Mexico City, November 24th , 2020 – Terrafina® (“TERRA” or “the Company”) (BMV: TERRA13), a leading Mexican industrial real estate investment trust (“FIBRA”), externally advised by PGIM Real Estate and dedicated to the acquisition, development, lease and management of industrial real estate properties in Mexico, announced today that, as part of its capital recycling strategy, it closed the sale of an industrial portfolio for US$127 million. This transaction strengthens Terrafina’s balance sheet by paying down debt and also supports Terrafina’s development strategy for tenants in strategic sectors and submarkets.
The transaction comprises an asset sale of 3.0 million square feet at fair market value. This group of properties is located in the Northern region (45.5%), the Bajio region (48.5%), and the Central region (6.0%). As a result of this asset sale, the average appraised value will increase from $56.0 to $57.3 per square foot, the occupancy rate will move from 95.5% to 95.7%, and the average rental rate per square foot will increase from US$5.18 to US$5.25. Furthermore, after the sale, the percentage of USD denominated leases in the portfolio will increase and the average portfolio age will decline.
Alberto Chretin, CEO of Terrafina, commented: “We are very pleased to complete this asset sale, which represents an important milestone for Terrafina. The transaction will allow us to continue fueling organic growth in the medium term through investing in selective developments. In the short term, the proceeds will be used to pay down debt, thereby decreasing our loan to value (LTV) ratio from 42.7% to an approximate 39.8%. More importantly, with this transaction we are generating additional value in our portfolio by improving operating and financial metrics that will provide for greater stability in the long-term.”
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