Mexico will reach a new record in demand for industrial buildings in 2023, say specialists

Although economic growth in Mexico has been slow, activity in the industrial real estate market maintains its dynamism -as it has done for a couple of years- thanks to the reconfiguration of supply chains, a phenomenon also known as nearshoring.

The national territory has been crowned as one of the most attractive for the arrival of foreign companies. Thus, from 2021, the sector of industrial ships has exceeded all expectations and by 2023, the international developer Prologis forecasts that the Demand will hit a new yearly record as nearshoring fuels expansion across the border.

“The increase in deliveries in 2023 will allow greater absorption because the vacancy rate is at an all time low. We see construction of new projects increase to a record 25 million square feet in the third quarter of this year, while vacancy fell to 1.4 percent,” Prologis reported.

In this sense, Giovanni D’Agostino, president of the real estate services firm Newmark in Mexico and regional director for Latin America, explained that vacancy rates had never reached such low levels and, consequently, rental prices continue to risewho had already broken all records.

Demand grew 55%

According to a Solili report, the third quarter of 2022 brought with it an increase in gross demand of almost 13% compared to the same quarter of 2021, exceeding the 2.1 million square meters nationwide.

In turn, the national net demand, which incorporates unemployment in its calculation, shows an even higher 55% annual growth with the registration of more than 1.7 million square meters, which shows signs of a highly competitive market that consumes vacant inventories faster than in previous periods.

It is worth mentioning that the expansions related to the relocation of production plants from international companies accounted for half of new leases this year; being Monterrey, Juarez and Tijuana the main beneficiary states.

However, it must be taken into account that the following year, the market will face the shortage of industrial spaces in most markets, where it is not possible to meet all the existing demand.

investment situation

Among the positive aspects of Mexico to promote the construction of industrial buildings During 2023, D’Agostino highlighted the development of projects of infrastructureAs the Mayan trend, the Interoceanic Corridor and the Tultepec – Felipe Ángeles Airport highway; whose objective is to improve the interconnection in different parts of the country.

In addition, he assured that the country has an open economy that, through its network of free trade agreementsguarantees access to international markets, and has various sectors with high investment potential.

Proof of this, he said, are the investments that take place in the sector industrialsuch as PGIM, which has allocated 169.3 million dollars to three industrial buildings portfolios distributed throughout the country.

“We look forward to 2023 with optimismwith the certainty that, despite the caution in investments, they will continue to register in the industrial field throughout Mexico and Latin America, taking advantage of the need for new latitudes”, concluded Giovanni D’Agostino.