REALTORS

Mexico 2017 | CONSTRUCTION & REAL ESTATE | B2B

Whether providing boutique commercial services or professionalizing real estate through franchising, multinational real estate companies are transforming the realtor business in Mexico.

Sergio Felgueres C.
SERGIO FELGUERES C.
Director General
REMAX Mexico
Luis G. Méndez Trillo
LUIS G. MÉNDEZ TRILLO
President
Coldwell Banker Commercial Mexico

What are the benefits of working with your company over competitors?

LUIS G. MÉNDEZ TRILLO We are growing, but we also want to stay as close as possible to a boutique firm with a personal and professional relationship with a small number of highly serviced clients. This is what differentiates us from our competitors and made us so successful in the last five years.

SERGIO FELGUERES We are quite different from independent individuals that sell real estate. The majority of them do not have any experience, and yet clients still give them the most important part of their assets. Often, these independent people fail to protect their clients. I have seen many people who lost their assets because they chose a bad real estate agent. On the contrary, REMAX agents are very well prepared to protect their clients.

What is the typical profile of someone who purchases a franchise or a foreign investor?

LMT We consult a lot of investors for whom we do tailor-made projects. We understand their risks, their expectations on returns, and the type of products they want to invest in. We are also a major player in the land search and securement process for land banks and investors. We are one of the few large brokerage firms with expertise in the technical, legal, and market conditions that define the strongest investments. We are working a lot on securing land for developers. We also work in appraisals and are one of only two appraisers for Fibra Uno, and the exclusive appraiser for Fibra Danhos. Both of these keep us busy. We also just opened our project management and construction management branch and are excited to have already gotten our first enquiries. A chief strength of ours is being committed to long-term relationships and being able to serve our clients in any part in the country.

SF We have different kinds of clients. We have people who used to work in a big company and are looking for more independence. Some of our clients own small independent real estate companies and want to be part of our network. We also work with our own agents, who want to grow and open their own business while still being part of the brokerage system. We do not want people who buy a franchise to be self-employed; we want them to build a business.

How has Mexico evolved as a destination for real estate investment?

LMT Most new developments started about 20 years ago when NAFTA was signed. This is when we started to see the first modern and state-of-the-art buildings. In the last five years, we have seen a further increase in the quality and scale of mixed-use products. In a complicated city like Mexico City where we have security, traffic, and distance issues, it is important to develop mixed-use projects that allow users to have a higher quality of life and a place that they can work, exercise, eat and entertain themselves with cinemas, restaurants, bars, and gyms. Each year more and better products are entering the market; though this trend will continue, the challenge now is an oversupply of office space in the next three to four years. However, in terms of the quality of our products, the yields for international investors, and our increasingly educated market, Mexico still has huge growth opportunities. Many of our seven- to 10-year leases are now based on the US dollar; therefore, we also have the same guarantees you will find in the world's main markets. Our market is becoming more mature, secure, and sophisticated

SF The real estate business in Mexico is consistently becoming more professional as small real estate businesses move into our franchise models. This means we can grow from 110 to 300 franchisees over the next three years, a leap that is well within our reach. The major reason to grow is that soon we will have a state license to sell real estate in Mexico. There are 10 states in Mexico in which real estate licenses are approved at this moment, and we hope the whole country will soon have obligatory real estate licenses. The value of some of our franchises is increasing, and we are going to grow very quickly. In the aftermath of the economic crisis that shook Mexico and the world, the best place to invest is real estate. Real estate investments never lose their value; sometimes they dip for a bit, but they always recover.