The Insurgentes office submarket in Mexico City is poised to become a magnet for investment during the current and upcoming year. Insurgentes is currently emerging as the area with the most office projects in planning and construction among the submarkets of the country's capital. In 2023, the area will be modernized with high-end buildings, as the most significant corporate projects are mostly class A or A+. These projects have delivery areas of more than 10 thousand and up to 60 thousand square meters, according to SiiLA Market Analytics.

This is excellent news for Insurgentes, which has experienced a gradual slowdown in the delivery of new inventory in the submarket and an upward trend in the availability rate over the last three years. However, this trend is starting to change.

Starting in the third quarter of 2020, the market price in Insurgentes began to fall due to the vacancy of office space during the pandemic. Nevertheless, availability in this submarket started to increase in the third quarter of 2021 and continued to do so a year later, in the third quarter of 2022. Subsequently, the market price and occupancy in Insurgentes started to recover, according to SiiLA.

In 2022, gross absorption (tenant inflows) rebounded every quarter with an overall outperformance compared to 2021. In the final stretch of last year, net absorption (tenant inflows versus outflows) returned to positive. Furthermore, starting in the third quarter of the same year, deliveries of new inventory were reactivated, which, together with absorptions, reflects an environment of economic reactivation in the area.

What does the future hold for Insurgentes in 2023 and beyond?

The next two years appear to be promising for the submarket, which stretches (south to north) from Bosque de Tlalpan to the edge of Bosque de Chapultepec on Avenida Constituyentes. According to Market Analytics, 36% of the Class A and A+ office square meters to be built or delivered as of 2023 in the Mexico City office market are being developed in Insurgentes. Among the most noteworthy projects are:

1.- Capital Insurgentes in the Benito Juarez district, which will have 14 levels of class A+ offices and a gross leasable area (GLA) of approximately 17 thousand square meters.

2.- Espacio Condesa in the Cuauhtemoc district, which will have 21 class A+ office space levels and a GLA of more than 38 thousand square meters.

3.- The C, K, and T towers of Mitikah in the Benito Juarez district, which will have more than 30 levels of class A+ offices and a GLA of more than 100 thousand square meters.

4.- Corporativo Jaime Nuno in Benito Juarez, with 21 levels of class A+ office space and a GLA of close to 34 thousand square meters.

If you would like more information and insights about Mexico's commercial real estate market, please visit SiiLA or contact us at contacto@siila.com.mx.