Under a clear sky, metal beams rise like skeletons of what will soon be a towering industrial warehouse. The steel and concrete structure unfolds in the heart of Naucalpan, State of Mexico, defying the uncertainty of a small yet complex market. As the sun illuminates the construction site, the shadows cast on the concrete floor reveal the magnitude of what’s to come: more than 5,800 square meters of gross leasable area awaiting to be filled with activity.

This project is not just a new construction; it is Grupo FREL’s first industrial development, a company traditionally focused on office, retail, and residential sectors.

When SiiLA asked Alan Rodríguez about the reason behind this strategic shift, especially at such a critical moment for the Mexican market, marked by the reconfiguration of supply chains and the nearshoring boom, the Commercial Director of FREL explained that the decision to enter the industrial sector was no coincidence. The company had owned the land since 2014, but the increase in demand for logistics space led them to rethink its use. As Naucalpan became a key location for last-mile logistics, developing industrial infrastructure became a more suitable option than the originally planned residential development.

However, how profitable is Naucalpan?

Despite being one of the smallest industrial real estate markets in the Valle de México, Naucalpan has demonstrated notable, albeit inconsistent, dynamism. Its average growth rate of 4.7% per year over the past five years reflects moderate expansion. In 2024—after nearly three years without significant developments—the area added 16,500 square meters of industrial space. For 2025, two projects are scheduled, with FREL’s being the largest.

While infrastructure investment in the region has been limited, mainly due to competition from other submarkets in central Mexico and additional costs stemming from its distance from downtown Mexico City, Naucalpan’s strategic importance is undeniable. According to IGECEM, INEGI, and the Mexican Economy Secretariat, Naucalpan contributes the most to the GDP of the State of Mexico, accounting for nearly one-fifth of the state’s economy. This underscores its role as a key industrial and logistics center. Additionally, data reveals that Naucalpan’s productivity remains strong in high-growth industries. Two out of every five companies in the area belong to vehicles and parts, capital goods, and transportation and logistics sectors, generating about 95% of the municipality’s international sales.

However, in 2023, Naucalpan faced several hurdles, with negative net absorption reflecting market uncertainty. Yet, 2024 brought a significant recovery, with the second-highest absorption rate since SiiLA started tracking. These demand and tenant retention fluctuations have resulted in substantial vacancy rate changes over the past five years. Today, however, it is at levels similar to those of 2019, suggesting a gradual market stabilization.