Starting this year, the Mexico City, Guanajuato, and Monterrey markets will see the construction and delivery of three extensive industrial facilities, each with a projected gross leasable area (GLA) between 140,000 and 430,000 square meters.

These developments are a milestone for the industrial market and reflect the growing interest in investing and expanding production capacity in Mexico. Their construction marks a significant contribution to the strengthening of the national economy and promotes the creation of jobs and opportunities for business development in three regions (Central, Bajío, and Northern Mexico) driven by nearshoring.

The three industrial giants under construction stand out among 515 Class A and B projects scheduled for delivery in the next two years in the markets monitored by SiiLA in the Mexican Republic.

To put the size of these industrial properties in perspective, it is essential to mention that they are between 10 and 40 times larger than the average industrial space built in the same class in the Mexico City, Guanajuato, and Monterrey markets.

According to SiiLA Market Analytics, in these three industrial markets alone, there are 15 built facilities with more than 100,000 square meters of GLA, in addition to 10 properties under construction (including those in this top) and six in the pipeline that exceeds 100,000 square meters.

In some cases, the construction of large industrial warehouses may be related to the saturation of available space in areas close to urban centers and the demand for industrial space in these areas. However, it can also be a growth and consolidation strategy for companies seeking to expand their production capacity and consolidate their operations in a single location.

In addition, constructing larger industrial buildings can provide economic advantages in terms of economy of scale, logistics costs, and production efficiency. In general, the construction of more significant industrial buildings is a response to growing market demand and an opportunity for the economic development of the region in which they are built.

In that sense, Market Analytics data indicates that between 2020 and 2022, there was an increase in the average size of new industrial inventory delivered in Mexico City (50%), Guanajuato (22%), and Monterrey (13%). While in Mexico City and Guanajuato the trend has been to build medium to extensive facilities, in Monterrey, the trend has been to build larger facilities.

In the case of the three industrial giants presented below, the largest will be built in Monterrey. It should be noted that for this top, the construction of industrial parks was not considered, so only plants and warehouses were taken into consideration.

1.- Interpuerto Monterrey: This plant of the German engineering and technology company Bosch has an estimated GLA of 430,000 square meters, almost twice the size of building III of Liverpool's Arco Norte Logistics Platform (PLAN), the largest property of its kind in Mexico and Latin America. According to SiiLA's Market Analytics, this Class A property, which will have an approximate investment of 5.2 billion pesos, is in the Salinas Victoria submarket.

2.- Building V of Liverpool's Arco Norte Logistics Platform (PLAN): This Class A industrial building will have an approximate GLA of 185,000 square meters. Located in the Arco Norte submarket in Mexico City, the Liverpool property is one of seven giant buildings in which the company plans to invest. The PLAN is part of Liverpool's project to centralize its operations and create a land-based logistics structure.

3.- Kohler San Luis de La Paz plant: The factory of Kohler, a leading company in producing and designing kitchen furniture, bathrooms, and decorative products, will have an investment of 181.2 million dollars. According to SiiLA, this is a Class A property with a projected GLA of 140,000 square meters in the industrial market of Guanajuato. This factory for Kohler's Kitchen and Bath Division will generate 886 direct jobs, the company said in October 2021.

If you are interested in more information and insights on Mexico's commercial real estate market, please visit SiiLA or email us at contacto@siila.com.mx.