@FibraHotel Annual Report 2016 2016 Highlights 2.2 Million hotel room nights 67.2% Stabilized portfolio occupancy rate +12.3% Stabilized portfolio RevPAR increase 75 Operating hotels 10 Hotels under development 503 Million distributed to CBFI holders 1,749 Million pesos invested in hotels 2,697 Million: financial debt as of December 31st, 2016 +62bps Increase in lodging contribution margin for managed hotels (2015 comparable perimeter) Live Aqua Monterrey Valle 4 Annual Report 2016 AC by Marriott Guadalajara Marriott by AC Page 6 Letter from the CEO 8 Introduction to FibraHotel 8 Presentation 9 FibraHotel History 10 Structure 11 Senior Management Team 13 Industry overview 15 Market Opportunity 16 FibraHotel Strategy 16 Competitive Advantage 18 Strategy 20 Acquisitions Content 21 Development 24 FibraHotel Portfolio 24 Presentation of the FibraHotel Portfolio 26 Portfolio Map 31 Brand Affiliations 33 Hotel Segments of the FibraHotel portfolio 31 Operational indicators of the FibraHotel portfolio 36 Financial section 36 2016 Financial Results 41 Cash flow and liquidity 43 Capital Expenditures 44 Cash distribution 45 FibraHotel Corporate Governance 45 Technical Committee and FibraHotel Committees 47 Long-term alignment of interest 48 FibraHotel on the Mexican Stock Exchange 48 CBFI price 48 Stock ownership 49 Post-2016 events 50 Consolidated Financial Statements NOTE: The publication date of this Annual Report is May 31st, 2017. 5 n 2016, FibraHotel finished its first Americana Pabellon M, AC by Mar- Letter inorganic growth phase as we riott Queretaro and AC by Marriott Iopened an important number of Guadalajara, which added over 800 hotels that we had been develop- rooms and represented an invest- from ing during the past few years. These ment of over 1.6 billion pesos. hotels, along with additional actions the CEO taken by management during the FibraHotel’s current portfolio com- year, will support AFFO growth per prises 85 hotels with 12,000 rooms, Dear certificate for the coming quarters an impressive achievement if you FibraHotel and years. I would like to highlight take into account that only four years certificate five full-service hotels out of these ago it included 17 hotels and 2,500 holders: openings which complement our rooms. During 2016 alone, our inor- portfolio with highly valuable stra- ganic growth investment was more tegic assets. These hotels are Live than 2.5 billion pesos through the Aqua Monterrey Valle, Grand Fiesta acquisition of two hotels with 397 Americana Monterrey Valle, Fiesta rooms, the opening of 11 hotels with 1,518 rooms from the development portfolio and we also added four new development hotels with 660 rooms. May 2017 These assets diversified our portfo- lio with hotels in mixed-use projects with seven different brands across all service categories and with signif- icant exposure to gateway cities such as Monterrey, Mexico City, Guadala- jara and Queretaro. Our first growth phase took us a couple of years to achieve as we developed landmark hotels in mixed-use projects and gateway cities, and we are certain that this growth phase will be in the best long-term interest of our share- holders as we were able to round out our portfolio, improve its quality and prove our open architecture model as we now have over 2,000 rooms with international brands and over 2,000 full service rooms with agreements based on a mostly variable fee. From an operating perspective, 2016 was again a record year for our hotels with a RevPAR growth of over 12% for 2016 AC by Marriott Querétaro Annual Report Annual 6 comparable properties and reaching an average occupancy of the stabi- lized portfolio for the year of 67%. This organic growth continues to be a key component of FibraHotel’s suc- cess and it will continue to provide tailwinds in recently opened hotels and hotels going through their sta- bilization period. In the past couple of years we have seen a very healthy and dynamic lodging market in Mex- ico with significant RevPAR growth across all sectors and regions. The highest growth areas continue to be the north and the Bajio regions and gateway cities including Mexico City, Monterrey and Guadalajara. These positive operating results are further highlighted by our diversified port- folio across 26 states with different underlying dynamics. Our operating Courtyard Cd. del Carmen team continues working on raising average daily rates and maintaining Regarding growth, for 2017 we have six new hotel open- a leading penetration of our hotels in ings, three of which have already opened and three more their respective markets. that will open by the end of the year. For 2018 and going forward we have an additional batch of full-service ho- In 2017, we will focus on stabilizing tels currently in process until the core and shell of the recently opened hotels, pushing fur- buildings are finished. Depending on market conditions ther RevPAR growth and focusing on we will continue the development of these hotels and strong cost control to improve mar- open them during the next few years. Our growth strat- gins. The recent merger between egy continues to target hotels inside mixed-use projects Marriott and Starwood will help sup- with high barriers to entry that will improve quality and port these objectives by providing diversification of our portfolio. us with a larger partner in Mexico, as the two companies together will During 2016, we distributed more than one peso per have a better distribution network certificate to our holders. Additionally, during our and larger operating structure in the fourth annual investor day event, we announced for country. I am very proud of the man- the first time an AFFO growth guidance of 25% for 2017. agement team we have assembled at I would like to thank all our certificate holders, em- FibraHotel, which I believe is the best ployees, and operating partners for the strong effort in the industry and that it along with put together in 2016, which represented an important our structure offers a good platform step in consolidating the company and positioning it for future growth. for further future success. Simón Galante CEO FibraHotel 7 development of new hotels. This strong ex- pansion meant that in terms of geographic, segment, operators and brands, by December 31st, 2016, FibraHotel’s portfolio was comprised by the following: > 75 hotels in operation: • 62 hotels owned by FibraHotel as of De- cember 31st, 2015. • Two hotels acquired during 2016. • 11 new hotels that opened during 2016 and were part of the development portfolio of FibraHotel as of December 31st, 2015. > 10 hotels under development. As of the date of this Annual Report, the FibraHo- tel portfolio comprises 85 hotels (78 in operation and seven under development) thanks to the opening of three hotels from the development Introduction portfolio during the first months of 2017. The hotels are located in 26 Mexican states and are associated with strong hotel brands, which to FibraHotel provide significant advantages and increased de- mand because of their i) service quality, ii) loyalty programs, iii) modern reservation systems, iv) national and international distribution channels, and v) growing demand from travelers in Mexico. Presentation FibraHotel continues to expand its brand port- FibraHotel is a Mexican trust created primarily to own, ac- folio through development and acquisitions. quire, develop and operate hotels. FibraHotel is a Real Estate In 2016, FibraHotel added to its portfolio the Investment Trust (REIT), known as Fideicomiso de Inversión en following brands: Live Aqua and Grand Fiesta Bienes Raíces (FIBRA in Spanish) and is listed on the Mexican Americana operated by Grupo Posadas, and AC Stock Exchange (Bolsa Mexicana de Valores). The trust is the by Marriott operated by Marriott International. first lodging REIT in Latin America and the best-positioned as FibraHotel’s portfolio offers lodging services owner of one of the largest and most diversified hotel portfo- across the country to business and leisure trav- lios in Mexico. elers. Most of its hotels are located in strategic sites with significant business and industrial FibraHotel’s objective is to provide attractive returns to its CBFI activity, and are located inside or near mixed- holders through stable cash distributions and real estate value use projects such as regional shopping centers, appreciation. In addition, FibraHotel will strive toward a high- business centers, industrial parks, airports and quality portfolio through affiliations with different brands, bus terminals, among others; thus offering our prestigious operators as well as geographic diversification and guests access to a large variety of amenities segmentation. and services. FibraHotel owns the real estate and equipment of each hotel, Part of our development portfolio, including the as such, it does not operate hotels or own hotel brands. This Fiesta Americana Viaducto, Fiesta Americana Ve- open architecture makes it possible to maximize the cash flow racruz, Fiesta Americana Tlalnepantla and Live of each asset by working with various operators or brands best Aqua San Miguel de Allende hotels, are current- suited to each specific hotel. ly advancing construction only until the core and shell of the building. FibraHotel will deter- FibraHotel was established in late 2012, with a portfolio of mine the best time to finish and open the hotels 30 operating hotels and four hotels at different stages of de- based on macroeconomic conditions and when velopment. Since then, FibraHotel has experienced sustained FibraHotel considers it is the appropriate time to 2016 growth through a mix of acquisitions of operating hotels and invest and generate value to the portfolio. Annual Report Annual 8 FibraHotel History Main events since the creation of FibraHotel until December 31st, 2016: July 31st, 2012: the Trust is formed. November 30th, 2012: FibraHotel Initial 2012 Public Offering on the Mexican Stock Exchange.