Potential of the industrial real estate segment attracts foreign investors

Given the conditions offered by Mexico for the industrial development and with the trend of reconfiguration of supply chains, an effect known as nearshoringforeign investors set their sights on the country.

According to Sergio Pérez, Newmark’s executive director of corporate accounts in Latin America, the real estate projects industrial roots In the national territory they have capitalization rates – percentage of the first year’s rent compared to the total investment – close to double digits, which whets the appetite, especially among US developers.

“For the first time in many years, there are entry capitalization ranges between 9.5 and 10.5%, while, for a sales portfolio, in exit caps, developers can sell it from 6.5 to 8 percent. The margin for the developer in Mexico is huge, which will be a long-term trend and the country is prepared,” said the specialist.

Among the competitive advantages that the country has to benefit from the nearshoring, highlighted Sergio Pérez, highlights the workforce. The average age of the Mexican population is 29 years, while in the United States and Canada it is 38 and in China 41.

Throughout the entire national territory there is an inventory of 75 million square meters in Industrial facilities speculative with an availability of 2.3% and a net absorption of about 2 million square meters, according to figures from Newmark.

Industrial demand will be covered in 2023

Electronic commerce, manufacturing and logistics are sectors that have triggered a historic absorption of industrial spaces throughout North America.

This was reported by Newmark executives during the NASCO 2022 event, a meeting organized by the North American Strategy for Competitiveness (NASCO), a leading organization focused on the competitiveness of the North American supply chain, in the city of Kansas, United States.

Gregg Wassmansdorf, director of the firm in Canada, pointed out that during the health crisis many companies and factories went bankrupt, and today new opportunities are opening up to grow the industrial real estate market in Canada, mainly in Vancouver.

“Demand has been strong, but we will not be able to meet it until 2023, since most of the properties that are built have a delivery date until next year. Today there are opportunities throughout North America from Mexico to Canada and the demand is such that everything that comes on the market is immediately absorbed”, indicated the director of Newmark Canada.

During the meeting, it was noted that the United States, Canada, and Mexico have been trading partners for a long time, which is why, at this juncture, they are taking advantage of the opportunity to work together with governments and developers to receive the investments that are being registered in the industrial real estate market.

“The logistical challenge has been enormous, the time to deliver the product has represented a great change for the companies. In addition, Mexico is one of the countries with the most trade agreements in the world, if you manufacture here, you can send to North America and enter Europe. That is reflected in the industrial absorption for the country”, concluded the executive director of corporate accounts in Latin America of Newmark.