Sources told Bloomberg that Consorcio Ara and O'Connor Capital Partners intend to sell nine shopping centers for a price tag of USD 384 million. Consorcio Ara is the largest homebuilder in Mexico while O'Connor Capital Partners is a real estate company.
The people who did not wish to be named because the matter was private, said the firms want to reach a deal by the end of 2013. Ara and O'Connor are joint owners of most of the malls put up for sale, but there are also some properties that they own separately that are also included in the sale.
Brokerage firm Corporativo GBM Analyst Javier Gayol told Bloomberg that the divestment would enable Ara to concentrate on its main business since the fall of its rivals like Desarrolladora Homex SAB and Corp. Geo provided new growth opportunities. He added that funds are easily raised through an asset sale since getting financing from banks or the bond market has become more challenging.
In a phone interview with Bloomberg, Gayol said "They should take advantage of opportunities that present themselves. They could accelerate development in areas where competition had previously been an obstacle."
Ara has become the largest builder in Mexico based on market capitalization and earnings in the third quarter as output of its three main competitors decreased. In the past two years, the government programs that subsidized housing established under the previous leadership of President Felipe Calderon had failed when homeowners made an exodus. They reportedly left the housing communities in large numbers as long commutes finally took their toll among homeowners. The government then changed gears and promoted urban construction, a move which lowered the value of the inventory of the homebuilders.
However, Ara grew since its sales were not as dependent on the subsidies as that of its rivals. It also had the least debt among the four homebuilders, Bloomberg reported.
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