Border cities with great potential to attract FDI through Nearshoring: Foinbra

Monterrey, NL. Mexico, and in particular the cities on the northern border, have the capacity and opportunity to double the size of industrial parks in the medium and long term and take advantage of nearshoring. In the United States, the area is 10 times larger, and in Mexico production costs are 43% lower than in North America, he told The Economist, Roberto Garcia OlavarrietaCEO of Foinbra.

FOINBRA, SAPI DE CV, based in Monterrey, is going for Nearshoring with investments of 2,000 million pesos for the purchase of industrial warehouses for rents in dollars, with spaces for AAA companies.

“This Nearshoring phenomenon is a transition that is transforming the real estate market throughout the world and Mexico is spearheading the border, from Tijuana to Matamoros (…) Mexico is very well positioned to capture this opportunity,” García emphasized. Olavarrieta.

He explained that in Tijuana the industrial market is the most saturated by the excess of demand, but in the northeast area it is still developing. In the metropolitan area of ​​Monterrey, the peripheral municipalities are growing “and most of the Foreign Direct Investment (FDI) that comes to the country is being captured, because it has qualified labor with good technical levels, for 25 years.”

“What we see throughout the north of the country is that new areas are going to open up, for example in the Tijuana-Mexicali corridor, Reynosa is going to expand and hopefully Matamoros too, there is opportunity everywhere,” he stressed.

He listed the advantages of border cities over the industrial market of the United States. The entire industrial park in Mexico is the size of the park in Houston or Atlanta and 1.3 times smaller than that of Chicago, or 10 times smaller than that of the United States.

However, the labor labor costs in the country they are 5.48 dollars per hour, the rent per square meter is lower (…) freight puts Mexico in a privileged position, in transportation and logistics Mexico has a cost 43% lower than in the United States and 23% compared to China.

He deepened that to invest in industrial buildings, three aspects must be taken into account: basic services and close labor; have good access to communication routes and the cost per square meter.

“In Santa Catarina and García, industrial parks are growing, the highway or bypass passes through there, which goes from Highway 57, through the outskirts of Monterrey and you can find land at an attractive price. Other areas are getting more expensive, Tijuana has the highest cost per square meter in the country.”

“What we are seeing is that 5 or 10 (companies) are not going to arrive, the country’s industrial park has the potential to double growth in 10 to 15 years,” he stressed.

tailored suit

He said that Foinbra in its industrial portfolio, has Bimbo as its main client, “we build industrial buildings, distribution centers as requested, with the heights that they want.”

Its real estate portfolio has developed a group specialized in Build to Suit (BTS) or custom suits, since many clients are currently arriving who want to put their industrial buildings with very specific characteristics.

Foinbra is one of the private portfolios of the industrial and commercial real estate market, with close to 200 properties. Revenues come from customers like Bimbo, HEB, aurreraconvenience stores OXXO, Savings Pharmacies y Guadalajara Pharmacies.

“I worked as a wealth advisor for 20 years, the options in the public markets are in the fixed income part with Cetes, and in variable income. I found in real estate a better risk-return ratio, what it offers compared to fixed income are superior returns, thanks to the income streams that come from rents, with a high degree of security by having tenants in these properties from the leading companies in the national market, with long-term contracts”, he explained.