The Industrial Real Estate Market in Mexico Skyrockets in the 2nd Quarter of 2023 with 184 Transactions and Record Absorptions

During the second quarter of 2023, Mexico's real estate market experienced significant dynamism with 184 industrial transactions, according to data from SiiLA. These transactions involved the absorption of nearly 1.7 million square meters, predominantly (81%) in high-quality or class-A spaces.

The analyzed transactions refer to property rentals and provide information on the sector's dynamics, economic activity, and investment opportunities.

Based on their initial rental price, which may change during negotiations, these transactions are estimated to have the potential to generate approximately $119 million in annual rental payments. This data highlights the significant economic and financial impact that the industrial real estate market has in the country.

In addition to the number of transactions recorded during the second quarter of 2023, which exceeded the quarterly average transactions (173) since 2020, the most relevant aspect is that the absorbed area is the highest of any second quarter in the last three years. This growth trend reflects the attractiveness and ongoing demand for industrial properties in Mexico, indicating a promising outlook for the real estate market.

In fact, the industries that demanded the most space in the past three months were transportation and logistics, vehicles and parts, services, capital goods, and electronics, collectively absorbing 47% of the space negotiated in transactions.

According to SiiLA Market Analytics, among the companies that occupied the most space during the second quarter of this year were AGP Glass, a Tesla supplier that established itself in FINSA Santa Catarina – 11 in Monterrey, and the American manufacturer The Toro Company, which settled in Prologis Apodaca East Park – 10 also in Monterrey. Other significant firms that absorbed industrial spaces include The Coca-Cola Company, Mercado Libre, and Samsung.

It is important to highlight that 56% of the absorptions resulting from the 184 transactions occurred in northern Mexico. The rest were concentrated in Mexico's Bajio (27%) and Central (17%) regions. These figures underscore the role of the northern region as a preferred destination for investment in the real estate sector due to its developed infrastructure, access to international markets, and skilled labor force. However, Mexico's Bajio and Central regions also demonstrated significant growth, driven by their strategic location and the expansion of sectors such as automotive and logistics.

The Mexican industrial sector is experiencing positive dynamism, as reflected in the second quarter of 2023, with significant transactions and a notable upturn in absorptions. If you want more information on this and other topics, we invite you to explore SiiLA's REsource or contact us at contacto@siila.com.mx.