Between 2021 and 2023, the Mexican Association of Real Estate Investment Trusts (AMEFIBRA) members increased their leasable area by more than 20%, reaching 35 million square meters. Despite adverse global economic conditions, such as economic slowdown, market volatility, inflationary pressures, armed conflicts in Eastern Europe and the Middle East, and the persistent effects of the COVID-19 pandemic, Real Estate Investment Trusts (REITs) have proven to be resilient investment models.
In 2024, the market continues to demonstrate this resilience. During FIBRA Day, it was reported that the estimated consolidated market value of the FIBRAs stands at approximately US$23 billion. Currently, 16 FIBRAs (i.e., Mexican REITs) own 115 million square feet across two thousand properties throughout Mexico. More information can be found on AMEFIBRA’s website, which serves as the Mexican equivalent to NAREIT.
Increase in Real Estate Asset Investment
The total value of real estate asset investment within the REITs reached 40 billion dollars, representing a 22% increase between 2021 and 2023. This growth has enabled the 15 REITs affiliated with AMEFIBRA, including Fibra Uno, Fibra Terrafina, Fibra Shop, and Fibra Prologis, to manage over 2,000 properties across all federal entities in Mexico.
Economic Challenges and Outlook for 2024
Josefina Moisés, General Director of AMEFIBRA, highlighted that inflation remains a significant concern for the sector in 2024 due to elevated interest rates that increase the financial cost of debt and limit economic growth. However, the Bank of Mexico is anticipated to begin a cycle of interest rate reductions during the year, providing an additional stimulus to both investment and consumption.
Emerging Trends in the Real Estate Sector for 2024
- Sustainability: Real estate projects incorporating sustainable practices, such as using clean energy and resource-saving systems, are rising. This approach not only addresses environmental demands but also offers significant long-term savings.
- Verticalization: Vertical real estate developments will continue to gain popularity, particularly in densely populated areas such as Mexico City and Monterrey. This model seeks to maximize space efficiency and reduce users’ commuting times.
- Investment in Tangible Assets: In times of economic uncertainty, investors increasingly seek refuge in tangible assets with attractive long-term returns, resulting in heightened demand for real estate as a secure investment option.
Conclusion
The REIT sector in Mexico demonstrated remarkable performance between 2021 and 2023 despite global economic challenges. The outlook for 2024 remains positive, driven by emerging trends such as sustainability and verticalization, along with the expected reduction in interest rates, which could further stimulate growth and investment in the sector.
Source: El Economista
