Fibras give Mexico more attractive dividend than U.S.

July 14, 2014

Yields dividend yield Fibras outperform these vehicles in the U.S. due to higher interest rates and strong growth in Mexico that still have only three years after it was created.

Fideicomisos de Inversión en Bienes (fibras) in Mexico have distributed profits are more attractive than those of these instruments in the United States, called Real Estate Investment Trusts (REITs, for its acronym in English).

While in the first quarter of 2014, REITs dividends distributed with an annualized return of 4.1 percent, the lowest in the last four quarters, in Mexico this indicator was 6 percent.

The dividend yield (dividend yield) is calculated based on the distribution of market certificate made ​​Fibers and price listed. Being hybrid capital and debt instruments between, investors do not only look at the price of the securities in the market, but also in the dividend yield.

Since leaving the Bolsa Mexicana de Valores (BMV), in March 2011, Fibra Uno has a yield of 132 percent to pass your Certificados Bursátiles Fiduciarios Inmobiliarios (CBFIs) for a price of 19.50 pesos to 45.27 (yesterday’s close ) and its annual dividend yield of 2013 was 12 percent.

A person who invested 950,000 million pesos Fiber One, since it hit the market, has had a gain 3 million 46 thousand 570 pesos, that is, 156 percent. This includes the accumulated price of CBFIs and dividends paid to increase.

The highest yields of fiber are associated with the start-up phase by traversing the instruments in Mexico, just three years of being created, as well as aggressive expansion that has driven its financial results with up to triple digit growth in its operating profit, analysts said.

“The fibras are at a stage where they present significant growth rates in new properties and also yields (dividend) relatively attractive relative to interest rates, to vary between 4 and 8 percent,” said Augusto Arellano, director of Investment Banking Evercore Mexico.

Fibers with lower dividend yields are those that have in their portfolios a lot of properties in development that do not generate revenue by not being bound, which punishes the quarterly payment to investors, said Arellano.

The index brings together the eight fibers that are listed on the market today accumulated yield of 6 percent in the last 12 months.

In three years, Fibra Uno has taken its initial portfolio of 17 properties with a leasable area of ​​475 thousand square meters, 416 buildings with an area of ​​5.2 million square meters, resulting in triple digit annual growth in net income and operating performance up to 69 percent of its securities (including dividends paid) in 2012.

Other factors that make it more profitable dividends Fibras are interest rates and inflation.

Luis Gutierrez, Prologis president for Latin America, said the country risk is higher in Mexico than in other countries, like the U.S., where interest rates long term hovering below 3 percent in Mexico and levels exceed 7 percent.

Arellano said the spread between yields and interest rates in REITs is much lower than that of the fibras, making them more attractive to international investors.

“They are instruments that provide ‘yield’ and in an environment in which the investor is looking for a general performance with relatively low risk, the fibers have become very attractive and attract much foreign investment,” said the director of Evercore.

This was observed in the recent follow-on Fibras One in the BMV, where 60 percent of the paper was in the hands of foreign investors, said Roberto Solano, an analyst at Monex. Despite higher dividend yields of the fibers, the performance of its securities in the market has been punished in recent months.

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