Real estate in Mexico is once again making headlines,with the Financial Times calling it ‘red hot’ in a recent article. The news comes just weeks after President Enrique Peña Nieto vowed to push a variety of progressive economic reforms through Congress and on the heels of his success in already passing significant reforms in Mexico’s telecom and education sectors.
According to the article,the upcoming reforms could boost Mexico’s annual growth rate past the six percent mark and will fuel already growing demand for more office space,hotels and shopping malls throughout the country. In addition,the introduction of real estate investment trusts (REITs) to Mexico in 2011 has spurred a frenzy of investment in Mexico real estate. Over the last year and a half,REITs and the companies managing them have raised more than $4.6 billion through domestic and foreign investors.
“Like in the U.S.,these new financial vehicles have allowed investors to gain exposure to the property market,” writes the Financial Times. “Meanwhile,real estate developers and managers have been able to raise billions of dollars to purchase,remodel or build different types of properties around the country.”
Also of note,Mexican investment fund Planigrupo Management forked out more than $255 million to buy nine shopping malls throughout the country in late May,following a $31 million shopping mall purchase last November in the northern manufacturing hub of Monterrey. Earlier this month,Canadian real estate company Reichmann International joined with Mexican REIT Fibra Uno to invest more than $165 million in the construction of a 33-story high-rise and commercial tower on Mexico City’s ultra-chic Paseo de la Reforma Boulevard.
In addition,Business Monitor International (BMI) recently released its Mexico Real Estate Report for the second quarter of 2013,which examines commercial,residential,industrial,retail and construction sectors throughout the nation. BMI also predicts that there will be a significant rise in private sector investment and that Mexico will continue to outperform the region,prompted by growth in manufacturing,stronger private consumers and a booming retail segment.
“Mexico’s construction industry continues to progress along a robust path and the outlook is among the most stable in the Latin America region,” writes BMI. “We maintain an overall positive view about the potential of the commercial real estate sector in Mexico over the long term.”