Mexican real estate firm Corporación Inmobiliaria
Vesta SAB (VESTA.MX) is the first company of its type to make a global public offer of its stock in the Mexican stock exchange, says Vesta Chairman and CEO Lorenzo Berho.
“We offered 69 per cent in Mexico and 32 per cent among international investors,” adds Mr Berho. “Our process was successful because of how well the Mexican economy is perceived nationally and internationally, because the industrial sector has grown stronger and because of Mexico’s positive prospects for receiving larger foreign investments.”
Mr Berho explains that these resources are being used for the development of industrial real estate infrastructure and acquisition of industrial buildings for lease in Mexico. “This makes it possible for our company to be part of the vast opportunities that Mexico can offer in various sectors,” he says. “Our country has become more competitive and that is why certain sectors, like the aerospace and automotive sectors, believe strongly in Mexico.”
The development of the aerospace sector has been a Mexican government priority for the past 10 years, and has made the country one of the world’s biggest investment recipients in this sector. Central Mexico is the fastest growing part of the country, and Vesta is its leading developer, says Mr Berho.
“The Querétero Aerospace Park is one of our insignia projects and it houses renowned multinational companies,” he says. These include Canada’s Bombardier, France’s Safran Group and the United Kingdom’s Meggit, among others.
Vesta is also very active in the automotive sector, where it has almost 24 per cent of its clients. Mr Berho points out that these clients are not big assembly companies, but their suppliers are Tier 1 and Tier 2 companies that need new buildings. Vesta is focused on providing real estate solutions to the many companies already established in Mexico, and to those who are yet to arrive. Mr Berho says the company offers park-to-suit and built-to-suit projects.
About the initial public offering (IPO) announced in July 2010, Mr Berho explains that when Vesta was formed 14 years ago, “our objective was to go public. For that reason, we integrated a corporative administration with independent board members with broad experience in the financial and real estate sectors. This has given great transparency to our operations.”
Vesta has announced expansion investments of more than US$400 million over the next three years, including funds raised when the company announced its IPO on the Mexican stock market. Mr Berho said at the time that the US$200 million raised in the primary stock offering would allow the company to issue an additional US$200 million in debt, while maintaining its debt level at 50 per cent of capital, which he added was low for a real estate company.
Vesta is an industrial real estate developer with 85 properties mostly in central and northern Mexico. Its biggest customer is Nestle SA, which accounts for 21 per cent of Vesta’s revenue, while no other company accounts for more than 5 per cent.
Expansion plans include multi-tenant developments for companies that need ready-made facilities to set up quickly, and built-to-suit and park-to-suit developments that serve specialised supply chains, such as the auto industry.
Mr Berho says Vesta does not plan to expand abroad, as “there is a lot of space to grow in Mexico.” He says if market conditions remain stable, he is confident that the company can maintain average annual growth at historical levels around 26 per cent.
Vesta’s current debt is US$335 million, all of it owed to a unit of General Electric Co (GE). GE financed Vesta’s buyout of GE’s 50 per cent stake in the Querétero aerospace park, which the two partnered to set up in 2007.
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