Guadalajara and Guanajuato were the leading industrial markets for new inventory during the first quarter 2024. Each region added more than 300,000 square meters, marking growth rates of 3% and 2%, respectively. According to SiiLA, these figures set a record for both regions of the Mexican Bajio and represent growth that is two to five times higher than other markets, where more modest growth (such as in Mexicali, Queretaro, Saltillo, and San Luis Potosi) or a significant decline in new inventory offerings (such as in Mexico City, Ciudad Juarez, and Monterrey) was observed.

The industrial real estate growth in Guanajuato and Jalisco (whose capital is Guadalajara) is no surprise.

After Mexico City, the State of Mexico, and Nuevo Leon, these regions contribute the most to Mexico's GDP, with a joint share of nearly 12%. According to INEGI (2Q 2023), although the industrial activities (mining, manufacturing, construction, and electricity) of Guanajuato and Jalisco saw modest growth of 2.3% and 0.6% annually, these states, along with San Luis Potosi, were the ones that most influenced the variation in economic activity in the North-Central region of Mexico, primarily due to their offerings of goods and services.

It is worth noting that these markets excel not only in quantity but also in quality. SiiLA Market Analytics data indicates that, during the first quarter of this year, 98% and 85% of the space delivered in Guadalajara and Guanajuato, respectively, was class A. Quality is essential to meet the needs of today's businesses, which seek spaces that support high efficiency, safety, and sustainability operations.

The quality, strategic location, and communication and transport infrastructure have boosted tenant arrival and retention in Guadalajara and Guanajuato. An example of this is their increasing levels of net positive absorption, which help maintain a stable vacancy rate, even in the face of new inventory additions. This indicator reflects the demand and confidence of businesses in these regions. Also, it shows the interest of national and international companies in expanding their operations in strategic areas that offer logistic benefits due to their proximity to maritime ports (like that of Manzanillo, in Colima) and access to a widely developed terrestrial transport network.

What Drives Development in Guadalajara and Guanajuato?

The boom in the Bajio is explained by factors such as the high cost and scarcity of industrial lands in the north and center of Mexico, the proactivity of government and private investors, and the strategic location between the center and north of the country. Specifically, Guanajuato, Queretaro, and Guadalajara stand out as the most prominent industrial markets in the Bajio, especially compared to highly developed areas like Aguascalientes and San Luis Potosi. This is mainly due to the maturity of the markets and conditions, such as competition for land suitable for industrial development, which depends on the availability of zoned soil, and pressure on existing infrastructure, which in some regions like Queretaro, becomes more evident as industrial development accelerates.

In this context, Guanajuato and Guadalajara—which, along with Michoacan, are the Bajio regions with the longest roads and highways—excel in the development of logistic infrastructure and the creation of commercial connections with international markets. These advantages have enabled them to capture and satisfy the demand of national and international companies looking to expand their operational footprint in strategic locations.

In this regard, SiiLA data indicates that, during the first quarter of 2024, Guanajuato and Guadalajara had the highest volume of gross absorption nationally, with more than 325,000 and about 190,000 square meters occupied, respectively. These absorptions were primarily by companies in the vehicle and parts, electronics, construction, health, and manufacturing sectors, which represent 81% of the absorptions. Michelin, Foxconn, Evercast, and AMSA stand out among these companies.

For more information about the performance of the industrial markets in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.