PREI® combines industrial funds; launches publicly-traded Fibra in Mexico
MEXICO CITY--(BUSINESS WIRE)-- Prudential Real Estate Investors-sponsored Terrafina (BMV: TERRA13), has raised MXP8.3 billion (US$665 million) in its initial public offering, PREI® announced today. Terrafina is a Mexican real estate investment trust known as a fideicomiso de bienes raíces, or Fibra. PREI is the real estate investment management and advisory business of Prudential Financial, Inc. (NYSE: PRU ) .
Terrafina offered 295.7 million securities at 28 pesos per share, with the potential to sell an additional up to 44.4 million securities pursuant to a greenshoe option. PREI and Terrafina’s internal management team will manage the Fibra, which holds the third largest industrial portfolio in Mexico. Citigroup, Goldman Sachs & Co. and HSBC served as joint bookrunners for the IPO.
“The dual management structure leverages PREI’s real estate acquisition expertise and asset management capabilities while providing a corporate governance framework that absolutely aligns our interests with those of Terrafina’s shareholders,” said Alfonso Munk, head of PREI-Latin America.
Terrafina’s initial portfolio comprises 146 properties acquired through the combination of two of PREI Latin-America’s closed-end funds, PLA Industrial Fund I and PLA Industrial Fund II. The properties include 132 developed industrial properties and 14 land reserve parcels. The properties are primarily located in Mexico’s central, Bajío and northern regions, spread throughout 25 cities in 16 states.
“Terrafina’s initial portfolio, with its scale, diversity and geographic reach, gives our investors stability and a substantial market share and positions them to take advantage of Mexico’s ongoing economic expansion,” said Alberto Chretin, CEO of Terrafina. “We are delighted that our investors will continue to benefit from PREI’s expertise, its industry relationships and ability to execute transactions.”
Terrafina’s investors include Mexican institutional and retail investors who acquired securities through the public offering, along with institutional investors around the world who invested through a private placement, and the original investors in the two closed-end funds.
Terrafina’s potential for strong growth outlook is underpinned by the prospects for acquisitions of quality additional properties and organic growth through repositioning properties in the initial portfolio, continuing improvement in occupancy rates, and by the prudent development of its land reserves. “Our conservative, yet flexible capital structure will allow us to pursue appropriate growth opportunities,” added Francisco Navarro, the Fibra’s chief financial officer.
A majority independent board with experienced business leaders from a range of industries governs Terrafina to represent the collective best interests of the shareholders, maximize the value of the Fibra and foster long-term success. Chretin, as the CEO, came to Terrafina after serving as executive advisor to the closed-end industrial funds. He has more than 30 years of international business experience and more than 15 years of experience in running industrial property businesses in Mexico, and was most recently minister of the economy for the State of Chihuahua in Mexico. Munk is the other business-affiliated board member.
Independent board members include: Eduardo Solís, president of the Mexican Association of the Automotive Industry; Arturo D’Acosta, managing director of Alvarez & Marsal in Mexico City; Edmundo Vallejo, a professor of general management at the IPADE Business School; José Luis Barraza, former chair and current member of the board of directors of Grupo Aeromexico; and Victor D. Almeida, general director of Interceramic.
“Our independent board members have deep knowledge and experience in economics, capital markets, international trade, the automotive industry and management, which complement the investment management and real estate knowledge of the Terrafina team and the external advisor,” Chretin said.
PREI is a leader in the global real estate investment management business, offering a broad range of investment vehicles that invest in private and public market opportunities in the United States, Europe, the Middle East, Asia, Australia and Latin America. Headquartered in Madison, New Jersey, PREI has other offices in Atlanta, Chicago, New York, San Francisco, Miami, London, Lisbon Luxembourg, Frankfurt, Munich, Paris, Istanbul, Abu Dhabi, Mexico City, Sao Paulo, Beijing, Hong Kong, Seoul, Singapore and Tokyo. In addition, PREI hasrepresentatives in Milan and is establishing a presence in Sydney (pending regulatory approval). As of September 30, 2012, the company managed approximately $51.2 billion in gross real estate assets ($34.6 billion net) on behalf of more than 490 clients worldwide. Its gross assets in Latin America total $3.6 billion ($2.4 billion net). For more information, visit http://www.prei.com.
Prudential Financial, Inc. (NYSE: PRU ) , a financial services leader with approximately $1.060 trillion of assets under management as of December 31, 2012, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/.
Terrafina (BMV:TERRA13) is a Mexican real estate investment trust formed primarily to acquire, own, develop and manage real estate properties in Mexico. Terrafina’s portfolio consists of attractive, strategically-located warehouses and other light manufacturing properties throughout the central, Bajío and northern regions of Mexico. Terrafina owns 146 real estate properties, including 132 developed industrial facilities with a collective GLA of approximately 19.8 million square feet and 14 land reserve parcels. The company has approximately 180 lease agreements with tenants that include international, national, regional and local companies. Additional information is available at http://www.terrafinafibra.com.
THIS PRESS RELEASE IS NOT AN OFFER FOR SALE OF THE SECURITIES, AND THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED. TERRAFINA DOES NOT INTEND TO REGISTER ANY PART OF THE OFFERING, OR CONDUCT A PUBLIC OFFERING, IN THE UNITED STATES.
Prudential Financial, Inc.
Theresa Miller, 1-973-802-7455
KEYWORDS: Mexico Central America