First Fibra hits market after 8 years of waiting

After eight years of starts and stops and regulatory wrangling, Mexico has finally seen its first real estate investment trust - known locally as a Fibra - issue shares on the BMV. On Thursday (Mar 17), Fibra UNO issued more than 185mn shares at a price of 19.5 pesos each, to raise a total of 3.62bn pesos (US$300mn). The shares were offered locally and to international investors. The issue was handled by the brokerage division of Santander México and by local brokerage Protego. According to a joint press release, Fibra UNO will use the funds to purchase three additional properties to add to its current portfolio of 16. "Fibras are an instrument that has been awaited anxiously by the markets and real estate developers," Fibra UNO general director André El-Mann said in the release. LONG WAIT The waiting started in 2003, when Mexico's finance ministry adjusted tax regulations to allow for the new instruments. However, other regulator and tax concerns held up the first issue until now. Mexico's private sector pension fund managers - known as Afores - have been among those waiting since a recent loosening of regulations allowing them to invest more heavily in equity securities. Fibras are required to be made up of at least 70% real estate investments and pay at least 95% of annual earnings to shareholders. The trusts earn revenue through renting out the commercial, residential and industrial properties in their portfolios.