FIBRA Monterrey Acquires Zeus Real Estate Portfolio for $662M, Doubling Portfolio and Joining Top 5 REITs in Mexico

FIBRA Monterrey which manages, develops, and operates industrial, office, and retail properties in Mexico, has acquired the Zeus Real Estate Portfolio for $662 million dollars. The portfolio comprises 46 industrial buildings across 11 Mexican states, with a total gross leasable area (GLA) of 822,052 square meters, and a land reserve of approximately 882,723 square meters.

On March 29, 2023, FIBRA Monterrey released a statement regarding the recently acquired portfolio and projected a net operating income (NOI) of approximately $53.3 million, which according to SiiLA Market Analytics research results in a 8.05% portfolio cap rate (considering the land reserve for future projects). The REIT also noted that 92% of the in-place rents are in US dollars and that the acquired properties have a 99.2% occupancy rate. The addition of the Zeus Real Estate Portfolio is expected to boost FIBRA Monterrey's annualized NOI by more than 80% as analyzed by SiiLA FIBRA Analytics.

The portfolio boasts major tenants such as Aztek Technologies, IAC Group, Veritiv, NBHX, Omnilife Group, BOS Group, Inteva Products, and ABC Aluminum Solutions.These companies now join the FIBRA’s already impressive client portfolio, which includes major tenants such as Whirlpool, Walmart, and DHL, as reported by SiiLA.

FIBRA Monterrey has reported that it used a combination of three funding sources to cover the costs associated with the acquisition of the Zeus Real Estate Portfolio, which amounted to $662 million, as well as transaction taxes totaling $105.7 million. The funding sources included syndicated credits and revolving credit lines, which provided $353 million, $341.4 million in cash from preferred stock (CBFI's) subscriptions, and $73.3 million in remaining cash reserves.

The acquisition of the Zeus Real Estate Portfolio has significantly expanded FIBRA Monterrey's portfolio and market presence. The transaction effectively doubled the size of the REIT's portfolio and elevated it to one of the top five largest Mexican REITs in terms of area. The acquired properties are strategically located across different markets, including 24 in Mexico’s northern markets, 13 in the Bajio Region, and 9 in other markets such as Guadalajara and Puebla. One example is building three of the FINSA Aguascalientes industrial park with an occupancy rate of 100%. With its expanded presence and strategic location, FIBRA Monterrey is well-positioned to capitalize on the growing demand for industrial real estate in Mexico.

According to SiiLA FIBRA Analytics data, the acquisition of the Zeus Real Estate Portfolio by FIBRA Monterrey will result in a portfolio readjustment. The REIT's industrial properties, previously accounting for 76% of the total area, will now represent 89%, while office and retail properties will decrease from 24% to 11% of the company's total owned area. FIBRA Monterrey stated that this realignment reflects the REIT's dedication to actively participate in Mexico's industrial market, driven by the regionalization of global supply chains or Nearshoring, which it believes will be the primary driver of Mexico's industrial and economic development in the coming years.

As FIBRA Monterrey continues to invest and expand its industrial portfolio, it expects to see steady and profitable growth. SiiLA will be closely monitoring the performance of FIBRA Monterrey and other Mexican REITs. If you want to learn more about investing in commercial real estate and FIBRAs, visit our website to learn more about our solutions for FIBRA investors, or contact us at contacto@siila.com.mx for more information.