What have been FICADE's main accomplishments since 2018?
Overall, 2019 was a complicated and atypical year in terms of permits because the government was reviewing a number of projects that had already started, and new projects took longer than usual to be approved. This caused new projects and businesses that were in the pipeline to be delayed. We have a few important projects already approved, but it was difficult to launch new projects, and that prompted us to be cautious in terms of buying new land. We are waiting for the housing policy to be completely clear. The Mayor of Mexico City included a stipulation in the regulations that requires one to have low-cost housing in certain locations; however, the execution of these policies is still not clear. Due to the changes in government, we are waiting to see where we are headed with the new regulations.
What type of land are you planning to buy and what projects will you launch?
Since we want to enter the low-cost housing segment, we are looking to buy land for less than MXN2.5 million. We want to make housing as low cost as possible for the final buyer. The foundation of the industry is solid, and it is independent of the government in office. There are always opportunities, and with hard work one can achieve results. We are looking for land where there are no restrictions on the minimum size for housing because that way we can build small apartments in central locations that are both profitable for and affordable for buyers. Housing that costs over MXN6-7 million is slow on the uptake, and the lower market is more dynamic. We are exploring some options for renting, but it is more difficult to mix products because buying a shared house is difficult. Co-living models work better for rentals because they are temporary. Some digital platforms are starting their operations in Mexico, and we are building partnerships with foreign companies that are dedicated to short- or long-term rentals. We are about to launch a co-living project in Condesa. Our core will always be selling housing, but we are also looking into these new lines of business.
What types of financing do you use to develop new projects?
We use private investors to buy the land and banks for building, specifically bridge loans. These loans are established so that when you sell a unit you pay a part of the loan. For co-living, the model is different and more long term, but banks give those types of loans as well. There is uncertainty right now, but there will be new opportunities in the future. We need to be prepared for pandemics because this is not the first or the last. In today's world, more people have the privilege of being in a lockdown at home with their needs covered; however, many others are not as fortunate and live day by day. More sources of funding will be created due to this crisis, but I cannot anticipate what they would look like. There will be economic reactivation plans, where interest rates will go down, and loan payments could be postponed. There is a great deal of panic right now, but once the situation calms down, people's attitudes will also make a huge difference. We are giving assurances to our staff, and we are supporting them. We would reduce salaries before firing anyone.
What will be your main priorities for the rest of 2020?
We want to launch two new projects as soon as the crisis is over. The other priority is to structure the new co-living model and rentals, because there is an interesting and important opportunity in that segment. We will wait to see what happens after the pandemic, because it is an unprecedented crisis in the world.