Equity International is to make its first investment in retail real estate in Mexico since 2008.
The company founded by entrepreneur Sam Zell is investing $125m (€118m) in Grupo Acosta Verde, a family-owned developer, owner and manager of shopping centres in Mexico.
Equity International was last active in the Mexican retail sector between 2003 and 2008 when it invested with Mexico Retail Properties, which owned shopping centres leased to big-box retailers.
The new investment was made in a consortium that included funds managed by the alternative solutions group of BlackRock and Altan Capital.
Equity International invested on behalf of its fund, EI AV Fund, which was set up specifically for the deal. As reported earlier this month, the Teacher Retirement System of Texas provided $75m of the capital.
Tom Heneghan, CEO of Equity International said: “EI was an early investor in Mexican retail property and we are pleased to return in partnership with a distinguished group of global investors who share our vision.
Acosta Verde is involved in a retail portfolio that totals 160,370sqm across 15 states in Mexico.
The company created the Sendero shopping centre brand, targeted at middle class consumers.
There is a strong investment opportunity in Mexican retail. Growing consumer purchasing power is driving an increase in the gross leasable area of shopping centres across the country.
The retail landscape in Mexico is shifting from predominantly small informal, individual storefront operations to more specialised retail, propelled by consumer demand and expectations for quality and price competitiveness.
Market studies indicate that only 20% of Mexico’s retail sales occur in shopping malls, compared with 56% in the US.
”Acosta Verde is well positioned to deploy capital with an experienced management team and a proven, scalable concept.”
Arq Jesus Acosta Verde, CEO of Acosta Verde, said: “This new relationship is a perfect match for Acosta Verde’s future. The strength of our brand, people and business model will benefit from this new growth capital and from EI’s experience.”
