FUNO Splits its Industrial Portfolio and Becomes the Largest Commercial and Office Assets REIT in Mexico

With its industrial portfolio partition to create FIBRA Next, FIBRA Uno (FUNO) now ranks as the second-largest real estate investment trust (REIT) regarding square meters managed in Mexico. At the same time, FIBRA Next claims the top spot. Before the portfolio segmentation into two FIBRAs, FUNO was the most extensive REIT in the country. Nevertheless, even without its industrial properties, FUNO still boasts the most extensive portfolio of commercial and office real estate in Mexico, according to data from SiiLA.

Without more than six million square meters of industrial space in its portfolio, as of November this year, FUNO will operate approximately five million square meters, representing 45% of its total assets before the industrial portfolio carve-out to create FIBRA Next.

On the one hand, FUNO's commercial property portfolio will encompass over three million square meters of gross leasable area (GLA). On the other hand, FUNO's office portfolio will exceed 1.1 million square meters of GLA.

FUNO's Performance Without Its Industrial Portfolio

Industrial properties not only represented a significant portion of FUNO's managed area in Mexico but also a substantial portion of its rental income.

Excluding its industrial portfolio, FUNO's vacancy rate will decrease from 94% to just under 90%, and the REIT's rental income will reduce by approximately 31%. This calculation considers that the industrial portfolio now under the purview of FIBRA Next generates over 7,000 million pesos (around 389 USD million) in annual rental income, according to SiiLA FIBRA Analytics data.

Despite the reduction in income, FUNO will maintain a robust tenant base and stabilized properties that ensure the continuity of its operations and profit margins at optimal levels, delivering significant profitability.

In this regard, the financial reports of the REIT indicate that the majority (42%) of FUNO's income comes from its commercial assets, and their profitability stands out within its portfolio. In the past year alone, between the third quarter of 2023 and 2022, the segment with the highest increase in total income at constant prices was the commercial segment (+9.9%), followed by the industrial (+3.8%) and office (+2.3%) segments.

Thanks to the performance of its commercial and office properties, which now make up 60% and 23% of FUNO's portfolio, respectively, the REIT is well-positioned to maintain a strong presence in the Mexican real estate market and continue diversifying and expanding its portfolio.

For more information about this and other REITs in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.