The Bajio region is one of Mexico and Latin America's most vital industrial and logistical development zones. Its prime location in the central-northern part of Mexico, coupled with a skilled workforce and top-notch infrastructure fueled by a surge in investments due to nearshoring to Mexico, makes it an irresistible magnet for global companies seeking fertile ground for expansion.

Amidst this economic and productive upswing, it's intriguing to note that 30% of Bajio's industrial inventory is concentrated within three pivotal submarkets of the region. Silao in Guanajuato, El Salto in Guadalajara, and the Mexico-Queretaro corridor in Queretaro collectively boast nearly nine million square meters of industrial warehouses, predominantly of substantial size and high quality.

These regions have become strategic destinations for manufacturing, consumer products, transportation, and logistics companies. According to SiiLA, between 75% and 95% of the gross leasable area (GLA) in these regions is occupied by companies in these sectors, with substantial investments from the United States, Japan, and Germany.

Among the notable giants that have established their presence in these submarkets are DHL, General Motors, IBM, Mercado Libre, and Walmart.

While it is undeniable that these submarkets, like many others in the Bajio, attract multinational corporations due to their location, connectivity, infrastructure, workforce, foreign investment, and government support, one distinguishing factor has been the growth of domestic demand and market diversification, despite the strong presence of industries such as automotive, electronics, and technology.

Two Years of Growth and Demand

Over the past two years, inventory in Silao, El Salto, and Mexico-Queretaro increased by 3% to 12%, and their vacancy rates dropped by 2% to 45% due to the persistent demand for spaces in these regions and limited new inventory supply. The arrival and expansion of companies, combined with limited availability, with rates ranging from 0.7% to 5.0% depending on the region, have driven price increases ranging from 7% to 25%, depending on each case.

With a growing demand fueled by nearshoring and the surge in e-commerce following the coronavirus pandemic, it's essential to ask: What types of spaces are in demand in these regions?

According to SiiLA Market Analytics, 82% of the absorbed space during the first half of 2023 was Class A in medium and large-sized industrial warehouses. In El Salto, newly occupied warehouses averaged 10,200 square meters, while in Mexico-Queretaro and Silao, they averaged 5,200 and 3,500 square meters, respectively.

The provided data reflects a positive trend for the remainder of the year in these three submarkets. A robust demand for modern, high-quality, and large-sized industrial facilities is directly linked to economic growth and increased industrial activity in these regions.

For more information on this and other trends in the commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.