Kimco Dedicatedly Pruning Latin American Assets, Sheds 3 More

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In tandem with its motive of shedding Latin American assets, Kimco Realty Corporation (KIM) disclosed the sale of three retail properties in Mexico. The company sold these unencumbered assets to a Mexican real estate investment trus t (:REIT) – FibraShop – for 1.5 billion Mexican pesos (US $112.8 million).

Kimco reaped pro-rata proceeds of around 1.2 billion pesos (US $93.5 million) from it. This transaction is the company’s third successful portfolio divestiture in Mexico this year. With this, since May 2013, this retail REIT has divested 127 Latin American properties for US $1.5 billion. Kimco’s share of proceeds from this is US $660.2 million.

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.

Spanning 1.3 million square feet in total, these three divested Mexican assets are positioned in the cities of Hermosillo, Tapachula and Cuautla with anchor tenants including Wal-Mart Stores Inc. (WMT), Cinepolis and Cinemex.

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

Kimco currently has a Zacks Rank #3 (Hold). Moreover, investors interested in the retail REIT industry may consider stocks like General Growth Properties, Inc (GGP) and Cedar Realty Trust, Inc. (CDR). Both stocks carry a Zacks Rank #2 (Buy). 

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