Fewer Offices Available, Higher Rents, but No Boom in Demand
- Mexico’s office market is seeing higher occupancy and rising rents, but its recovery depends more on retaining tenants than attracting new ones.
The Office vacancy rate in Mexico City, Monterrey, and Guadalajara continued to decline during the third quarter of 2026, reaching 14.5%, its lowest level in six years. The trend, which began in 2022, has continued without an extraordinary increase in new occupancies, as companies are vacating less space and construction activity has declined considerably.
On the demand side, SiiLA data show that companies occupied just over 121,000 square meters of office space in the third quarter, similar to a year earlier and below the quarterly average of about 142,000 square meters since 2020. By contrast, they vacated just 23,000 square meters, the lowest volume on record. As a result, net absorption reached nearly 98,400 square meters, its highest level since the third quarter of 2025.
The decline in move-outs has also changed the relationship between the space companies occupy and the space they vacate. A year ago, 2.8 square meters were occupied for every square meter vacated; during the third quarter of 2026, that ratio rose to 5.3. The shift is also evident in the number of transactions: 3.4 move-ins were recorded for every move-out, compared with 2.2 a year earlier.
However, companies occupying more space than they vacate does not, by itself, guarantee a decline in availability, as the amount of new space entering the market also matters. In the first nine months of 2026, the three markets delivered less than 150,000 square meters of office space, compared with an average of about 203,000 square meters during the same period each year from 2020 to 2024. The difference is even greater over longer periods, as the space delivered between early 2023 and the third quarter of 2026 represents just 38% of the space added during the preceding 15 quarters.
Availability Doesn’t Tell the Whole Story
Although the market still has considerable available space, not all vacant offices compete for the same tenants, as companies require specific locations and property features, and the operational, financial, and logistical costs of relocating make tenant turnover more difficult. This means that high overall availability can coexist with limited supply for certain needs, while a decline in availability does not necessarily improve every landlord’s competitive position equally.
Consequently, lower availability does not necessarily translate into greater bargaining power, which can also limit rent increases across the broader market. Nevertheless, after several years of declining availability, rents are also rising. In the third quarter of 2026, the average asking rent reached $23.84 per square meter per month, a 6.5% annual increase that, after adjusting for available U.S. inflation data through August, represents an estimated real increase of approximately 3%.
Though rising rents point to improving market conditions, they must be interpreted in light of declining availability, since a recovery driven by substantial growth in new occupancies has different implications than one sustained primarily by fewer move-outs and limited construction. In the latter case, the market can record higher occupancy and rents without companies demanding significantly more space than before. Therefore, a rent recovery does not necessarily mean the market has become more dynamic, or that demand is strong enough to support a significant supply expansion.
Want to learn more about what’s driving Mexico’s office market performance recently? Visit SiiLA Market Analytics or email us at contacto@siila.com.mx.
