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Greystar to raise its first Mexican RE fund

The Charleston, South Carolina-based firm is planning to list the vehicle on Mexican Stock Exchange in the second or third quarter.

Greystar Real Estate Partners has filed for its first listed private equity real estate fund, or CKD (certificado de capital de desarrollo), in Mexico.

The offering would have an initial issuance of 800 million pesos ($37.4 million; €34.9 million) and a maximum issuance of 4 billion pesos, according to a prospectus filed with the Mexican Stock Exchange, known locally as the Bolsa Mexicana de Valores (BMV).

Greystar is said to be targeting a fund listing on the BMV under the ticker symbol GREYCK 17 in the second or third quarter. If it is successful, the vehicle – in which Mexican pension funds and other qualified investors can buy shares – could be the first multifamily-focused CKD to close.

The Charleston, South Carolina-based multifamily real estate firm has identified a pipeline of $3.2 billion of projects totaling 1,580 units in Mexico City, Puebla and Guadalajara for the CKD.

Greystar first established operations in Mexico in 2013, when it was hired by PGIM Real Estate to operate a multifamily portfolio in Mexico City and Monterrey. In October 2015, Greystar raised a $250 million separate account with a sovereign wealth fund and has now committed more than 3 million pesos in various investments through the vehicle.

To date, the firm has invested in three projects in Mexico and expects to invest in one or two more projects in the coming months. The investments include Greystar Perisur, a 486-unit development in Mexico City that is in pre-construction and expected to be completed in July 2019; Greystar Americas, a 219-unit project that will be the first rental property in Guadalajara and is due to be completed this summer; and Greystar Puerta Bosques, a 455-unit development in Mexico City also slated for completion in July 2019.

Mexico currently has only 3,200 of purpose-built apartment units out of a population of a 120 million, according to the fund’s prospectus. “Mexico currently shows demographic trends that are favorable for rental housing,” Greystar said in the prospectus. “In addition to a strong trend of marrying at an older age, the increase in life expectancy and the growth of single-person households offers an attractive panorama. Additionally, the decrease in the average size of homes indicates that more rental units are needed for the population.”

Greystar has had an extremely busy fundraising year. Last week, PERE reported that the firm was preparing to launch its first open-ended core plus real estate fund, Greystar Growth and Income Fund. Meanwhile, it is anticipated to hold a final close for its latest value-added real estate fund, Greystar Equity Partners IX, at its $1.25 billion hard-cap by the end of the month. Greystar previously raised $800 million for Fund VIII in 2013.

In October, Greystar closed Fondo de Inversión Credicorp Capital Renta Residencial I Chile, a fund that it created with Credicorp Capital, the investment banking platform of Peruvian financial holding company Credicorp. PERE understands that the fund will have about $250 million in investment capacity to develop multifamily properties in Santiago.

That same month, the firm also announced the formation of an Asia-Pacific rental housing platform called Greystar Asia-Pac in partnership with Macquarie Capital. Through the venture, the firms plan to raise institutional capital to acquire, develop, reposition and manage rental residential assets across the region, initially targeting the cities of Tokyo, Beijing, Shanghai, Sydney and Melbourne.