Dear investors:
I am delighted to greet you and share with you Acosta Verde's performance during 2022.
Although the effects of the pandemic gradually eased throughout the year, we remained vigilant and, as from day one, guaranteeing the wellbeing of our employees, customers, and visitors continued to be our top priority. Under this context, while complying with all sanitary protocols, we kept contributing to the steady progress of Mexico's COVID-19 vaccination plan during 2022 by placing several Plaza Sendero shopping centers at the disposal of the competent health authorities to serve as vaccination centers. Thanks to these continuing efforts, over 330 thousand vaccine doses were administered throughout the year.
We also followed a prudent approach in the use of our resources, focusing on preserving liquidity and pushing the recovery of our shopping centers' key operating metrics. Therefore, even though we have a positive outlook for the industry, we decided to put on hold the construction of Plaza Sendero Ensenada, in Baja California, until economic conditions become more favorable to confidently meet our profitability standards.
For this reason, we continued to deploy multiple initiatives to drive visitor traffic in our shopping centers for the benefit of our tenants, highlighting i) the “#SEGUROVIENESMAS” campaign, which included the participation of well-known figures from Mexican children's television; ii) the Mega Día Sendero, a countrywide event celebrating the twentieth anniversary of the inception of the Plaza Sendero concept in which we gave away around 40 thousand free products to our visitors in all our shopping centers; iii) the celebration of graduation ceremonies free of charge in our shopping centers' facilities, thus promoting community building with schools and neighbors; and, iv) the Sendero Ofertón, in which we formed alliances with our tenants to provide offers to be exhibited in our shopping centers' aisles in July.
This certainly contributed to strengthen the market positioning of the Plaza Sendero brand among our commercial partners, whose preference for Sendero as their main growth path is reflected in the leasing of much of the space vacated due to the pandemic (93% occupancy in 2022), as well as the 6 stores vacated by Famsa, between 2021 and 2022. Here is worth noting that the new leases were engaged with retailers from a variety of economic sectors in high demand by our visitors (Cuidado con el Perro, Coppel, Gyms and Restaurants).
These efforts have been carried out while caring for the efficiency and quality of our human capital, since the talent of our employees and the sound business culture that defines them is a major strength of Acosta Verde's strategy. For this reason, we continued to promote the professional development of our entry-level workforce (where most of our core staff proudly comes from), as this provides them with a greater awareness of the value generated by the Sendero concept for all our stakeholders.
In this regard, the ongoing efforts of our team resulted in 2022 outperforming 2021, as shown below:
This is even more relevant if we consider that, alongside the challenges of the pandemic, we weathered an adverse economic backdrop marked by rising inflation and higher interest rates, once again, showing the resilience of our business model and the great capacity of the Acosta Verde team to adapt to market conditions.
On another note, in line with our firm commitment to Environmental, Social and Governance (ESG), considering the water shortage affecting certain communities in Northern Mexico, most of our efforts in 2022 were focused on raising awareness about water saving and achieving greater water-use efficiency by reusing water to irrigate green areas, adjusting irrigation schedules, and installing water-saving solutions for sinks and toilets, among other initiatives.
Likewise, being aware that we must follow the best practices worldwide to keep moving steadily forward on the path to sustainable growth, we signed the UN Global Compact to continue supporting and acting on the 10 Principles related to human rights, labor rights, environment, and anti- corruption. And, at the same time, we remained focused on contributing to and promoting compliance with the Sustainable Development Goals of the Global Compact's 2030 Agenda. The foregoing without neglecting the execution of tree planting and carboard recycling campaigns, as well as the ongoing pursuit of strategies to lower energy consumption and improve waste management.
Regarding social responsibility and governance, beyond providing continuous support to our community (employees and myself visited orphanages, hospitals, and nursing homes, among other institutions, to provide support as needed), during 2022: i) we conducted human rights training activities for security staff at all Plaza Sendero shopping centers, seeking to ensure adherence to best practices at all organizational levels within the Company; ii) as I mentioned, several Plaza Sendero shopping centers served as COVID-19 vaccination sites; and, iii) we strengthened our ESG policies by establishing guidelines for environmental, employee health & safety, and supplier ethics issues.
Additionally, in line with our commitment to transparency, we released our second Annual Sustainability Report this year, in which we outlined the efforts and progress made by the Company on ESG issues, aligned with GRI and SASB standards, as well as TCFD reporting recommendations.
Finally, I am convinced that we are on the right track; millions of people continue to choose Plaza Sendero shopping centers as their second home, our customers continue to grow, the Company continues to reinforce the groundwork for the generation of sustainable value, and our employees, Acosta Verde's most important asset, continue to contribute to the brand positioning of the Plaza Sendero shopping centers within the industry with their outstanding commitment, passion, skills, and empathy. And, while we are aware of the lingering challenges for 2023, we are enthusiastic about the opportunities that the nearshoring trends and Tesla's new gigafactory in Nuevo Leon will bring, since more than 70% of our GLA is in regions which are benefiting and will benefit from these investments; mainly in Sendero Santa Catarina, which is only 5 minutes away from the western region where Tesla's new factory will be built.
For all this, we will continue to innovate with the aim of providing the best possible experience for each member of the families visiting our Plaza Sendero shopping centers, as I have no doubt you will surely visit Sendero more often!
Thank you for your trust and support!
Best regards.
Jesús A. Acosta CastellanosCEO of Acosta Verde.