Since 2014 was a year of consolidation, will 2015 shift gear to expansion?
This year we will focus on two activities; execution—delivering new projects and starting operations, sharing this new wave of projects with people nationwide—and expansion. We will be opening new areas and divisions within the company. Last year we established a presence in key markets around the country, and gained control of key sites and destinations. The focus was on development, and while that is still a focus, we see good opportunities in acquiring income-producing assets. There are opportunities to purchase existing buildings that are not necessarily well operated or leased, which we can be redeveloped and repositioned to new market standards.
What strategy does Thor Urbana follow when targeting an investment?
Our underlying goal is to lead every segment we are present in, which begins by having the best site and controlling the optimum location. We avoid developing projects that could eventually be considered mere commodities. Our projects aim to be one-of-a-kind icons in their respective towns and cities that contribute to the integrity of these locations. We are disciplined when it comes to buying sites and assembling land. Two different visions exist in real estate. Many companies look outwards and they go to smaller cities that are less served than the major cities in order to provide basic needs to these markets. Nevertheless, Thor Urbana has a much more urban focus and vision. We go into city centers that are experiencing high population and economic growth, and that stand to benefit from national reforms. Most of the time, we buy land with structures already on them that need to be demolished, in order to maximize the use and value of sites through greater development. We are looking to upgrade city centers. Once we select a city, we select the most attractive neighborhood that will be experiencing economic and population growth in the near term.
What value are your developments adding to these selected cities?
We bring a different kind of shopping experience to cities. At many of these sites, due to the cost of the land, we need to undertake mixed-use projects and build other uses top of retail such as offices, hotel or residences. Our goal is to bring a completely innovative retail experience to markets focused on lifestyle and entertainment. We are working with globally known consultants specialized in different areas ranging from landscaping to architecture. For instance, we are building an open-air mall in Metepec that will offer a wide range of entertainment, options, gathering places and new concepts. It will likely become a tourist destination and will improve the lives of people living in that community.
How appealing is the development of mixed-use projects for international investors?
Mexico is an emerging economy that has shown interesting growth and opportunities compared to other emerging markets in the world. We are seeing international brands enter into the country, which translates into more growth in terms of retail and more offerings for international investors. We are mainly funded by foreign institutional investors, who invest with us because they see a healthy industry that has been growing at a stable rate. The demand is there. Mexico has a young population, and demographics are a major factor in anticipating growth in retail consumption. When talking about the growth of the middle class, it is important to mention that 60% of retail consumption and purchasing still occurs in informal markets. Real estate is a cyclical industry, and we have positioned ourselves so that we have irreplaceable assets and locations when there are downturns.