PGIM is the global management business of Prudential Financial, inc. Yesterday, their real estate business PGIM Real Estate announced plans to invest $4.4 billion Mexican pesos into Mexico real estate. This news comes after a successful capital raise (equivalent to $235 million USD) for a closed real estate fund – PruMex IV CKD. The capital raise for the fund was made possible by existing PGIM Real Estate clients, who raised over half of the capital raise target. The remainder came from new investors. PGIM Real Estate will use the fund to invest across different Mexico real estate sectors.
Expansion From industrial to Residential Mexico Real Estate
PGIM´s presence in Latin America began in 2002 and has since garnered approximately $3 billion in gross assets. This makes PGIM one of the largest investors in the region. PGIM Real Estate as a whole has a history of investing in residential Mexico real estate. They were pioneers in regional real estate due to their involvement in the development of the multifamily sector in 2009. However, the PruMex fund has previously been reserved solely for industrial real estate. This is set to change with the latest capital raise. The PruMex IV fund will also invest in residential-for-sale, multifamily and mixed-use properties. This will be in addition to the traditional industrial real estate it generally invests in.
Alfonso Munk, Americas Chief Investment Officer for PGIM Real Estate, has commented:
“The strong market fundamentals in Mexico, including a growing middle class, competitive labor costs and manufacturing, and favorable housing policies and regulatory changes, continue to be the key drivers for the development of industrial and residential assets in the country. The strong participation of existing and new clients in PruMex IV is a testament to PGIM Real Estate’s on-the-ground expertise and footprint that positions us to capitalize on the long-term investment opportunities in Mexico.”
This expansion into residential Mexico real estate really shows confidence in the stability of the real estate sector. As a result, we can expect to see some exciting developments in the residential Mexico real estate market in the coming years.