“To boil it down very simply,in the famous words of Mark Twain,'Buy land,they’re not making it anymore," stated Richard Houghton of Investment Properties Mexico. “Of course,the more beautiful and coveted the land,the sounder the investment,and I don’t know of any land more beautiful than what can be found in parts of Mexico.”
Of course,there’s more to it than just this. For example,the real estate market in Mexico has been a strong area of focus for institutional investors for more than 20 years,as the U.S. market reached a level of real maturity that started to impact yields and cap rates. In turn,this prompted real estate investment trusts (REITs) and real estate investment managers from both the U.S. and Europe to start looking south of the border at what real estate in Mexico can offer in terms of growth.
During the mid-1990s,as a new wave of industrial expansion hit Mexico following the signing of the North American Free Trade Agreement (NAFTA),U.S. institutional investors began leasing industrial facilities in Mexico to AAA-rated companies at great rates,which amounted to a safe – not to mention savvy – real estate investment opportunity.
“Since then,real estate in Mexico has skyrocketed,” revealed Houghton. “From multi-billion dollar investment platforms in commercial,industrial and residential real estate,to investing in some of the world’s most stunning and exclusive resort properties and beachfront developments,the Mexican market is proving to be a real boon for investors worldwide.”
Perhaps the most exciting thing about real estate in Mexico right now is that the market has yet to mature,and while Twain may have been right when he observed that they’re not making land anymore,Mexico is still growing and there is plenty of property still ripe for development,especially in popular tourist destinations like the Riviera Maya and Cancun.
Known locally as FIBRAs,real estate investment trusts in Mexico are a big part of current investment dollars flowing into the sector. Since its launch in 2013,Mexico’s FIBRA market has attracted an impressive number of foreign investors,who view these vehicles as a safe and practical way to take part in the growth of Mexico’s real estate sector. Larger FIBRAs,such as FIBRA Macquarie,FIBRAUno and TerraFina have already amassed enormous portfolios that include commercial,industrial and retail properties,while other FIBRAs have focused on accumulating a diverse array of assets,such as resorts,boutique hotels,raw land or Mexico’s growing residential real estate market.
Last but not least,a number of visionary new developers are beginning to invest in Mexico’s housing market,including luxurious condominium developments,rental properties and more,offering totally modern infrastructure and a staggering list of amenities buyers would be hard-pressed to find in similar beachfront locales worldwide.