Prologis Solely Funds FIBRA Prologis in Mexico - Analyst Blog

Industrial real estate investment trust – Prologis, Inc. PLD – announced its sole sponsorship of FIBRA Prologis, a real estate investment trust in Mexico. The move would serve as a long-term investment vehicle for the company and help it to leverage on the growing market for logistics and manufacturing facilities in Mexico.

As a matter of fact, FIBRA is an investment trust that is engaged in the acquisition and development of real estate in Mexico. The properties are leased and the company must satisfy certain conditions (like the REITs legislation in other countries) to qualify as FIBRA.

Spanning 29.7 million square feet of space, the class-A portfolio comprises 177 logistics and manufacturing facilities in Mexico. Notably, 61% of these properties are positioned in global markets of Prologis while 39% are in its regional markets.

It would also include properties from the previous Prologis MX Fund LP, Prologis Mexico Fondo Logistico and Prologis' wholly owned Mexico properties. A wholly owned subsidiary of Prologis would operate as the property and asset manager for FIBRA Prologis.

With improving operating conditions, the Latin American market remains a good investment option for Prologis. According to the International Monetary Fund, GDP growth in Mexico is projected to be 3.0% in 2014, up from only 1.1% in the prior year.

The market continues to experience a recovery in demand while occupancy rate across the six largest logistics markets continued to improve. Hence, we believe this move would help Prologis to ride on the growth trajectory going forward.

Prologis currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may also consider stocks like The GEO Group, Inc. GEO, Terreno Realty Corp. TRNO and W. P. Carey Inc. WPC. All these stocks carry a Zacks Rank #1 (Strong Buy).
 

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