VIEW FROM THE TOP |
THE LOGIC BEHIND INDUSTRIAL FIBRAS ALBERTO CHRETIN President and Director General of Terrafina
Q: What are your expectations for the country and the
macroeconomic factors. If the economy becomes stagnant
next administration?
and properties are not rented, then the investment suffers.
A: I hope AMLO succeeds. I also hope the new agreement
But at our 95.1 percent occupancy rate, such a situation
will be beneficial for Mexico. Regarding investment, I think
should lower this rate to 40 percent, which implies a low risk.
the Peña Nieto administration achieved a good synergy between the public and private sectors. ProMéxico also
Q: What are Terrafina’s goals over the next five years and
developed positive initiatives for investment attraction.
how will they be achieved?
I think this promotion should continue regardless of the
A: We have seized the growth opportunities that we
change in administration. In this scenario, the challenge for
have encountered. Our growth strategy was based on
Terrafina and the rest of the business sector is to remain
acquisitions, development and the organic growth of our
present and united, pursuing what is in Mexico’s best
portfolio. We started with an 80 percent occupancy rate,
interest. To achieve this, we actively take part in several
which we have significantly improved in a short period.
institutions, such as AMPIP, promoting investment in the
While we are not developers, we do know how to develop,
country. But our main goal is to foster our investors’ success.
which is positive as the recovery for developing is higher than for acquisitions. But the greatest part of our growth
I also think that the Fibra sector is performing very well
comes from the latter. We bought excellent portfolios from
in general terms. The Mexican Association of Fibras
Intermex, American Industries and Davisa, just to mention a
(AMEFIBRA) is bringing important topics such as regulation
few. We increased the volume and quality of our portfolio
to the table. There are opportunities to improve the current
through follow-ons for raising capital from the market.
legislation but my expectations for the sector are excellent. Today, Terrafina is at a consolidation stage. We do not plan Q: The issuance of CBFIs allows a greater segment of
to raise any more capital from the market anytime soon.
the population to invest. What is the next step in making
Our balance sheet is solid, with more than US$100 million in
investment accessible to more people?
the bank, which is enough to keep expanding, maintaining
A: The legislation that gave birth to Fibras aimed to boost
our buildings and servicing our debt. We are experiencing
real estate development, for the industrial sector in our case,
a period of stability that allows us to wait and see how the
and laid the industrial foundation of the country. If Mexico has
business environment develops. We are satisfied with our
strong industrial developments and a healthy supply of parks
investors and our performance and will focus on organic
at world-class competitive prices, this will boost investment.
growth and some minor expansions. While we are enjoying
Fibras and similar financial vehicles allowed more people
this period, we also will keep some options for capitalization
to profit from real estate. Before, only multimillionaires
open. Recycling capital is key. For example, a couple of
could invest in the sector. Imagine three people buying a
years ago we sold around 2.5 million ft2 valued at around
building together and leasing it. Half of the rent covers the
US$100 million. We are constantly open to the possibility of
asset’s expenses and the other half goes into its owners’
recycling capital through asset sales, which is a very healthy
pockets, insured by the asset itself and a long-term contract.
practice in real estate. These are either vacant properties or
Now imagine the same scheme for hundreds of buildings
located in markets where we want to reduce our presence.
purchased by hundreds of members through CBFIs and with a 10 percent yearly return from the buildings. The value of our properties in the country is US$2.4 billion. Besides their
Terrafina is a real estate trust, specialized in industrial and
natural valorizations, these also rely on stock value and as
designed mainly to acquire, own, develop and manage real
more people invest, the recovery also increases. But these
estate in Mexico. The properties within its portfolio consist of
investments comes with a risk, which is related to capital and
stores and light manufacturing assets
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