Five real estate submarkets accounted for nearly 40% of industrial space absorptions nationwide during the first half of 2023. These regions in Mexico City, Monterrey, and Saltillo have become highly significant for the manufacturing and transportation/logistics sectors due to their strategic positioning, developed infrastructure, skilled workforce, and access to major communication routes.

Over six months, the CTT and Toluca-Lerma submarkets in Mexico City, Apodaca and Cienega de Flores in Monterrey, as well as Ramos Arizpe in Saltillo, collectively absorbed over 1.3 million square meters of space, according to data from SiiLA.

Absorptions in the commercial real estate market reflect a region's economic and business dynamics. These absorptions, indicating the occupancy of commercial properties, unveil supply and demand trends, as well as market cycles. Moreover, they directly impact rent prices, investment decisions, and local economic vitality. Overall, space absorption is an essential indicator for comprehending the commercial real estate market's dynamism, competition, and performance.

Data also suggests that while distribution and logistics companies largely drove absorptions in Mexico City, manufacturing companies and related service providers took center stage in Monterrey and Saltillo. Regarding the profile of the absorbed spaces, information from SiiLA Market Analytics reveals that 86% of the occupied properties consisted of Class A industrial warehouses or distribution centers, with an average gross leasable area (GLA) ranging from 6,000 to 20,000 square meters, depending on each submarket.

This implies, on the one hand, that Northern submarkets favor tenants seeking cost-effective manufacturing and goods shipping due to their proximity to the Mexico-United States border. On the other hand, Central submarkets tend to attract last-mile transportation and manufacturing companies within supply chains. However, in both cases, the profile of the occupied spaces suggests that companies seek spacious and high-quality properties, whether for large-scale operations or potential expansion strategies.

It's important to highlight that one of the factors that favored space absorption in these submarkets was the expansion and relocation of corporations at the national level. In this regard, SiiLA's data indicates that six out of ten companies that absorbed spaces already had a presence in Mexico, as seen in cases like Genie, Cedrosa, and Mercado Libre, to name a few.

The consistent growth of these real estate submarkets underscores the interconnectedness between strategic location and economic boom. The combination of top-tier infrastructure and specialized workforce has created a conducive environment for investments and business expansion. Additionally, the diversity of leading industries in space absorption reflects the regions' adaptability to changing demands in the global market.

For more information about the commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.