WHAT ARE FIBRAs?

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What are FIBRAs?

 

FIBRA is the equivalent to a REIT in Mexico. These instruments are listed in the Mexican Stock Exchange. 

 

FIBRA is a vehicle focused both on the acquisition and construction of real estate that is rented in Mexico and the result obtained from its operating flow is distributed, through dividends, every quarter.

 

FIBRAs as an investment instrument focus on different segments of the real estate sector such as: offices, industrial, hotels, commercial ( retail ) and self-storage ( storage ).

How does a FIBRA work?

como-funciona-una-fibra-amefibra

1 - INCOME

FIBRA receives income derived from the lease contrats of the properties.

2 - EXPENSE

Operation and property management expenses are paid.

3 - INTEREST

Interest is paid on debt (if any).

4 - MANTENANCE

Property maintenance and lease fees are paid.

6 - YIELDS

The remaining amount is distributed to CBFIs holders through dividends.

Advantages:

  • Conversion of low liquid physical goods to liquid and marketable securities.
  • Guaranteed liquidity, since certificates are easily converted into cash thanks to the fact that they are freely traded on the main exchanges.
  • Constant flow source via dividends.
  • High rates, based on growth derived from surplus value, which exceeds the inflation rate.
  • Diversification derived from the product, customers and companies that guarantee contracts, minimizing risks.
  • Flexibility to adjust to the needs of both institutional and physical investors.
  • Trusts that ensure the permanence of the property managed and operated through a third party, as well as the destination of the flows.
  • Trust in the issuer that is a CPO holding company that complies with the regulations of the stock exchange.
  • Improvement of trading conditions for those who sell assets.
  • Guarantee of negotiations carried out through transparent and efficient platforms.
  • It offers investors the opportunity to participate in the ownership or financing of Real Estate, in addition to having significant tax benefits since there is no ISR (Income Tax) for obtaining capital gains derived from the disposal of issued shares by Mexican companies in the stock exchange, and in accordance with recent modifications, provisional payments of ISR and IMPAC (Asset Tax) are exempted.

Some types of Real Estate FIBRAs:

OFFICES

HOTELS

SCHOOLS

LAND

MALLS

INDUSTRIAL

SELF-STORAGE

MIXED USES