China leads investment in industrial spaces for nearshoring in Mexico

Mexico continues to take advantage of the benefits of the trend of relocation of the production centers of the companies, known as nearshoringa phenomenon that has accelerated the activity of the industrial real estate sector.

According to a market report by the real estate services firm CBRE, the participation of this phenomenon in the total demand for industrial spaces it went from 14% in 2021 to 26% at the end of the third quarter of 2022.

“1 million 200,000 square meters of demand were reached for nearshoringthis represents almost double the annual figure with which it closed 2021”, explained Francisco Muñoz, Executive Vice President of Industrial and Logistics at CBRE.

It should be noted that, between January and September of this year, China was the country with the highest investment in company relocation projects in Mexico. The original capital of the Asian nation represented 40% of the demand for nearshoringa figure consistent with what was registered in the last four years from that country, according to the real estate firm.

On the other hand, a study by the Bank of Mexico (Banxico) found that two of the main reasons why companies relocate to the national territory are trade tensions between the United States and China; as well as compliance with the Rules of Origin of the Trade Agreement between Mexico, the United States and Canada (T-MEC).

In addition, Banxico conducted a survey in which more than 26% of the companies integrated into the Global Supply Chain mention that they have registered increases in the demand of its products due to the relocation of its operations.

Monterrey and Coahuila, the winners

Given its proximity to the US-Mexico border, the industrial real estate sector of the northwest of the country has been the greatest beneficiary of the nearshoring.

This is reflected in the results of Monterrey, Nuevo León and Saltillo, Coahuila during the third quarter of 2022, since both cities concentrated 61% of the demand nationwide by companies that have decided to move to Mexican lands.

According to CBRE, the automotive industry continues to dominate the activity in the transactions of industrial spaces both in the center and in the north of the country.

During 2022, the manufacture of auto parts represented about 40% of the demand for industrial spaces by relocated companies, while the manufacture of furniture, machinery and household appliances maintain a strong trend of participation.

Chihuahua benefits from exports

Another of the states that has also benefited from the nearshoringand that has impacted its industrial real estate market, is Chihuahua, which in the second quarter of the year was in the first position at the national level in the figures for Mexican exports, with an income of 18.645 million dollars, according to the National Institute of Statistics and Geography (Inegi).

According to the firm Solili, this boost in exports is correlated with the industrial real estate sector in the state, with significant growth in gross and net demand and construction.

According to data from Solili, the state’s quarterly net demand has been in the order of 35,000 square meters, while gross demand reflects an increase of 70 percent. In terms of construction, they have registered a record with a building of almost 51,000 square meters at the end of October of this year.

“The recent investment announced by the British company Reckitt for 150 million pesos in its plant in Delicias and that it projects for 2023 a figure that will reach 299 million pesos, are examples of the confidence generated by this northern industrial market,” said Solili. .