Mexican real estate investment trust Fibra Prologis has become the biggest player in the nation’s real estate sector upon completing the acquisition of a majority share of Fibra Terrafina, a move that positions Fibra Prologis to capitalize on the growing nearshoring trend.
Fibra Prologis closed on its tender offer proposed on May 17, acquiring 77.4% of Fibra Terrafina’s shares via an unspecified amount of cash and an exchange of CBFIs — certificates of participation in the assets that comprise a FIBRA’S property portfolio, a type of security that can be traded as easily as stocks.
Fibra Prologis — sponsored by the San Francisco-based Prologis Inc., the global leader in logistics real estate — outbid Fibra Macquarie, which had increased its original offer in mid-June.
“This investment comes at a unique moment for Mexico, and it demonstrates our long-standing commitment to one of our most important markets,” said Dan Letter, president of Prologis. “We appreciate the vote of confidence by Terrafina’s stakeholders in the quality, sustainability and global connectivity of Fibra Prologis’ logistics portfolio and in our shared future success.”
Héctor Ibarzabal, Fibra Prologis’ chief executive officer, said securing a majority shareholder position in Fibra Terrafina is good not only for shareholders and customers but also for Mexico’s economy.
“Our company’s scale, operational expertise and investments provide an excellent platform to drive Fibra Prologis and Terrafina’s business growth and shared success while strengthening Mexico’s economic prospects and position as an international trade partner,” he said, according to a Prologis press bulletin.
Fibra Terrafina manages approximately 42.2 million square feet of industrial real estate, including 288 industrial warehouses across several key Mexican markets.
What are FIBRAs?
Fibra Prologis features 236 Class-A logistics and manufacturing facilities in six industrial markets in its Mexico portfolio, according to the company, with holdings totaling nearly 47 million square feet of gross leasable area.
About 70% of these properties are located in consumption-driven markets, and about 30% are located in manufacturing-driven markets.The company is a leading owner and operator of Class-A industrial real estate in Mexico.
Class A properties are generally defined in the industry as the most desirable investment-grade pieces of real estate in their market and geographical area.
A FIBRA, or Fideicomiso de Inversión en Bienes Raíces (Real Estate Investment Trust) is a financial vehicle focused both on the acquisition and construction of real estate that is rented in Mexico. It distributes through quarterly dividend payments at least 95% of the profits it derives from rents or property sales.
It is similar to REITs in the U.S., or Real Estate Investment Trusts, which allow investors to earn income from real estate without having to buy, manage or finance properties themselves.
Prologis arrived in Mexico 25 years ago, a move that represented its first international expansion. The company continues to grow its business in the market.
In June 2023, Fibra Prologis announced plans to invest US $700 million in warehouses and parks and, in October of last year, the company acquired two buildings from its parent company that are located in Ciudad Juárez and Monterrey, for an aggregate purchase price of US $106 million, including closing costs.
With reports from El Economista, El Financiero and Bloomberg Online
