Agreement includes $200 million investment alongside Hines for Mexico logistics assets
Realty Income has entered into a new strategic partnership designed to deploy more than $1.5 billion in capital across North America, marking the real estate investment trust’s first move into the Mexican market.
The partnership with Singapore-based sovereign wealth fund GIC is structured around three key initiatives: a joint venture focused on U.S. industrial development, a $200 million commitment with global developer Hines to develop logistics properties in Mexico, and GIC’s investment in Realty Income’s U.S. income-producing commercial real estate portfolio.
The announcement comes as Mexico intensifies efforts to attract multinational businesses. In December 2024, Mexican President Claudia Sheinbaum extended fiscal incentives, including tax breaks for export-driven industries, to encourage foreign investment, according to a report by law firm Hogan Lovells.
Mexico’s proximity to the United States, participation in the USMCA trade agreement, competitive labor costs and continued growth in the automotive sector have positioned the country as an increasingly attractive destination for corporate expansion, the report noted.
GIC, one of the world’s largest institutional real estate investors, will partner with San Diego-based Realty Income under a flexible structure that allows both firms to scale investments over time. The agreement supports Realty Income’s strategy of broadening capital sources beyond public markets while entering new geographies and property sectors.
The partnership follows Realty Income’s recent $800 million investment in CityCenter Las Vegas alongside Blackstone, underscoring the REIT’s ability to execute large, multi-asset transactions with institutional partners.
“Our scale, operating history and data-driven platform enable us to efficiently source and manage diversified real estate portfolios,” said Sumit Roy, president and CEO of Realty Income, in a statement. “Partnering with one of the world’s leading real estate investors strengthens these capabilities and expands our investment universe, creating opportunities for higher returns and long-term growth.”
Partnership details
As part of the U.S. industrial component, Realty Income and GIC will pursue build-to-suit logistics facilities that are preleased to investment-grade tenants under long-term contracts. Realty Income will maintain majority ownership in assets acquired through this venture.
In Mexico, the partners plan to finance and develop a portfolio of industrial properties in key markets including Mexico City and Guadalajara, working alongside Hines. Realty Income and GIC will jointly fund construction, with Realty Income agreeing to acquire the properties once development is completed.
The $200 million Mexico portfolio will feature U.S. dollar-denominated leases with Global Fortune 100 tenants, offering currency stability and credit strength.
This investment represents Realty Income’s first deployment of capital outside its traditional markets.
Hines has maintained a presence in Mexico since 1992. Meanwhile, Prologis, through its Fibra platform, has established itself as a dominant industrial REIT in the country, with a portfolio totaling nearly 66.3 million square feet.
Under the partnership’s third component, GIC will provide long-term capital through its U.S. core-plus fund to complement Realty Income’s expertise in net-lease assets. Net-lease structures are attractive to investors as tenants typically cover property taxes, insurance and maintenance expenses.
“We maintain strong confidence in the net-lease sector’s ability to deliver stable, long-term cash flows,” said Cai Wenzheng, head of Americas real estate at GIC. “This collaboration enhances our exposure to U.S. net-lease investments and provides direct access to the investment-grade logistics segment, where we see sustained growth potential.”
For the record
Greenhill served as financial adviser to Realty Income on the partnership with GIC. CBRE Investment Banking advised on the Core Plus fund transaction.
Source: Original reporting by Mark Heschmeyer, CoStar News.
