FIBRA Prologis First Annual Report is Here
FIBRA Prologis’ inaugural annual report demonstrates that its first six months of operations have set the stage for future growth, positioning the fund to capitalize on economic conditions in Mexico favorable to logistics, manufacturing and export businesses.
FIBRA shares trade on the Mexican stock exchange and pay out 95 percent of their taxable income as dividends. First launched in Mexico in 2011, FIBRAs have proven popular with institutional and retail investors alike.
FIBRA Prologis began trading on the Mexican Bolsa in 2014. Its initial portfolio of nearly 30 million square feet was seeded with properties from the Prologis Mexico portfolio. Today, FIBRA Prologis is the leading owner and operator of Class-A industrial space in Mexico. The portfolio began to grow almost immediately after the fund was launched, with the acquisition of a 1.6 million square foot portfolio in two of the country’s most dynamic population centers—Mexico City and Guadalajara, plus a 166,000 square foot development project in Mexico City.
Although the fund is new, the executive team has been together for more than 25 years, noted Jorge Girault, chief financial officer. In addition, having Prologis as a sponsor is a clear positive. “Not only do we benefit from the group’s experience and knowledge,” says Girault, “but we also share a relationship with Prologis’ global tenants.”
With Prologis as its external manager (in compliance with Mexican regulations), the fund brings its sponsor’s high standard of corporate governance to the FIBRA, which “instills confidence in our investors,” said Girault. The fund uses NAREIT metrics and language, which are already familiar to international investors.
Moving into its second year, FIBRA Prologis has a strong platform for continued growth, driven by available liquidity of $304.8 million at the end of first quarter 2015 plus access to Prologis’ land bank. In addition, the annual report notes that 84 percent of revenues are dollar-denominated, which protects the fund from fluctuations in the peso while providing access to cheaper dollar-denominated debt.
With growth in the domestic Mexican economy plus strong export demand from the U.S., there is significant upside for high-quality logistics and manufacturing space in the country, particularly in the key markets where the fund is already active.
FIBRA Prologis focuses primarily on Class-A properties in the country’s most dynamic markets: Mexico City, Guadalajara, Monterrey, Tijuana, Ciudad Juárez and Reynosa.