A Mexican REIT is a vehicle used to finance the acquisition or construction of real estate in Mexico through a trust, which will be used for leasing or for the acquisition of the right to receive rental income. Similar to REITs in the United States, Mexican REITs combine the features of fixed income and equity instruments, offering investors periodic payments (lease revenue flows) and the possibility to obtain capital gains (asset appreciation).
Fibra HD is a Mexican REIT whose main objective is to provide attractive long-term, risk-adjusted returns to its CBFI Holders, through stable cash distributions and asset appreciation. This objective will be achieved by selectively creating a diversified portfolio of real estate to be leased or lease rights.
Our action plan is to create and manage a diversified portfolio of real estate for lease. For this purpose, leases will preferably be arranged on a fixed rent basis. However, in the case of variable rents, these will always be tied to sales in accordance with the Mexican Income Tax Law. Regarding portfolio, it will be comprised of top quality, high revenue-generating real estate, located in Mexico’s fastest growing urban and suburban markets.
Since Fibra Plus' tender offer, the operation of Fibra HD is handled by the Administrator and Advisor, who are responsible for the management of the Trust’s real estate portfolio. They also have the necessary human capital to negotiate lease agreements, collect rents, and commercialize, maintain, and operate the properties.
The Manager and Advisor are responsible for submitting investment opportunities to the Technical Committee, as well as for the management of the Trust’s real estate investments and divestments.
Real estate trust certificates or Certificados Bursátiles Fiduciarios Inmobiliarios (CBFIs, for its Spanish acronym) are participation certificates for the assets comprising the real estate portfolio of a Mexican REIT, whose yield is linked to the operating income from such properties or, if applicable, to the proceeds from their sale. These securities combine the features of fixed-income and equity instruments, as they provide holders with quarterly cash distributions paid as dividends, equivalent to 95% of real estate rental income, and an additional yield from real estate appreciation. CBFIs can be traded as easily as shares.
Our value proposition is rooted in the following points:
Under these assumptions, we believe that through the incorporation of several small- and mid-sized properties we can deliver an attractive return to risk ratio in the Mexican real estate sector.
