@FibraHotel 2013 Annual Report 2013 Highlights 66Portfolio occupancy rate% 5.6Revenue Per Available Room increase% 20 hotels acquired 2,924 million of Pesos invested in hotels 4,878 20 million of Pesos raised in May 2013 (follow-on) hotels: agreement with Marriott 338 million of Pesos: total distribution to holders 22.8% CBFI return from the IPO (November 2012) to December 2013 (including distributions) 2013 IBRA OTEL Annual Report F H 1 1. Fiesta Inn Aguascalientes This select-service, 125-room hotel is located in the city of Aguascalientes, in the State of Aguascalientes. Located just 20 minutes from the Aguascalientes international air- port and 10 minutes from downtown Aguascalientes, it has easy access to the city’s most important industrial corridor. This hotel is near the Villasunción Shopping Center, as well as various tourist attractions. As of Dec. 31, 2013, the number of employees was 61. 2 Content Page Hotel’s list 4 At the time of this Annual Report, the portfolio of Letter from the Director to Holders hotels in operation was as follows: Num. Hotel Introduction to FibraHotel 6 Page Introduction 6 8 1. Fiesta Inn Aguascalientes 2 The History of FibraHotel 3 8 2. Fiesta Inn Ciudad Juárez Portfolio Evolution 3. Fiesta Inn Ciudad Obregón 6 Structure 10 4. Fiesta Inn Chihuahua 7 8 Management Team 12 5. Fiesta Inn Culiacán 6. Fiesta Inn Cuautitlán 9 13 7. Fiesta Inn Durango 10 Industry overview 11 14 8. Fiesta Inn Ecatepec Hotel industry trends in Mexico 9. Fiesta Inn Guadalajara Expo 12 Market Opportunity 15 10. Fiesta Inn Hermosillo 13 11. Fiesta Inn León 14 15 FibraHotel’s Strategy 16 12. Fiesta Inn Mexicali 16 13. Fiesta Inn Monclova 16 FibraHotel’s Competitive Strengths 17 18 14. Fiesta Inn Monterrey La Fe / Airport FibraHotel’s Strategy 15. Fiesta Inn Naucalpan 18 Acquisitions 21 16. Fiesta Inn Nuevo Laredo 19 20 Developments 22 17. Fiesta Inn Oaxaca 18. Fiesta Inn Perinorte 21 24 19. Fiesta Inn Perisur 22 FibraHotel Portfolio 23 25 20. Fiesta Inn Puebla FINSA Presentation of the FibraHotel Portfolio 21. Fiesta Inn Querétaro 24 FibraHotel Portfolio - Map 28 22. Fiesta Inn Saltillo 25 30 FibraHotel Portfolio – Brands and Operator 30 23. Fiesta Inn Tepic 24. Fiesta Inn Tlalnepantla 31 FibraHotel Portfolio Segments 33 25. Fiesta Inn Torreón Galerías 32 Key Performance Indicators of 33 34 26. Fiesta Inn Toluca FibraHotel’s Portfolio 27. Fiesta Inn Xalapa 34 28. Real Inn Guadalajara Centro 35 Finance section 36 29. Real Inn Morelia 36 37 Financial Results for the year 2013 37 30. Real Inn Mexicali 40 31. One Acapulco 38 Cash flow and liquidity position 39 41 32. One Aguascalientes Capital Expenditures 33. One Coatzacoalcos 40 Cash flow distribution 42 34. One Culiacán 41 35. One Guadalajara Tapatío 42 43 FibraHotel Corporate Governance 43 36. One Xalapa 44 37. One Monterrey Airport 44 Technical Committee and FibraHotel Committees 38. One Puebla FINSA 45 39. One Querétaro Plaza Galerías 46 FibraHotel on the Mexican Stock Exchange 48 40. One Toluca 47 41. One Patriotismo 48 49 Renovations 50 42. Camino Real Puebla 43. Camino Real Hotel & Suites Puebla 50 51 52 44. Fiesta Americana Aguascalientes Post-2013 events 45. Fussion 5 León 52 46. Fairfield Inn Los Cabos 53 Consolidated Financial Statementss 54 47. Valle Grande Ciudad Obregón 54 NOTE: The publication date of this Annual Report is June 30th, 2014. 2. Fiesta Inn Ciudad Juárez This select-service, 166-room hotel is located in Ciudad Juárez in the State of Chihua- hua. It is strategically located nearby the city’s most active commercial and financial district. This hotel is just kilometers from the border with El Paso, Texas, and the In- ternational Airport of Ciudad Juárez. The location makes for easy access to important industrial parks, malls, museums, and entertainment venues. As of Dec. 31, 2013, the number of employees was 46. 2013 IBRA OTEL Annual Report F H 3 Letter from the Director Fiesta Inn Querétaro Fiesta to Holders June 2014 Dear FibraHotel Certificate Holders, 2013 was our first full year as a public FIBRA, and a great one for FibraHotel. As a very young company with strong growth to come during the next couple of years, during 2013 we focu- sed on executing our business plan and setting up the company for long term success. Recapping our most important achievements during 2013, FibraHotel: • More than doubled our number of hotels in operation. We started the year with 18 operating hotels (of which it had taken us 17 years to develop 17 hotels as a private company), and with the transformation to a Fibra, we finished the year with 39 operating hotels and eight hotels under developments reaching a total of 47 hotels. • Transitioned the company from private to public by rounding out our management team and implementing an administrati- ve structure ready to support our growth strategy. • Implemented the double invoicing system, bringing all of our hotels and operators in line with the systems, accounting and ope- rating requirements for Lodging REITs in Mexico. • Proved our organic growth potential, es- pecially targeting room rate growth in real terms. We achieved ADR growth for our ini- tial portfolio of 5.7%, while RevPAR grew 5.6%. Both of these metrics were well above Mexican GDP growth of 1.1%, and inflation of 3.9% • Capitalized the company through a successful US$381million equity offering and signed a MXN $1,000 million revolving credit line. Even though we only expect to use leverage transactionally at this stage, this capital pro- vides the firepower to execute our business plan and reach our goal of FibraHotel 100, or 100 business hotels in the medium term. 4 • Expanded the alternatives in our open ar- where it is difficult to acquire an operating hotel at the right price. De- chitecture, under which we as hotel owners velopments provide us with a higher risk/return component, but we are choose the best operator and brand based very comfortable in managing this risk and that through our real esta- on each specific situation, going from two te relationships we can find unique locations inside multi-use projects operators with three brands, to three opera- that provide a barrier to entry that is difficult to replicate. Furthermore, tors with 11 brands. During 2013 we, signed new developments will help us get higher returns in the medium term a 20-hotel agreement with Marriott Interna- as well as balance our portfolio with new assets and new brands/ope- tional giving us access to their international rators. The main drawback to developing new hotels is that in the near brands, signed a 10-hotel agreement with term, they will be a drag on returns because we will invest the cash that Grupo Real Turismo, and continued streng- we currently have on our balance sheet, and before obtaining a proper thening our relationship with Grupo Posadas return we will have to wait 12-18 months for the hotel construction to adding new brands. be complete and an additional six to 18 months for the hotel to ramp- • Returned through distributions almost MXN up. We understand this risk component in developments, but as the $338 million representing MXN $0.77 per largest shareholder in the FIBRA, I am very comfortable that this will certificate. This, notwithstanding the fact maximize the dividend in the long term and our certificate holders will that for most of the year a very important be properly rewarded in time. part of our balance sheet was held in cash providing a drag on portfolio returns. We will In terms of the market, we continue to believe that the industry dyna- continue focused on returning cash flow to mics as very attractive and that there is an important opportunity to investors through distributions. capitalize on the expected growth of the Mexican economy in the fu- ture through business hotels, and in the organic growth of our existing Even with all of these successes, during 2014 portfolio through the sustainable increase in room rates. The first half we will continue to be focused on executing our of 2013 was stronger than the second half and to date in 2014, but we business plan to maximize the value of FibraHo- continue to expect important room demand growth in Mexico which tel in the following years as we put to work the will be directly benefited by the increased investing in the country both MXN $5,000 million in cash at the end of 2013 by foreigners and locals, as business spending continues to accelerate, and as these investments mature providing us as the general economy grows, and in the medium term as the structu- with attractive returns. ral reforms in Mexico are passed and implemented. Our core investments continue to be business In 2013 the hotel industry in Mexico saw an important increase in hotels in Mexico and are very strict in enforcing focus by both local and international investors with new money and an investment discipline that is value accretive players coming into the market. This availability of capital created cap in the acquisition of stabilized hotels, repositio- rate compression in the market and at times aggressive acquisition pri- ning of existing hotels and development of new ces. In this light, we continue to hold firm in our acquisition discipline hotels. We will continue to only acquire ope- and believe that there continue to be attractive opportunities through rating hotels at a 10% or higher cap rate and our proprietary sourcing. We expect the market to continue growing in do developments of new hotels at a 11-12% or the future years and thus continue to be very focused in hotels that higher cap rate.