Mexico City, August 23rd, 2023 – Terrafina (“TERRA”) (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 the acquisition of two industrial Class A portfolios located in Tijuana and State of Mexico. This US$221 million acquisition was executed through the Company’s sidecar, adding 2.6 million square feet to its current portfolio.
The acquisition comprises US$209 million of stabilized assets and US$12 million of land reserves.
- In Tijuana
- Nine fully-leased USD-denominated Class A buildings with a total GLA of 1.6 million square feet.
- 216,000 square feet of potential GLA in new developments
- In the State of Mexico
- Two fully-leased USD-denominated Class A buildings with a total GLA of 510,000 square feet.
- 297,000 square feet of potential GLA in new developments
This transaction represents Terrafina’s first acquisition through the sidecar. It will be funded with a combination of retained AFFO and debt, while maintaining our 35% LTV targeted leverage.
The stabilized properties (which have an average age of 3.5 years) are 100% leased with an average annual rent of US$7.13 per square foot. Tenants come from nearshoring activities in the electronics, medical, consumer goods, and logistics 3PL segments linked to the US market. The portfolio will consolidate Terrafina’s presence in the Northern and Central regions, where there is a limited supply of space and land for these markets. Furthermore, Terrafina will seek ESG certifications for all the existing buildings as well as for the new developments.
As a result of this acquistion, Terrafina i) will have allocated more than half of the sidecar’s capital ahead of schedule, and ii) increase its presence in fast growing markets with attractive returns that will unlock value to investors as new GLA is added to the portfolio without dilutive effects.
Alberto Chretin, Terrafina’s CEO, commented: “We are very pleased with the speed at which we have started to deploy the sidecar’s resources in high quality assets. This portfolio marks the beginning of a strategic plan that, with our advisor PGIM Real Estate’s support, will allow us to continue taking advantage of the opportunities offered by a strong industrial real estate market in Mexico. It will also better align our portfolio with our sustainability objectives. We will grow without diluting key stakeholders or increasing our leverage, while the exposure to key markets additionally translates into strong rental upside.
Terrafina (Alberto Chretin, President and CEO of Terrafina) and PGIM Real Estate (Enrique Lavin, Managing Director and Head of Mexico and Deputy Head of Latin America for PGIM Real Estate) will host a conference call to discuss more details on this recent acquisition:
Conference Call Details
Thursday, August 24th, 2023
10:00 A.M. Mexico Time.
11:00 A.M. Central Time (CT).
12:00 P.M. Eastern Time (ET).
To access the call, please dial:
U.S.: +1-888-506-0062
International: +1-973-528-0011
Mexico Toll Free: 55-8526-2489
Entry Code: 122250
Audio Webcast Link:
https://www.webcaster4.com/Webcast/Page/2133/48981
Conference Replay
A replay of this call will be available for 7 days, please dial:
U.S.: +1-877-481-4010
International: +1-919-882-2331
Replay Passcode: 48981
Miranda Newswire – Full Press Release: Download PDF
About TERRAFINA
Terrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, develop, lease and manage industrial real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically located warehouses and other light manufacturing properties throughout the Central, Bajio and Northern regions of Mexico. It is internally managed by highly qualified industry specialists and externally advised by PGIM Real Estate.
Terrafina owns 282 real estate properties, including 278 developed industrial facilities with a collective GLA of approximately 40.0 million square feet and four land reserve parcels, designed to preserve the organic growth capability of the portfolio. Terrafina’s objective is to provide attractive risk-adjusted returns for the holders of its certificates through stable distributions and capital appreciations. Terrafina aims to achieve this objective through a successful performance of its industrial real estate and complementary properties, strategic acquisitions, access to a high level of institutional support, and an effective management and corporate governance structure. For more information, please visit www.terrafina.mx/en/
About PGIM Real Estate
With $210 billion in gross assets under management and administration ($134 billion net),1 PGIM Real Estate provides investors and borrowers access to a range of real estate equity, real estate debt, agriculture, and impact solutions across the risk-return spectrum.
PGIM Real Estate is a business of PGIM, the global asset management business of Prudential Financial, Inc. (NYSE: PRU). PGIM Real Estate’s risk management approach, execution capabilities and industry insights are backed by a 50-year legacy of investing in commercial real estate, a 140-year history of real estate financing,2 and the local experience of professionals in 32 cities globally. Through its investment, financing, asset management, and talent management approach, PGIM Real Estate engages in practices that strive to ignite positive environmental and social impact, while pursuing activities that seek to strengthen communities around the world. For more information visit pgimrealestate.com.
1As of March 31, 2023; AUA is $49 billion; $134 billion AUM.
2 Includes legacy lending through PGIM’s parent company, PFI.
About PGIM
PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU), a leading global investment manager with more than $1.4 trillion in assets under management as of March. 31, 2023. With offices in 18 countries, PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. For more information about PGIM, visit pgim.com.
Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information please visit news.prudential.com
Forward Looking Statements
This document may include forward-looking statements that may imply risks and uncertainties. Terms such as “estimate”, “project”, “plan”, “believe”, “expect”, “anticipate”, “intend”, and other similar expressions could be construed as previsions or estimates. Terrafina warns readers that declarations and estimates mentioned in this document or realized by Terrafina’s management imply risks and uncertainties that could change in function of various factors that are out of Terrafina’s control. Future expectations reflect Terrafina’s judgment at the date of this document. Terrafina reserves the right or obligation to update the information contained in this document or derived from this document. Past or present performance does not guarantee future performance.