This year, FIBRA Soma proudly announced that the construction of the Antara Expansion in Mexico City had reached an overall progress of 48%. This meticulously planned expansion, scheduled for completion in 2025, will add approximately 90,000 square meters of gross leasable area (GLA) to the mixed-use project in the Polanco submarket, which has been under development for nearly 18 years and includes around 231,200 square meters of office, retail, and hotel space.

According to data analyzed by SiiLA, the Antara Expansion project will include over 50,300 square meters of corporate space and nearly 31,000 square meters of retail space, featuring an anchor store and 76 retail units. Additionally, the lower floors of the corporate tower will house 133 rooms and suites from the prestigious Rosewood Hotels & Resorts chain.

The impact of this project on the real estate trust's portfolio will be transformative, significantly increasing its office GLA by 30%, its hotel GLA by 16%, and its retail GLA by 5%. This substantial growth is a clear indication of the company's commitment to diversifying its portfolio and seizing new opportunities, particularly since the pandemic.

Currently, FIBRA Soma's operational and developmental GLA is focused on retail assets, which represent 72% of its more than 795,500 square meters. The remainder is divided between office space and hotel rooms, which account for 21% and 7% of the GLA, respectively.

The trust's strategic diversification will protect its income and maintain liquidity, mitigating the risk of relying on a single asset type. This is reflected in the company's rental income, which derives 63% from retail assets, 20% from offices, and 17% from the hotel sector.

Funding Sources for Antara Expansion

As of March 2024, FIBRA Soma owned 84.7% of the Antara Expansion. To increase its stake, the company utilized two sources of capital: issuing Real Estate Trust Certificates (CBFIs) and securing bank debt.

SiiLA FIBRA Analytics data indicates that between the last quarter of 2023 and the first quarter of 2024, the trust issued just over 8.5 million CBFIs, equivalent to a capitalization of 420.6 million pesos (around 24.8 million dollars). Additionally, in 2021, the company secured a loan of 3,125 million pesos, of which 993.6 million pesos (nearly 58.6 million dollars) are still owed.

These operations increased FIBRA Soma's outstanding CBFIs by 1% and its debt by approximately 16% since the first quarter of 2021, closing March 2024 with a debt level of around 14,900 million pesos (around 878.3 million dollars) and a loan-to-value ratio of 23.6%. These figures indicate that the company has effectively managed its capital to finance its projects and increase its stake in the Antara Expansion while maintaining a moderate leverage level.

The Weight of FIBRA Soma

FIBRA Soma's involvement in the Antara project has been a journey of steady growth. It began in 2006 with the development of Antara Fashion Hall, the commercial core of the project. Between 2012 and 2014, the company participated in developing the project's first two corporate sections, and between 2016 and 2018, it began constructing an expansion that included two towers. The current expansions of the corporate and retail sections are on track to be delivered in the coming years, marking another milestone in the project's development.

Thanks to these and other projects, which include 330,000 square meters of GLA under development, equivalent to 70% of the company's operational GLA, FIBRA Soma anticipates improving its position relative to other investment vehicles. According to SiiLA, FIBRA Soma's office portfolio is the second largest among the six of the 16 major FIBRAs in Mexico with corporate-use properties, representing 17% of the GLA. In the retail sector, including hotels, it ranks fourth among eight, with 9%.

In terms of commercialization, Antara's expansion is expected to significantly boost the company's finances. According to the trust, there is already interest in more than 100% of the office GLA and nearly 90% of the retail GLA, indicating strong demand. Contracts have been signed for approximately 25% of the retail GLA, and syndicated loan agreements for the hotel are being drafted, with formalization expected in the second quarter of 2024.

For more information on the development and performance of FIBRAs in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.