Ciudad Juarez and Tijuana are set to add approximately 1.8 million square meters of industrial space starting in 2023, according to SiiLA Market Analytics. With this new inventory, the industrial property offering in Ciudad Juarez will grow by 17%, while in Tijuana, it will increase by 8%. The expansion of the industrial sector in these two border cities with the United States reflects the development of investment opportunities in the northern-northwestern region of Mexico, which has established itself as a hub for cross-border trade over the past three decades.

Currently, Ciudad Juarez (in Chihuahua) and Tijuana (in Baja California) are poised as the border cities with the highest potential for industrial growth starting in 2023. The boost in both regions is largely due to the arrival and expansion of companies as a result of nearshoring. This phenomenon has strengthened the trade in these cities, which were already established as two of the most important and strategic land crossings between Mexico and the United States. Data from the Secretariat of Economy and the National Institute of Statistics and Geography (INEGI) indicate that the international sales of Ciudad Juarez and Tijuana grew by 23.4% and 12.5%, respectively, in the last year. These sales, of which 95.5% are destined for the US market, generate a joint economic impact equivalent to 7% of Mexico's GDP.

Regarding the growth of industrial inventory in both regions, it is noteworthy that in the northern zone of Mexico, Ciudad Juarez and Tijuana are the submarkets with the largest gross leasable area (GLA) under development, second only to Monterrey, Nuevo Leon. While the former will add over 1.2 million square meters of industrial space, the latter will add nearly 578,000 square meters, according to SiiLA data as of Q1 2023.

The projected square meters delivered from 2023 onwards are more significant in Ciudad Juarez than in Tijuana. This is because the projected delivery area in Ciudad Juarez is nearly 1.6 times larger than the area delivered between Q1 2020 and Q1 2023. In contrast, the new inventory to be delivered in Tijuana accounts for 46% of the deliveries in 2020-2023.

Regardless of the growth difference between both industrial submarkets, they will certainly experience significant expansion in the coming years. This growth will entail the availability of high-quality industrial properties since, in both cases, 98% of the projected GLA corresponds to Class A industrial facilities. Additionally, the average size of the industrial properties under development is medium to large. In Ciudad Juarez, the average GLA of the upcoming properties is 21,500 square meters, while in Tijuana, it is 14,800 square meters. To provide context, it's important to note that the average size of the projected inventory in Ciudad Juarez and Tijuana is 85% and 70% larger, respectively, than the average size of the current inventory in these regions.

The significant growth, the new offering of high-quality properties, and the increased average size of industrial properties under development reflect a favorable outlook for attracting investments, promoting economic growth, and generating skilled employment opportunities in both cities. To learn more about México's industrial real estate sector trends, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.