Experience and Investment Strategies in Mexico

by: Carlos de la Mora

Investors see a downturn in the market for the first year in every new administration in Mexico, which is the case today. However, this time they see a much more severe shutdown as well as increased political risk. In that context, a dramatic decrease in liquidity over the past 9 months make it a great time to be a liquidity provider in Mexico. This is the case for our panelists: Bob Batting, Karl Kreppner and Ira Schulman, who represent three of the largest and most important funds investing in Mexico today.

Mexico remains a country with 120 million people, with good demographics and proximity to the United States. Favorable demographics and a young population with a relatively low use of debt add to Mexico representing a solid investment candidate. These fundamentals make it a good investment for development funds, especially in the long-term view.

Carlos Aiza from Creel moderated this panel impeccably and asked panelists about the risks and opportunities investors see with the evolution of investment vehicles that first appeared in 2009 (CKDs, FIBRAs, CERPIs), a recent change of government, changes in policies and a potential new Free Trade Agreement (T-MEC).

Investment funds continue to be bullish on Mexico. Returns in general are very attractive and have held up well. Strong local partners in each sector are clearly a fundamental factor in each of these funds’ success. Having the right partner is one of the most important elements towards a successful development or acquisition in Mexico.

Uncertainty and unpredictability in the market result in low projected growth this year, but also bring opportunity. Things that historically have worked, no longer do. Strategies, therefore, need to change. There are solid value-add and exciting market opportunities, and the key today is to be selective. To frame where the opportunity is, in terms of geography and asset type.

It will be interesting to see how capital markets and domestic strategies in Mexico evolve in a complicated global investment scenario.

ULI Member Book Signing: Real Estate Titans with Author Erez Cohen

During the Fall Meeting, people were able to assist a book signing with our CMA Erez Cohen who gladly shared details with the readers and discuss several topics of his book.

An incredible experience to chat with him and buy a signed copy of his amazing book.

Closing Session with Nikki Haley, U.S. Ambassador to the United Nations

Nikki R. Haley is the former United States Permanent Representative to the United Nations. She served as a member of President Donald Trump’s Cabinet and the National Security Council.  During the closing session, Haley talked about her professional path moderated by Derek Chollet, from The German Marshall Fund of the United States.