Ten years after their creation, Infrastructure and Real Estate Trusts (FIBRAS) are facing a special situation as the real estate sector is not immune to the economic downturn. However, trusts with a diversified portfolio have been able to face the situation paralyzing the economy, and several analysts foresee an economic recovery in the second half of 2020.
Mexican Infrastructure and Real Estate Trusts handle multiple types of real estate products, such as offices, industrial parks, shopping malls, hotels and educational centers, all of which contribute to developing a country’s economy.
According to the study “Real Estate Outlooks during the Health Crisis” published by Newmark Knight Frank (NKF), Infrastructure and Real Estate Trusts to date amount to around $27,500 million dollars in assets, with 23,800 million square meters and more than 1,750 properties.
These investments have not faced a challenge like the current situation since 2011, as the market remained consistent. Although hotels and retail were the most affected at the outbreak of the pandemic, the logistics market showed an increase in operations thanks to new trend towards e-commerce consumption and last mile deliveries from traditional retailers.
Although Infrastructure and Real Estate Trusts are facing a special situation as the real estate sector is not immune to the downturn in economic activities, the development of industrial infrastructure, e-commerce and telecommunications still has good prospects.
According to Diego León, Market Analyst at NKF, Diversified Infrastructure and Real Estate Trusts compensated for the impact of the products that suffered a downturn in the first half of 2020 with others that performed better. He also states that the outlook for the second half of the year is optimistic, as economic performance is expected to recover after a significant reduction in overall activity, and so the gradual re-opening of the labor market will reactivate the sector.
According to Alejandro Pérez, Equity Market Director at NFK, the sector will gradually recover, so having the necessary infrastructure to meet the demand that was suppressed during the pandemic, as well as implementing operating protocols that prioritize the well-being of workers will be essential for keeping the sector strong.
Oradel Industrial Center plays an important role in the reactivation of the Mexican economy. It offers class A Industrial buildings for manufacturing operations in Nuevo Laredo, just minutes away from international bridges to the United States.