VIEW FROM THE TOP
GROWING E-COMMERCE TO BOOST INDUSTRIAL DEMAND LUIS GUTIÉRREZ Director General of Fibra Prologis
Q: What is your outlook on the industrial real-estate sector
environment for more investor appetite. We could be on
in Mexico in terms of Fibras?
the verge of seeing a growth in Fibras within the market.
A: This year got off to a very rough start with a lot of 176
uncertainty. The US-Mexico relationship and NAFTA were
Q: What is Fibra Prologis’ role regarding the development
brought into question by the US president. Since NAFTA
and maintenance of industrial assets?
is arguably the most important trade agreement Mexico
A: Prologis owns 46 percent of Fibra Prologis and has
holds, questions surrounded the future of US-Mexico trade
the land bank in its portfolio. Prologis performs the
and the markets became nervous. In January 2017, the value
development and Fibra Prologis has the exclusive right to
of the peso fell to MX$22 to the dollar and GDP was revised
buy from Prologis. We are present in six markets – three
downward.
related to consumption, which are Mexico City, Guadalajara and Monterrey. The other three are tied to manufacturing
Having said that, it now seems that the rhetoric and tone of
in Reynosa, Tijuana and Ciudad Juarez. Prologis has been
the US government has improved. In that sense, for Mexico,
developing properties in those six markets and the one with
there has been a partial recovery in confidence levels. The
most growth has been Mexico City.
exchange rate has rebounded by almost 20 percent, trading at MX$18 to the dollar as of June 2017 and in addition there
Fibra Prologis is designed to be a stabilized portfolio.
are now talks about opening up the NAFTA agreement to
The operating metrics of Fibra Prologis have been very
try to modernize it with a mutually beneficial arrangement.
strong and our 1Q17 numbers show 97.4 percent occupancy
Now, the financial markets are much more stable and there
rates. There is also a very good pipeline of projects being
is a new forecast for the Mexican economy.
developed by Prologis and once these are leased, they are offered to Fibra Prologis so we can grow our portfolio.
The real-estate markets have been very strong and consumption has been the key driver of the economy, with
Q: Why is Mexico City the driver of growth at the moment?
the second being manufacturing and exports. Therefore,
A: The Mexican economy has been driven by consumption
Fibras that are exposed to these industries are promising
and this is fueled by growing employment, the growing
because there is a good perception of growth for the
population and an increase in credit, which is very much
Mexican economy for 2017. Some of the securities that trade
focused in Mexico City. That is producing higher sales. One
in relation to infrastructure construction may benefit from
of our key customer segments is retailers who demand
more stable markets. Industrial real-estate funding vehicles
better spaces to store more products, especially in Mexico
can be seen as a positive instrument to take advantage of
City, which is serving as a logistics hub to service the
this new strong economy.
rest of the country. Logistics operators like DHL, FedEx, Kuehne + Nagel, UPS and Geodis have seen double-digit
For a few years, Fibras fell out of favor among investors
growth because a lot of companies want to optimize their
but these factors may create a context wherein investment
supply chains and recruit these third parties to do so. These
in Fibras will be more attractive. A lot of Fibras are now
companies demand modern infrastructure, which is now
trading below their net asset value but this may be a better
growing in Mexico City. A newer trend is e-commerce. Sales in Mexico are 2 percent,
Prologis is the world’s leading industrial real estate company, with
which is very low compared to 8 percent in the US. The
more than 30 years’ experience in the market. Prologis entered
leader, Amazon, recently established operations in Mexico
Mexico in 1996 and, through a merger with AMB in 2011, went on
and has launched its Prime program that guarantees one-
to become the pre-eminent global industrial real estate company
day delivery. This encourages other e-commerce companies
