Kimco Gradually Shedding its Assets in Mexico - Analyst Blog


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Mexicans are upbeat following the defeat of Cameroon in their first match in the FIFA World Cup 2014 and are gearing up to face Brazil in their next. However, retail real estate investment trust (REIT) - Kimco Realty Corporation ( KIM ) - is gradually leaving the country by selling its retail assets.

After disposing a 9-property Mexican portfolio in the first quarter, the company has now divested a 4-property portfolio for a gross sales price of 1.1 billion Mexican pesos (US $82.1 million).  Kimco reaped around 688.1 million Mexican pesos (US $53.3 million) as pro-rata proceeds from this 4-property portfolio disposition.

As a matter of fact, in a zest to focus exclusively on its U.S. and Canadian shopping center portfolios, Kimco is simplifying its operations and pruning its Latin American retail assets.

This Mexican portfolio disposition comes as part of that assets sale and the company is redeploying the proceeds to acquire high quality U.S. shopping center assets in its key markets, with demographics and household income levels higher than the national average. Currently, the company is under negotiations for the disposition of the rest of the retail Latin American assets.

Spanning 1.2 million square feet in total, these 4 Mexican assets are positioned in the cities of Rosarito, Tijuana, Los Mochis, and Mexicali with anchor tenants including Wal-Mart Stores Inc. ( WMT ), The Home Depot, Inc. ( HD ) and Cinepolis.

Going forward, we believe that solid demand for its properties, its portfolio restructuring activity, along with easy access to capital promises considerable upside potential to Kimco.

Kimco currently has a Zacks Rank #3 (Hold). Moreover, investors interested in the retail REIT industry may consider another stock - Retail Properties of America, Inc. ( RPAI ) - that carries a Zacks Rank #2 (Buy).  

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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