In recent years, the Mexican real estate market has experienced a notable increase in the consolidation of FIBRAS (Real Estate Investment Trusts), a phenomenon that is reconfiguring the sector. The consolidation of FiBRAS, in general terms, consists of the acquisition of all the assets of one FIBRA or real estate platform by another, in order to increase its market share, consolidate operations and improve returns for its investors.
The largest FIBRAs seek to expand their size and market power through consolidation, allowing them to achieve economies of scale, reduce operating costs and improve their efficiency. In addition, this process facilitates greater diversification of assets and enhances their negotiating capacity in terms of financing and lease agreements.
In recent years, this consolidation has been carried out through various structures. In particular, transactions have been carried out through public takeover offers (OPA), previously approved by the National Banking and Securities Commission (CNBV), to make the process more efficient.
These OPAs allow the acquiring FIBRA to purchase all of the Real Estate Trust Stock Certificates (CBFIs) of the FIBRA to be acquired, thus beginning the integration process. This process involves the consolidation of real estate assets, the alignment of operational strategies and the integration of financial and administrative structures. In some cases, adjustments are also necessary to the capital structure and to the management of existing contracts.
Throughout this process, it is essential to comply with the regulatory requirements imposed by the CNBV and other relevant authorities, as well as to address the various tax implications that may arise from the acquisition. The complexity inherent in consolidating FiBRAS requires precise coordination of real estate, financial, regulatory and fiscal aspects to ensure successful integration. In this context, experience and specialized knowledge are essential to navigate each phase of the process effectively.
Although several consolidation actions have been carried out in recent years, such as the purchase by Fibra MTY of the Zeus portfolio owned by FINSA and Walton, or the acquisition by Walton of all Advance assets, in the current context, two transactions stand out for their complexity and relevance: the acquisition of Fibra HD by Fibra Plus and the purchase of Terrafina by Fibra Prologists. These transactions exemplify how FiBRAs are using consolidation to maximize their influence and operability.
An increase in consolidation operations is expected in the coming years, driven by various market trends. A favorable economic environment, the need for optimization of operating costs and increasing competition in the real estate sector, particularly in the industrial market, are creating favorable conditions for consolidation. In addition, the growth of foreign investment also drives demand for these operations.
Consolidation transactions involve a series of essential considerations, such as the valuation of real estate assets, the structuring of the takeover bid and attention to tax implications. The integration of different portfolios and the analysis of tax implications are critical aspects that require detailed planning and execution to ensure the success of the operation.
At Mijares, we have extensive experience managing the complexity inherent in FiBRAS consolidation operations. Our ability to comprehensively address all aspects involved, from legal coordination to tax and regulatory advice, allows us to offer strategic support to our clients at every stage of the process.
Our comprehensive and specialized approach to the real estate sector allows us to offer complete and effective solutions to our clients.
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