The Impact of Traxión-Solística in a Logistics Market That Has Grown 41% in Mexico Since 2020

Traxión could expand its industrial footprint by up to 42% in Mexico by acquiring Solística, positioning itself as one of the most prominent players in the country’s logistics real estate sector.

This transaction will enable Traxión to capitalize on the nearshoring boom, particularly in northern Mexico, where industrial space occupied by logistics and transportation companies has grown 74% since 2020, according to SiiLA data.

Aby Lijtszain is the Executive Chairman of Traxión. Photo: SiiLA.

By: SiiLA News

10/16/2024

Last week, Grupo Traxión, a Mexican transportation and logistics services company, made a strategic move by announcing an agreement to acquire Solística, FEMSA's comprehensive logistics division (3PL), in a deal valued at 4.06 billion pesos (nearly 228 million dollars). This significant transaction raises a fundamental question: How will this transaction impact the industrial real estate market?

First off, this acquisition will not only allow Traxión to expand its operations in Mexico, particularly in the northern border region, but also opens up a world of potential for cross-border freight transport to the United States.

According to data from SiiLA and the companies, Traxión's logistics storage area—which includes all its subsidiaries, such as Redpack and Medistik—would grow by approximately 42% in Mexico. This would make its logistics real estate infrastructure—excluding its transport fleet and personnel—one of the most significant in the country, with the potential to surpass the physical presence of industry giants like Ryder System and Kuehne + Nagel, which have between 300,000 and 600,000 square meters of warehouse space each in Mexico. However, this would not necessarily imply greater logistical capacity than its competitors.

As of the first half of this year, Traxión and its subsidiaries reported over 791,000 square meters of 3PL (Third-Party Logistics) warehouse space dedicated to offering outsourced storage, transportation, and inventory management services to companies looking to optimize their supply chains. During the same period, Solística reported a storage capacity of approximately 340,000 square meters in Mexico. Thus, Traxión's warehouse network and its subsidiaries would surpass 1.1 million square meters nationwide.

Traxión's growth comes amid broader expansion in the logistics and transportation sector. Since 2020, industrial space occupied by companies in this sector has grown by 41%, according to SiiLA Market Analytics. Currently, northern and central Mexico host the majority of these companies. Nonetheless, between the end of 2020 and the third quarter of 2024, northern Mexico's industrial space for logistics and transportation grew by 74%, compared to 28% in the central and Bajío regions. Today, the logistics sector surpasses 8 million square meters of gross leasable area in Mexico, driven by increasing demand for infrastructure across North America.

Traxión in LATAM

Traxión subsidiaries, such as Redpack, have a significant presence in the metropolitan area of the Valley of Mexico. Photo: SiiLA.

In addition to expanding its presence in Mexico, the company founded by Bernardo and Aby Lijtszain will absorb part of FEMSA's operations in Brazil and Colombia. According to Solística, the company manages over 460,000 square meters of storage outside Mexico, in strategic markets such as Brazil, Colombia, Costa Rica, the United States, Nicaragua, Panama, and Peru.

Traxión will take over logistics contract operations and transportation management in Brazil, except for the less-than-truckload (LTL) segment, which will remain under FEMSA's control. According to SiiLA Market Analytics, Solística operates nearly 200,000 square meters of industrial space in Brazil, with high-quality properties primarily located in key markets like Bahia, Goiás, Minas Gerais, and São Paulo.

Similarly, Solística has at least 50,000 square meters of industrial space in Bogotá, Colombia, where it serves tenants in sectors such as food and beverages, auto parts, electronics, publishing, home goods, retail, textiles, pharmaceuticals, cosmetics, and personal care.

The sale of Solística is part of FEMSA's "FEMSA Forward" strategy, which aims to strengthen the company's financial structure. This involves divesting non-strategic assets to focus on its core businesses, such as OXXO and the fintech sector, and reducing its debt. FEMSA's net liabilities currently stand at 36.019 billion pesos (around 2,000 million dollars), reflecting a balanced leverage level, equivalent to 0.6 times its adjusted EBITDA.

For Traxión, the interest in Solística aligns with its strategy to take advantage of the growing demand for logistics services driven by nearshoring in Latin America, particularly between Mexico and the United States. The company aims to establish itself as a leading regional player, following a 40.5% revenue increase in its Logistics and Technology segment between the second quarters of 2023 and 2024, which now accounts for 36.8% of Traxión's consolidated revenue.

As demand for logistics and transportation services grows in Mexico, companies like Traxión will become increasingly important to the national and continental economies. Want to learn more about the performance of tenants in the industrial real estate markets of Mexico, Brazil, and Colombia? Explore SiiLA REsource or contact us at contacto@siila.com.mx.

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