FIBRA Hotel Sells Gamma Guadalajara for $8 Million, 45% Above Book Value

FIBRA Hotel, the first real estate investment trust (REIT or FIBRA) specializing in Mexico's hotel sector, completed the sale of Gamma Guadalajara Hotel for 135 million pesos (nearly $8 million). This figure represents a 45% increase over its book value, which stood at 93 million pesos (around $5.5 million) at the end of the first quarter of 2024.

The net proceeds from the sale of Gamma Guadalajara Hotel will be used to reduce FIBRA Hotel's debt. This transaction, involving the transfer of 195 rooms, adjusts the trust's portfolio, which now includes 85 hotels with 12,360 rooms.

According to SiiLA, the hotel has been part of FIBRA Hotel's portfolio since August 1, 2013. Originally named "Real Inn Guadalajara," it was renamed "Gamma Guadalajara" in the second quarter of 2018 and has been operated by Grupo Posadas since July 1 of the same year.

FIBRA Hotel's Debt

In 2024, FIBRA Hotel plans to invest between 400 and 600 million pesos ($24 to $35 million) in inorganic growth strategies to strengthen its portfolio. This contrasts with the 597 million pesos allocated by the trust in 2023, mainly for capital expenditures (CapEx) for maintenance, development, and hotel renovations.

REITs in Mexico, such as FIBRA Hotel, typically finance their investments by issuing Real Estate Trust Certificates (or CBFIs) and acquiring stock and bank debt, providing them with diversity and flexibility in their financing options. By employing various financing methods, REITs can reduce risks and enhance their ability to efficiently manage and develop their real estate portfolios.

In this financial context, as of the fourth quarter of 2023, FIBRA Hotel recorded bank and stock debt of just over 4.39 billion pesos (nearly $260 million), equivalent to 24.9% of the total value of its assets. This level of indebtedness, considered prudent, effectively supports its investment and growth strategy in the hotel sector.

According to SiiLA FIBRA Analytics, approximately 19% of FIBRA Hotel's liabilities are denominated in dollars, and 57% have fixed rates. These indicators suggest a cautious management of exchange and interest rate risks, allowing the trust to maintain a stable financing structure in a changing economic environment.

Additionally, the data indicates that 57% of FIBRA Hotel's debt is in the form of stock, while 43% is bank debt, highlighting the diversification of its financing sources. Among the company's main bank creditors are Banorte and BBVA, each holding 18% of the bank debt, while Scotiabank holds 7%. This financial strategy optimizes the cost of capital and ensures a solid liquidity position to seize expansion opportunities and enhance its properties.

For more information on FIBRAs' performance, explore SiiLA REsource or contact us at contacto@siila.com.mx.