Biggest IPO in 5 years anticipated on Mexican stock exchange

November 1, 2023

951d8562358bead169f5194b59f24b43 — Real estate investment trust Fibra Next is set to become the largest IPO on the Mexican stock market since 2018. (Sordo Madaleno)

The Mexican Stock Exchange (BMV) could soon see its biggest initial public offering (IPO) since 2018.

Mexican real estate investment trust Fibra Nearshoring Experts and Technology, or Fibra Next, plans to launch its IPO this year, according to Oct. 19 filings with the BMV.

Fibra owns much of Mexico’s commercial real estate. (Fibra Uno)

Bloomberg reported Tuesday that Fibra Next – made up of assets of parent trust Fibra Uno, Latin America’s largest real estate investment trust – “is planning to raise as much as [US] $1.5 billion in what would be Mexico’s biggest initial public offering since 2018.”

That information, the news agency said, came from people familiar with the deal.

Bloomberg said that Fibra Next’s primary offering in Mexico will be backed by industrial and warehouse properties. The creation of the trust was approved by investors last month to take advantage of the nearshoring trend, according to Reuters, which also cited a draft notice saying that Fibra Next would comprise 196 properties.

According to the Bloomberg sources, Fibra next has hired banks and recently held meetings with investors. But the unidentified people said that a firm date for the IPO hasn’t been set.

Prologis warehouse — Increased demand for commercial space as a result of nearshoring has seen the value of Fibra skyrocket in recent months. (Prologis/Twitter)

Reuters reported that BBVA, Merrill Lynch, BTG Pactual, J.P. Morgan and Citigroup’s Mexico arm are managing Fibra Next’s offering.

The new trust is headed up by Raúl Gallegos, an executive with Credit Suisse and president of the Mexican Association of Private Capital, or Amexcap.

Bloomberg reported that the Fibra Next IPO will follow “a handful of offerings that have injected some life into Mexico’s stock market” after an extended period in which no new companies listed on the BMV and some firms exited. Aeroméxico formally exited the BMV last December.

By placing some of its properties in a new real estate investment trust, Fibra Uno is seeking to take advantage of growing demand for factories, warehouses and industrial parks in Mexico, according to Bloomberg.

Numerous foreign companies have recently announced plans to relocate to Mexico or expand their existing operations here.

As it seeks to capitalize on the nearshoring opportunity, the federal government last month announced tax incentives aimed at boosting investment in Mexico.

With reports from Bloomberg, Reuters and El Economista