COVID-19 Knowledge Center
Wednesday January 20th, 2021 Rodrigo de los Rios

FIBRAS: What are They and What Are the Trends?

During almost all 2020, COVID-19 has caused uncertainty and uneasiness on investors and dealmakers. Despite the concern the pandemic has generated in the market, the current administration’s policies for addressing the disease have been perceived rather faint and with scarce financial support and incentives for the private sector. As a result of the pandemic, striking a deal to merge, acquire or invest in Real Estate becomes challenging due to the social distancing and communication hurdles. Furthermore, uncertainty of how much assets, properties or businesses are worth the day after a possible transaction, and the fluctuation of material prices have caused a stall in these sectors.

FIBRAS were born under the concept that “any entity or person can invest in a portion of a Real Estate asset”

Despite the uncertain times, Real Estate Private Equity Investment sector still holds stable. Naturally, Real Estate investment represents a relatively secure way to invest money nowadays, providing the investor with a regular income through the payment of dividends for his investment; in addition, such investment is supported by the existence of real estate property. During a time of crisis, it is only logic that investors feel much safer knowing that their money is being managed in a fairly stable environment in comparison with other investment sectors.

In an effort to increase Mexico’s attractiveness for investors, the REIT model1, backed by 27,500 million US Dollars of accumulated assets, which make up a portfolio of 23.8 million m2 in more than 1,750 properties2, has proved to be a key mechanism of investment in order to maintain the Real Estate sector alive by issuing attractive debt to the market and by providing a safe place for investors to protect their investments.

The FIBRA structure has performed formidably, yielding 30% above the Índice Nacional de Precios al Consumidor (National Consumers’ Price Index)3. Proof of this, was the positive start of FIBRA 1 and FIBRA Terrafina during the first quarter of the year, closing before the start of 2020 some of the most relevant operations in the decade, consisting in:

  1. the acquisition of 1,000 million US Dollars in debt bonds of FIBRA 1 by foreign investors;4
  2. the payment made by FIBRA 1 to FINSA of 841 million US Dollars for the portfolio of 74 industrial properties;5
  3. the expansion of an industrial manufacturing property in Aguascalientes by FIBRA Terrafina, investing 11.2 million US dollars.6

FIBRAS were born under the concept that “any entity or person can invest in a portion of a Real Estate asset7 focusing in investments and rights to derive income from the lease of the FIBRAs’ properties.  In brief, a typical structure consists on the contribution of Real Estate assets into a trust, the trust will retain title to the properties while such are managed by a professional property manager. The trust will issue investment securities (usually Certificados Bursátiles Fiduciarios Inmobiliarios “CBI”) which will be usually traded in the Mexican Stock Exchange (Bolsa Mexicana de Valores “BMV”) or in international capital markets. The resources obtained from the offering will be destined to the Trust.  The properties are leased, thereby allowing investors to obtain two potential sources of income: i) periodical payments arising from the rents; and ii) variable income arising from the appreciation of the Real Estate assets.

In addition to compliance with the requirements and obligations under the Securities Market Law (Ley del Mercado de Valores “LMV”), the FIBRAS model entails a special tax treatment due to the fact that its regulated under the Income Tax Law (Ley del Impuesto Sobre la Renta “LISR”)8 which imposes certain rules and restrictions regarding the assets that comprise the trust corpus, the purpose of the trust, the distribution of profits and additional reporting obligations, among others.

While it took decades for Mexico to see its first FIBRA created until 2011, currently there are around fifteen FIBRAS9 that often operate with a diverse portfolio that mainly comprises commercial, industrial, office space, hospitality, energy and infrastructure, mixed-used developments, logistics and, in a smaller degree, educational and mortgage properties. Most FIBRAs are currently listed in the BMV. In 2019 FibraMX was the first FIBRA listed under the new Institutional Stock Exchange (Bolsa Institutional de Valores “BIVA”),10 the new Mexican stock exchange that was launched on 2017 and is now competing with the BMV holding around 10% of the market.

What types of FIBRAs are there?

As of mid-2020, leading the market are:

  1. Fibra Uno, holding 641 properties distributed between its industrial, retail and offices portfolios;
  2. Fibra Macquarie, holding a portfolio of 234 industrial and 17 retail properties across Mexico;
  3. Fibra Danhos, holding around 14 large properties for retail, mixed use and office spaces;
  4. Fibra Educa, accumulating a total amount of 59 properties and 454,196 m2 that comprises university campuses, education centers and offices;
  5. Fibra HD, holding a portfolio of 41 properties and 310,339 m2 distributed between retail, education, industrial and office spaces;
  6. Fibra Hotel, with 86 hotels/resorts and 12,679 rooms;
  7. Fibra Inn, mustering a total of 40 hotels/resorts and 6,944 rooms;
  8. FibraMty, holding 55 properties and 680,284 m2 between industrial, office and retail spaces;
  9. Fibra Nova with a portfolio of over 97 properties and 342,700 m2 diversified in different cities and industries, including logistics, manufacturing, educational and retail;
  10. Fibra Prologis, with 191 class-A logistics and manufacturing facilities;
  11. Fibra Plus, currently holding a portfolio of 12 properties with a total construction area of 169,645 m2 and with a portfolio in operation of 5 properties with a total construction area of 110,694 m2, including commercial, industrial and offices;
  12. Fibra Shop holding a portfolio of 17 high quality shopping centers and 2 under construction, located in 13 states throughout Mexico, these shopping centers combine over 787,500 m2 ;
  13. Fibra Storage holding a portfolio of 8 operating properties, 3 properties under construction and 5 pending projects, with a total construction area of more than 97,000 square meters focused on the self-storage industry; and
  14. Fideicomiso Terrafina with a portfolio of 299 properties located in 32 different cities, with a total area of 41.1 million square feet.

FIBRAS have been performing well since their creation in 2011, showing an annual profit of approximately 31.49% in 201911. Nevertheless, as most economic actors in 2020, FIBRAS are facing important challenges arising from the COVID-19 pandemic, the Standard & Poor’s (“S&P)/BMV Fibras fell 24.99% during the first quarter of 2020.12 Within the most affected FIBRAS we can find those that specialize in the accommodation, commercial and office sectors, such as Fibra Hotel, Fibra Uno and Danhos; being the first two sectors the most heavily affected.13

The last three years saw a rise of energy and infrastructure based FIBRAS, Such as FIBRA-E, which is a listed investment vehicle for energy and infrastructure projects, offering tax advantages similar to the Master Limited Partnership.14 While the current administration’s agenda may give rise to uncertainty in the Energy Sector due to recent amendments on the energy, oil and gas regulations, other infrastructure projects remain unhindered. As an example of the foregoing, in the middle of the COVID-19 crisis and during this period of uncertainty for the economy and global financial markets, Promotora del Desarrollo de América Latina (Promotora Ideal) listed its FIBRA E “FIDEAL” on April 2020 issuing 284,531,874 certificates at $90.77 pesos each.15 FIDEAL is an infrastructure oriented FIBRA, which’s main assets are the concessions for the operation, management and fee collection of 12 toll roads in Mexico.16

FIBRAS, as previously discussed, is a relatively new way of investing capital in Real Estate that has proved to be, during the crisis, a safe profitable alternative for investors to receive a stable income in the medium and long term.

A FIBRA normally operates as follows: i) Real Estate owners provide to the portfolio of the FIBRA their real property in exchange of capital and dividends; ii) the trustee or manager of the FIBRA and Real Estate, usually a banking institution or an expert in the subject, registers it in the stock market and issues stock certificates (Certificados Fiduciarios) to attract the investment capital from the investors. Naturally, the owners and shareholders of the FIBRA may benefit from the dividends; iii) the investors receive in proportion to their investment the capital generated by the FIBRA’s Real Estate lease (at least 95% of the annual profit must be distributed between the investors).17 As a result, the investors may enjoy the benefits of this mechanism with relatively little effort and without having to deal with the management of the properties.
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At Ibarra, del Paso y Gallego, S.C., we have the expertise and ample experience in using Real Estate Trusts and REITs and we have represented many national and foreign investors in structuring this financial and legal mechanism in their real estate projects throughout Mexico, please contact Rodrigo de los Ríos, Carlos Ibarra or Alejandra Gutierrez at the following e-mail addresses.

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1Fideicomiso de Infraestructura y Bienes Raíces.- Infrastructure and Real Estate Trust, or by its Spanish acronym “FIBRA”, similar to the United States’ “REITs.”
2Interview between Luis Gutierrez, president of AMEFIBRA, and el Heraldo Radio, dated November 6, 2019, consulted: June 2, 2020.
4Santiago Judith, el Economista, FUNO emite deuda por 1000 mmd,  27 June 2019, consulted: June 2, 2020
5Rivera Ruben, El Financiero, Fibra Uno estima elevar el nivel de capitalización en prortafolio Titán, December 5th, 2019, consulted: June 2, 2020.
6Obras por Expansión, Fibra Terrafina invertirá 11.2 mmd en una ampliación en Aguascalientes, July 1st, 2019, consulted: June 2, 2020.
7Velasco, Rodrigo, Interview for Inmobiliare.
8LISR, Art. 187
9Tapia Ramírez, Rubí ¿Cuál es la situación actual de las FIBRAS en México?, Inmobiliare, May 28th, 2019.
10Expansión, BIVA ya tiene su primera fibra y abre la pelea para listar más, May 16, 2020.
11Bran, Viviana para Reporte Indigo, La Resistencia de las Fibras a la Incertidumbre, January 2020.
12El Economista, Por Pandemia de COVID-19, Mal desempeño de Fibras en la Bolsa, April 2, 2020.
14PWC, New FIBRA-E investment structure for the Energy Industry in México, October 2015.
15Carbajal, Braulio para La Jornada, En plena contingencia, Promotora Ideal coloca Fibra E en la BMV, April 21st, 2020.
16Prospectos FIDEAL
17LISR, Art. 187


Rodrigo de los Ríos Gordoa| Partner |

Carlos Ibarra Fernández| Partner |

Alejandra Gutiérrez | Of Counsel |

T. 52+(55) 5202-0717

This alert does not constitute legal advice and is protected under copyright law.

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