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Thor to launch next Mexican RE fund

The Mexican affiliate of Thor Equities is seeking to raise capital for the first time from the country’s pension plans.

Thor Urbana, the Mexican affiliate of New York-based real estate firm Thor Equities, has applied to list a real estate fund on the Mexican Stock Exchange, or Bolsa Mexicana de Valores, the firm announced Tuesday.

The fund, known locally as a certificado de capital de desarrollo (CKD), marks the first time that the firm is targeting Mexico’s retirement funds, or Afores, as a capital source. The CKD is expected to be listed on the BMV within the next few months.

Thor Urbana is seeking to raise between $350 million and $400 million for the fund from the Afores and qualified foreign investors. Through the CKD, the company plans to invest in lifestyle retail centers and mixed-use projects in Mexican cities with a high population density and strong potential for economic growth.

To date, the firm has invested in 14 projects for which it has raised more than $750 million, according to a prospectus filed with the BMV last month. Thor Urbana is targeting a return of 20-23 percent and a multiple of between 2.1x and 2.5x for the projects in its current portfolio.

The company has 13 of the 14 projects in Mexico City, Guadalajara, Playa del Carmen, San Luis Potosí, Torreón, Mérida, Estado de México and Los Cabos, while the remaining project is located on the island of Caye Chapel in Belize. Six of the projects are in operation, while eight are still in development, according to the prospectus.

Meanwhile, the company has identified 11 projects in various Mexican cities. The majority of these are new developments, with some acquisitions and repositionings, the prospectus said. Thor Urbana estimates that the minimal amount of capital required for the development of the projects would be approximately 11 billion pesos ($570 million; €539 million).

In June 2015, PERE reported that Thor, led by chief executive Joe Sitt, was preparing to launch its next Mexican real estate fund, with the goal of raising $400 million primarily from existing investors. To date, Thor Urbana has raised more than $1 billion for its first two funds, Thor Urbana I and II.

Thor is not the only private equity real estate firm that is currently looking to raise capital through a CKD. In December, Chicago’s Walton Street Capital filed for its second CKD, Walton Street Equity CKD II, which has an equity goal of up to 1.4 billion pesos. That same month, Greystar Real Estate Partners, filed for its first CKD, with a maximum issuance of 4 billion pesos.