MEXICO CITY-Prologis Inc. announced this morning that it has contributed $293 million worth of industrial assets in Mexico, 21 industrial and distribution buildings, to its Prologis Mexico Fondo Logistico. The fund was created by the former AMB Property Corp. in April 2010, before the firm was taken over by San Francisco-based Prologis.
The 5.3 million square feet of assets are 95% leased, and are located here, in Monterrey and Guadalajara. Newark, NJ-based Prudential Mortgage Capital Co. said it provided $160 million in financing to help the fund acquire the properties. Frederick van Overbeek and Elizabeth Velazquez with Prudential led the transaction for their firm. “The significant improvement in Mexico’s economy over the past couple of years, along with continued manufacturing growth, bodes well for Mexico’s industrial real estate sector,” Velazquez said in a Prudential statement.
William Sullivan, CFO for Prologis, said in a Prologis statement that his firm donated $234.5 million in assets from its wholly-owned portfolio, and $58.5 million from its Prologis North American Industrial Fund II. The proceeds from the sale will go to pay down Prologis debt, Sullivan said. “Two of our top priorities are to grow our private capital business, and to further strengthen our financial position by reducing debt,” he said.
AMB created the Mexico Fondo Logistico fund to acquire and develop industrial properties in major Mexican markets. The fund was initially sponsored by private Mexican pension plans, which raised $260 million, and AMB had contributed another $65 million. Eugene Reilly, former AMB Americas head and now CEO Americas for Prologis, had overseen the fund when it started.
Luis Gutierrez, Prologis president for Latin America, said in the statement that this deal is the largest industrial real estate transaction completed in the country to date with the pension fund proceeds. "Industrial real estate in Mexico is an attractive investment due to the country's economic growth, expanding consumer demand, young population base and the recognized need for state-of-the-art supply chain infrastructure,” Gutierrez said.
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