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MX23_RC_AMEFIBRA_simon

MEXICO - Real Estate & Construction

Simón Galante

President, Mexican Association of Real estate FIBRAs (AMEFIBRA) & CEO, Fibra Hotel

Bio

Simón Galante Zaga is CEO of FibraHotel and founding partner of Grupo GDI. Galante has more than 30 years of experience in the real estate sector in structuring, acquisition, development and financing of real estate projects. He holds certificates from IPADE and Harvard Business School.

AMEFIBRA is the face of FIBRAs in Mexico in terms of dealings with the government, regulatory issues, and everything else related to the sector, with over USD37.66 billion in total assets among members.

AMEFIBRA is the face of FIBRAs in Mexico in terms of dealings with the government, regulatory issues, and everything else related to the sector, with over USD37.66 billion in total assets among members.

Can you elaborate on the current state of the FIBRA industry in Mexico?

Our association united the 15 FIBRAs in Mexico and our main focus is promoting the FIBRA market in Mexico through national as well as international investors. This association also serves as the front for all issues with the government, regulatory issues, and everything else related to FIBRAs, so that communication is more efficient and is focused on having one centered strategy for all FIBRA players. There is about USD37.66 billion in total assets among the FIBRAs. We have more than 2,000 properties in the association, with about 290.5 million sqft of rentable space. FIBRAs are present in many sectors, including the office sector, industrial, hotels, retail, educational and self-storage. We also have about 400,000 collaborators or employees in the FIBRAs, directly and indirectly. This financial tool plays an important role in providing jobs for people in the 32 states in Mexico. Furthermore, 14 of the 15 FIBRAs have presented ESG reports, and AMEFIBRA as a whole has also done so. That is important in that we want to be a leader in real estate and play a public role in the ESG movement. This is not only a trend or something that investors want; we expect a full return of investment on such an important movement as ESG. We are also leaders in the emission of green bonds, with almost USD657 million in green bonds issued by all the FIBRAs. This is not only in support of ESG, but can also help save money and achieve a better rate. Another key point is that three of our FIBRAS are listed in S&P’s 2022 Sustainability Yearbook. We are extremely proud of their achievements.

In what ways is the Mexican REIT market still in development?

The REIT market started in USA in the 1960s and in Mexico in 2011, almost 50 years later. The sector is in its 10th year, so we still have a great deal of ground to cover. We have been adopting many good practices and learnings in the world of REITs. (NAREIT) However, we are still in the development mode. The most important thing that needs to happen is a strong corporate government and inclusive boards with men and women. We have been extremely vocal about equality. For example, there are two female board members on our board, and we believe we can grow that number when required and when we see talent. The other thing is that we need to reengage the international community in FIBRA investments in Mexico. When we went out to market, there was great participation from institutional international investors, and now we need to return. At FIBRA Day in New York City, we want to educate potential investors in order to diversify our investment into different markets. We also need to get better at disclosure and have been working strongly on that. Our disclosures and reports are world-class, though we want to improve further. We have also diversified into different industries, geographies, or risks. We are the best professionally managed option. If someone wants to invest in the real estate market with dividends, a clear path, and professional disclosure, we are the best option. FIBRAs will grow strongly in the next 10 years.

What are the advantages of the Mexican REIT or FIBRA market in comparison to other emerging markets?

Mexico has a great opportunity with nearshoring. We are becoming, by far, the largest manufacturing opportunity next door to big markets. In the industrial sector, the past few years have been the best in the history of Mexico. The possibility to grow on that is enormous, and all the parallel things that go with that. This is a great opportunity that other countries do not have. We have a historic opportunity in Mexico that we will grow, and this will stimulate all the segments of the FIBRA through that.

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