Brazil, Mexico, and Colombia: 32M sqm of Industrial GLA in Four Years. Which Will Become the Factory of the Future?

The industrial surge reflects increased demand for infrastructure and underscores the role of real estate development as a pillar of economic competitiveness.

Cross-referencing industrial value-added data from the World Bank with the average space occupied per company according to SiiLA, it is estimated that an industrial company generates an average of $40.3 million in Brazil. At the same time, in Mexico and Colombia, this figure stands at $29.8 million and $27.4 million, respectively.

This indicator does not measure productivity or operational efficiency, but it reveals the relationship between space utilization and the industry's economic impact. A higher figure does not necessarily mean a country has better factories—it may indicate that companies in that market are larger, produce higher-value goods, or are more concentrated in specific industrial sectors. Conversely, a lower figure may suggest a higher proportion of small businesses, a more dispersed industrial landscape, or a lower-margin product mix.

This aligns with studies from the World Bank, OECD, and national agencies (DANE, IBGE, and INEGI), which show that Brazil's industry is dominated by large, high-value-added enterprises, particularly in the automotive, petrochemical, and agribusiness sectors. Meanwhile, with a more diversified manufacturing base and strong integration into global supply chains, Mexico has developed a highly competitive export industry in sectors such as automotive, aerospace, and electronics. Colombia, on the other hand, has a more fragmented industrial market, with a higher share of small and medium-sized enterprises, distinguishing it from Brazil and Mexico in terms of scale and business concentration.

This industrial composition determines which sectors have driven industrial space growth in each country over the past four years.

In Mexico, the increase was led by the automotive, capital goods, consumer goods, electronics, and logistics industries, which accounted for six out of ten square meters absorbed. In Brazil, the automotive, consumer goods, pharmaceutical, manufacturing, and logistics sectors comprised eight out of ten square meters of demand. In Colombia, expansion was driven by the food, construction, retail, textile, and logistics industries, representing six out of ten square meters absorbed.

The rise of the industrial market in these three nations comes at a critical moment, as Brazil and Mexico solidify their positions as the most dynamic markets in Latin America, albeit with different trajectories.

In Brazil, the industrial market has maintained sustained expansion, with a strong focus on A+ and A-class warehouses, particularly in São Paulo, which accounts for more than half of the country's inventory. Stable demand has led to net absorption consistently outpacing new supply, reflecting high tenant retention. This has driven sustained rent increases, with cumulative hikes of up to 56% in the country's leading markets since 2020. As a result, industrial vacancy has dropped to 8.3%, the second-lowest level recorded by SiiLA, signaling an increasingly competitive market with a growing scarcity of premium spaces.

In Mexico, nearshoring has redefined the industrial landscape, fueling an unprecedented expansion cycle. However, after three years of rapid growth, in 2024, the market began to adjust, with a slight increase in vacancy following a record influx of new inventory. Nevertheless, occupancy remains strong, with vacancies below 3.3%, confirming demand resilience. Additionally, asking rent has seen double-digit increases for two consecutive years, accumulating a 40% rise since 2022, particularly in the northern and Bajío corridors, where space shortages have pushed prices higher. In 2025, 6.3 million additional square meters are expected to be delivered, testing the market's ability to absorb new supply amid growing economic and trade uncertainties in North America.

Colombia's industrial sector, while significantly smaller than Mexico's and Brazil's, has shown key advancements, particularly in reducing vacancy. Since 2020, the vacancy rate has declined by 65%, falling below 3.3% by the end of 2024—similar to Mexico's levels. This trend is driven by strong tenant retention and stable net absorption despite a slight downward trend in gross absorption since 2021. As a result, the asking rent has surged by 55% over the same period. Additionally, unlike in markets such as Mexico, where most industrial spaces are leased, Colombia is dominated by owner-occupied facilities, where the tenant is also the property owner. This has contributed to the stability of industrial investments in the market.

These trends are not isolated occurrences but rather the result of a broader transformation in global supply chains, driven by the need to diversify manufacturing, mitigate the effects of trade tensions, and capitalize on Latin America's growing appeal as an investment destination compared to Asia.

In this scenario, where, after the United States and the Netherlands, Brazil and Mexico are the world's top destinations for foreign direct investment (FDI), while Colombia ranks as the fifth-largest recipient in Latin America and the Caribbean, the expansion of the industrial market is not just a trend—it is a sign of a structural shift in global commerce and investment.

Moreover, the growth of e-commerce—now exceeding $500 billion in Latin America—and the increased demand for premium logistics spaces have made industrial infrastructure a strategic asset for domestic market development.

In Mexico, the northern and Bajío industrial corridors have reached occupancy rates exceeding 97% in key regions like Monterrey and Guanajuato. In Brazil, demand for A+ and A-class spaces in São Paulo, Guarulhos, and Cajamar has driven down vacancy rates, while in Colombia, logistics infrastructure has evolved with the emergence of strategic hubs in Bogotá and Medellín, boosted by the storage and distribution sectors.

This outlook makes it clear that industrial growth in Latin America is not just a real estate expansion but a strategic realignment in global trade. Manufacturing and logistics no longer depend solely on labor costs or geographic proximity; they require world-class infrastructure, operational stability, and efficient access to major markets. In this new order, the countries that successfully balance these factors will attract investment and establish themselves as the industrial powerhouses of the next decade.

For more insights on the performance and evolution of the commercial real estate market in Latin America, visit SiiLA REsource or contact us at contacto@siila.com.mx.