Mexico City, December 9th, 2021 – Terrafina (“TERRA”) (BMV: TERRA13), a leading industrial real estate investment trust (“FIBRA”), externally advised by PGIM Real Estate and dedicated to acquiring, developing, leasing, and managing industrial real estate properties in Mexico, announced the following today:
Terrafina continues to take advantage of its high-conviction growth story in Mexico supported by the strategic advisory of PGIM Real Estate. As previously discussed, the digital transformation of our society, and structural demand changes, have given rise to new opportunities in the e-commerce sector. As a result, Terrafina has signed new lease agreements, demonstrating the relevance of e-commerce growth for the Company’s strategy. In particular, Terrafina was able to confirm:
- The signing of a seven-year term lease for the 210,000 square foot industrial property. This lease will generate an estimated US$1.6 million in NOI per year, beginning in June 2022. The tenant specializes in the manufacturing of packaging solutions, which serves a diverse range of customers in the e-commerce sector.
- The signing of a five-year contract with a leading e-commerce group for last-mile operations in Tijuana. The repositioning of this currently vacant property of 50,849 square feet will generate annualized NOI of US$320,000 as of December 2021.
Additionally, based on the same investment thesis, Terrafina initiated new developments that will support its growth strategy:
- The beginning of two new industrial properties’ developments in Ciudad Juárez and Monterrey that are expected to have a total Gross Leasable Area (GLA) of 473,000 square feet. These projects, located in Terrafina’s land reserves, are expected to require a total investment of US$18.6 million and generate an estimated annualized net operating income (NOI) of US$2.1 million for 3Q22. This implies a return on investment of over 11%. Terrafina already has letters of intent for 68% of the leasable space, signed by multinational companies in the logistics sector.
- The groundbreaking for the construction of a 38,000 square foot expansion of an existing property in the growing electric automotive cluster of Ramos Arizpe, in Coahuila. It is estimated to require an investment of approximately US$2.8 million, and the rate of return measured by NOI is 11%. Terrafina expects construction to take approximately six months and the expansion to begin generating revenues in July 2022. Finally, the term of the new lease will be ten years.
In sum, in its first year since launching its strategic growth plan Terrafina has initiated one million square feet of new developments:
- Terrafina concludes the first year of its strategic plan with more than one million square feet of new developments in process or starting operations, located in land reserves in primary markets, and developed under LEED standards. Total investment reaches US$68.4 million and will generate approximately US$7.0 million in NOI per year, projected to be fully stabilized by 3Q22.
Alberto Chretin, CEO of Terrafina, commented, “We are very pleased with the progress of our growth and repositioning plan. With the outstanding support of our advisor PGIM Real Estate, Terrafina has invested in new developments throughout the year, taking advantage of its land reserves and the new opportunities arising from growth in e-commerce activities in Mexico. We will continue to advance with our growth strategy, maintaining a disciplined management of our leverage, which we have reduced to 36.4% in 3Q21. We will continue to focus on the quality of our assets, our markets, and the generation of value for our stakeholders.”
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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