Are Mortgage REITs Desperately Needed In Mexico?

Are Mortgage REITs Desperately Needed In Mexico?

During our constant contact and communication with developers, project land owners, investment real estate agents and consultants, and other industry participants in the real estate field throughout Mexico, we have found out that one of the primary problems the industry faces is the lack of cash liquidity.  How can this problem be addressed and solved? The solution is the creation of Mortgage RIETs, or FIBRAs, primarily directed to the purchase of mortgage debt.

The creation of A Mortgage REIT (FIBRA Hipotecaria) in Mexico, just like the creation of FIBRA UNO in the acquisition and investment of real estate has done to the real estate industry in the last couple of years, would create the desperately needed cash flow and liquidity developers, project land owners, investment real estate agents and consultants require to be able to promote and move their properties and create wealth to an struggling real estate industry in Mexico.

 It is a known fact that major housing development companies in Mexico have been placing their company shares in the Bolsa Mexicana de Valores (BMV) or the Stock Market for the past few years.  An example of this is the fact that since 2008 to 2010 the major housing development companies GEO, HOMEX, URBI, ARA, SARE and HOGAR, have been showing relatively good numbers in spite of the global economic debacle.  In fact mortgage sales for the years 2007-2010 have ranged in the amounts of 6.2 billion uds. Approx.  and these developers which sales constitute almost One Quarter of the total construction and sales of housing in Mexico, show the following %s for the first trimester of 2011: GEO (34%), HOMEX (30%), URBI (21%), ARA (12%), SARE (2%), HOGAR (1%), as shown in the graphs shown.

And as you we see the leaders in this area are: GEO, HOMEX y URBI, followed by ARA y SARE, with a smaller participation.

And even as stock for these companies sell in the BMV (Mexican Stock Exchange), what we don’t have is a real estate debt participation of any kind in the BMV. 

Therefore the need to create a Mortgage REIT (FIBRA Hipotecaria) in Mexico.  Which could open a window of opportunity, not only to these major developers, but again for all small developers working in the Mexican Real Estate Market to acquire the cash flow and liquidity they require to continue to grow.

Consequently, we are actively negotiating and working with a USA based Mortgage REIT, and preparing the launching of the first FIBRA Hipotecaria in Mexico. Therefore, if you are a developer, project land owner, real estate investment agent, or just a good opportunity investment individual, feel free to contact us so we can keep you abreast of the launching of said product.  Which we know will come to revolutionize the understanding of real estate wealth in Mexico.