BanderasNews
Puerto Vallarta Weather Report
Welcome to Puerto Vallarta's liveliest website!
Contact UsSearch
Why Vallarta?Vallarta WeddingsRestaurantsWeatherPhoto GalleriesToday's EventsMaps
 NEWS/HOME
 EDITORIALS
 ENTERTAINMENT
 VALLARTA LIVING
 PV REAL ESTATE
 CONDOS FOR RENT
 HOMES FOR RENT
 CONDOS FOR SALE
 HOMES FOR SALE
 LAND FOR SALE
 ABOUT VALLARTA LIVING
 HOME OWNERSHIP INFO
 FINANCING OPTIONS
 ABOUT TITLE INSURANCE
 REAL ESTATE FAQS
 VALLARTA REALTORS
 MEET THE AGENTS
 PHOTO GALLERIES
 PUERTO VALLARTA MAPS
 TRAVEL / OUTDOORS
 HEALTH / BEAUTY
 SPORTS
 DAZED & CONFUSED
 PHOTOGRAPHY
 CLASSIFIEDS
 READERS CORNER
 BANDERAS NEWS TEAM
Sign up NOW!

Free Newsletter!

Puerto Vallarta News NetworkPuerto Vallarta Real Estate 

Mexico Clears Way for Maiden Real Estate Investment
email this pageprint this pageemail usPatrick Rucker - Reuters
go to original
December 04, 2010



Mexico City - Mexico will offer shares of its first real estate investment trust early next year as Latin America's second-largest economy mints an asset that could help stimulate property markets.

Investors have complained for years that Mexican real estate investment trusts, known as REITs, were impossible to structure due to murky tax rules and and other costly regulation.

Market uncertainty and a small pool of eligible properties have also discouraged investors but local financiers have bundled 16 commercial and industrial properties that will underpin the new security.

"These kinds of instruments are never easy to structure. Piece by piece, though, we have put the puzzle together," said Augusto Arellano, director of Protego Asesores, which spent 18 months putting together the REIT to be dubbed 'Fibra Uno' after the Spanish acronym for the security.

Mexico finance ministry officials have helped clarify the federal tax treatment for REITs while some states in Mexico have forgone their tax take in order to encourage the market, Arellano said.

Regulators have also recently cleared the way for Mexican pension funds to bet some of their $114 billion on the new security in a move that should reassure outside investors.

President Felipe Calderon has tried to stir infrastructure investments by cutting red tape and pushing the pension funds to invest in roads, bridges and other construction projects.

The size of the new REIT has not been disclosed but one source close to the deal said he expects the security to go on the block before the end of February.

Mexico's commercial and industrial real estate sector is underdeveloped compared to regional peers like Brazil, where foreigners see securities markets as more dynamic.

Lawmakers created a Mexican version of real estate investment trusts more than five years ago but the securities have not been used due chiefly to adverse tax implications.

"The shared view is that the tax uncertainty was the main obstacle," Arellano said.

Since they bundle a variety of real estate projects, REITs add liquidity to the market while hedging risk for investors. The securities, which can be traded like shares, typically shield the fund from corporate income tax.

Santander, Merrill Lynch and UBS are to help shepherd the investment to global investors.

(Editing by Kenneth Barry)



In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving
the included information for research and educational purposes • m3 © 2009 BanderasNews ® all rights reserved • carpe aestus