Fibra Sendero postpones IPO as international accounts cool on Mexican real estate funds

Fibra Sendero postpones IPO as international accounts cool on Mexican real estate funds

Mexico Equity

Grupo Acosta Verde’s Fibra Sendero put off its IPO Wednesday, citing market conditions, in a move that comes as international investor demand wanes for Mexican real estate funds.

Six fibras — fondos de inversión en bienes raíces — have tapped the equity market this year, raising 52.36 billion pesos ($4 billion). But the excitement that surrounded the asset class at the time of Fibra Uno’s $1.7 billion January follow-on is now waning.

“Fibras are undergoing an important valuation correction. They should not see the same volume next year as this year,” says a senior ECM banker.

The market needs to digest the existing real estate funds before sizeable new issuance can resume, he says.

Fibra Danhos priced a 5.98 billion peso IPO last month at the bottom of the range, as did Fibra Shop in July when raising 5.46 billion pesos. The pair had traded down 3.7% and 7.3%, respectively, through Wednesday.

US developer Prologis, meanwhile, has yet to launch its deal filed last month.

Sendero’s shopping mall-focused real estate fund was expected to raise around 5.94 billion pesos. The fund has 10 malls in five Mexican states, and aims to acquire land to develop six more.

The strength of the Mexican ECM pipeline for the rest of 2013 remains unclear. Grupo Alfa has prepared initial documents for the IPO of the Sigma food products unit, hoping to price by the end of the year and capture the momentum of Grupo Lala, which raised 14 billion pesos through its October listing.

Brazilian firms, meanwhile, are also hoping for a chance to raise capital. Retailer Via Varejo filed for a follow-on last month, but has held off launching the transaction. Yet travel service provider CVC Brasil Operadora e Agencia de Viagens has seen the opportunity to move forward, launching a 700m real ($299 million) IPO which scheduled for December 5. LF