Major Real Estate Boom: 41 Class A+ and A Projects to Revolutionize Mexico's Office Sector

In major cities of Mexico, at least 41 Class A+ and A projects could add nearly 830,000 square meters to the office sector. If these projects were built today, the office inventory in Mexico City, Guadalajara, Monterrey, and Queretaro would grow by 8%, which is nearly half of the growth these markets experienced in the last four years, according to data from SiiLA Market Analytics.

These projects indicate dynamism in the national real estate market as they respond to factors such as space demand, economic growth, investment opportunities, and urban development in one or multiple regions nationwide. Real estate projects are developments that have yet to start construction as they are in the design and planning stage, which involves feasibility studies, market analysis, financing search, blueprint and technical document preparation, and obtaining necessary permits and licenses, among other tasks.

Of the existing projects in major cities of Mexico, 79% are concentrated in the capital city, followed by Monterrey, Queretaro, and Guadalajara with 13%, 6%, and 2%, respectively. It is important to note that only two out of the 41 projects have environmental certification. These Class A+ projects are being developed in Mexico City. One of them is Corporativo Corner, a development with over 19,000 square meters of gross leasable area (GLA) that will be built in the Santa Fe area and has basic LEED certification. The other one is Insurgentes 262 building in the Cuauhtemoc borough, which will have an approximately 9,000 square meter area with LEED Gold certification.

SiiLA data also indicates that most buildings in the planning stage are small. 56% of the 41 projects have a projected GLA below 20,000 square meters. This situation may not only be due to investment or regulatory issues but also to the available land size for project development. In contrast, there are two developments exceeding 50,000 square meters, both located in the Reforma submarket of Mexico City. These are Torre CETRAM and Reforma 10, with a GLA of approximately 75,000 and 56,000 square meters, respectively.

Furthermore, it is important to mention that 98% of the office area in the planning process is of the highest quality (A+). These projects are being developed by important firms such as GICSA, Sordo Madaleno Arquitectos, and Altea Desarrollos, to name a few examples. Additionally, at least two projects involve institutional investors like FIBRA SOMA and FIBRA Uno. The first Mexican REIT (or FIBRA) is working on the expansion project of Antara in Polanco, Mexico City, and the second trust is involved in the development of Poliforum Siqueiros in the Insurgentes submarket of the capital city.

In the context of significant dynamism in the national commercial real estate market, staying informed about trends, projects, and new developments is important, especially to maximize investment potential. To learn more about the office sector in Mexico, visit SiiLA or contact us at contacto@siila.com.mx.