FIBRA Prologis Acquires 77.1% of Terrafina in USD 2.5bn Deal, Cementing Leadership in Mexico’s Industrial Real Estate Market

By Velizar Velikov, Head of M&A Database at EMIS

FIBRA Prologis, a top Mexican real estate investment trust (REIT) focused on Class-A industrial properties, has successfully completed its tender offer to acquire a 77.1% stake in Terrafina, a prominent peer in the industrial real estate sector. The transaction, valued at approximately MXN 45.9bn (USD 2.5bn) including debt, significantly strengthens FIBRA Prologis’ position as a dominant player in Mexico’s booming industrial real estate market.

As part of the offer, FIBRA Prologis gave Terrafina shareholders the choice between receiving MXN 45 in cash per certificate or 0.63 FIBRA Prologis certificates for each Terrafina certificate. The REIT issued over 217 million of its own certificates and paid MXN 11.8 billion to those opting for cash.

This acquisition comes at a pivotal time for FIBRA Prologis, as Mexico experiences a surge in demand for industrial space driven by nearshoring – a trend where global manufacturers relocate production closer to key consumer markets. With an impressive near-100% occupancy rate and continuous rental growth, FIBRA Prologis is well-positioned to capitalize on these favorable market conditions.

Terrafina, a REIT that owns, develops, and manages industrial properties across Mexico, boasts a portfolio of 3.9 million m2 of industrial real estate across several key markets, which includes 288 industrial warehouses and 4 land bank properties. This extensive portfolio complements FIBRA Prologis’ own holdings, which as of June 30, 2024, include 236 logistics and manufacturing facilities covering 4.4 million m2 of gross leasable area in Mexico’s six key industrial markets.

FIBRA Prologis is sponsored by Prologis, Inc., the global leader in logistics real estate. As of mid-2024, Prologis had a portfolio of approximately 115 million m2 in 19 countries, with a customer base of 6,700 companies involved in business-to-business and retail/online fulfillment. Prologis has a long-standing presence in Mexico, its first international market, and continues to see significant growth opportunities in the region.

Currently, about 70% of FIBRA Prologis’ portfolio is located in consumption-driven markets, while the remaining 30% serves manufacturing-driven regions, reflecting its strategic focus on high-demand areas. This acquisition further reinforces FIBRA Prologis’ ability to meet the growing needs of Mexico’s industrial sector while leveraging the expertise and global reach of its sponsor, Prologis, Inc.

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