Ciudad Juárez and Tijuana: Key Markets for FIBRA Upsite’s Multi-Million Dollar Investments Toward 2030

FIBRA Upsite is accelerating its industrial expansion in Mexico by drawing $29.2 million from its global credit line to advance key projects aligned with nearshoring and USMCA opportunities.

With favorable credit conditions and a focus on acquiring and developing strategic land in regions like Tijuana, Ciudad Juárez, and Naucalpan, the company’s capitalization strategy is designed to drive real estate growth through 2030.

Rodolfo Balmaceda García is the CEO of FIBRA Upsite. Photo: SiiLA.

By: SiiLA News

09/27/2024

FIBRA Upsite has taken a critical step in strengthening its industrial portfolio in Mexico. Recently, the company accessed $29.2 million from its global credit line to finance land acquisitions and the development of new projects, particularly in the Bajío region, known for its automotive and aerospace industries, and northern Mexico, a key area for manufacturing and logistics. This financing, which is part of a total $150 million credit facility, is a cornerstone of an ambitious investment plan designed to capitalize on nearshoring and USMCA opportunities through 2030.

This loan offers favorable terms for FIBRA Upsite. With a fixed interest rate of 5.9% and a seven-year term, the trust will only pay interest during the first two years, allowing it to focus resources on new investments. Starting in year three, the principal will be amortized over 25 years, providing long-term financial flexibility and minimizing immediate pressures that could affect expansion plans.

These credit terms align with the company’s debt strategy. According to data from SiiLA FIBRA Analytics and the company itself, FIBRA Upsite’s debt level stood at just over 30% by the end of the second quarter of 2024, well below the internal policy limit of 50%. This gives the company ample room to continue financing projects without compromising financial stability while continuing to invest in strategic projects.

Expansion and Land Reserves

Like this BTS property, FIBRA Upsite’s industrial facilities in Tijuana underscore the company’s significant commitment to invest in Mexico. Photo: FIBRA Upsite.

As part of its growth plan through 2030, FIBRA Upsite’s capitalization strategy includes raising $250 million in 2024 through the issuance of 50 million additional real estate certificates, bringing the total authorized certificates to 150 million, along with taking on up to 5 billion pesos (approximately $283 million) in debt. These funds will be directed towards developing its land reserves in key regions such as the Bajío and Naucalpan and acquiring land in Tijuana and Ciudad Juárez.

These regions are critical for the trust, as its land reserves in Ciudad Juárez and Tijuana have been depleted. Currently, 99% of the company’s remaining reserves are located in Querétaro and Guanajuato, with 1% in the State of Mexico. By the end of the second quarter of 2024, FIBRA Upsite reported 624,719 square meters of reserves, with a development potential of 284,767 square meters of gross leasable area (GLA).

Ciudad Juárez and Tijuana also account for 84% of FIBRA Upsite’s industrial GLA, with the remainder located in Tlaxcala. The company currently holds ten properties with a combined GLA of 205,335 square meters. This portfolio is fully occupied, driving significant revenue growth. In the second quarter of 2024 alone, the trust saw a 52.6% increase in leasing revenue, reaching 65.16 million pesos (approximately $3.7 million), reflecting the growing demand for industrial space in Mexico.

In a global context where Mexico plays a key role in supply chains, FIBRA Upsite invests not only in land and buildings but also in the country’s industrial future. While nearshoring and the USMCA present opportunities, they are tempered by economic recession concerns and uncertainties related to the rule of law at the national level. Nevertheless, the confidence shown by institutional investors, including FIBRAs, indicates that betting on Mexico ultimately means betting on its ability to adapt and grow amidst uncertainty.

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