asapercentageofannualbaserents)remainatlevelsofbetween3%to22%forthenextfiveyears.

95.1%

4.6%0.3%

Occupancyasof3Q17(as%ofTotalGLA)

LeasedGLAVacantGLASignedLemersofIntent

3Q17 3Q16 Var.

LeasedGLA 95.1% 92.8% 233bps

VacantGLA 4.6% 5.2% -61bps

SignedLettersofIntent 0.3% 1.9% -169bps

Total 100.0% 100.0%


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ThefollowingtablebreaksdownTerrafina’sleasingmaturityschedulefortheupcomingyears:

Annual

BaseRent(millionsofdollars)

%ofTotalOccupiedSq.Ft(millions) %ofTotal

2017 5.0 2.8% 1.07 3.0%2018 26.6 14.8% 5.48 15.2%2019 31.3 17.4% 6.36 17.7%2020 39.4 21.9% 7.78 21.6%2021 25.8 14.3% 5.13 14.2%Thereafter 51.8 28.8% 10.19 28.3%Source:PGIMRealEstate–AssetManagement

CapitalDeploymentAcquisitionsDuring the third quarter of 2017, Terrafina concluded the first tranche of its acquisition strategy using the resourcesobtained from the issuance in July 2017. Terrafina acquired eight Class A industrial properties for US$59.0 million –excludingtransactionandVATexpenses,atan8.8%stabilizedcaprateforthenext12months.ThesepropertiesarelocatedintheNorthernregionandadd1.1millionsquarefeetofGLAtotheportfolio.Theacquiredportfoliois100%occupiedandallleasesareU.S.dollar-denominatedunderatriple-netlease(NNN)structure.Moreover,the average age for these properties is four years.With this acquisition, the annualized AFFO is expected to increasebetween4%and6%.

CapitalExpenditures(CAPEX)Terrafina’sCAPEXisclassifiedasrecurringexpensesthattookplacebasedonupcomingleasingmaturitiesandpropertyimprovements. The main goal of these expenses is the renewal of leasing contracts as well as the improvement ofpropertyconditionstakingintoaccounttenantrequirements.TerrafinaexpectstoapplyCAPEXtowardsvacantpropertiesaswellastowardsthedevelopmentofnewGLAbymeansofexpansionsand/ornewdevelopments.

Additionally,itisimportanttoconsiderthatCAPEXintendedforexpansionsandnewdevelopmentsarenotfinancedwithTerrafina’soperatingcashflowandthereforedonotpassthroughtheincomestatement.

Capitalexpendituresaccountsarecomprisedasfollows:1) TenantpropertyimprovementresourcesaswellasrecurringmaintenanceCAPEX.2) Brokerandadministratorfees.3) CAPEXfornewdevelopments,whichduetotheirnature,aregenerallycapitalized.In3Q17,Terrafina’sinvestmentsintenantimprovementsandrecurringCAPEXwasUS$1.0million.TotalCAPEXfor3Q17isbrokendowninthefollowingtable:

CapitalExpenditures 3Q17 3Q17

(millionsofpesos)

(millionsofdollars)

TenantImprovements&RecurringCapex 18.2 1.0LeasingCommissions 20.7 1.2DevelopmentCapex1 39.2 2.2

TotalCapitalExpenditures 78.1 4.4

MaintenanceexpensesforvacantpropertiesareincludedintheTenantImprovements&RecurringCAPEXfigures.(1)CAPEXforexpansions/newdevelopments.


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LandReservesTerrafina’slandreserveasofSeptember30,2017wascomprisedof12landreserveproperties,equivalentto6.2msfofpotentialGLAforthedevelopmentoffutureindustrialproperties.AsofSeptember30,2017,Terrafina’slandreservesweredistributedasfollows:

AsofSeptember30,2017

SquareFeet

(millions)

LandatCost

(millionsofpesos)

LandatCost

(millionsofdollars)

AppraisalValue

(millionsofpesos)

MarketValue

(millionsofdollars)

North 2.7 723.7 39.8 558.7 30.7Bajio 0.2 13.0 0.7 13.5 0.7Central 3.3 675.9 37.1 390.7 21.5

TotalLandPortfolio 6.2 1,412.6 77.6 962.9 52.9Source:PGIMRealEstate-AssetManagementandFundAccounting

12

3Q17FinancialPerformanceFinancialResultsandCalculationsTerrafina’s financial resultsarepresented inMexicanpesosandU.S.dollars.Figuresonthe incomestatement foreachperiodwereconvertedtodollarsusingtheaverageexchangerate for3Q17,while for thebalancesheet, theexchangerateatthecloseofSeptember30,2017wasapplied.Terrafina has in place best accounting practices for measuring the FIBRA’s (REIT) performance results by providingrelevant metrics to the financial community. Throughout the following financial performance section, additionalcalculations are available. It is important to note that these metrics must not be considered individually to evaluateTerrafina’sresults.ItisrecommendedtousethemincombinationwithotherInternationalFinancialReportingStandardsmetricstomeasuretheCompany’sperformance.Terrafina presents in this earnings report additional metrics such as Net Operating Income (NOI), Earnings BeforeInterests, Taxes, Depreciation and Amortization (EBITDA), Funds from Operations (FFO), and Adjusted Funds fromOperations(AFFO).Eachbreakdowncalculationisavailableinthisdocument.

Inaddition,TerrafinarecommendsreviewingtheAppendicesasareferenceoftheintegrationofdifferentitemsof

Terrafina’sfinancialstatement.Thisinformationisavailableinthelastsectionofthisdocument.

Pastperformanceisnotaguaranteeorreliableindicatoroffutureresults.

13

SameStoreThefollowingtableshowsTerrafina’s3Q17same-storeandconsolidatedinformation:

(asofSeptember30,2017)

Same-Store13Q17

Consolidated2

3Q17

NumberofProperties 207 268 OccupancyRate 94.6% 95.1%

GrossLeasableArea(GLA)(msf) 30.1 37.8

Avg.LeasingRent/SquareFoot(dollars) 4.95 5.00

Same-Store

3Q17Consolidated

3Q17Same-Store

3Q17Consolidated

3Q17 (millionsofdollars) (millionsofpesos)

RentalRevenues 33.2 41.2 591.8 734.3

NetOperatingIncome 33.6 41.4 598.9 737.7

NOIMargin 93.5% 93.3% 93.5% 93.3%

EBITDA 30.1 37.2 536.5 662.3

EBITDAMargin 83.8% 83.7% 83.8% 83.7%

FFO 21.3 25.6 379.7 456.8

FFOMargin 59.2% 57.8% 59.2% 57.8%

AdjustedFundsfromOperations 18.9 23.0 336.9 410.4

AFFOMargin 51.7% 51.4% 51.7% 51.4%

(1)Samepropertiesinformationevaluatesperformanceoftheindustrialproperties,excludingacquisitionscompletedinJanuary2017.

(2)IncludesacquisitionscompletedinJanuary2017andSeptember2017.Source:PGIMRealEstate-AssetManagementandFundAccounting

RentalRevenuesIn3Q17,TerrafinareportedrentalrevenuesofUS$41.2million,a25.3%orUS$8.3millionincreasecomparedto3Q16.Rentalrevenuesdonotincludeaccruedrevenuesastheseareanon-cashitem.OtherOperatingIncomeIn3Q17,otheroperatingincometotaledUS$3.8million,a72.1%orUS$1.6milliondecreasecomparedto3Q16.Other operating incomemainly stem from tenant refunds from triple-net leases. Expenses reimbursable to Terrafinamainlyincludedelectricity,propertytaxes,insurancecostsandmaintenance.

NetrevenuesreachedUS$45.5millionin3Q17,anincreaseofUS$10.0million,or28.2%comparedto3Q16.

14

Revenues

3Q17 3Q16 Var.% 3Q17 3Q16 Var.%

(millionsofpesos) (millionsofdollars)

RentalRevenue 734.3 615.5 19.3% 41.2 32.9 25.3%

AccruedIncome1 8.9 7.5 19.1% 0.5 0.4 26.4%

OtherOperatingRevenues 67.0 40.5 65.6% 3.8 2.2 72.1%

ReimbursableExpensesasRevenues2 54.2 34.2 58.7% 3.0 1.8 64.5%

ReimbursableTenantImprovements 10.8 4.7 130.5% 0.6 0.3 142.2%

Othernon-cashincome 2.0 1.6 - 0.1 0.1 -

NetRevenue 810.3 663.5 22.1% 45.5 35.5 28.2%(1)Straightlinerentadjustment;non-cashitem.(2)TriplenetleasesexpensesreimbursedtoTerrafinafromitstenants.Source:PGIMRealEstate-FundAccounting

Foradditionalinformationregardingtherevenuebreakdownusedtocalculateadditionalmetricspresentedinthisearningsreport,pleaserefertoAppendix1inthelastsectionofthisdocument.

RealEstateExpensesIn 3Q17, real estateexpenses totaledUS$6.4million, an increaseof 3.7%orUS$0.2million compared to3Q16. Theseexpensesmainlycorrespondedtorepairandmaintenance,propertytaxesandinsurance.It is important todifferentiatebetweenexpenses that aredirectly related to theoperationand those that are for themaintenanceoftheindustrialportfolio;thelatterareusedintheNOIcalculation.

Theremainderoftheaccountsincludedinrealestateexpensesareconsiderednon-recurringexpensesandareusedtocalculateEBITDAandAFFO.

Foradditionalinformationregardingtherealestateexpensesbreakdown,pleaserefertoAppendix2inthelastsectionofthisdocument.

15

NetOperatingIncome(NOI)In3Q17,NOItotaledUS$41.4million,a22.1%orUS$7.5millionincreasecomparedwith3Q16.NOImargindeclinedby104basispointsreaching93.3%comparedto94.3%in3Q16.ThefollowingtabledisplaystheNOIcalculationfor3Q17:

NetOperatingIncome 3Q17 3Q16 Var.% 3Q17 3Q16 Var.%


RentalRevenues1 734.3 615.5 19.3% 41.2 32.9 25.3%

OtherOperatingincome2 56.8 57.8 -1.8% 3.2 3.1 3.2%

NetRevenuesforNOICalculation 791.1 673.4 17.5% 44.4 36.0 23.4%

RepairandMaintenance -8.8 -6.6 33.2% -0.5 -0.4 40.0%

PropertyTaxes -0.1 -0.6 -87.6% 0.0 0.0 -86.8%

PropertyManagementFees -16.3 -13.5 20.2% -0.9 -0.7 26.4%

Electricity -15.9 -7.1 125.3% -0.9 -0.4 139.2%

PropertyInsurance -2.6 -3.1 -14.0% -0.1 -0.2 -9.9%

Security -3.2 -3.3 -0.6% -0.2 -0.2 4.6%

OtherOperationalExpenses -6.4 -4.4 43.9% -0.4 -0.2 52.3%

RealEstateOperatingExpensesforNOICalculation -53.4 -38.6 38.4% -3.0 -2.1 45.8%

NetOperatingIncome3 737.7 634.8 16.2% 41.4 33.9 22.1%

NOIMargin 93.3% 94.3% -104bps 93.3% 94.3% -104bps(1)Excludesaccruedincomefromstraightlinerentadjustmentsasitisanon-cashitem.(2)ExcludestenantimprovementsreimbursementswhichareincludedintheAFFOcalculation.(3)Theincomecalculationgeneratedbytheoperationoftheproperty,independentofexternalfactorssuchasfinancingandincometaxes.NOIistheresultofNetRevenues,includingrentalincomeandtriplenetleases’expensesreimbursementsminusRealEstateOperatingExpenses(costsincurredduringtheoperationandmaintenanceoftheindustrialportfolio).Source:PGIMRealEstate-FundAccounting

FeesandAdministrativeExpenses(G&A)G&Ain3Q17totaledUS$7.1million,a74.2%,orUS$3.0millionincreasecomparedto3Q16.

ThefollowingtablebreaksdowntotalG&A:G&A

3Q17 3Q16 Var.% 3Q17 3Q16 Var.%


ExternalAdvisorFees1 -47.9 -40.0 19.7% -2.7 -2.1 28.6%

ProfessionalandConsultingServices -11.3 -8.1 38.5% -0.6 -0.5 35.1%

Payroll,Admin.FeesandOtherExpenses -67.7 -28.6 136.9% -3.8 -1.5 148.7%

TotalG&A2 -126.8 -76.7 65.3% -7.1 -4.1 74.2%(1)PLAAdministradoraIndustrial,S.deR.L.deC.V.,isaMexicanaffiliateofPGIM,andAdvisoraspertheAdvisoryContract.(2GeneralandAdministrativeExpenses.

Source:PGIMRealEstate-FundAccounting

16

EarningsBeforeInterest,Taxes,DepreciationandAmortization(EBITDA)In3Q17,EBITDAtotaledUS$37.2million,anincreaseofUS$6.7million,or21.8%,comparedto3Q16.EBITDAmarginfor3Q17was83.7%,a108basispointdecreasecomparedto3Q16.ThefollowingshowstheEBITDAcalculationfor3Q17:

EBITDA 3Q17 3Q16 Var.% 3Q17 3Q16 Var.%


RentalRevenues1 734.3 615.5 19.3% 41.2 32.9 25.3%

OtherOperatingincome2 56.8 57.8 -1.8% 3.2 3.1 3.2%

RealEstateExpensesforEBITDACalculation -57.6 -41.4 39.2% -3.2 -2.2 46.5%

RealEstateOperatingExpensesforNOICalculation -53.4 -38.6 38.4% -3.0 -2.1 45.8%

Advertising 0.0 -0.1 -69.2% 0.0 0.0 -

Admin.PropertyInsuranceExpenses -0.7 -0.9 -26.2% 0.0 0.0 -

OtherAdmin.RealEstateExpenses -3.5 -1.8 - -0.2 -0.1 115.0%

FeesandAdmin.Expenses -71.1 -61.2 16.2% -4.0 -3.3 22.6%

ExternalAdvisorFees -47.9 -40.0 19.7% -2.7 -2.1 28.6%

Legal,Admin.andOtherProfessionalFees -10.9 -12.7 -14.3% -0.6 -0.7 -14.1%

TrusteeFees -4.0 -1.5 172.7% -0.2 -0.1 187.7%

Payroll -6.1 -5.7 6.2% -0.3 -0.3 11.8%

OtherExpenses -2.3 -1.3 73.3% -0.1 -0.1 82.2%

EBITDA3 662.3 570.7 -37.9% 37.2 30.5 21.8%

EBITDAMargin 83.7% 84.8% -108bps 83.7% 84.8% -108bps(1)Excludesaccruedincomefromstraightlinerentadjustmentsasitisanon-cashitem.(2)ExcludestenantimprovementsreimbursementswhichisincludedinAFFOcalculation.(3)Earningsbeforeinterest,taxes,depreciationandamortization.


ForadditionalinformationregardingthecommissionsandadministrativeexpensesbreakdownusedforthecalculationofEBITDAandAFFO,pleaserefertoAppendix3locatedinthelastsectionofthisdocument.

FinancingExpenses

In3Q17,financingexpensestotaledUS$11.8million,anincreaseof23.8%orUS$2.3millioncomparedto3Q16.

FinancialExpenses 3Q17 3Q16 Var.% 3Q17 3Q16 Var.%


InterestPaid -208.5 -168.5 23.7% -11.7 -9.0 30.0%

BorrowingExpenses -5.8 -12.1 -51.8% -0.3 -0.6 -48.4%

Recurring -0.7 -0.2 200.0% 0.0 0.0 215.4%

NonRecurring -5.2 -11.9 -56.6% -0.3 -0.6 -53.5%

InterestIncome 3.6 1.6 122.6% 0.2 0.1 133.6%

Total -210.7 -178.9 17.7% -11.8 -9.5 23.8%Source:PGIMRealEstate-FundAccounting

17

FundsfromOperations(FFO)/AdjustedFundsfromOperations(AFFO)In3Q17,FFOincreasedbyUS$4.1million,or18.8%comparedto3Q16,reachingUS$25.6million.FFOMarginwas57.8%,a225basispointdecreasecomparedto3Q16.Additionally,TerrafinareportedAFFOofUS$23.0million,an increaseofUS$4.5million,or24.4%comparedto3Q16.AFFOmarginwas51.4%,andecreaseof158basispointsversus3Q16.

FundsfromOperations(FFO) 3Q17 3Q16 Var.% 3Q17 3Q16 Var.%


EBITDA 662.3 570.7 16.0% 37.2 30.5 21.8%FinanceCost1 -205.5 -167.1 23.0% -11.5 -8.9 29.2%FundsfromOperations(FFO) 456.8 403.8 13.1% 25.6 21.6 18.8%FFOMargin 57.8% 60.0% -225bps 57.8% 60.0% -225bpsTenantImprovements -18.2 -32.1 -43.5% -1.0 -1.7 -40.5%LeasingCommissions -20.8 -20.4 1.8% -1.2 -1.1 6.1%OtherNonRecurringExpenses2 -7.5 -4.8 57.1% -0.4 -0.3 65.0%AdjustedFundsfromOperations(AFFO) 410.4 346.4 18.5% 23.0 18.5 24.4%AFFOMargin 51.4% 52.9% -158bps 51.4% 52.9% -158bps(1)NetOperationalInterestExpensescomprisedbyinterestpaid,recurringborrowingexpensesandotherinterestincome.(2)Relatedexpensestoacquisitions,dispositions,legalandotherexpenses


ComprehensiveIncomeComprehensiveIncomefor3Q17reachedUS$44.3million,comparedtotheUS$39.0millionin3Q16.

ThefollowingtablepresentsthecalculationofComprehensiveIncomefor3Q17:

ComprehensiveIncome 3Q17 3Q16 Var.% 3Q17 3Q16 Var.%


NetRevenues 810.3 663.5 22.1% 45.5 35.5 28.2%

RealEstateExpenses -114.6 -116.5 -1.6% -6.4 -6.2 3.7%

FeesandOtherExpenses -126.8 -76.7 65.3% -7.1 -4.1 74.2%

Gain(Loss)fromSalesofRealEstateProperties -5.8 0.0 - -0.3 0.0 -

NetIncome(Loss)fromFairValueAdjustmentonInvestmentProperties

103.1 -175.9 - 5.8 -9.2 -

NetIncome(Loss)fromFairValueAdjustmentonDerivativeFinancialInstruments 4.7 0.0 - 0.3 0.0 -

NetIncome(Loss)fromFairValueAdjustmentonBorrowings -134.8 -106.6 26.5% -7.6 -5.6 35.8%

NetIncome(Loss)fromFairValueAdjustmentonLoansReceivable 0.0 -1.7 - 0.0 -0.1 -

ForeignExchangeGain(loss) -71.9 -14.1 411.0% -4.0 -0.7 501.6%

OperatingProfit 464.2 172.1 169.7% 26.0 9.6 171.1%

FinancialIncome 3.6 1.6 122.6% 0.2 0.1 -

FinancialExpenses -214.3 -180.6 18.7% -12.0 -9.6 24.8%

NetFinancialCost -210.7 -178.9 17.7% -11.8 -9.5 23.8%

ShareofProfitfromEquityAccountedInvestments -3.7 23.7 - -0.2 1.2 -

NetProfit(Loss) 249.8 16.8 1387.4% 14.0 1.3 957.8%ItemsReclassifiedafterNetProfit(Loss)-CurrencyTranslationAdjustments 540.9 705.1 -23.3% 30.3 37.7 -19.4%

ComprehensiveIncome 790.7 721.9 9.5% 44.3 39.0 13.7%Source:PGIMRealEstate-FundAccounting

18

DistributionsperCBFIsIn3Q17,TerrafinadistributedUS$23.0million,orUS$0.0291perCBFI.

Distributions (millionsofpesosunlessotherwisestated) 3Q16 3Q16 4Q16 1Q17 3Q173 Var.%

(3Q17vs3Q16)

TotalOutstandingCBFIs1(millionsofCBFIs) 607.4 607.4 607.5 791.0 791.0 30.2%

CBFIPrice2 30.84 29.48 28.74 32.35 31.29 1.5%

Distributions 346.4 400.4 450.5 452.4 410.4 18.5%

DistributionsPerCBFI 0.5703 0.6593 0.7417 0.5720 0.5188 -9.0%

FXRateUSD/MXN(averageclosingperiod) 18.72 19.81 20.39 18.57 17.83 -4.8%

Distributions(milliondollars) 18.5 20.4 22.1 24.3 23.0 24.4%

DistributionsPerCBFI(dollars) 0.0305 0.0335 0.0364 0.0308 0.0291 -4.5%

AnnualizedDistributionYield4 7.4% 8.9% 10.3% 7.1% 6.6% -76bps(1)In2Q16,167,094CBFIswereaddedaspartofTerrafina´scompensationplan.NumberofCBFIsattheendofeachperiod(2)Averageclosingpricefortheperiod.(3)In3Q17,Terrafinaconcludedanequityfollow-onfor183,546,039CBFIs(4)AnnualizeddistributionpersharedividedbytheaverageCBFIpriceofthequarter.Source:PGIMRealEstate-FundAccounting

DebtAsofSeptember30,2017,Terrafina’stotaldebtreachedUS$1,058.8million.TheaveragecostofTerrafina’slong-termdebtwas4.49%.AllofTerrafina’sdebtisdenominatedinU.S.dollars.

OutstandingDebt

(asofSeptember30,2017)

Currency millionsofpesos

millionsofdollars

InterestRate Terms Maturity Extension

Option Derivatives

LongTermDebt

Citibank1 Dollars 5,368.4 295.0 Libor+2.65% InterestOnly Aug2019 - US$120Mswap2/US$100Mcap3

Metlife Dollars 2,729.7 150.0 4.75% InterestOnly Jan2027 - -

BBVA/JPMorgan Dollars 2,729.7 150.0 Libor+2.25%Interest+Principal Sep2021 - US$100Mswap4

SeniorNotes Dollars 8,147.1 447.7 5.25% InterestOnly Nov2022 - -

NewYorkLife Dollars 292.2 16.1 5.19% InterestOnly Feb2020 - -

TotalDebt 19,267.1 1,058.8

NetCash 6,658.7 365.9

NetDebt 12,608.4 692.8 (1)Unsecuredsyndicatedloanfacilitywithsevenbanks.(2)Swapfixedrate:1.286%.(3)Capstrikeprice:1.75%(4)Swapfixedrate:1.768%.

Source:PGIMRealEstate-FundAccountingandTransactions

42.0%

58.0%

InterestRateBreakdown(asofSeptember30,2017)

VariableRate FixedRate

19

The following tables show leverageanddebt service coverageasof September30,2017aswell asTerrafina’sprojectionsforthefollowingsixquarters:

Loan-to-Value(LTV)

(asofSeptember30,2017)(millionsofpesos)

(millionsofdollars)

TotalAssets 46,753.7 2,569.2

TotalDebt 19,267.1 1,058.8

Loan-to-Value(LTV)1 41.2%(1)TotalDebtdividedbyTotalAssetsasdefinedbytheNationalSecuritiesandBankingCommission(CNBV)

Source:PGIMRealEstate-FundAccountingandCapitalMarkets

DebtServiceCoverageRatio(DSCR)

period (millionsofpesos) (millionsofdollars)

Cash&CashEquivalents September30,2017 6,658.7 365.9

RecoverableTaxes Σnext6quarters 279.7 15.4

EBIT1afterdistributions Σnext6quarters 1,656.6 91.0

AvailableCreditLine September30,2017 1,455.8 80.0

period (millionsofpesos) (millionsofdollars)

InterestPayments Σnext6quarters 1,339.2 73.6

PrincipalPayments Σnext6quarters 15.7 0.9

RecurringCAPEX Σnext6quarters 196.3 10.8

DevelopmentExpenses Σnext6quarters 218.4 12.0

DebtServiceCoverageRatio(DSCR)2 5.7x

(1)EarningsBeforeInterestandTaxes(2)(Cash&CashEquivalents+RecoverableTaxes+EBITAfterDistributions+AvailableCreditLine)/(InterestPayments+PrincipalPayments+RecurringCAPEX+DevelopmentExpenses)Source:PGIMRealEstate-FundAccountingandCapitalMarkets

Moreover,asofSeptember30,2017,TerrafinawasinfullcompliancewithitsdebtcovenantsrelatedtotheUS$425millionbondissuance,asfollows:

UnsecuredBondCovenants (asofSeptember30,2017) Terrafina BondCovenants

Loan-to-Value(LTV)1 41.2% ≤60%

DebtServiceCoverageRatio(DSCR)2 2.8x ≥1.5x

SecuredDebttoGrossAssetsLimitation 6.5% ≤40%UnencumberedAssetstoUnsecuredDebtLimitation 251% ≥150%

(1)TotalDebtdividedbyTotalAssets.(2)(NetIncome/Loss+InterestonDebt+UnrealizedGain/Lossoffairvaluechanges)/(allinterestandprincipalpaymentsonDebt)

Source:PGIMRealEstate-Transactions

20

AnalystCoverageThefollowingisalistofbanksandinstitutionsthatregularlypublishresearchreportsonTerrafina:-Barclays -Interacciones-BBVABancomer -Invex-BofAML -ItaúBBA-BTGPactual -JPMorgan-BX+ -Monex-CitiBanamex -MorganStanley-CreditSuisse -NAUSecurities-GBM -Scotiabank-HSBC Vector-Invex -Santander

-UBS

21

AboutTerrafinaTerrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, develop, lease andmanage industrial real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically locatedwarehousesandotherlightmanufacturingpropertiesthroughouttheCentral,BajioandNorthernregionsofMexico.Itisinternallymanagedbyhighly-qualifiedindustryspecialistsandexternallyadvisedbyPGIMRealEstate.Terrafina owns 280 real estate properties, including 268 developed industrial facilities with a collective GLA ofapproximately37.8millionsquarefeetand12landreserveparcels,designedtopreservetheorganicgrowthcapabilityoftheportfolio.Terrafina’s objective is to provide attractive risk-adjusted returns for the holders of its certificates through stabledistributionsandcapitalappreciations.Terrafinaaimstoachievethisobjective throughasuccessfulperformanceof itsindustrialrealestateandcomplementaryproperties,strategicacquisitions,accesstoahighlevelofinstitutionalsupport,andtoitsmanagementandcorporategovernancestructure.Formoreinformation,pleasevisitwww.terrafina.mxPGIMRealEstatePGIMReal Estate is the real estate investment business of PGIM Inc., the global investmentmanagement business ofPrudentialFinancial, Inc. (NYSE:PRU). Redefining therealestate investing landscapesince1970,PGIMRealEstatehasprofessionals in 18 cities in theAmericas, EuropeandAsiaPacificwithdeep local knowledgeandexpertise, andgrossassetsundermanagementofUS$67.3billion(US$49.0billionnet)asofJune30,2017.PGIMRealEstate’stenuredteamofferstoitsglobalclientbaseabroadrangeofrealestateequity,debtandsecuritiesinvestmentstrategiesthatspantherisk/returnspectrum.Formoreinformation,visitwww.pgimrealestate.comAboutPrudentialFinancial,Inc.Prudential Financial, Inc. (NYSE:PRU), a financial services leader with more than US$1.1 trillion of assets undermanagement as of June 30, 2017, has operations in the United States, Asia, Europe, and Latin America. Prudential’sdiverseandtalentedemployeesarecommittedtohelpingindividualandinstitutionalcustomersgrowandprotecttheirwealththroughavarietyofproductsandservices,includinglifeinsurance,annuities,retirement-relatedservices,mutualfundsandinvestmentmanagement.IntheU.S.,Prudential’siconicRocksymbolhasstoodforstrength,stability,expertiseandinnovationformorethanacentury.Formoreinformation,pleasevisitwww.news.prudential.comForwardLookingStatementsThisdocumentmayincludeforward-lookingstatementsthatmayimplyrisksanduncertainties.Termssuchas"estimate","project", "plan", "believe", "expect", "anticipate", "intend", and other similar expressions could be construed asprevisionsorestimates.Terrafinawarnsreadersthatdeclarationsandestimatesmentionedinthisdocument,orrealizedbyTerrafina’smanagementimplyrisksanduncertaintiesthatcouldchangeinfunctionofvariousfactorsthatareoutofTerrafina’scontrol.FutureexpectationsreflectTerrafina’sjudgmentatthedateofthisdocument.Terrafinareservestherightorobligationtoupdatetheinformationcontainedinthisdocumentorderivedfromthisdocument.Pastorpresentperformanceisnotanindicatortoanticipatefutureperformance.

22

ConferenceCall

(BMV:TERRA13)Cordiallyinvitesyoutoparticipateinits

SecondQuarter2017Results

Friday,October27,201711:00a.m.EasternTime10:00a.m.CentralTime

***

Toaccessthecall,pleasedial:fromwithintheU.S.1-800-311-9404fromoutsidetheU.S.1-334-323-7224

ConferenceIDNumber:34974

AudioWebcastLink:https://www.webcaster4.com/Webcast/Page/1111/22723

ConferenceReplayU.S.1-877-919-4059

International(outsidetheUS)1-334-323-0140Passcode:96488567

23

AppendixAppendix1–RevenuesTerrafina’srevenuesaremainlyclassifiedasrentalrevenuesandotheroperatingreimbursablerevenues.Additionally,thereareaccountingrevenuesthatmustberegisteredaccordingwithIFRS;however,theseareconsideredasnon-cashitemsandthereforeareexcludedinsomecalculations.ReimbursabletenantimprovementsareincludedinthetenantimprovementexpensesfortheAFFOcalculation.

Revenues

3Q17 3Q16 3Q17 3Q16


NOIcalculation RentalRevenue 734.3 615.5 41.2 32.9

NonCash AccruedIncome1 8.9 7.5 0.5 0.4

OtherOperatingRevenues 67.0 40.5 3.8 2.2

NOIcalculation ReimbursableExpensesasRevenues2 54.2 34.2 3.0 1.8

AFFOcalculation ReimbursableTenantImprovements 10.8 4.7 0.6 0.3

NonCash Othernon-cashincome 2.0 1.6 0.1 0.1

NetRevenue 810.3 663.5 45.5 35.5

NOIcalculation ShareofProfitfromEquityAccountedInvestments2 2.6 23.7 0.1 1.2

(1)Straightlinerentadjustment.(2)TriplenetleasesexpensesreimbursedtoTerrafinafromitstenants.(2)Profitfromjoint-venturedevelopments.


24

Appendix2–RealEstateExpensesReal estate expenses are comprised of recurring figures relatedwith the operation (used for theNetOperating Profitcalculation) as well as non-recurring figures used for metric calculations such as Earnings Before Interests, Taxes,DepreciationandAmortization(EBITDA),FundsfromOperations(FFO),AdjustedFundsfromOperations(AFFO).Thefollowingtablepresentstherealestateexpenses’breakdown,whichareusedforthecalculationofseveralmetrics.

RealEstateExpenses

3Q17 3Q16 3Q17 3Q16


RepairandMaintenance -37.8 -43.5 -2.1 -2.3

NOIcalculation Recurring -8.8 -6.6 -0.5 -0.4

AFFOcalculation NonRecurring -29.0 -36.8 -1.6 -2.0

PropertyTaxes -5.5 -0.6 -0.3 0.0

NOIcalculation Operating -0.1 -0.6 0.0 0.0

NonCash NonOperating -5.5 -0.1 -0.3 0.0

NOIcalculation PropertyManagementFees -16.3 -13.5 -0.9 -0.7

NOIcalculation Electricity -15.9 -7.1 -0.9 -0.4

AFFOcalculation BrokersFees -20.7 -20.4 -1.2 -1.1

PropertyInsurance -3.3 -4.0 -0.2 -0.2

NOIcalculation Operating -2.6 -3.1 -0.1 -0.2EBITDA

calculation Administrative -0.7 -0.9 0.0 0.0

NOIcalculation Security -3.2 -3.3 -0.2 -0.2EBITDA

calculationAdvertising 0.0 -0.1 0.0 0.0

OtherExpenses -9.9 -10.4 -0.6 -0.6

NOIcalculation OperationalRelated -6.4 -4.4 -0.4 -0.2

NonCash NonOperationalRelated 0.0 -4.3 0.0 -0.2EBITDA

calculationAdministrative -3.5 -1.8 -0.2 -0.1

NonCash BadDebtExpense -1.8 -13.6 -0.1 -0.7

TotalRealEstateExpenses -114.6 -116.5 -6.4 -6.2


25

Appendix3–FeesandAdministrativeExpensesFeesandadministrativeexpenses include figuresused formetric calculations suchasEarningsbefore Interests, Taxes,DepreciationandAmortization(EBITDA),FundsfromOperations(FFO),AdjustedFundsfromOperations(AFFO).Terrafina’sfeesandadministrativeexpensesbreakdownisavailableinthefollowingtableandindicatesthefiguresusedforthecalculationofthesemetrics:

FeesandAdministrativeExpenses

3Q17 3Q16 3Q17 3Q16


EBITDAcalculation ExternalAdvisorFees -47.9 -40.0 -2.7 -2.1

LegalFees -6.2 -3.4 -0.3 -0.2

EBITDAcalculation Recurring -0.3 -0.7 0.0 0.0


OtherProfessionalFees -5.1 -4.7 -0.3 -0.3

EBITDAcalculation Recurring -3.5 -2.7 -0.2 -0.2


AdministrativeFees -55.3 -20.1 -3.1 -1.1

EBITDAcalculation Recurring -7.2 -9.4 -0.4 -0.5

NonOperationalrelated NonRecurring1 -48.2 -10.7 -2.7 -0.6

EBITDAcalculation Payroll -6.1 -5.7 -0.3 -0.3

EBITDAcalculation TrusteeFees -4.0 -1.5 -0.2 -0.1

EBITDAcalculation OtherExpenses -2.3 -1.3 -0.1 -0.1

TotalFeesandAdmin.Expenses

-126.8 -76.7 -7.1 -4.1

(1)Nonoperationalrelatedadministrativefees.


26

Appendix4–ReconciliationReconciliationofNetProfit(Loss)toFFO,EBITDAandNOI

3Q17 3Q16 3Q17 3Q17 (millionsofpesos) (millionsofdollars)

ComprehensiveIncome(Loss) 790.7 721.9 44.3 39.0Add(deduct)CurrencyTranslationAdjustment: CurrencyTranslationAdjustment -540.9 -705.1 -30.3 -37.7

Add(deduct)CostofFinancingAdjustment: NonRecurringBorrowingExpenses 5.2 11.9 0.3 0.6

Add(deduct)Non-CashAdjustment: ForeignExchangeAdjustments 71.9 14.1 4.0 0.8FairValueAdjustmentonBorrowings 134.8 106.6 7.6 5.7FairValueAdjustmentonDerivativeFinancialInstruments -4.7 0.0 -0.3 0.0FairValueAdjustmentonInvestmentProperties -96.9 175.9 -5.4 9.4FairValueAdjustmentonLoansReceivable Gain(Loss)fromSalesofRealEstateProperties 5.8 0.0 0.3 0.0

Add(deduct)ExpensesAdjustment: NonRecurringRepairandMaintenance 29.0 36.8 1.6 2.0NonOperatingPropertyTaxes 5.5 0.1 0.3 0.0BrokersFees 20.7 20.4 1.2 1.1BadDebtExpense 1.8 13.6 0.1 0.7OtherNonOperationalRelatedExpenses 0.0 4.3 0.0 0.2NonRecurringLegalFees 5.9 2.7 0.3 0.1NonRecurringOtherProfessionalFees 1.6 2.1 0.1 0.1

Add(deduct)RevenuesAdjustment: AccruedIncome -8.9 -7.5 -0.5 -0.4OtherNon-CashIncome -2.0 -1.6 -0.1 -0.1ReimbursableTenantImprovements -10.8 -4.7 -0.6 -0.3

Add(deduct)NonOperationalAdministrativeFees NonOperationalAdministrativeFees 48.2 10.7 2.7 0.6

FFO 456.8 403.7 25.6 21.6Add(deduct)CostofFinancingAdjustment: InterestPaid 208.5 168.5 11.7 9.0RecurringBorrowingExpenses 0.7 0.2 0.0 0.0InterestIncome -3.6 -1.6 -0.2 -0.1

EBITDA 662.3 570.7 37.2 30.5Add(deduct)ExpensesAdjustment: ExternalAdvisorFees 47.9 40.0 2.7 2.1RecurringLegalFees 0.3 0.7 0.0 0.0RecurringOtherProfessionalFees 3.5 2.7 0.2 0.1AdministrativeFees 7.2 9.4 0.4 0.5Payroll 6.1 5.7 0.3 0.3TrusteeFees 3.5 1.5 0.2 0.1OtherExpenses 4.0 1.3 0.2 0.1Advertising 0.0 0.1 0.0 0.0AdministrativePropertyinsurance 0.7 0.9 0.0 0.0OtherAdministrativeExpenses 2.3 1.8 0.1 0.1

NOI 737.7 634.8 41.4 33.9Add(deduct)ExpensesAdjustment: RecurringRepairandMaintenance 8.8 6.6 0.5 0.4OperatingPropertyTaxes 0.1 0.6 0.0 0.0PropertyManagementFees 16.3 13.5 0.9 0.7Electricity 15.9 7.1 0.9 0.4OperatingPropertyInsurance 2.6 3.1 0.1 0.2Security 3.2 3.3 0.2 0.2OtherOperationalExpenses 6.4 4.4 0.4 0.2

Add(deduct)RevenuesAdjustment: OtherNon-CashIncome 2.0 1.6 0.1 0.1AccruedIncome 8.9 7.5 0.5 0.4ReimbursableTenantImprovements 10.8 4.7 0.6 0.3ShareofProfitfromEquityAccountedInvestments -2.6 -23.7 -0.2 -1.3

NetRevenue 810.3 663.5 45.4 35.5

27

ReconciliationofNetProfit(Loss)toAFFO 3Q17 3Q16 3Q17 3Q17


ComprehensiveIncome(Loss) 790.7 721.9 44.3 39.0Add(deduct)CostofFinancingAdjustment: NonRecurringBorrowingExpenses -540.9 -705.1 -30.3 -37.7

Add(deduct)CostofFinancingAdjustment: NonRecurringBorrowingExpenses 5.2 11.9 0.3 0.6

Add(deduct)Non-CashAdjustment: ForeignExchangeAdjustments 71.9 14.1 4.0 0.8FairValueAdjustmentonBorrowings 134.8 106.6 7.6 5.7FairValueAdjustmentonDerivativeFinancialInstruments -4.7 0.0 -0.3 0.0FairValueAdjustmentonLoansReceivable 0.0 1.7 0.0 -0.1FairValueAdjustmentonInvestmentProperties -96.9 175.9 -5.4 9.4

Gain(Loss)fromSalesofRealEstateProperties 5.8 0.0 0.3 0.0Add(deduct)ExpensesAdjustment: NonOperatingPropertyTaxes 5.5 0.1 0.3 0.0BadDebtExpense 1.8 13.6 0.1 0.7OtherExpensesNonOperationalRelated 0.0 4.3 0.0 0.2

Add(deduct)RevenuesAdjustment: AccruedIncome -8.9 -7.5 -0.5 -0.4OtherNon-CashIncome -2.0 -1.6 -0.1 -0.1

Add(deduct)NonOperationalAdministrativeFees NonAdministrativeFees 48.2 10.7 2.7 0.6

AFFO 410.4 346.4 23.0 18.5

28

Appendix5-CapRateCalculationTerrafinasubtractscashandlandreservesbookvalueforthecapratecalculation.ImpliedcaprateandunderNAV(NetAssetValue)calculationareshowninthefollowingtables:

ImpliedCapRate

QuarterlyAveragePrice(dollars)¹ 1.76

(x)CBFIs(millionsofshares) 791.0

(=)MarketCapitalization 1,388.5

(+)TotalDebt 1,058.8

(-)Cash 365.9

(=)EnterpriseValue 2,081.4

(-)Landbank 52.9

(=)ImpliedOperatingRealEstateValue 2,028.5

NetOperatingIncome(NOI)2017e 160.8

ImpliedCapRate 7.9%

Figuresexpressedinmillionsofdollarsunlessotherwisestated.

(1)3Q17averagesharepriceofPs.31.29;andexchangerateofPs.17.8255

CapRateCalculationwithNAV

(+)InvestmentProperties(excludinglandbank) 2,068.2

(+)Land 52.9

(+)Cash 365.9

(-)TotalDebtandLiabilities 1,099.3

(=)NAV1 1,387.6

(/)CBFIs(millionshares) 791.0

(=)NAVperCBFI(dollars) 1.8

CBFIPrice(NAVcalculation) 1.8

(x)CBFIs(millionshares) 791.0

(=)MarketCap 1,387.6

(+)TotalDebtandLiabilities 1,099.3

(-)Cash 365.9

(=)EnterpriseValue 2,121.1

(-)Landbank 52.9

(=)ImpliedOperatingRealEstateValue 2,068.2

NetOperatingIncome(NOI)2017e 160.8

ImpliedCapRate 7.8%

29

FinancialStatements

IncomeStatement

3Q17 3Q16

(thousandsofpesos)

Rentalrevenues

$743,212 $623,047

Otheroperatingincome

67,047 40,482

Realestateoperatingexpenses

(114,595) (116,509)

Feesandotherexpenses

(126,803) (76,696)

Realizedgainfromdisposalofinvestmentproperties

(5,752) -

Netgain(loss)fromfairvalueadjustmentoninvestmentproperties

103,056 (175,879)

Netgain(loss)fromfairvalueadjustmentonborrowings

(134,788) (106,554)

Netgain(loss)fromfairvalueadjustmentonloansreceivable

- (1,713)

Net(loss)gainunrealizedfromfairvalueonderivativefinancialinstruments

4,685 (28)

Foreignexchange(loss)gain

(71,880) (14,068)

Operatingprofit 464,182 172,082

Financeincome

3,611 1,622

Financecost

(214,294) (180,572)

Financecost-net (210,683) (178,950)

Shareofprofitfromequityaccountedinvestments

(3,660) 23,653

NetProfitfortheperiod 249,839 16,785

Items that may be subsequently reclassified to profit or loss-currencytranslationdifferences 540,918 705,109

TotalComprehensiveincomefortheperiod 790,757 721,894

30

FinancialStatements

BalanceSheet Sep-30-17 Jun-30-17(thousandsofpesos)

Assets Non-currentassets

Investmentproperties $39,048,450 $37,393,865(Cost:30/09/2017-Ps.38,231,624;30/06/2017-Ps.36,718,602)

Investmentsaccountedusingequitymethod 379,146 258,429Loanreceivable 35,670 35,360(Cost:30/09/2017-Ps.35,360;30/06/2017-Ps.35,360)

Financialderivativeinstruments 9,192 4,334Currentassets Otherassets 59,258 28,337Loanreceivable 1,131 1,097(Cost:30/06/2017-Ps.1,097;31/03/2017-Ps.1,232)

Recoverabletaxes 279,736 1,290,268Prepaidexpenses 3,584 4,956Acquisitionprepayment 614 -Deferredchargesandaccruedincome 167,781 156,037Accountsreceivable 76,634 77,400(Netofallowancefordoubtfulaccounts:30/09/2017-Ps.28,055;30/06/2017-Ps.27,775)

Restrictedcash 33,766 28,063

Cashandcashequivalents 6,658,691 884,045

Totalassets 46,753,653 40,162,191

NetassetsattributabletoInvestors Contributions,net 19,844,088 14,785,745Retainedearnings - -126,214Currencytranslationadjustment 6,904,057 6,363,139

Totalnetassets(NetEquity) 26,748,145 21,022,670

Liabilities Non-currentliabilities

Borrowings 19,256,799 18,526,032

(Cost:30/09/2017-$18,843,797;30/06/2017-$18,255,246)

Tenantdeposits 242,213 197,970Accountspayable 3,971 3,798Currentliabilities

Tradeandotherpayables 449,837 343,437Borrowings 10,269 -

(Cost:30/09/2017-Ps.10,269,30/06/2017-Ps.0)

Tenantdeposits 42,419 68,284

Totalliabilities(excludingnetassetsattributabletotheInvestors) 20,005,508 19,139,521

Totalnetassetsandliabilities 46,753,653 40,162,191

31

FinancialStatements

CashFlowStatement Sep-17

(thousandsofpesos)

Cashflowsfromoperatingactivities(Loss)profitfortheperiod $640,191

Adjustments:Netloss(gain)unrealizedfromfairvalueadjustmentoninvestmentproperties 9,746

Netloss(gain)unrealizedfromfairvalueadjustmentonborrowings 647,456Netloss(gain)unrealizedfromfairvalueadjustmentonderivativefinancialinstruments (9,090)Realizedgainfromdisposalofinvestmentproperties 2,476

Baddebtexpense 30,185

Interestexpense 632,608

Interestincomeonbankaccounts (5,267)

Shareofprofitfromequityaccountedinvestments (11,659)

Decrease(increase)deferredrentsreceivable 5,580

Decrease(increase)inrestrictedcash 55,371

Decrease(increase)inaccountsreceivable (63,402)

Decrease(increase)inrecoverabletaxes (129,954)

Decrease(increase)inprepaidexpenses 8,801

Decrease(increase)inotherassets 51,999

Decrease(increase)intenantdeposits 44,945

(Decrease)inaccountspayable 153,249

Netcash(usedin)generatedfromoperatingactivities 2,063,235

CashflowsfrominvestingactivitiesAcquisitionssofinvestmentproperties (9,822,667)

Improvementsofinvestmentproperties (180,477)

Proceedsfromdispositionsofinvestmentproperties 133,751

Acquisitionprepayment 9,195

Interestincomeonbankaccounts 5,267

Investmentsinjointventure (141,401)

Loansreceivablepayment 829

Netcash(usedin)generatedfrominvestingactivities (9,995,503)

CashflowsfromfinancingactivitiesProceedsfromborrowings 9,728,294

Principalpaymentsonborrowings (2,895,373)

Interestexpense (632,608)

Distributionstoinvestors (1,303,294)

CBFIsequityissuance 5,390,049

Netcash(usedin)generatedfromfinancingactivities 10,287,068

Net(decrease)incashandcashequivalents 2,354,800

Cashandcashequivalentsatthebeginningoftheperiod 4,297,096

Exchangeeffectsoncashandcashequivalents 6,795

Cashandcashequivalentsattheendoftheperiod $6,658,691

32

FinancialStatements AttributabletoInvestors

StatementofChangesinEquity Netcontributions

Currencytranslationadjustment

Retainedearnings Netassets

(thousandsofpesos) BalanceatJanuary1,2017 $14,782,859 $9,663,287 $334,283 $24,780,429CapitalContribution,NetofIssuingCosts 5,390,049 - - 5,390,049DistributionstoInvestors (328,820) - (974,474) (1,303,294)ComprehensiveIncome Netlossoftheperiod - - 640,191 640,191OtherComprehensiveIncome CurrencyTranslation - (2,759,230) - (2,759,230)TotalComprehensive(loss)income - (2,759,230) 640,191 (2,119,039)

NetAssetsasofSeptember30,2017 $19,844,088 $6,904,057 $- $26,748,145

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