Real estate investment trusts more mainstream in Mexico

The trusts, or “fibras”, were introduced to the Mexican market in 2011, with other trusts joining the Fibra Uno the following year. By the end of 2012, Fibra Uno had gone from 13 properties on its portfolio to 279.

Now, REITs are becoming more popular with domestic and foreign investors, outperforming the wider stock market.

Indeed, the Fibra Uno is now up 12.8 per cent year-on-year compared to the stock index’s 0.75 per cent. Other trusts have seen even higher growth.

“The attraction at the heart of the fibra is the ability to invest in property without having to buy a building,” Andre El-Mann, chief executive of Fibra Uno, told Reuters .

Analysts added that Mexican business properties look more attractive than other countries such as Chile and Brazil, with Mexico City rents now 40 per cent below Sao Paulo.

The fibras’ success follows the President’s new ambitious reforms for the country’s economy, which has stimulated interest in the Mexican financial sector. Where families previously owned Mexican property, private groups are becoming increasingly commonplace in the market. Some experts predict the growth will continue, with another 20 new fibras expected to be introduced by 2018.

 

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