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PREI® Combines Industrial Funds; Launches Publicly-traded Fibra In Mexico

Stocks in this article: PRU

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.

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