Real Estate Investment Trusts (Fibras) in Mexico are vehicles designed to finance the acquisition and/or construction of real estate properties intended for leasing or for acquiring the right to receive rental income from such properties, in accordance with Articles 187 and 188 of the Mexican Income Tax Law.
They allow investors to participate in the real estate market without requiring a large amount of capital, offer a diversified portfolio of properties, and are managed by industry experts.
The first real estate Fibra was listed on the Mexican Stock Exchange (BMV) in 2011 — Fibra Uno, which raised MXN $3.143 billion. Today, there are 15 Fibras trading on the BMV and the Institutional Stock Exchange (BIVA), with a combined market capitalization of approximately MXN $370 billion. These trusts own over 2,200 properties across commercial, industrial, office, hospitality, and service sectors.
Characteristics of Real Estate Investment Trusts (Fibras) in Mexico
- Hybrid instrument that can provide predictable returns from rental income (debt-like) and variable returns from property appreciation (equity-like).
- No fixed term or credit rating is required.
- Professionally managed, with an appointed administrator responsible for operating the trust’s real estate assets.
- Attract institutional investors such as pension funds (Afores), insurance companies, and surety companies.
- Traded in the “Equities” segment, under regulations similar to those of any publicly listed stock.
- At least 70% of their assets must be invested in real estate.
- Must distribute between 90% and 95% of their taxable income or profits to shareholders each quarter.
- Acquired or developed properties must be leased, not sold, for at least four years after construction or acquisition is completed.
Objectives of Real Estate Investment Trusts (Fibras) in Mexico
- Promote real estate development in Mexico
- Serve as a source of liquidity for developers
- Enable real estate investment for all types of investors
- Contribute to investment portfolio diversification
- Boost financing for various real estate segments: industrial, office, retail, residential, hospitality, self-storage, among others
What Benefits Does a Real Estate Investment Trust (Fibra) Offer?
- Invest in real estate with accessible amounts
- Investment diversification
- Periodic payments from rental income, known as dividends, with the potential for capital gains through property appreciation
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