Logistic Properties of the Americas Q2 Earnings Call Highlights

Key Points

• Q2 performance remained strong: Revenue rose 26.1% year over year, NOI increased 27%, and the portfolio maintained 100% occupancy. Peru and Colombia led rental growth, while average rent per square foot climbed 10% to $8.88.
• Lima Sur sale will fund expansion: LPA agreed to sell its Peruvian Lima Sur Park for $145 million, expecting approximately $65 million in net proceeds after debt repayment and taxes. Most proceeds will be redeployed into Mexico while LPA continues managing the property.
• Mexico is becoming the primary growth market: The company agreed to acquire 2.1 million square feet of Class A facilities in Greater Mexico City for $200 million and expects Mexico to represent more than half of its portfolio within two to three years.

Logistic Properties of the Americas NYSEAMERICAN: LPA reported second-quarter revenue growth of 26.1% year over year and net operating income growth of 27%, as the regional logistics real estate company maintained 100% occupancy across its portfolio and advanced a strategy to shift more capital toward Mexico.

Chief Executive Officer Esteban Saldarriaga said the company’s revenue growth was led by Peru and Colombia, where rental revenue increased 50.4% and 29.3%, respectively. Costa Rica revenue rose 5.6%. LPA attributed the gains to leasing activity at newer facilities, higher market rents captured through renewals and re-leasing, and contributions from Mexican assets acquired during the latter half of the prior year.

Average rent per square foot increased 10% to $8.88 during the quarter. Same-property NOI rose 15% to $9.6 million, while total NOI reached $12.2 million. Chief Financial Officer Paul Smith said that excluding the favorable accounting translation effect from Colombian peso appreciation, NOI would have increased 23% to $11.8 million.

Peru and Colombia Drive Rental Growth

In Peru, Smith said the increase in rental revenue was primarily driven by PepsiCo’s occupancy of a new LEED Gold facility at Parque Logístico Callao near the end of last year. Leasing of previously vacant space and the addition of another tenant at the same park also contributed, with higher market rates producing positive lease spreads.

Colombia’s growth was largely tied to the late-2025 re-leasing of Parque Logístico Calle 80 space to U.S. retailer PriceSmart, along with contractual inflation adjustments. Smith noted that, excluding the currency translation effect, Colombian revenue increased about 11%.

In Costa Rica, higher rates from re-leasing, tenant expansions and renewals supported growth. LPA’s Colombian leases are denominated in local currency, while leases in its other markets are largely denominated in U.S. dollars.

Operating expenses increased 27% to $2.6 million, reflecting costs associated with newly leased Peruvian facilities, maintenance activity, higher ground lease payments and real estate taxes in Costa Rica following a reassessment of La Verbena Park. General and administrative expenses declined 8.7% to $4.2 million, mainly due to reduced reporting and legal expenses.

Operating gross leasable area totaled 5.8 million square feet at quarter-end, up 9.7% from a year earlier, while leased GLA rose 10.8% to 6.2 million square feet.

Lima Sur Sale Funds Mexico Expansion

A central development in the quarter was LPA’s agreement to sell its Lima Sur Park in Peru for $145 million. The transaction represented an in-place capitalization rate of approximately 7% and was priced about 18% above the park’s independently appraised carrying value, according to Saldarriaga.

After repayment of roughly $60 million of debt and payment of capital gains taxes, the company expects approximately $65 million in net proceeds. Smith said the sale was undergoing customary regulatory approvals and that LPA expected to receive the bulk of the capital in September, though timing could extend into October.

The company reported an investment property gain of $20 million for the quarter, compared with a $257,400 valuation loss in the prior-year period. The gain included a $16.3 million gain related to the Lima Sur sale and a $3.2 million valuation gain associated with development spending at the Callao park.

Under the sale agreement, LPA will manage and operate Lima Sur for buyer FIBRA Prime, generating management fee income while retaining day-to-day operating control and tenant relationships. The company also has an option to repurchase the park four years after the sale closes.

Saldarriaga said the Lima Sur transaction is intended to support a more capital-efficient model, with proceeds largely redeployed into Mexico. He said future sales of mature assets remain a possibility as LPA seeks to grow its Mexican presence, though the company remains committed to its foundational markets of Peru, Colombia and Costa Rica.

Mexico Pipeline and Development Plans

LPA plans to deploy capital toward its Mexico acquisition pipeline, beginning with a programmatic agreement to acquire Central Park 57 facilities in the Greater Mexico City area from Fortem Capital. The $200 million agreement covers 2.1 million square feet of Class A facilities to be acquired over the next 12 to 18 months.

The company said Central Park 57’s square footage is equivalent to about 34% of LPA’s current GLA. Saldarriaga said LPA expects Mexico to account for more than half of its property portfolio within two to three years, based on its current opportunity set of roughly $1 billion in facilities. The company expects to target acquisitions at capitalization rates of 8% to 9%, depending on tenant quality and lease terms.

LPA expects to fund expansion through a mix of divestiture proceeds, local debt and local equity partners. Management said it continues to prioritize off-market and proprietary acquisitions and is monitoring potential asset sales that could result from consolidation among larger Mexican industrial real estate companies.

Management said it remains selective in Mexico, favoring logistics and domestically oriented light-manufacturing properties in major metropolitan logistics corridors while generally delaying investments exposed to near-term trade-policy volatility in northern markets.

At Parque Logístico Callao in Peru, LPA has two facilities under development that will add 440,000 square feet of GLA. The projects were 92% pre-leased and remained on budget and schedule, according to management. Building 200 was nearing completion and is expected to contribute $1.3 million in annual NOI beginning in the third quarter, while Building 400 is expected to contribute $1.6 million beginning later in the fourth quarter. Management said the projects imply development yields of roughly 13%.

During the question-and-answer session, Saldarriaga said the company did not expect another 10% increase in average rent per square foot during the second half because it has fewer leases and re-leases scheduled. He also said Colombia’s improving business sentiment has generated tenant inquiries, but LPA is proceeding cautiously on development there because tenants are still adjusting to higher market rents and interest rates remain elevated.

Saldarriaga also said LPA has no currency hedges in place for its Colombian peso exposure, which represents roughly 20% of the portfolio. Property values are appraised in local currency each quarter, meaning currency changes are reflected quarterly. Smith said currency appreciation can increase asset values while also creating losses on U.S. dollar-denominated debt in local-currency markets.

In closing remarks, Saldarriaga said an Aug. 10 earthquake in western Colombia caused no damage at LPA’s Parque Logístico Calle 80 in Bogotá and that the facility remained fully operational.

About Logistic Properties of the Americas (NYSEAMERICAN:LPA)

Logistic Properties of the Americas (NYSE American: LPA) is a publicly traded real estate investment trust focused on the acquisition, development, and management of Class A industrial properties across the Americas. The company's portfolio comprises modern logistics and distribution facilities strategically located in key markets throughout the United States, Mexico, and Latin America. By targeting high-barrier-to-entry locations, Logistic Properties of the Americas aims to support growing demand from e-commerce, retail, manufacturing, and third-party logistics providers.

Founded in 2020, the company launched its initial public offering in late 2020 and is overseen by a management team with deep experience in industrial real estate and supply chain operations.

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