Ivanhoé Cambridge JV to Invest $500M in Mexican M-U Development Projects

 By Scott Baltic, Contributing Editor

It’s a trip from North of the Border to South of the Border, with a step in between. Ivanhoé Cambridge, the prominent Canadian institutional fund manager, has undertaken a partnership that will invest in the development of mixed-use urban communities in some of Mexico’s main cities, including Mexico City, Monterrey and Guadalajara, Ivanhoé Cambridge announced Wednesday.

Its partner is Black Creek Group, of Denver, a real estate private equity firm with extensive experience sponsoring real estate companies in Mexico.

Ivanhoé Cambridge’s investments, which could eventually total up to $500 million, will be made through MIRA, one of Black Creek’s five real estate platform companies in Mexico.

The venture is Ivanhoé Cambridge’s first direct investment in Mexico, and the first project, worth more than $100 million, will be a residential development in the Mexico City borough of Cuajimalpa, adjacent to the Santa Fe business district. The project, as yet unnamed, consists of two residential condominium buildings totaling 479 units and about 500,000 square feet of net saleable area.

“With this investment, Ivanhoé Cambridge is setting a major foothold in Mexico, which will provide excellent access to opportunities, including long-term investments in a portfolio of high-quality assets,” Rita-Rose Gagné, Ivanhoé Cambridge’s executive vice president, growth markets, said in a release. “The economic growth and demographic trends in Mexico are producing a large and sustained local demand for commercial and residential real estate.”

Gross unit sales proceeds for the Cuajimalpa project are expected to be around $139 million, Bob Batting, Black Creek Group managing director, told Commercial Property Executive.

Construction is expected to begin in 2015 and to be complete in 2017, Batting said. The project’s current conceptual design features one-, two- and three-bedroom units ranging from 764 to 1,434 square feet.

The urban community development will also include a third residential building, a multi-family rental building to be developed by Gran Ciudad, Black Creek’s Mexico multi-family company. Common amenities will include a pool, fully equipped gym and green areas, Batting said.

Jaguar Growth Partners, of New York, acted as advisor to Ivanhoé Cambridge on this transaction, and FTI Consulting, of Washington, D.C., advised on the investment’s financial aspects.