Hines makes first new Mexico investment in 5 years

The Houston-based real estate company has bought back a logistics park that it sold to Union Investment seven years ago.

Hines has acquired Parque Industrial Tecnológico II, a 1.3 million-square-foot, Class A industrial park in Guadalajara, Jalisco, Mexico from Hamburg, Germany-based real estate investment firm Union Investment. Financials of the transaction were not disclosed, although PERE understands that Hines purchased the park on behalf of a separate account client.

While Hines has several ongoing projects that require investment, the transaction represents the firm’s first new investment in Mexico since 2009. Hines’ business plan for Parque Industrial Tecnológico II is to redesign the façade of a building that was occupied by Intel, and subdividing the existing space in order to provide leasable areas from 10,000 square feet to 131,686 square feet of office space for different users.

Hines developed Parque Industrial Tecnológico II over several construction phases from 2001 to 2006, on behalf of the Hines Emerging Market Real Estate Fund. It then sold the park in 2007 to Union Investment, which bought the property for its open-ended real estate fund Unilmmo: Europa. Hines, however, has continued to manage the industrial park since its inception.

The logistics park comprises six industrial buildings and is currently leased to 22 tenants, the largest of which are Assa Abloy, Bonafont, and Heinz.  Since 2010, the park’s average annual occupancy has been above 95 percent. Parque Industrial Tecnológico II is one of three industrial parks that Hines has developed in the Periferico Sur submarket of Guadalajara.

“We expect Parque Industrial Tecnológico II to benefit from a combination of strong tenants and occupancy history, construction quality and an excellent location, which is superior to most industrial assets traded in the last three years in Mexico,” stated Ricardo Serrano, marketing director at Hines. “The gradual shift from industrial into office in the area is driven by the lack of large area, quality Class A space, reasonably priced below price B rates.”

Meanwhile, Union Investment disposed the property, which had been the firm’s sole non-European logistics asset, primarily for strategic reasons. “Our investment focus in Latin America is currently on the office property market in Mexico City,” said Martin Brühl, head of International Investment Management at Union Investment Real Estate GmbH. “We see exciting opportunities here for our international funds to expand our excellent Americas portfolio.”

In Mexico, Union Investment's open-ended real estate funds hold seven properties with a total value of approximately €300 million. Following the sale of Parque Industrial Tecnológico II, Unilmmo: Europa’s remaining investments in Latin America consist of two office properties in Mexico City.