Invisible Properties: Lack of Transparency in Mexican REITs Limits Real Estate Market Growth

In Mexico, FIBRAs manage more than 2,000 commercial properties totaling over 30 million square meters of gross leasable area (GLA), according to data from SiiLA. However, current regulations do not require a detailed breakdown of each asset, leaving significant gaps in the available information. This lack of transparency hampers investors' and analysts' ability to accurately assess each property's profitability, risks, and opportunities.

A review of FIBRAs' reports and official sites shows that while they include general information about portfolios and financial performance, they omit key details, particularly in the industrial and office sectors, which comprise about 71% of their GLA. Practices vary across different trusts, but hotel-related FIBRAs tend to be more transparent than most.

One example is FIBRA Macquarie, which does not disclose the identities of its tenants or the lease rates for its industrial properties. In many cases, FIBRAs justify this opacity with confidentiality clauses or technicalities, such as price variability, which make it difficult to obtain clear figures.

FIBRA Macquarie's properties also face specific challenges. For example, properties like the MEX003 warehouse in Iztapalapa and others in Ciudad Juárez, Mexicali, and Tijuana took years to incorporate the company's branding and colors after being acquired. This complicates their identification in the field. In contrast, other trusts make these adjustments in less than six months.

The lack of clarity extends beyond tenant information; MPA Group, the property manager for FIBRA Macquarie, also fails to provide precise details about transactions or property conditions.

According to Alejandro Delgado, Country Manager Mexico at SiiLA, the situation in Mexico contrasts with mandatory standards in the United States, where REITs or FIBRAs report each property in detail, creating a more reliable market. In Mexico, regulations are more flexible, allowing FIBRAs greater discretion in disclosing information.