RESIDENTIAL
As urban expansion puts pressure on land in Mexico City, the smartest and most successful developers are pushing upward, with more public amenities to make up the difference.
We focus on the medium- and high-level housing segments; we do not go after volume, but quality in our products. We offer a customized service; although it is true that our prices are slightly higher than the competition, which only reflects the quality of our products. We personally ensure that every client to whom we deliver a house has legal certainty of his property. In 2018, there will be a light train connecting Metepec with Mexico City, which will drive the development of the area. Prices are beginning to rise considerably, more than what we expected. A great deal of development is now coming to the area. Our projects are all located in Metepec, Toluca, and the state of México. We have, for example, Balmoral, La Joya, Puerta de Hierro, Country Club, Las Bárcenas, Palma Real, Loma Real, and the largest in Condado del Valle. In just over 30 years, we have worked on 12 residential developments, four commercial developments, and an office development, which is our next project.
Before working in real estate, I was a racecar driver. I believed that as a public figure I could influence Mexico in an important way. The way resources are distributed and the way certain decisions regarding education and government are made, seem like they could use some good influence. I believed I could change these in a positive and important way. When I realized I would not get to where I wanted by racing cars, I saw that this could be also achieved in business; I had a few good friends that trusted me and helped to get started by believing in my projects and investing in me. I created a partnership with a friend who is an architect, and we started building in Guadalajara. We did four buildings together, and we were doing big things quickly. We were one of the first high-rise builders in Guadalajara, and we ended up building what were the two tallest buildings in the city at the time.
SARE was founded in 1968. Its founders worked hard to bring a new vision to the housing industry in Mexico and put lot of energy into creating vertical housing. This was the strong foundation for the company that carries on today. At the time of the crisis, the company was working on creating condos for the middle-income market in the metropolitan area of Mexico City. Focusing on this probably saved the company from the worst effects of the crisis. After 2001, SARE started to expand into the low-income market. They built thousands of homes in different parts of Mexico. That was the birth of a new kind of company, a company that also had projects outside of Mexico City. However, with the mortgage crisis of 2008, the company started to have some problems. But in contrast to the three biggest housing companies in Mexico, SARE did not go bankrupt. As a result of this, we are in a good position right now.
We have seen a change in the institutionalization of financing and its opportunities. In the past, projects were much smaller. The sector is currently so institutionalized that it has become 40% financial; it is about finding the right financing. Projects are extremely large now. Mexico's industry has grown so much that it is comparable to the US. Fibras have boosted this growth; after Fibras came out, the sector institutionalized considerably. In the last five years, the amount of mixed-use developments have increased, following a broader trend. Cities can no longer grow; hence, vertical developments are on the rise. We invest a great deal of time on each project. Our signature is our quality and level of design; we work with the best architecture and landscaping firms. We sacrifice some of our profit to deliver high-end products. We want to have developments we would like to live in. One of the biggest challenges is finding the right land.
Another challenge for Terraforma and the industry is changing the apartment culture. In the past, there used to be large apartments; now, they are smaller. However, there are other amenities in the same building, such as a concierge, gym, shops, dry cleaning, and restaurants. This way people can do their daily routines in their living areas. We work with companies like 4S that help us do market research, so we can select the amenities our clients need according to what these companies survey. Otherwise, our change of strategy to institutionalized funding has had its pros and cons. By transforming into institutional means, we are not able to make decisions fully by ourselves. There are regulations of the funds that we have to respect in order to reduce risks for investors. Nonetheless, our management has improved considerably. Altogether, we are well positioned in the luxury segment and clients recognize our work, so our developments sell fast. Our products speak for themselves.
RESIDENTIAL
TABLE OF CONTENTS
Interview
Alicia Bárcena, Executive Secretary , UN Economic Commission for Latin America and the Caribbean (ECLAC)
TBY talks to Alicia Bárcena, Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), on Mexico's structural reforms in line with the 2030 Agenda and maintaining consistent growth.
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Frederic García, President, Consejo Ejecutivo de Empresas Globales (CEEG)
TBY talks to Frederic García, President of Consejo Ejecutivo de Empresas Globales (CEEG), on making Mexico a more attractive FDI destination and promoting growth and development in the South and Southeast.
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Dr. Enrique Cabrero Mendoza, Director General, National Council of Science and Technology (CONACYT)
TBY talks to Dr. Enrique Cabrero Mendoza, Director General of National Council of Science and Technology (CONACYT), on investing more in science, technology, and innovation and positioning Mexico as a knowledge economy.
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Sergio Ayala, General Manager, GIFAN
TBY talks to Sergio Ayala & Alberto Rementeria, Directors of GIFAN, on identifying and capturing niche markets in Mexico, importing healthy and profitable solutions in the food industry, and working with forward-thinking, medium-sized companies.
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Carlos Morales Paulín, Country Manager, Telefónica
TBY talks to Carlos Morales Paulín, Country Manager of Telefónica, on how to provide the best customer service on the market, an ultra-competitive suite of products, and forcing the competition to improve customer standards in the process.
read articleFocus: Digital Television Transition
Digitalizati-ON!
Starting with the first analog blackout in Tijuana, Baja California in June 2013, Mexico has achieved an effective national transition to digital television. According to data from the Federal Telecommunications Institute, 95% of the population benefits nowadays from digital terrestrial television (DTT).
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