Industrial Vacancy Stops Rising After 11 Consecutive Quarters of Increases
- Industrial deliveries fell nearly 40% in January–September 2026. In the third quarter, net absorption nearly matched new deliveries.
Mexico’s industrial real estate market entered the third quarter of 2026 with its first sign of stabilization after nearly three consecutive years of rising vacancy rates. The rate edged down from 5.25% in the second quarter to 5.24% in the third, a minimal change that nevertheless interrupted a prolonged upward trend. The shift comes as new property deliveries slow and demand, although still below previous-year levels, begins to improve on a quarterly basis.
Alejandro Delgado, SiiLA’s Country Manager Mexico, explains this trend in his presentation, Industrial Market Overview: From Boom to Balance. His analysis shows that slower deliveries of new industrial buildings and changes in net absorption have narrowed the gap between space entering the market and space being occupied.
In 2023, new deliveries and net absorption remained nearly balanced, at 6.08 million and 5.97 million square meters, respectively. However, in 2024, deliveries rose to 7.89 million square meters, the highest annual volume since SiiLA began tracking the market, while net absorption was 6.22 million square meters.
The cumulative gap continued to widen over subsequent quarters, with deliveries exceeding net absorption by 3.65 million square meters between January 2024 and September 2026. This contributed to sustained vacancy rate growth, even as occupied space continued to rise.
Despite this trend, the gap between new deliveries and net absorption began showing signs of narrowing in 2026. According to SiiLA data, the first nine months of the year saw 2.96 million square meters delivered, nearly 40% less than in the same period of 2025. Although demand also declined, net absorption rose 21.2% in the third quarter from the second, reaching 702,000 square meters, nearly matching the 695,000 square meters delivered. This convergence, together with growth in total inventory, helps explain why the vacancy rate stopped increasing.
Adding to this scenario are rising construction costs, with producer prices increasing 5.71% year over year in September 2026, according to INEGI. This increase adds pressure to development costs and could slow new construction starts in a market where new inventory additions are already slowing.
How Long Can This Stabilization Last?
Although net absorption improved compared with the second quarter, it remained 59.8% below its year-earlier level. Moreover, the vacancy rate remains nearly one percentage point above its third-quarter 2025 level. The interruption of the upward trend therefore does not yet indicate a sustained market recovery.
If the average delivery pace recorded between January and September continues, 2026 would end with about four million square meters of new inventory, the lowest annual volume since 2021 and nearly half the space delivered in 2024, when deliveries hit a record high. Although the final figure will depend on how much space is delivered in the fourth quarter, whether the market stabilizes will depend on maintaining a balance between new deliveries and net absorption.
Explore industrial vacancy, net absorption, new deliveries, and other commercial real estate market indicators across Mexico with SiiLA Market Analytics. For more information, email us at contacto@siila.com.mx.
