International Consortium Buys $300M Mexico Portfolio

MEXICO CITY-The publicly traded Mexican real estate company G. Accion has sold a 5.6-million-sf portfolio of properties in Mexico for about $300 million to an international consortium of institutional investors led by CalPERS and British Columbia Investment Management Corp. Included in the portfolio is 52 industrial properties and one office building. LaSalle Investment Management will look after the assets and G. Accion will provide property management services.The properties are located in 12 cities across Mexico, including all major cities and border markets, and the tenants are mostly multinational corporations. LaSalle’s director of Mexican operations Amy Erixon tells GlobeSt.com the lone office building in the portfolio is the 204,800-sf headquarters for Banamex (Citibank) located in Monterrey. The industrial properties include about 900,000 sf in Queretaro developed by Hines and Sony’s 500,000-sf distribution center in Mexico City. Other tenants include Samsung, ABB and Philips Electronics.In addition to being possibly the largest real estate transactions ever completed in Latin America, Erixon says she believes this is only the second time a US pension fund and a Canadian pension fund have worked together and the first time they have invested directly in Mexico real estate as opposed to working through a local developer. “We have about 80 executives down there,” says Erixon. “That may have made them more comfortable with the investment.”The consortium reportedly will look to flip some of the properties acquired. Erixon says any plans to re-trade some of the buildings would be “less an issue of quality and more about smaller markets with a thinner economic base than we would be comfortable holding property in on a longer-term basis.”CalPERS and British Columbia Investment Management Corp. put up the vast majority of the equity required for the transaction, says Erixon. European institutional investors also were involved, through funds owned and controlled by Jones Lang LaSalle group. “We believe that the risks associated with investing in Mexican real estate have been decreasing at a rapid rate, as evidenced by the country’s recent achievement of an investment-grade rating,” says Erixon. “The track record, reputation and professionalism of the seller’s management team were also important to selecting this particular transaction.” This acquisition is CalPERS second major investment in Mexico this year. In April, through LaSalle, CalPERS purchased a 32% interest in a $100-million, 21-building industrial portfolio controlled by Mexico-based industrial developer Vesta.