Making Residential More Accessible

Q: What are the main factors that have led the company to capture 12 percent of the Mexico City market as of 2017?

A: High demand is among the factors. The second-largest player in our area has only a 4 percent share. A reason why we have been able to differentiate ourselves is that we invest a great deal in developing alongside communities. A new development should not impact neighboring complexes in a negative manner, especially when it comes to water and energy supplies, as well as transportation and environment. Quiero Casa dedicates 2 percent of its construction budget to improvements in the community and construction of new social infrastructure surrounding our projects, such as parks and sidewalks. Our goal is to create infrastructure that makes communities more sustainable. This is something that allows us to open developments in different parts of the city and with this strategy we sell 1,700 apartments every year in Mexico City. The institutionalization of our business has also played an important role in our growth, bolstered by our focus on corporate governance, systems and processes.

Q: What impact will the Mexico City Housing Law and Human Settlements Law have on housing developments in the city?

A: I actually think that it was great news for the industry that a new Housing Law was passed. This was actually the first housing law in the history of Mexico City. The new law dictates that every citizen has the right to have a house. It will also allow government use of land to construct even more housing developments, as well as the creation of new housing programs. The law also encourages neighborhoods within Mexico City to prioritize residential zoning when creating its codes. Besides the law, new codes were passed, one of which grants developers the permission to build more stories if they are building for Infonavit or Fovissste credit holders. If our clients have access to these loans, we will now be able to construct taller buildings with more apartments. Combining these new policies will make land cheaper and in turn will create lower prices for the end consumer. This will help provide apartments to not only the middle class but also to people who are below middle class. Our homes are within the range of MX$600,000-2.5 million and our average price is MX$1.5 million. But if land becomes cheaper, then we would be able to lower the price at least by MX$100,000 in some segments. The cheapest apartment in Mexico City is MX$600,000, but with greater land availability, we can lower that another 10 percent.

Apart from facilitating development, new government codes stipulate that developers must now show their projects to their neighbors, who along with community groups will be part of the process to accept the construction of new developments in their communities. Despite the fact that some developers might think that it will be a large challenge to include communities in these processes, I think including communities will bring long-term sustainability to our projects.

Q: How will the company continue to finance its growth and develop more apartments in the coming years?

A: We have enough equity resources to buy land and maintain our size with the private funds we have structured. These funds come from Mexican high-net worth individuals and family offices. However, due to the expected growth of our company and the opportunities we see in the market, we will need more resources. That is why we secured joint-venture agreements with institutional real estate private equity funds in the last few years. In terms of debt, we have a close relationship with 13 commercial banks that provide us with construction bridge loans. That is the only form of debt that we use and we do not want new debt products.