Singapore’s sovereign wealth fund GIC and the CCLA partnership have entered into a MX$5.5B (€239m) joint venture to develop and operate multi-family buildings in Mexico.
GIC has team up with CIM Group and Compass Group to develop and operate purpose-built, for-rent multi-family buildings across Mexico’s largest cities including Mexico City, Guadalajara and Monterrey.
The joint venture aims to develop a portfolio of mid to high-rise buildings, with each comprised of around 250 to 400 rental units.
CCLA will develop and operate the buildings.
Avi Shemesh, the co-founder and principal of CIM, said: “Adding a world-renowned investor of the calibre of GIC advances the continued growth of our presence in Mexico.
“We are seeing tremendous opportunities for an experienced owner and operator like CCLA to bring much needed institutional-quality residential assets and operations to Mexico’s gateway cities as our existing assets have proven.”
Manuel Balbontin, a founding partner of Compass, said: “Leveraging Compass Group’s deep knowledge of the Mexican market for more than 20 years, along with CCLA’s growing pipeline of multifamily operating and development projects for the past several years, this collaboration with GIC further strengthens CCLA’s strategy in Mexico.
“CCLA believes that the growth of the middle-class and the cultural shift in favour of city-living is rapidly transforming the residential demand in urban centres.”
Lee Kok Sun, the chief investment officer of GIC Real Estate, said: “As a long-term value investor, we are attracted by the sustainable risk-adjusted returns of purpose-built apartments.
“This asset class provides a compelling option for a large and growing population of renters within our target income and geographic segments.”
Given current and expected demographic trends, GIC believes this asset class in Mexico will follow the same trajectory as in the US, he said.
