FIBRA NEXT’s IPO Delayed Until Next Year

FIBRA NEXT, the industrial-focused spin-off of FIBRA UNO (FUNO), Latin America's largest and most established Mexican Real Estate Investment Trust (FIBRA), has deferred its planned initial public offering (IPO) from late November 2023 to early 2024. Anonymous sources have disclosed that this follows challenges associated with non-compliance in fulfilling tax and stock regulator paperwork requirements necessary for listing on the Mexican Stock Exchange (BMV).

On Oct. 9, 2023, FUNO Real Estate Trust Certificate (CBFI) holders unanimously voted in favor of the creation of an industrial FIBRA originating from the separation of FUNO’s industrial properties, as reported by MBN. 

While FUNO did not disclose an exact date for the IPO, internal sources indicated that it could occur in late November, coinciding with the Thanksgiving timeframe. During this period, the company aimed to raise over US$1.5 billion, potentially making it the largest IPO on the BMV since 2018. However, the IPO did not materialize. “FUNO is opting not to price FIBRA NEXT´s IPO at this time, and instead defer pricing until a Fibra wrapper is confirmed. FUNO continues with its commitment to keep its investors informed and will revert in the near term with an update,” the company said in a press release. 

Although efforts are being made to obtain the required paperwork within this month, this process could potentially extend for several weeks, making it less likely to be completed before the 1H24.

In a filing issued on Nov. 28, 2023, FIBRA NEXT stated that the tax benefits associated with being a FIBRA would only take effect upon receiving official approval. The absence of necessary paperwork would lead to the exclusion of the country's pension funds from participating in the deal. “While we could price a full-sized offering in the range, Fibra Next is focused on going public with the broadest possible shareholder base, including key shareholders of FUNO, AFOREs, and international institutions,” reads the press release. 

FIBRA NEXT's portfolio encompasses 199 properties, covering a gross leasable area (GLA) of 7.5 million m², as reported by El Financiero. The company highlighted that the upcoming OPI has garnered interest from six AFOREs and global investment funds. Additionally, it has the potential to attract over MX$21.5 billion (US$1.2 billion) in foreign capital. At the time of writing, neither FUNO nor FIBRA NEXT has commented on when the OPI would take place or the reasons behind the delay.