The Evolution of Fibra MTY’s Portfolio

March 2, 2023 | #DatozByDatoz

Fibra MTY is on the verge of closing the acquisition of the Zeus real estate portfolio, following the approval of the Assembly of Holders of its real estate trust certificates (CBFIs). 

Zeus is comprised of 46 industrial buildings with a total gross leasable area (GLA) of approximately 8,848,494 square feet (ft2) and a land reserve with a total surface area of approximately 9,501,551 ft2, distributed in 11 states across Mexico. The acquisition price amounts to $662 million dollars (plus VAT, as well as other taxes, costs, and acquisition expenses). 

This purchase will be the largest in fibra’s almost 9-year history. In addition, the GLA of the properties for acquisition is higher than the current total portfolio, which amounts to 8,814,179 ft2, so with this acquisition, Fibra MTY would double its GLA. 

From Corporate Offices to a Vast Industrial Portfolio 

In December 2014, Fibra MTY made its debut on the Mexican Stock Exchange (BMV) with a portfolio of 9 properties totaling 1,428,349 ft2 of GLA, of which 64% corresponded to office spaces and only 34% to industrial spaces. 

In 2015, Fibra MTY’s portfolio grew to 22 properties, with a GLA of 2,371,149 ft2. During this year, the fibra strengthened its industrial portfolio, going from 2 to 9 properties and added retail properties. GLA was divided into 49.5% industrial properties, 42.2% office space, and 8.3% retail space. Revenues continued to accumulate mostly from offices followed by the industrial space. 

During the last seven years, the share of industrial space in Fibra MTY’s portfolio has fluctuated between 66% and 74% of GLA, while offices varied between 29% and 23%. During this time, 6,443,029 ft2 were added, reaching 8,814,179 ft2 by the end of 3Q-2022, of which 6,372,084 ft2 belonged to industrial buildings. The biggest increases in the portfolio occurred in 2016 and in 2018. 

It is worth noting that although industrial properties presently account for the largest share of GLA, in terms of total revenue, offices add up to roughly 50% while industrial properties represent between 45% and 48%. 

Fibra MTY stated that the Zeus portfolio will increase its capacity to take advantage of a historically strong industrial real estate market. It should be noted that Mexico recorded historic absorption during 2021 and 2022, surpassing 70 million ft2 just in the last year alone according to data taken from Datoz’s industrial market statistics tool, Analytics 2.0

With the addition of Zeus’ 8,848,494 ft2, Fibra MTY would reach a built GLA of over 17 million ft2, of which more than 86% would be industrial space adding up to a total of 15.2 million ft2, while its office portfolio would be reduced to approximately 12.6%. Additionally, 73% of the revenue will be from industrial space and 26% from corporate office contracts, according to Fibra MTY’s estimates. 

Will Fibra MTY Begin Developing Industrial Buildings? 

Fibra MTY’s vocation has historically been the administration of industrial, office, and retail properties, so the growth of its portfolio has mainly originated from acquisitions. However, the purchase of the Zeus portfolio could signify a turning point, as it includes more than 9.5 million ft2 of land reserves, which may lead Fibra MTY to implement some development strategies in the future including build-to-suit (BTS) projects and the construction of speculative buildings.  

In addition, Fibra MTY recently closed the acquisition of a plot of land for the expansion of the Huasteco Fagor industrial building located in San Luis Potosi. The plot of land has an area of 106,207 ft2, on which the expansion will be built, adding a rentable area of 72,463 ft2. Based on the terms of the lease agreement for the expansion of this building, which Fibra MTY disclosed, it can be concluded that the Fibra will oversee the construction of the building. 

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