Bogotá, May 9, 2024. During the first-quarter 2024 results conference, Pei Asset Management, Pei’s real estate manager, presented the business’s financial and real estate results. These included revenue of more than COP 191,000 million in the first three months of the year, a 13% increase compared to the same period last year, a real estate portfolio occupancy rate of close to 95%, and lease-contract renewals above 99%.
Regarding margins, the first-quarter results reflect the business’s seasonality, which does not yet incorporate the full operating expenses that will accrue as the year progresses. The NOI margin achieved was 84.5%, and the EBITDA margin was 72.8%, representing increases of 118 basis points and 61 basis points, respectively, compared to the first quarter of 2023 — reflecting the stabilization of the vehicle’s new management fee structure.
Portfolio occupancy
Overall, during the first quarter of the year Pei renewed 99.2% of its lease contracts, resulting in physical vacancy of 5.42% and economic vacancy of 7.15%. These real estate results stem from rent escalation, a lower supply of square meters in the economy, and the effect of inflation on revenue.
Debt and Distributable Cash Flow
During this period, significant progress was made in refinancing close to 25% (more than COP 750,000 MM) of the debt portfolio, achieving an improvement in the cost of debt of more than 120 bps, from 14.08% in the fourth quarter of 2023 to 12.85% in the first quarter of 2024.
Capital-structure management led to updated debt ratings: long-term debt at AA+, improving on the prior year’s outlook, and short-term debt at BRC 1+. Likewise, BRC Ratings S&P Global affirmed the iAAA rating for Pei’s Equity Securities Program, as well as the Gaaa rating for portfolio-management effectiveness at Pei Asset Management, the vehicle’s real estate manager.
In addition, the vehicle’s operations for this quarter generated a Distributable Cash Flow for investors of COP 27,014 million, equivalent to COP 631 per Security, to be paid on May 16. This represents an 80% increase over the distribution for the same period last year.
Capital markets activity
Lastly, so far in 2024 the Security’s price on the secondary market rose 7.2%, reaching COP 68,900 at the close of March. Average daily trading volume (ADTV) was COP 751 MM, 1.3 times higher than the same period last year. For 2024, Pei’s strategy will remain focused on optimizing its capital structure and seeking access to the capital markets in the second half of the year.
About Pei (PEI CB Equity)
Pei is a real estate investment alternative structured and managed by Pei Asset Management, with more than 6,500 investors. It has built a portfolio of high-specification, income-generating assets totaling more than 1.14 million m2 of leasable area, with a diversified base of more than 1,350 tenants and a presence in more than 30 cities and municipalities across the country. The portfolio is valued at more than 9.4 trillion pesos and comprises four asset categories: corporate, commercial, logistics, and specialized use.