Prudential Fibra Lands at Low End

Prudential Real Estate Investors has priced a MXP9.52bn ($765m) IPO for the Terrafina Mexican real estate trust, coming at the bottom of the range. On offer were 340m primary shares pricing at MXP28.00 each, according to people familiar with the sale, versus a MXP28.00-MXP32.00 range. The share total assumes the exercise of a 15% greenshoe option. Though investors continue to express strong interest in the Fibra asset class, the deal’s pricing compares to a Fibra Uno follow-on coming at the top of its range and a Fibra Inn IPO at the midpoint, both earlier this year. The bottom of the range level is in line with the Sanborns and Cultiba IPO’s this year, suggesting investors’ enthusiasm for Mexico but perhaps with some disagreement on valuations. The Terrafina trust will initially contain 132 industrial properties and 14 properties in development throughout Mexico, coming from Prudential’s PLA Industrial I and PLA Industrial II funds. It claims to have the third-largest industrial real estate portfolio in Mexico, and counts La-Z-Boy, Chedraui and Mattel among its tenants. Proceeds from the sale provide funds to repay debt and for working capital. Going forward, Terrafina plans to target acquisitions in the $750m-$1.25bn range. Citi, Goldman Sachs and HSBC managed. The second Fibra IPO of the year brings the total number of Fibras to five, with bankers expecting at least three more Fibra IPOs during 2013. Mexican new ECM issuance continues Thursday, with the scheduled IPO of Sempra Energy’s IEnova.