The real estate sector is one of the best options for investment. Buying a house, an apartment, or a piece of land is a move that will protect your future and your finances in case of an economic or personal emergency.
By investing in the real estate sector, you obtain a tangible asset that, in the long term, tends to generate a competitive return, which in turn lends confidence to you as an investor.
Investing in real estate helps to improve housing markets by creating communities of people living together in the same area.
In addition, there is a wide variety of investment options. This variety allows you to diversify your money and reduce the risk of losses due to fraud and sudden changes in the economy.
By 2020, Mexico had a total population of 128,932,700 million people. The average age of the population was 29 years old. The population grew by 13.7 million people compared to 2010, making an average annual growth rate of 1.2% over the last decade.
In 2020, there were 35,219,141 inhabited private homes. In 2000, the figure was 21,942,535 dwellings and in 2010 it was 28,607,568. From 4.4 occupants in 2000, it dropped to 3.9 in 2010 and 3.6 in 2020.
Mexico is the second-largest economy in Latin America and the fourteenth largest in the world, representing 1.67% of world GDP and growing at an average annual rate of 2%, except during pandemic years.
As such, Mexico represents a great opportunity for real estate investment since both its population and its economy are growing rapidly and the demand for housing is increasing in the same direction.
In Mexico, 26.5% of the population lives in substandard housing; that is, housing with some type of deficiency such as overcrowding, insufficiency, or even construction with precarious materials, to such a degree that they fail to satisfy a minimum level of wellbeing for the inhabitants. In other words, 8.5 million homes have a housing backlog. This is explained by the fact that most of the population does not have access to financing that would allow them to acquire a home. The states with the highest number of homes in this condition are in the center and southern parts of the country.
According to INFONAVIT data, at the end of the second two-month period of 2019, of a little more than 6.8 million beneficiaries who can exercise their mortgage credit, 45.8 percent have an income of less than 2.6 times the value of the monthly Measurement and Updating Unit, which shows that a high percentage of available credits is concentrated in the low-income population. The Mexican government is seeking to put an end to this backlog, which is why INVI finances low-income housing.
Javer as an Investment Vehicle in the Sector
Javer is the largest housing developer in Mexico in terms of units sold. In addition, for several years it has positioned itself as the number one provider of INFONAVIT loans.
Javer specializes in the development of low-income, middle-income, and residential housing. Low-income housing has a selling price of less than $300,000, the middle-income housing segment ranges from $300,000 to $850,000, and the residential segment is comprised of homes priced over $850,000.
It can be clearly seen that Javer has great potential in Mexico, because, thanks to the conditions in the country, Javer's sales will increase over the years.
Historical Trajectory
Javer’s history is divided into three stages, with the first beginning in 1973 with the founding of the company. Salomón Marcuschamer, president of the company, began by building houses designed for the wealthiest sectors of the population in Monterrey, Nuevo León, where the company's main offices are currently located. At the same time, he reinvested a large part of the profits he generated to buy land.
The second stage occurred from 2000 to 2007, when Javer made its way into low-income housing. The, INFONAVIT began with the "boom" of mortgage loans, which is when the land purchased by Javer began to look attractive for low-income housing. During this period, the company went from selling 1000 to 14,000 units per year.
Specifically in the year 2000, the company began to develop low and middle-income housing projects in the state of Monterrey, and in 2003 it entered the markets of the states of Jalisco, Aguascalientes, and Tamaulipas.
In 2007, Servicios Corporativos Javer, S.A.B. de C.V. was incorporated as a result of the corporate restructuring that groups the subsidiaries of the controlling group into two groups depending on their sector: real estate and industrial.
The third stage involved the association with investment funds. In 2009, there was a change of control in the Company due to the sale of 60.0% of the company's shares to Southern Cross Group, Glisco Partners, and the family office, Arzentia Capital. This led to several strategic changes. Now, instead of building a few very large projects, they have built many smaller projects.
For example, in 2008, Javer sold 15,000 homes in 17 projects, and in 2016 it sold 18,500 in 45 projects.
In 2009, it began to place debt in international markets; it added bonds for 320 million dollars (mdd) maturing in 2021, paying a coupon of 9.875%, a much higher percentage than that of a bank loan, gave the company flexibility in the use of capital.
In 2012 and 2014, Javer increased its geographic presence, reaching the State of Mexico, Queretaro, and Quintana Roo, respectively.
In 2015 it was named the number one provider of INFONAVIT credits for the second consecutive year nationwide.
On January 12, 2016, the next move of the financial strategy began: Javer launched its Initial Public Offering, placing among the investing public a total of 94,801,550 shares, equivalent to 34% of the total outstanding shares. In the same year, Javer was once again positioned as the number one provider of INFONAVIT loans for the third consecutive year.
On January 13, 2016, the company raised 1,801 million pesos in the Mexican Stock Exchange and decided to use this money to pay the debt.
In 2017, Javer sold 18,750 units, a record figure for the Company, thus maintaining its leadership as the largest housing developer nationwide.
In 2018 it obtained the Socially Responsible Company Certification and the Best Companies to Work for in Mexico Certification, which it has managed to maintain until 2021.
In 2019 they inaugurated their first project in Guanajuato.
In 2020, despite the pandemic caused by COVID 19, Javer managed to sell 14,302 units, which represented a decrease from the 15,716 units sold in 2019; even so, the Company remained strong compared to the global outlook.
Javer maintains high expectations, as they managed to title 9,934 units as of September 30, 2021.
In 2020 and 2021, Javer will receive the "Ethics and Values" award from CONCAMIN in recognition of the Company's social responsibility efforts.
Javer is currently present in seven Mexican states: Nuevo Leon, Jalisco, Queretaro, Estado de Mexico, Aguascalientes, Tamaulipas, and Quintana Roo.
Javer's strategy is to maintain the model: short and medium-term projects, investing between 600 and 1,000 million pesos per year for land replacement, generating returns of more than 20% and favoring cash flow overgrowth.
Strong Commitment to Sustainability
Javer is committed to being an agent of change, seeking to constantly innovate and improve to reduce its impact on the environment. The company has built a Corporate Social Responsibility model, for which Javer has received for the fourth consecutive year the distinction of Socially Responsible Company by the Mexican Center for Philanthropy, was named for the fifth time Great Place to Work as one of the best companies to work for in Mexico, and for the second time was awarded the Ethics and Values in the Industry award.
This model consists of 5 lines of action that incorporate the main goals and objectives for the Company: Our People, which fosters the development of human capital by offering tools such as a harmonious work environment, continuous training, incentives, and growth plans; Our Community, which works to facilitate the development of the communities in which it operates through programs such as "INFONAVIT Mortgage with Services", which aims to develop sustainable communities through the creation of social fabric and maintenance of common areas to guarantee the added value of the projects; Nuestro Planeta, an initiative that uses sustainable practices that comply with the applicable regulations in the country, incorporating sustainability strategies that take care of the environment by focusing on reducing, compensating, and eliminating its environmental impact with strategies such as community tree planting, human gardens, recycling, and flora and fauna rescue programs, among others.
Javer also joined the commitment to actively participate in the Sustainable Development Goals (SDGs) of the United Nations that make up the new global sustainability agenda, which has been integrated as a guide in its development as a company.
