Nearshoring triggers occupation of industrial buildings in CDMX; availability hits record low

the market of industrial ships in the Mexico City (CDMX) continues in an expansion cycle, but the availability of spaces reached a new all-time low, derived from the “boom” in demand caused by the relocation of companies, a phenomenon also known as nearshoring.

According to a market report from the real estate services firm CBRE México, the inventory of the Mexican capital reached 10.3 million square meters at the end of the first quarter of 2023, which meant an annual increase of 8 percent.

The new offer was 154,896 square meters, 21.49% higher than that reported in the same period of 2022. However, even with the incorporation of this area, availability continues to decline, since it closed the first quarter of the year at 2.0 percent. hundred.

Francisco Muñoz, Vice President of Industrial and Logistics at CBRE Mexico, explained that this low vacancy behavior, despite the growth in inventory, is the result of the fact that 94% of new projects entered the market with pre-leasing contracts, that is, busy.

“The Mexico City has maintained a strong demand in the industrial real estate sectorwhich is expected to continue throughout 2023, reinforced by recent announcements by the Ministry of Economic Development to create an investment attraction agency, in addition to promoting tax incentives and administrative processes for the arrival of companies,” said the specialist .

It should be remembered that the capital’s government has a plan for the Vallejo-Azcapotzalco corridor, where the application of these measures is expected to attract Asian companies that seek to serve the US market.

Lawsuit keeps construction going

inventory of industrial ships under construction inside the Mexico City was 423,000 square meters, during the first quarter of the year, according to CBRE.

These were concentrated in the main corridor of the city, CTT (Cuautitlán, Tultitlán and Tlanepantla) with the following distribution:

• Cuautitlan: 50%
• Tultitlan: 32%
• Tlalnepantla: 18%

“The demand in the market and the low vacancy rate have motivated the start-up of new projects for this beginning of the year, such is the case of Logicenter Diamante and World Park Tultitlán 3, in the Cuautitlán and Tultitlán corridors,” said Muñoz.

In addition, more than 700,000 square meters of industrial space in planning, same that, in the course of the year, could begin with earth movement in the corridors of Cuautitlán, Huehuetoca-Tepeji and Tultitlán, with tentative dates of delivery to 2024.

Developers would look for new alternatives

One of the main challenges in terms of industrial development in the Mexico City It is the lack of land with equipment for water and energy services, which has limited the construction of warehouses to satisfy the nearshoring.

Given this scenario, the Solili platform reported that construction companies would look for alternatives to continue expanding the market.

“In a highly speculative market, the scarcity of land with infrastructure is decisive for developers to see limited their interventions to get land, in order to close new parks. Therefore, this unsatisfied demand will explore three courses of action,” according to the report.

The first option would be the development of corridors other than the traditional ones, such as Zumpango and Huehuetoca, although they do not represent the same potential as the CCT and Toluca.

A next alternative is associated with the exploration of nearby markets, such as Hidalgo, Querétaro and Puebla, which could take advantage of the situation to attract part of the demand to their territories.

Related Post

Ford, GM, Arm, Adobe, Nucor, KeyCorp, and More Stock Market Movers

September 15, 2023

Ford, GM, Nvidia, AMC, Norwegian, HP Inc., Delta, and More Stock Market Movers

September 14, 2023

Some Chinese Stocks Are a Real Bargain Now. Alibaba Is One of Them.

September 13, 2023

C3.ai, Apple, GameStop, UiPath, ChargePoint, Yext, BlackBerry, and More Market Movers

September 7, 2023

Finally, there is the reconversion of old industrial spaces. These kinds of interventions begin to take place in Vallejo and Naucalpan, where buildings that have reached their functional obsolescence may have a new opportunity.

“This option will be on a much smaller scale and would imply costs that may be attractive for certain logistics activities that seek to compete in proximity to the capital’s demand,” Solili concluded.