In 2023, Mexico surpassed China as the largest exporter of goods to the U.S., driven by foreign direct investment (FDI) exceeding $36.2 billion, one of the highest levels in the past 20 years. This result reflects growing confidence among U.S. companies in Mexico as their preferred location for factories and distribution centers, not only to shorten but also to simplify supply chains.

KPMG notes that many companies are streamlining their supply chains by reducing the locations their products pass through before reaching the final consumer. The average number of locations is expected to decrease from 2.7 to 2.4 over the next three years, concentrating more operations in strategic markets like Mexico. This strategy enables greater agility and faster responses to market demands, particularly in key sectors such as automotive and semiconductors.

Another factor driving Mexico's rise is the reduction of dependence on U.S.-based supply chains and the growing distrust of Asian countries like China. KPMG highlights that while the share of companies operating in the U.S. will drop from 62% to 44% over the next three years, Mexico's importance as an efficient alternative will increase. Meanwhile, many companies still rely on the "China Plus One" strategy, which involves splitting production between China and another country. However, rising labor costs and concerns about intellectual property in China are prompting more companies to shift operations closer to Mexico.

According to SiiLA Market Analytics data from the third quarter of 2024, over 100 foreign companies—36 American companies—entered Mexico’s leading industrial markets in the past year, occupying approximately 1.8 million square meters of gross leasable area (GLA). Guiding these foreign investments were companies in the automotive, capital goods, electronics, petrochemical, and transportation & logistics sectors, which account for 60% of the GLA occupied by these firms.

Finally, KPMG emphasized that Mexico is strategic due to its geographic proximity, political stability, and robust infrastructure, making it a crucial partner for companies looking to mitigate risks and optimize supply chains amid rising global tensions.

If Mexico solidifies its position as the primary nearshoring destination for the U.S., the country's industrial real estate market will enter a new phase of expansion. The demand for industrial buildings and logistics centers could rise significantly, driving the development of more industrial parks, particularly in key regions like the North and the Bajío. Additionally, infrastructure investment will be critical to maintaining this growth momentum, and market rent is likely to continue rising, reflecting the high demand for industrial space. Thus, Mexico is emerging as a central player in North America's supply chain and a growth engine for the real estate sector.

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