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Mexico real estate: A matter of trust

Mar 1, 2013

Mexican Fibra funds are growing in size and popularity. But quality management and properties will be key to replicating the success of US REITs

By Ben Miller

In late January, Mexico's Fibra Uno real estate fund issued in the equity capital markets for the third time, raising $1.7 billion - a record for the young asset class. With more than $5 billion in demand, the fund became the first Mexican equity issuer in history to exercise a so-called hot issue - 20% overallotment at the issuer's discretion - in addition to the more commonplace greenshoe, which is 15% at the underwriters' choice.

The return of the oldest Fibra, or Fideicomiso de Inversión en Bienes Raíces, followed the debuts of two funds in December. The Mexican investment arm of Australia's Macquarie raised $1.17 billion in LatAm's largest-ever real estate IPO, and hotel-focused Concentradora Fibra Hotelera raised $318 million. Investors, particularly the international buyers that can take the size of an equity sale from medium to large, seem finally to be comfortable with the asset class...

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