By Benjamin Bain and Andrea Navarro / Bloomberg
Mexico’s homebuilding business is staging a comeback less than three years after the industry’s biggest companies saddled investors with losses from collapsing share prices and $2.7 billion in bond defaults.
Builders are dominating the new issuance market, with Corpovael and Servicios Corporativos Javer selling shares since early December and a third company seeking to raise money later this year.
They’re among the competitors that rushed to fill the gap left by the largest three builders, which were forced to downsize following their failures in 2013.
Pent-up demand for new homes hasn’t gone away since housing policy changes by President Enrique Pena Nieto helped lead to the collapse of Urbi Desarrollos Urbanos, Desarrolladora Homex and Corp. Geo.
While Homex and Geo resumed trading last quarter following restructurings and Urbi moves to conclude a deal, it’s the smaller companies that are driving a resurgence in an industry that until recently was given up for dead by foreign investors.
“It’s a good sign that it would seem the sector is coming back to life,” said Jorge Unda, who oversees about $35 billion as chief Latin America investment officer at for BBVA in Mexico City. “The companies that were able to stay in have been more cautious.”