A consortium led by Equity International has closed on a new investment in Grupo Acosta Verde, a Monterrey-based developer, owner and manager of shopping centers in Mexico. Funds managed by New York-based asset manager BlackRock’s BlackRock Alternative Solutions group and Madrid-based investment manager Altan Capital, among others, also participated in the transaction. Terms of the deal were undisclosed.
Since 1992, Acosta Verde has developed 35 retail properties and currently manages 26 shopping centers, of which it owns 11. Its portfolio encompasses approximately 1.7 million square feet across 15 Mexican states. The developer is also the creator of Sendero, a widely recognized shopping center brand in Mexico targeting middle-class consumers.
“EI was an early investor in Mexican retail property, and we are pleased to return in partnership with a distinguished group of global investors who share our vision,” said Tom Heneghan, EI’s chief executive officer. “Acosta Verde is well positioned to deploy capital with an experienced management team and a proven, scalable concept.”
The transaction marks the Chicago-based private equity firm’s return to the Mexican retail sector after nearly seven years. EI previously helped to form Mexico Retail Properties, which was established in 2003 and is focused on the development, acquisition and ownership of shopping centers throughout Mexico. EI exited its investment in MRP through a private sale in 2008.
Acosta Verde also represents EI’s first new investment in Mexico since 2013, when it acquired a stake in Advance Real Estate, an industrial developer in the Bajio region of central Mexico. The Advance deal, meanwhile, was EI’s reentry into Mexico after a five-year absence.
Growing consumer demand in Mexico is fueling a need for more shopping center space. According to market studies cited by EI, however, only 20 percent of retail sales in Mexico currently occur in shopping malls, compared with 56 percent in the US. Retail activity still occurs predominantly through informal, individual storefront operations, although that is shifting to more specialized retail amid rising consumer expectations for quality and price competitiveness.