Mexico to Launch Real Estate-Linked Securities, Bolsa CEO Tellez Says

Mexican real estate-linked securities known as Fibras will begin trading soon and represent “an enormous opportunity,” said Luis Tellez, chief executive officer of Bolsa Mexicana de Valores SAB, Mexico’s stock exchange operator.

The funds will be ready after Mexico’s Finance Ministry publishes adjustments to the rules governing the securities in the coming days, Tellez said today during a conference for real estate companies in Mexico City.

Tellez said Mexican Fibras are similar to real estate investment trusts in the U.S. and “fiscal matters” have delayed their entry in the Mexican market.

“This is a topic that’s been in discussions for a long time in Mexico, but I think we’re very close to seeing these instruments come out,” Tellez said. “There have already been various developers that have come to us in the Bolsa. They’ve shown interest and they are ready with their brokerages and underwriters.”

Tellez said the securities would likely have values of $100 million or more and Mexican banks and “institutional investors” have also shown interest.

Tellez said Mexico’s Bolsa is pushing to attract more companies to list in Mexico through new rules that give greater flexibility on corporate governance and reporting results to smaller firms.

Mexico has seen two initial share offerings in recent months after an 18-month dry spell.

Tellez said the nation’s private pension funds, which administered 1.2 trillion pesos ($93.5 billion) as of April, are stimulating Mexico’s financial markets. He said Mexico still needs to develop small-scale retail investing.

To contact the reporter on this story: Jonathan Roeder in Mexico City at jroeder@bloomberg.net

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