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Paladin Invests in Mexican Homebuilding Joint Venture Kreative

26 February 2018

Institutional real estate fund manager Paladin Realty Partners has committed an initial US$5m to the homebuilding joint venture Kreative, which will focus on providing modern, low-income housing in the Mexico City Metro Area.

(Press Release) Mexico City, Mexico, February 26, 2018 – Paladin Realty Partners, LLC, a leading real estate investment fund manager focused on Latin America, announced today that it has committed an initial $5 million equity investment to a newly-created homebuilding joint venture called Kreative, which will focus on providing modern, low-income housing in the Mexico City Metro Area.

This is Paladin Realty’s first partnership with local developer Casas Krea who focuses exclusively on low-income housing development in and around Mexico City. In keeping with Paladin’s longstanding commitment to responsible ESG investing, the Casas Krea joint venture will utilize environmentally-sensitive construction, featuring solar panels, water-limiting devices on sinks and toilets, and energy-efficient lighting. This new investment was made by Paladin Realty’s fifth pan-regional fund focused on Latin America, which has made other investments to date in Peru, Mexico, Colombia and Brazil.

Casas Krea’s initial plan is to develop the “Melchor Ocampo” project on a 62-acre parcel located in a northern suburb of the Mexico City Metro Area. The project will consist of approximately 2,000 residential units ranging from 43 m2
to 95 m2 (460 ft2 to 1,020 ft2) priced at an average of MXN$660,000 each, or about US$37,000 at today’s FX rate. Paladin has the option to increase its equity commitment to the joint venture to accommodate additional projects.

“We are extremely excited to partner with Casas Krea on this new programmatic joint venture. This venture reflects Paladin’s continued dedication to the low-income housing market in the Latin American region,” said Santiago Gil, Managing Director of Paladin Realty and head of its investment activities in Mexico. “Casas Krea’s commitment to build environmentally-responsible projects utilizing advanced construction techniques makes this partnership particularly important to us. Our venture will capitalize on the pent-up and growing demand for affordable housing in central Mexico that continues to be fueled by demographic tailwinds and formal job creation.”

“We’re thrilled to partner with Paladin Realty on this venture,” said Fernando Girault, Founder and CFO of Casas Krea. “Paladin’s two decades of experience in the region, paired with our cutting-edge approach to housing development, will bode well for all the stakeholders in this project. We hope the success of this initial project will lead to many more with Paladin.”