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Mexico Real Estate Investment Trusts (REITs) are Red Hot!

30 September, 2013

Mexico’s version of real estate investment trusts (REITs) are red hot right now and are quickly gaining the attention of savvy investors worldwide. Known as Fideicomiso de Inversión en Bienes Raíces,or FIBRAs,these new investment vehicles are currently drawing foreign investors to buy into Mexico real estate in a whole new way,including both the nation’s hotel and private sectors.

To see more about Mexico real estate,click here.

“Mexican real estate investment trust FIBRA Uno has agreed to buy a portfolio of commercial properties for $1.81 billion,” according to a press release this July. “The deal includes 49 properties with about 10.7 million square feet of leasable space that the REIT expects to generate $1.4 billion in annual revenue.”

In essence,FIBRAs are real estate-focused investment funds that offer investors a safe,easy way to participate in the earnings that are generated by the top properties in Mexico real estate,and they can also provide a variety of tax advantages. 

This July,FIBRA Inn was also in the news,announcing intentions to purchase the Hotel Marriott Real Puebla,which is a leading property in the region of Puebla and will contribute approximately 15 percent of its revenues to the investment trust. FIBRA Inn also acquired Hotel Holiday Inn Puebla La Noria this July,completing its current purchasing plans. In 2012,the Wall Street Journal reports that the hotel had an impressive occupancy rate of 83 percent. In addition,a cash distribution/capital reimbursement payment was announced in August for investors that will cover the period between April 1 and June 30 of 2013 totaling more than $600,000.

“FIBRA Inn has an initial portfolio of 14 high quality hotels and is geographically diverse,located in nine states throughout Mexico,” writes the WSJ. “It is a Mexican real estate investment trust specializing in the hotel industry serving the business traveler.”

Other Mexican REITs to keep an eye on include Macquarie (MMREIT),which consists of 244 industrial properties that are located in more than 20 cities in more than 15 Mexican states. Its second quarter 2013 earnings were released recently,reporting a total revenue of nearly $31 million.

“Our results for the second quarter reflect progress across all elements of our business plan and the continued strengthening of Mexico’s manufacturing sector,” stated the REIT’s CEO Jaime Lara.

Businesswire also reported on the Mexican Terrafina FIBRA,which reported an increase of more than 5.3 percent of its investment properties,an 86 percent rate of contract renewals and a variety of new projects in development. A dividend payment of Ps.0.3289 per CBFI was also made for the period between April 1 and June 30 2013. 

“Terrafina’s portfolio consists of attractive,strategically-located warehouses and other light manufacturing properties,” writes Daily Finance. “It was formed primarily to acquire,develop,lease and manage industrial real estate properties in Mexico.” 

Finally,even the US government is getting in on the action going on with Mexico real estate,via the Government Properties Income Trust,which is a REIT that typically buys up properties that are leased to government agencies throughout the US,but recent market volatility has caused new interest in using the REIT to trade in the Mexican currency as well.