Real estate trusts landed on the Mexican Stock Exchange (BMV) 10 years ago and their performance has been positive, although they have had to face significant difficulties as a result of the pandemic, where they have been victorious so far.

Reits are of special importance in the economic financial sector, since anyone can invest capital that will be used to finance the acquisition or construction of real estate and that will give income through income.

The properties acquired can be: offices, shopping centers, industrial warehouses and / or hotels, among several, in the proportion that each Reit determines.

Thus, public investment in real estate was democratized, by allowing the acquisition of shares through the purchase of shares, where the 16 Reits existing in Mexico have generated an ecosystem regarding purchases that has made real estate grow in the country.

The Reits listed on the BMV are still valid and in recovery, for the most part, as has the world economic cycle, demonstrating the resilience of this type of asset.

This situation has allowed the growth of some of them, which have benefited from low interest rates that have improved their access to various sources of funding.

The disadvantage came from sanitary restrictions and the suspension of activities, which brought with it problems to build and continue with the plans under development and complicated the payment of rent to clients.

The trusts opted to make discounts and defer payments to guarantee the tenants' permanence, so although vacancies did not fall completely, income and profits were reduced.

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In June, the economy began to dynamize intermittently throughout the country with openings when coronavirus cases fell in Mexico, which allowed us to see, more clearly, the damage count of the real estate sector. The consequences were different for the industrial, office, hotel and commercial segments.

The industrial sector and those trusts totally dedicated to it or with part of its portfolio in this segment, freed the declines. Manufacturing was affected more than logistics, in the beginning, where international treaties and the growth of e-commerce were the great triggers.

The construction and demand of spaces for logistics in the north of the country and near the cities was promoted, also causing the reconversion of spaces to create warehouses closer to the majority of the population.

On the contrary, the portfolios that had the highest share of offices have been the most affected. Corporate spaces represented a high risk of contagion, so companies changed their work format and began to carry out more digital and remote tasks.

Of interest: Fibra Prologis increases its portfolio with property in Monterrey

Various activities of the wholesale and retail trade, social and personal community activities, hotels, restaurants, among others, had to slow down or close. The consequence was the increase in vacancies, despite Reits' efforts to support tenants.

The result has been high vacancy, which has generated negative net demand, in a large part of the corporate markets.

In the capital of the country, during the first quarter, the vacancy rate grew 1.6%, and in Monterrey 1.8% more.

In Querétaro and Puebla, the increases in the vacancy were more pronounced with 5.9% and 3.4%, respectively.

Guadalajara also registered negative figures, with an annual increase of a third of its available spaces, while Tijuana doubled the empty offices, indicates the consulting firm Solili.

The situation has led to the implementation of other strategies, such as reconversion. Fibra Uno, for example, is working on transforming two office buildings into hospitals.

With the advance of vaccination and economic reactivation, the market will begin to establish itself and the occupancy of properties will return, but with configurations, and a strong inclination to sustainability.

Another opportunity in the immediate future is through the issuance of debt, which the Reits could probably take advantage of.

In Solili, consult the Solili Offices Report July 2021: The vacancy maintained a downward trend

Original note