24 April, 2023 | #DatozByDatoz
In March 2023, the real estate investment trust Terrafina, celebrated ten years listed on the Mexican Stock Exchange. In its initial offering, Terrafina placed 318 million real estate trust certificates at a price of $28 MXN per certificate, raising approximately $8.904 billion MXN, or $716 million USD.
With the proceeds from this issuance, Terrafina acquired its initial portfolio, which consisted of 145 properties: 132 developed industrial buildings totaling 19.9 million ft2 of GLA, and 13 land reserve properties with 19.3 million ft2.
Currently, Terrafina has 276 industrial properties that sum up 39.4 million ft2 of GLA, which represents a growth of 98% compared to the initial portfolio. That means, in a decade, Terrafina managed to double the GLA of its portfolio. This was achieved through a growth strategy of acquisitions, development, and even recycling of non-strategic properties.
Terrafina made one of its most significant acquisitions six months after its initial public offering, during the third quarter of 2013. This was the acquisition of American Industries’ Kimco portfolio, comprised of 84 industrial properties with 11 million ft2 of GLA leased by multinational light manufacturing companies in the automotive, aerospace and consumer goods sectors. This portfolio had an investment of $605 million USD.
In 2015, Terrafina acquired a portfolio of 10 industrial properties for $59.4 million USD. These properties are in San Luis Potosí, Guanajuato and, Monterrey. They all add 1.1 million ft2 of GLA to the portfolio.
During 2017, Terrafina added 75 properties and 10 million ft2 to its portfolio through a series of property purchases and development. One of the largest purchases was the acquisition of a portfolio for $422 million USD, consisting of 45 properties that represented 5.6 million ft2, distributed in the northern and central regions of Mexico. Additionally, Terrafina acquired six properties in the central region, totaling 725,000 ft2 for $41 million USD.
Since its initial portfolio, Terrafina has planned for growth through real estate development. Therefore, over this decade, it has maintained a significant portfolio of land reserve, which started at 19.3 million ft2 and currently stands at 4.6 million ft2.
In 2014, Terrafina began its development strategy with the signing of 271,000 ft2, of which 80% consisted of build-to-suit (BTS) buildings, and 20% consisted of expansions of existing properties. During 2015, Terrafina developed 883,000 ft2 located in the northern, central, and “bajio” regions of Mexico.
Starting in 2018, Terrafina’s growth strategy has focused on development. Since then, acquisitions have been nearly nonexistent, and the company has focused on BTS buildings and expansions.
During 2019, Terrafina developed 981,500 ft2, of which 72.5% were in the northern region and 27.5% in “bajio” region. In 2020, Terrafina developed 692,000 ft2 from expansions and BTS buildings.
In 2013, Terrafina also began its strategy of recycling strategic properties, with the sale of a property from the Kimco portfolio for $43 million USD.
The asset recycling continued in 2015 with the sale of 3.7 million ft2 distributed among various properties, including land reserves and industrial buildings located in the northeast region, mainly in Tamaulipas. This sale generated $101 million USD.
In 2020, Terrafina sold properties totaling 3 million ft2 for a total of $127 million USD. These properties were in the north, “bajio”, and center regions of Mexico.
The real estate investment trust has reported that its asset recycling strategy confirms its ability to increase the quality of its portfolio. Through sales, they reduce their presence in non-dominant markets and improve operating and financial indicators.