Gran Ciudad closed a Real Estate Fund of US$313m with commitments from Ivanhoé Cambridge the real estate investment arm of Canadian Pension Fund CDPQ and from Citibanamex Afore, the second largest pension fund manager in Mexico. Gran Ciudad will invest in multifamily rental housing properties in urban markets within Mexico.
(Press Release) Gran Ciudad Group, LP (including its affiliates, “Gran Ciudad”) has successfully completed the formation of an institutional real estate investment vehicle to fund the expansion of Gran Ciudad’s multifamily rental housing property portfolio in Mexico. Gran Ciudad secured Mx$6 billion pesos (US$313 million) of total equity commitments from Ivanhoé Cambridge, a global Canadian real estate investor, and from Citibanamex Afore, the second largest pension fund manager in Mexico, the latter completing its investment through its participation in a locally listed private equity fund (CKD).
The new real estate investment vehicle was arranged by Black Creek Mexico, LLC (“Black Creek Mexico”), Gran Ciudad’s sponsor. Gran Ciudad plans to invest through the vehicle in the acquisition and development of a portfolio of institutional-quality, multifamily rental housing properties throughout Mexico’s major urban markets, including the Mexico City’s Metro Area, Monterrey, Guadalajara and Queretaro.
“Gran Ciudad is extremely fortunate to be backed by some of the most sophisticated real estate investors in the world in both Ivanhoé Cambridge and Black Creek. With this latest round of fundraising, Gran Ciudad is well positioned to capitalize on the tremendous opportunity in Mexican multifamily rental housing and to establish ourselves as a market leader in this nascent industry in Mexico,” stated Alejandro Sanchez Ascencio, President of Gran Ciudad.
Rita-Rose Gagné, President, Growth Markets, Ivanhoé Cambridge commented: “We are very pleased to contribute to the growth of Gran Ciudad in Mexico, alongside Citibanamex Afore. This transaction also highlights Black Creek’s expertise in playing a leading role in sponsoring real estate investment platforms in Mexico.”
“This investment underlines our conviction in Mexico’s favorable demographic fundamentals, and our ability to create institutional-quality multifamily rental housing in Mexico,” added Jorge Margain, Vice President, Mexico, Growth Markets for Ivanhoé Cambridge.
Luis Sayeg, CEO of Citibanamex Afore, said: “We are delighted to invest with Gran Ciudad in partnership with Ivanhoé Cambridge. This investment is a clear example of one of the many long-term opportunities available today in Mexico that are attractive to both domestic and foreign institutional capital. We are certain that this investment will help enhance the pensions of the Mexican workers, in addition to encouraging job creation in the country.”
“The combination of sophisticated institutional investors with a long-term investment strategy, such as Ivanhoé Cambridge and Citibanamex Afore, and a scalable platform focused on secular growth, such as Gran Ciudad, is very powerful. With an exceptional management team, a well-defined business plan, and now significant buying power, we are excited about what lies ahead for Gran Ciudad,” said Bob Batting, Managing Director of Black Creek Mexico.
About Gran Ciudad
Gran Ciudad is a fully-integrated real estate company based in Mexico City. It is a developer, owner and operator of multifamily rental housing properties in major cities throughout Mexico. Gran Ciudad is comprised of a multidisciplinary team of professionals with extensive experience in real estate development, operations and finance. The company directly manages institutionally-funded investment vehicles and invests these funds in the properties that it develops and operates. Gran Ciudad is controlled by Black Creek Mexico, by way of BC Mexico Ventures, LP (“BCMV”). For more information: granciudad.mx
About Ivanhoé Cambridge
Ivanhoé Cambridge develops and invests in high-quality real estate properties, projects and companies that are shaping the urban fabric in dynamic cities around the world. It does so responsibly, with a long-term view to generate optimal, risk-adjusted returns. Ivanhoé Cambridge is committed to creating living spaces that foster the well-being of people and communities, while reducing its environmental footprint.
Vertically integrated in Canada, Ivanhoé Cambridge invests internationally alongside strategic partners and major real estate funds that are leaders in their markets. Through subsidiaries and partnerships, the Company holds interests in more than 1,000 buildings, primarily in the industrial and logistics, office, residential and retail sectors. Ivanhoé Cambridge held close to C$65 billion in assets as at December 31, 2018 and is a real estate subsidiary of the Caisse de dépôt et placement du Québec (cdpq.com), one of Canada’s leading institutional fund managers. For more information: ivanhoecambridge.com.
About Citibanamex Financial Group
Citibanamex Financial Group is the leading financial group in Mexico. The group offers a variety of financial services, including commercial banking, investment banking, insurance, and asset management through a global banking strategy. Its subsidiary, Banco Nacional de México, founded in 1884, has an extensive distribution with 1,462 branch offices, 9,356 ATMs, and 27,706 correspondent banking locations throughout the country.
About Citibanamex Afore
Citibanamex Afore is owned by Citibanamex Financial Group and is one of the founding Pension Funds of the Mexican Retirement Savings System (“SAR”). In recent years, Citibanamex Afore has shown great interest in participating in alternative investments through CKDs, CERPIs and FIBRAs. Citibanamex Afore had AUM of Mx$653.54 billion pesos as of May 2019, making it the second largest AFORE in the industry, managing 18.4% of SAR resources. Citibanamex Afore has the largest number of affiliates in the Mexican pension system with 12.1 million in total.
About Black Creek Mexico
Black Creek Mexico is a privately held investment management company based in Denver, Colorado with offices in Mexico City. Black Creek Mexico has been doing business in Mexico since 1996, and its affiliates have previously sponsored several of the leading private investment companies in Mexico, including: Corporate Properties of the Americas, a developer, owner and operator of industrial real estate in Mexico; Mexico Retail Properties, a developer, owner and operator of retail real estate in Mexico; MIRA, a developer, owner and operator of urban mixed-use real estate in Mexico; and Infraestructura Institucional, a developer and finance platform for infrastructure projects in Mexico. In February 2018, Black Creek Mexico sponsored the formation of BCMV, a private investment fund that pursues a venture capital strategy with an objective of investing in a portfolio of alternative asset investment platform companies in Mexico, expected to be anchored by a core position in platform companies focused on real estate and real asset investments.