Mexico City, January 12th, 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 that it signed a new sidecar (joint venture) with an international pension fund that has a key long-term relationship with PGIM Real Estate. The sidecar will focus on the acquisition, development, lease, and management of industrial assets located in strategic markets. Its initial commitments amount to US$200 million. Overall, the sidecar could add between US$450 and US$500 million in new investments, without diluting shareholders and in alignment with Terrafina’s LTV guidance.
This announcement comes as Terrafina completes its three-year growth plan ahead of schedule, having successfully committed a total investment greater than its initial guidance as of year-end 2022. The sidecar will represent a key milestone for Terrafina’s growth while capitalizing on the strong fundamentals fueled by Mexico’s nearshoring momentum.
The shift towards more regionalized trade dynamics has led many companies to accelerate their nearshoring strategies, benefiting Mexico with a growing demand for industrial real estate. Terrafina is well positioned to take advantage of these opportunities, given its exposure to northern border markets, and its expertise in providing solutions for tenants of Mexico’s import-export value chain. As a result, and through this sidecar, Terrafina will be able to continue growing to serve key industries. These include Electric Vehicles (EVs), e-commerce, electronics, healthcare, and manufacturing for export integrating cutting-edge technologies, among others.
Under this structure, resources will be allocated to the acquisition of Class-A properties, as well as development activities during a two to three-year investment period.
The key merits of this transaction are:
- Provides Terrafina with resources to capture the current environment’s opportunities, while significantly enhancing the Company’s growth story.
- Triggers incremental growth to Terrafina’s top line, NOI, and AFFO, without diluting current CBFI holders.
- Gives Terrafina preferential take-out rights.
- Allows a self-financed take-out, aligned with the growth and non-dilution strategy.
Alberto Chretin, CEO of Terrafina, commented: “This partnership represents an opportunity to further strengthen Terrafina’s position as a relevant player in the consolidation of industrial real estate space. It is also a great alternative to take advantage of current nearshoring trends without diluting our existing shareholders. Furthermore, the sidecar will provide additional resources to grow in key markets and industries, while maintaining a healthy and disciplined balance sheet. I would like to thank PGIM Real Estate for its key contribution to our business model and this new partnership. Through their expertise, relationships, and track record in the global real estate market, they enabled this transaction’s origination. This will bring an alternative aligned with the vision and acceleration of our growth in strategic markets to the table.”
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 webcast to discuss more details of this strategic announcement with the market.
Miranda Newswire – Full Press Release: Download PDF
Investor Relations Contact Details
Francisco Martinez
Investor Relations Officer
Tel: +52 (55) 5279-8107
E-mail: francisco.martinez@terrafina.mx
Marimar Torreblanca
Miranda IR
Tel: +52 (55) 5282-2992
E-mail: marimar.torreblanca@miranda-newswire.com
Webcast Details
Friday, January 13th, 2023
11:00am CT / 12:00pm ET
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Webinar ID: 853 2026 0206
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