We are a recently created real estate trust focused on the acquisition, leasing, and management of for-lease properties in Mexico. We were constituted by an entity of SOMA, a leader in asset management, with approximately $85 billion Mexican pesos in assets under management as of September 30th, 2020.
Our Trust will be internally managed by a local team with significant experience in the real estate sector in Mexico. We will also have access to the knowledge, focus on investments, and highly specialized asset management of the Administrator and its Affiliates, who are among the largest retail real estate owners and operators in Mexico.
Robust and diversified portfolio of Premium quality properties with first-rate tenants.
Within our Initial Portfolio there are emblematic assets with first class global tenants and a high visitor flow. These assets have generated a positive impact on the neighborhoods that surround them over time. The portfolio is also diversified, generating sustainable growth that mitigates risks from a particular property or region.
Out of the 10 operating assets, 9 are shopping centers and 1 is a mixed-use property which includes offices and retail. In terms of location, 4 of the operating assets are in the metropolitan area of Mexico City, 2 in Puebla’s capital, 2 in Querétaro, and 2 in Veracruz.
Our Initial Portfolio is strategically located in regions with growing economic activity, in highly populated areas, and within the most prominent commercial and office corridors in the country to (i) be in the points of highest influx (eg. Pedregal and Polanco in Mexico City, Boca del Rio in Veracruz, and Juriquilla in Querétaro), (ii) avoid cannibalization within the portfolio, and (iii) tend to the demands of this asset class.
The portfolio has mature assets, which have been maintained, renewed, and updated according to new trends in the retail industry to maximize the visitors flow. These assets have become a benchmark in the areas where they are located.
Additionally, the Initial Portfolio will have 2 projects under development located in the best areas of Mexico City and 1 project in the planning stage. The 2 projects under development are mixed-use projects. They all have substantial progress in their planning phase, after more than 3 years in architectural review, paperwork, legal structures, inclusion of key partners, and budget evaluation.
Internal manager with extensive sector experience, backed by one of the leading real estate groups in the country.
Our Trust will be internally managed by a team focused exclusively on the FIBRA. This will allow the efficient operation of the portfolio and a higher transparency level. The Management Team has more than 50 years’ experience in real estate, having developed 11 projects, overseen 2 projects currently under development and 1 in the planning phase in the main cities in Mexico. In total, our team has developed over 889,000 square meters of GLA.
The Management Team is composed by highly capable people, committed to the vision and growth of the platform. Said team will be involved in the day-to-day management of the FIBRA, seeking efficiencies in all our projects and thus leading to attractive returns and value generation over time.
In addition to the extensive experience that the Management Team has, the team has a deep knowledge of the portfolio assets as well as a proven capability to execute the development of new projects. This is all backed by a real estate group that offers comprehensive services from the planning stage of an asset all the way up to the operation of it.
Furthermore, the dynamics and knowledge the team has, allows it to achieve a unique vision when prospecting new investment opportunities for portfolio growth.
High growth potential through a defined strategy for identifying opportunities in strategic areas of the country.
Fibra SOMA will maintain an exhaustive process of identification and analysis of possible development opportunities. Institutionalized decision making will help determine which projects are economically feasible and favorable for the Trust and its investors, thus defining the best growth strategies that maximize profits and portfolio returns.
Additionally, derived from the experience the key members in the management team have accumulated, we believe we have a competitive advantage in identifying growth opportunities inside and outside of the Initial Portfolio. The Manager will also continuously look for ways to innovate and create spaces within the portfolio to maintain attractive growth for investors. This means improvements through expansions and remodeling will be done in accordance with current and future trends in the asset classes where we operate. Furthermore, the Manager will maintain open contact with several investors and market participants to identify possible future investments in Mexico.
Thanks to this strategy, in its history, the Management Team was able to build a unique portfolio throughout Mexico which has been successfully received by its tenants, visitors, and investors.
This is reflected in the addition of 278,025 sqm of GLA over the past 10 years. A good part of this has been leased to the same tenants who have historically decided to grow together with SOMA.
Solid corporate governance standards, in line with the best practices in the industry.
The Trust was strategically designed to have a governance structure that follows the market’s best practices. The Technical Committee is a balanced committee with members with significant experience in the national and international real estate space, led by universally recognized real estate groups.
Additionally, two committees have been created: (i) the Audit and Corporate Practices Committee, made up of 100% independent members and focused on constant monitoring and evaluation related party transactions as well as key trust activities and (ii) the Investment Committee, designed to strengthen the sourcing and due diligence process for new investment opportunities.
The members of our committees are individuals with distinguished reputations and globally recognized career paths. We believe their experience as well as their deep real estate knowledge can greatly benefit us when identifying, selecting, and acquiring attractive investment opportunities. In addition, in compliance with the best in class corporate governance standards, we have incorporated in our Technical Committee independent members with extensive experience in the sector.
Alignment of interest with investors.
Since its inception, Fibra SOMA has put in place several mechanisms for aligning the interests of its Management Team and investors. All of them are reinforced by our solid corporate governance structure.
First, once the Formation Operations have been Completed, SOMA will maintain a considerable stake in the FIBRA. By doing this, SOMA demonstrates its commitment to the Fibra and aligns its interests with investors to maximize the portfolio’s returns over time.
Second, the FIBRA has an internalized management, thereby guaranteeing the alignment between the management team and investors, while increasing transparency. The Management Team also has the support from one of the largest retail real estate owner and operator in Mexico, which will provide a competitive advantage when identifying and analyzing the best development opportunities for the FIBRA.
Third, the FIBRA’s corporate structure reinforces the alignment of interests. The Technical Committee will review the contracts for the provision of architecture, development, operation, and commercialization services to the FIBRA to ensure these are fair and efficient.
Additionally, Fibra SOMA will have an Investment Committee in which Cadillac Fairview will have the right to appoint 2 members (or 50% of the committee’s votes). Cadillac Fairview is a respected Canadian investment fund and with its participation in our Investment Committee, it will be able to contribute its extensive real estate knowledge to the FIBRA’s decision process.
Efficient operator with proven ability to execute that maximizes value through a vertically integrated platform.
With over 50 years’ real estate experience, SOMA is characterized by being a disciplined an effective operator of its properties. Throughout its history, SOMA has developed and operated over 889,000 square meters of GLA, leased to approximately 1,470 tenants including approximately 365 internationally recognized retail brands. Thanks to this experience, SOMA has been able to develop a unique and difficult to match know-how that today places it as one of the leading real estate groups.
SOMA’s ability to deliver positive returns as well as its operating capabilities have been demonstrated by the growth differential between NOI and GLA of approximately 3.5 times in the past last 14 years. Moreover, the properties operated by SOMA have maintained average occupancy rates of ~96% in recent years.
This is achieved by maintaining high renewal rates and a significant marketing effort. Thanks to this proven effectiveness of SOMA, tenants usually seek to grow and expand their presence in Mexico through properties operated by the group, forming a very productive partnership for both SOMA and the tenants.