Over 170 Asian Companies Occupy Offices in Mexico and Grow 6% in 1 Year

Asian companies have expanded by 6% in Mexico’s leading office markets, particularly in the Bajio region and northern part of the country. This growth has notably outpaced companies from the Americas and Europe, making a significant impact on the market.

This growth reflects a strategy tied to the industrial development of Asian companies nationwide and underscores their need to centralize administrative and logistical operations. This is particularly crucial in a competitive economic environment like Mexico's, which is positioning itself as a strategic hub in the global supply chain.

Diego Imperio leads Ricoh in Latin America. Recently, this Japanese company expanded its offices in Mexico City. Photo: SiiLA.

By: SiiLA News

07/01/2024

The expansion of Asian companies in Mexico is not only evident in the industrial real estate market but also in the office sector. According to data from SiiLA Market Analytics, Asian companies represent between 4% and 5% of the office market in the country's major cities. This translates to over 170 Asian companies nationwide, with one in ten establishing multiple offices across the country.

Over the past year, the gross leasable area (GLA) occupied by Asian companies in Mexico has notably increased by 6%. This growth surpasses that of companies from the Americas, Europe, and Oceania, which registered increases of 1% to 3%, while African companies experienced a 10% decrease.

The analysis also indicates that the most significant expansions occurred in the Bajio region and northern Mexico, with increases ranging from 5% to 33% in markets such as Queretaro and Monterrey. To a lesser extent, the country's central region, which has the highest presence of Asian companies nationwide, saw a GLA increase of up to 5%.

The relative dynamism of Asian companies in the Mexican real estate sector reflects their growing need to use Mexico as a significant consumer market and as a bridge to enter and expand operations in North America with the lowest possible operational costs. This trend is driven by nearshoring, an emerging global recession, trade tensions between China and the United States, armed conflicts in strategic sectors for energy and commerce like Ukraine and the Middle East, and the upcoming renegotiation of the USMCA in 2026, which forces companies to seek better market conditions for their investments.

As the presence of Asian companies increases in Mexico's industrial market, where they currently hold an 8% market share, there is a parallel need to expand their corporate presence. This is because, with more factories and plants operating in the country, these companies need more space for the personnel that manage and coordinate all their industrial activities. Thus, having more offices allows them to centralize administrative and logistical functions, facilitating more efficient operations.

Asian Corporations in Mexico

The HSBC Tower in Mexico City reflects the impact of Asian companies in the office market. Photo: BigStock.

Among Asian companies, those from China, South Korea, India, Japan, and Singapore expanded the most in the national office market, with increases ranging from 4% to 15%, depending on the case. SiiLA data also indicate that most (77%) of the companies from these countries belong to the finance, electronics, automotive, and technology sectors. Major tenants like HSBC, Huawei, Nissan, Tech Mahindra, and Samsung are on this list.

However, in general, Asian companies have seen the most growth in the pharmaceutical, chemical and petrochemical, mining, metallurgical and steel, and vehicle and parts sectors. Their corporate GLA in these sectors has varied between 20% and 150%, indicating their strategic investments.

The company with the most growth in the past year was the South Korean pharmaceutical firm CTC Bio, which quintupled its GLA. It was followed by companies with a much more significant presence in the office markets, such as the Japanese electronics firm Ricoh and the Chinese, South Korean, and Japanese automakers Chirey, Hyundai, and Mitsubishi, whose GLA increased two to three times.

It is interesting to note how, alongside automotive, machinery, and technology companies experiencing a significant boom in the Mexican corporate sector, they have also seen substantial growth in the industrial sector. This suggests a direct relationship between both sectors.

According to data from the Mexican Economy Secretariat, so far this year, 68% of international purchases from China, South Korea, and Japan, including goods and services that Mexico acquires from abroad for domestic consumption, industrial production, or re-export, correspond to machinery and transport inputs. In contrast, 66% of Mexico's international sales to the United States, encompassing exports and commercial transactions between the two countries, correspond to these sectors.

The strong demand in North America attracts Asian companies seeking to supply these markets. By expanding their operations in Mexico, these companies increase their workforce and corporate structure. Thus, the relationship between office growth and the industrial sector is indispensable, as business operations and management from corporate offices allow efficient coordination, while industrial production meets the demand for goods and services. This interrelationship is crucial for opening new markets and generating long-term sustainable investments, solidifying Mexico as a strategic hub in the global supply chain.

For more information about the performance and development of Mexico's commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.

Latam

Mexico

National

Office

Market Analytics

Nearshoring

ABOUT SiiLA

Founded in 2015, SiiLA is the industry leading REsource for comprehensive commercial real estate market insights, news and events across Latin America. The SiiLA suite of innovative products drive greater accuracy, efficiency, and strategic advantages for top players in the commercial real estate industry.