Mexico Real Estate Investment By Pension Funds- By: Sean O'Neal
Mexico real estate investment on a grand scale can be expected in the short to medium term by 4 Mexican private pension funds.
Financial regulators have approved AMB Property Corp, Artha Capital, Prudential Financial and Vertex Private Equity to invest in assets in the Mexico real estate market.
In addition, the funds Navix, Marhnos and Institutional Infrastructure have been given the go ahead to invest in Mexican infrastructure and Alta Ventures Mexico, EMX Capital and Promecap have the okay to invest in private equity.
Altogether, the 10 pension funds are expected to look for funding of $125 to $225 million.
The fact that the major financial institutions that run these funds are looking to pump cash in Mexico real estate is a significant vote of confidence for the country's property market.
As Mexico's GDP is predicted to grow by as much as 5% this year and mortgage loan credit is expected to rise to 15% of GDP, the Mexico real estate sector is poised for a major boost.
Forbe's "richest man in the world" said recently that now is the time to invest in Mexico and the property market has not escaped the wise investor's attention.
Although real estate in Mexico was affected by the health scare last year and the global financial crisis, it is not so dependent on mortgage credit as the United States to the north and has absorbed the shock relatively well.
Add to this proposals to make it cheaper for foreigners to buy Mexico real estate by abolishing the bank trust -- or fideicomiso -- system, and it's clear that the market is ready to rebound.
It seems that the savvy managers at the four big pension funds have already spotted these opportunities and for those very reasons they are gearing up to invest heavily in the sector.
Other investors tend to follow their institutional counterparts, so when the pension cash goes in, expect many more to also pile into real estate in Mexico.
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