When REITs Fall, Is It Because of Stocks or Interest Rates?

The yield on Mexico’s 10-year Mbono, one of the main indicators of long-term interest rates in Mexico, allows quantification of that effect. The analysis shows that a 100-basis-point increase in that yield is associated, on average, with an approximate 6.0-percentage-point decline in the expected quarterly return of FIBRAs¹.

In practical terms, this means FIBRA performance depends on both equity market behavior and the evolution of long-term interest rates.

This is because much of their value comes from the income their properties are expected to generate in the coming years. When rates rise, investors assign a lower value to that future income because they demand a higher return to wait to receive it. At the same time, government bonds offer higher yields with a lower level of risk, so some investors may prefer them over FIBRAs. Both factors tend to reduce the value the market assigns to these vehicles.

If rates and the market affect performance simultaneously, evaluating FIBRA performance solely through the stock market lens can yield incomplete conclusions, as a period of declines does not necessarily reflect deterioration in property quality, trust operations or income-generating capacity; it may also reflect changes in financial conditions.

Currently, long-term interest rates are moderating, although they remain elevated. During the first quarter of 2026 alone, the yield on Mexico’s 10-year Mbono declined from the end of 2025, while the S&P/BMV FIBRAs Index recorded a recovery of nearly 6.5%.

In that context, distinguishing between the effects of the equity market and of interest rates is essential for interpreting FIBRA movements. Indicators like those used in this analysis are part of the SiiLA Mexico Index (SMI) and SiiLA FIBRA Analytics, platforms developed to track these vehicles and the variables that affect their performance. To learn more about these tools, write to contacto@siila.com.mx.

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¹ The reported coefficients correspond to the main econometric model estimated for quarterly returns of the S&P/BMV FIBRAs Index between the first quarter of 2016 and the first quarter of 2026. Variables are expressed as logarithmic returns and changes in basis points for interest rates. The specification was subjected to stationarity tests (ADF and KPSS), autocorrelation tests (Durbin-Watson and Breusch-Godfrey), heteroskedasticity tests (Breusch-Pagan and White), normality testing (Jarque-Bera), functional stability testing (RESET), multicollinearity testing (VIF), structural stability testing (CUSUM and Chow), and influential observation analysis (Cook’s Distance). Inference was conducted using Newey-West robust standard errors (HAC) to control for potential heteroskedasticity and autocorrelation problems. Results remained stable in sensitivity tests, including the exclusion of the most influential observation and comparison across alternative specifications.