Mexico's industrial real estate market is rising, mirroring the nation's economic prowess. With its strategic location and continuously expanding economy, Mexico has emerged as an enticing destination for investment in industrial real estate. This phenomenon has spurred the development of industrial parks, distribution centers, and manufacturing plants across the Mexican landscape, generating employment opportunities, attracting foreign investments, and strengthening global supply chains. In this context, one question looms large: which industries have absorbed the most space in recent years?

According to SiiLA, between the second quarter of 2020 and 2023, marked by significant events like the coronavirus pandemic, the surge of nearshoring to Mexico, and the growth of e-commerce within the country, five sectors have outshone the rest in terms of industrial space absorption.

Agriculture or Agribusiness

Agribusiness encompasses economic activities involving transforming agricultural and livestock products through specialized machinery and technology to produce processed foods, chemicals, bioproducts, and other goods related to agriculture and livestock.

Over the past three years, the gross leasable area (GLA) occupied by companies in this sector has grown more than sixfold, reaching approximately 350,000 square meters in the second quarter of 2023. This expansion can be attributed to recent investments by major international conglomerates like The Toro Company and Deere & Company, which absorbed approximately 236,000 square meters nationally during that period, according to SiiLA Market Analytics data.

The real estate expansion in this productive sector occurred in a context where, between 2018 and 2022, the economic contribution of primary activities increased at an average annual rate of 2%, and where foreign direct investment related to the agricultural sector grew at an average yearly rate of 59%, as per data from the National Institute of Statistics and Geography (Inegi) and the Mexican Economy Secretariat.

FIRE and TAMI

In the past decade, tenants in the Financial, Insurance, and Real Estate (FIRE) sectors, as well as those in Technology, Advertising, Media, and Information (TAMI), have been steadily growing and competing, creating a more dynamic, strategic, and quality-demanding real estate ecosystem.

Between 2020 and 2023, the GLA of the FIRE group increased by 124%, surging from 317,000 to 709,000 square meters, according to SiiLA. Similarly, the space occupied by the TAMI group expanded by 96%, jumping from 579,000 to over 1.1 million square meters. This development paralleled the 3% increase in productivity in financial, insurance, and real estate services during 2018-2022, while the economic contribution of information and media services grew by 28% during the same period, according to Inegi data.

Entertainment

The entertainment industry encompasses creating, producing, and distributing content aimed at entertaining audiences, including films, music, television, video games, live shows, and cultural and sports leisure activities.

Between the second quarter of 2020 and 2023, the sector related to entertainment goods production doubled its industrial GLA in the country, adding nearly 18,000 square meters to its inventory, which surpassed 34,000 square meters this year. According to Inegi data, while entertainment companies expanded their space, the economy linked to "Cultural and Sports Recreation Services, and Other Recreational Services" grew at an annual rate of 5% between 2018 and 2022.

Manufacturing

Manufacturing means producing goods or products by transforming raw materials, components, or materials into finished products. This process involves goods design, production, assembly, quality inspection, and distribution.

In the last three years, the manufacturing sector also doubled its industrial GLA, adding over 22.1 million square meters to its inventory, which this year surpassed 43.5 million square meters of Class A and B nationally, according to SiiLA Market Analytics. This occurred in a context where the economic contribution generated by this industrial sector increased by 6% during 2018-2022, according to Inegi data.

The development of the national industrial real estate market mirrors Mexico's robust economic performance, capable of attracting investments in key sectors that have experienced remarkable growth, solidifying Mexico as an attractive destination for real estate investment. For more information on real estate sector trends, visit SiiLA REsource or contact us at contacto@siila.com.mx.