90-Property, $90M HSBC Commercial Portfolio Sale Biggest in Mexico This Year

September 8, 2011
By Barbra Murray, Contributing Editor

With the assistance of commercial real estate services firm Jones Lang LaSalle, HSBC has sold a group of 90 bank branches and regional corporate offices in Mexico in a $90 million sale-leaseback deal. The transaction marks the largest commercial real estate sale in Mexico in 2011 to date.

Eight individual investors snapped up the portfolio, which turned the eye of many a prospective buyer, including foreign funds. “We received several offers on each property in the portfolio which confirms an increasing level of interest of local and international investors in high quality assets in Mexico,” Mauricio Lozano, a senior vice president with JLL, said.

A few significant factors are luring commercial real estate players to Mexico. The country is an attractive investment market because, as Rodolfo Albin, senior vice president with JLL, told Commercial Property Executive, inflation is stable, foreign exchange is stable, the gross domestic product is stable at 3.3 percent and its risk factor is the second lowest in Latin America. “The rentability and profitability of Mexico’s real estate market has also remained very stable over the years, with average returns that are above those of the European and American markets,” Albin said. “In general, real estate activity, both development and investment, have continued to grow in spite of the global economic downturn.”

Investor interest in Latin America is on the rise. By the close of the first quarter of 2011, the year-over-year transaction volume had increased 47 percent to $10.6 billion, according to a report released in July by Prudential Real Estate Investors. Mexico trailed all other major Latin American countries — the bulk of the activity took place in Brazil — however, sales activity increased, nonetheless.

*This story was updated September 9, 2011, at 3:30 p.m. EST.