CCLA and GIC enter into MX$5.5B (~US$300M) joint venture to develop and operate multi-family buildings across major Mexican markets
Los Angeles/Mexico/Singapore, February 28, 2018 – CCLA, a partnership between CIM Group and Compass Group, which is focused on owning, developing and operating real estate in Latin America, and GIC, Singapore’s sovereign wealth fund, announced today that they have entered into a MX$5.5B (~US$300M) joint venture (“JV”) to develop and operate purpose-built, for-rent multi-family buildings across Mexico’s largest cities including Mexico City, Guadalajara and Monterrey. The JV aims to develop a portfolio of mid- to high-rise buildings, with each comprising approximately 250 to 400 rental units. CCLA will develop and operate the buildings.
“Adding a world-renowned investor of the caliber of GIC advances the continued growth of our presence in Mexico,” said Avi Shemesh, Co-Founder and Principal of CIM Group. “We are seeing tremendous opportunities for an experienced owner and operator like CCLA to bring much needed institutional-quality residential assets and operations to Mexico’s gateway cities as our existing assets have proven.”
“Leveraging Compass Group’s deep knowledge of the Mexican market for more than 20 years, along with CCLA’s growing pipeline of multifamily operating and development projects for the past several years, this collaboration with GIC further strengthens CCLA’s strategy in Mexico,” said Manuel Balbontin, Founding partner of Compass Group. “CCLA believes that the growth of the middle-class and the cultural shift in favor of city-living is rapidly transforming the residential demand in urban centers.”
Lee Kok Sun, Chief Investment Officer of GIC Real Estate, said “As a long-term value investor, we are attracted by the sustainable risk-adjusted returns of purpose-built apartments. This asset class provides a compelling option for a large and growing population of renters within our target income and geographic segments. Given current and expected demographic trends, we believe this asset class in Mexico will follow the same trajectory as in the US. We look forward to partnering with CCLA, Mexico’s largest apartment operator, on this joint venture and establishing a leading platform together.”