Clarion Sells Mexican Shopping Centers to JV Partner

Clarion Partners has sold its 50 percent interest in a 3.2 million-square-foot portfolio of Class A shopping centers in Mexico to its joint venture partner.
Magnocentro, Huixquilucan, Mexico

Magnocentro, Huixquilucan, Mexico

By Gail Kalinoski, Contributing Editor

Clarion Partners has sold its 50 percent interest in a 3.2 million-square-foot portfolio of nine Class A shopping centers in Mexico to its joint venture partner, Frisa. The portfolio was one of Clarion’s first investments in Mexico — eight years ago.

The real estate investment management firm said in a news release that the portfolio was valued at approximately $600 million. It comprises six fully stabilized and mature assets, which have a total average occupancy of 96.4 percent, and three assets that are in the lease-up stage with average occupancy of 77.9 percent. The properties are located in Mexico City suburbs, as well as Acapulco, Ciudad Madero and Tampico.

“This investment and joint venture relationship affirm the investment rationale with which we initiated our Mexico investment platform in 2006: Projected GDP growth above historical average in a country with an expanding middle class with increasing levels of disposable income should translate into strong retail investment opportunities,” Onay Payne, director at Clarion Partners, said in the release. “We believe that rationale holds true today.”

Payne told Commercial Property Executive that the retail portfolio was one of its first investments in Mexico in 2006. When it began the joint venture, she said, the stabilized assets had already been built by Frisa, which owns one of the largest retail portfolios in Mexico and also provides design, development and management services.

“During our joint venture, we expanded certain assets and also co-developed several,” Payne said.

In October, the New York-based firm agreed to sell a 22-building industrial portfolio in Mexico for $202 million to a Mexican public REIT, FIBRA Uno. The portfolio had 2.8 million square feet across five areas, including Monterrey and Cuidad Juarez. The sale, which closed in April, also included 67 acres in four land reserves.

Payne told CPE Clarion still has a large portfolio of retail assets; several industrial assets, both land and buildings; various land parcels; and other investments.

“We do not have plans for immediate new investment in Mexico, but are analyzing future investment opportunities,” she said. “The current acquisition environment is incredibly competitive, but we see Mexico as a good long-term play, particularly for retail, industrial and residential investment.”

In addition to New York and Mexico, Clarion has offices in major markets throughout the United States, as well as in Sao Paulo and London. The firm has more than $30 billion in total assets under management and offers a broad range of real estate strategies to more than 200 institutional investors.