Deutsche Bank Mexico, S.A., Institucion de Banca Multiple, Division Fiduciaria, Fideicomiso F/1616 or Fibra Inn (BMV:FINN13), a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, announced that its internal corporate governance bodies approved the purchase of a land bank located in the city of Coatzacoalcos, Veracuz, to be used for the development of a select service hotel.
Fibra Inn is evaluating the franchises in order to select the global brand that it will use to operate this hotel. The investment for this development will be Ps. 162.8 million, excluding acquisition costs. Of this amount, Ps. 137.4 million correspond to the construction of the hotel and Ps. 25.4 million correspond to the purchase of the land bank. The projected cap rate is 11.30%.
The hotel will have 180 rooms. The Company expects 3 months for the planning and securing of permits with an additional 12 months, approximately, for the construction process, thus operations are expected to initiate at this hotel during the second or third quarter of 2015.
Fibra Inn opted to develop a hotel in Coatzacoalcos, for the following reasons:
- Coatzacoalcos is a growth market that is mainly dependent on the oil and petrochemical industries.
- PEMEX’s Ethylene 21 plant is currently under construction.
- The city includes the following major companies: Weatherford, Haliburton, Dowell Schlumberger, Comesa, Cotemar, Grupo Idesa, Pemex, Cydsa and Mexichem.
- This city has an average overall occupancy rate of 66% with demand growth potential.
- Most of the hotel offerings in this location are comprised of independent hotels.
- Due to the recent Energy Reform, there is an expected positive impact on this city, which will benefit the performance of this hotel.
Logos, product and company names mentioned are the property of their respective owners.