Corporacion Inmobiliaria Vesta (NYSE:VTMX) reported stronger second-quarter 2026 results, citing higher rental revenue, improved occupancy, active leasing and progress on its Route 2030 development strategy, according to management comments on the company’s earnings call.
Chief Executive Officer Lorenzo Berho said Vesta is “converting demand into leases into occupancy” and turning its land bank into “disciplined development,” despite uncertainty in the global trade environment. Management said Mexico remains well positioned as a manufacturing and logistics platform due to nearshoring, North American supply chain integration and trade flows with the United States.
Leasing Activity Lifts Occupancy
Vesta reported approximately 2.4 million square feet of total leasing activity in the quarter, including about 900,000 square feet of new leases with new tenants and 1.5 million square feet of renewals. Berho said the renewals carried a weighted average lease term of about seven years and a quarterly spread of nearly 217%.
Total portfolio occupancy reached 91.7% at quarter end, up from 89.7% in the first quarter. Stabilized occupancy was 93.7%, while same-store occupancy remained at 95%. Berho said occupancy exceeded 80% in Monterrey and reached 100% in both Mexico City and the Central Southeast region.
Management also pointed to continued pricing power. Renewals and re-leasing activity totaled 1.5 million square feet, with a trailing 12-month weighted average spread of 10.3%. Berho said renewal activity was especially strong in northern markets, where Vesta achieved significant mark-to-market increases.
“Even in markets where vacancy has increased, tenants continue to prioritize high-quality buildings: infrastructure, location, energy availability, and an experienced partner they know can support their long-term operations,” Berho said.
Revenue and Profitability Rise
Chief Financial Officer Juan Sottil said total revenues increased 16.7% year over year to $78.5 million. Revenues excluding energy reached $76 million, up 16.2%, driven primarily by rental income from new leases and inflationary adjustments across the portfolio.
Adjusted net operating income rose 15.6% to $71.5 million, with an adjusted NOI margin of 94%. Adjusted EBITDA increased 15.7% to $63.6 million, with a margin of 83.7%. Vesta FFO excluding current tax rose 6.8% to $46.1 million, compared with $43.1 million in the second quarter of 2025.
Sottil said the increase in FFO was mainly due to higher EBITDA, partly offset by higher interest expense. Pre-tax income was $98.8 million, up from $54.5 million a year earlier, reflecting higher gains from the revaluation of investment properties, higher interest income and higher other income, partially offset by higher interest expense, lower foreign exchange gains and higher other expenses.
At quarter end, Vesta had $404 million in cash and cash equivalents and total debt of $1.2 billion. Net debt to EBITDA was 3.1 times, and loan-to-value was 24.3%. Sottil said the cash position reflected nearly $270 million in gross proceeds from Vesta’s recent equity follow-on offering. The company paid a second-quarter cash dividend on July 15, 2026, equivalent to $0.38 per ordinary share.
Development Pipeline Expands Under Route 2030
Vesta had about 1.8 million square feet under construction at quarter end, representing an estimated investment of approximately $162 million. Projects are underway in Tijuana, Ciudad Juárez, Guadalajara, Querétaro and Mexico City.
Berho said Vesta is activating development in markets where it has strong tenant interest, strategic land and the infrastructure needed to support long-term demand. The company has a land bank of approximately 23 million square feet, which management said provides flexibility to grow in phases.
In the second half of the year, Vesta expects to make significant infrastructure investments on land acquired last year, particularly in Monterrey, Guadalajara and Ciudad Juárez. Berho also said the company expects to begin new construction projects in Monterrey, Guadalajara and select northern markets as demand develops.
During the question-and-answer session, Berho said Vesta raised approximately $300 million in equity earlier in the year to support a broader investment plan tied to Route 2030. He said projects include Vesta Park Monterrey, Vesta Park Guadalajara 1 and 2, Mexico City, Tijuana and Ciudad Juárez, with the remaining capital expected to come from debt and retained earnings. He added that Vesta has historically invested at a pace of about $300 million per year, though the company does not provide specific CapEx timing guidance.
AI, Data Centers and Advanced Manufacturing Drive Demand
Berho said demand across Vesta’s portfolio is increasingly coming from light manufacturing, electronics, AI-related infrastructure, logistics, aerospace, automotive and other higher-value sectors. He said AI adoption and data center investment are influencing industrial demand for electronics, components, cooling systems, power infrastructure, logistics and specialized manufacturing.
In response to a question from Rodolfo Ramos of Bradesco BBI, Berho said Vesta is seeing strong demand in Guadalajara, Ciudad Juárez and Tijuana for electronics tied to data center infrastructure. In Guadalajara, he said some players are working with large hyperscalers to prepare servers and digital infrastructure for data center buildouts.
Berho also said demand is coming from manufacturers of air conditioning units, fans, ventilators, cabling equipment and electrical panels needed for data centers, benefiting markets such as Monterrey, Tijuana and Ciudad Juárez.
On the automotive sector, Berho said Vesta continues to see demand and recently signed new leases in automotive-related markets. He said the existing automotive supply chain continues to adapt to new North American requirements and that Mexico remains competitive for manufacturing integrated with original equipment manufacturers in Mexico and the United States.
Management Addresses Market Conditions
Analysts asked about the USMCA, market softness in San Luis Potosí, leasing spreads, construction costs and government support for industrial real estate. Berho said companies are seeking clarity on future trade rules, but he added that Vesta continues to see demand and companies setting up operations in Mexico because of its relative competitiveness.
On San Luis Potosí, Berho acknowledged it has been a slow market, with occupancy at 65% cited in the question, but said Vesta saw a stronger pipeline during the quarter and that rents have maintained their levels.
Regarding leasing spreads, Berho said Vesta believes recent growth is sustainable this year and possibly over the next couple of years, supported by demand for quality buildings with infrastructure and energy availability. Sottil said construction costs have not increased in a way that concerns management and said development spreads remain solid.
Looking ahead, Sottil said Vesta is comfortable with its guidance, while noting that second-half leasing activity will be compared against a strong second half of 2025. Berho concluded that Vesta enters the second half with a strong balance sheet, secure land bank, active development pipeline and continued tenant demand from industries requiring infrastructure, energy availability and scalability.
About Corporacion Inmobiliaria Vesta (NYSE:VTMX)
Corporación Inmobiliaria Vesta, trading as VTMX on the New York Stock Exchange, is a Mexico-based real estate investment trust (REIT) specializing in the development, acquisition and management of industrial properties. The company’s portfolio primarily consists of warehouses, distribution centers and manufacturing facilities tailored to multinational corporations, logistics operators and other businesses seeking modern, well-connected industrial space in Mexico.
Vesta’s core business activities include the design and construction of build-to-suit projects, the leasing of speculative and multi-tenant properties, and sale-leaseback transactions that convert existing facilities into long-term lease arrangements.
