Mexico Builds Industrial Space Faster Than Electricity

The difference raises a question rarely examined from a real estate perspective: Has industrial space grown at the same pace as electricity in the regions where it is concentrated? To answer it, SiiLA compared changes in inventory across eight industrial markets with electricity consumption and peak demand in the four electrical regions containing them between 2020 and 2024, the most recent period for which consolidated and comparable annual data are available.²

The answer is no, because the data show very different growth rates. Between 2020 and 2024, industrial inventory across the eight comparable markets increased 31.7%, while final electricity consumption in the four regions containing them grew 12.3%, gross consumption 12.1% and peak demand 13.6%. In other words, industrial space expanded approximately 2.5 times faster than regional electricity consumption.

The difference does not appear to be explained simply by the constructed space that remained unabsorbed. During the period analyzed, cumulative absorption nearly matched new inventory delivered in the Central and Northeast regions,³ precisely two of those showing the largest gaps between real estate and electricity growth. In the Central region, inventory grew 31.0%, compared with 6.6% for final consumption and 1.5% for peak demand; in the Northeast, it increased 43.0%, compared with 18.1% and 18.2%, respectively. In other words, industrial space not only grew, but the market absorbed a substantial share of that expansion without regional electricity metrics increasing at the same rate.

The contrast is clearest in the Western region, where inventory rose 24.1% and peak demand 21.2%. The relationship between real estate and electricity growth is therefore not only far from proportional but also varies considerably across regions.

What, then, could explain these differences? One possibility lies in the composition of industrial growth itself, since an additional square meter does not necessarily represent the same electrical load. A logistics facility, an automotive plant, a distribution center or a highly automated facility can occupy similar amounts of space while requiring very different amounts of electricity. Under that logic, inventory growth can substantially outpace regional consumption without the two trends contradicting each other.

That possibility also changes how the industrial market’s electrical needs should be viewed. Inventory size alone says little about the infrastructure a region will require. What also matters is the type of activity occupying that space, how much electricity it demands and, above all, where on the grid that demand emerges.

This is particularly relevant because electricity needs will continue to grow. The Mexican Energy Secretary (SENER) 2025–2039 Electricity Sector Development Plan (PLADESE) projects peak electricity demand to increase 2.8% annually, above the 2.5% expected for gross consumption, as new generation capacity is added to the system. That expansion will not be distributed uniformly, as the Northeast region accounts for nearly 30% of the new generation capacity planned through 2039, the largest share among the country’s electrical regions.

But delivering that electricity to where new loads emerge will also require grid expansion. In that regard, official planning identifies more than 200 active projects to expand and modernize the National Transmission Grid, including projects designed to address specific supply needs in areas such as the southeastern portion of the Monterrey Metropolitan Area.⁴ The planning framework also establishes a link between this infrastructure and industrial expansion by connecting the development of the electrical system with economic and industrial growth, supply-chain integration and company relocations.

That is where CFE FIBRA E returns to the center of the equation. If generation must grow, but electricity must also reach the specific points where demand emerges, raising capital to expand transmission means financing the physical link between the expansion of the electrical system and the economic activity that depends on it. For the industrial market, therefore, what matters is not only how much electricity Mexico can produce, but where it can deliver it.

That distinction could become increasingly important for real estate growth because an industrial facility may have access to land and connectivity, but its operation also depends on available electrical capacity where it is located. And if industrial space continues to expand while the infrastructure needed to supply it does not advance at the same pace, electricity availability could shift from an operational requirement to a physical constraint on growth.

Want to learn more about the trends shaping Mexico’s industrial market performance? Visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.

¹ 2017 is used as the starting point to maintain a comparable period given discontinuities observed in other PLADESE electrical infrastructure series around 2016–2017. RNT transformation capacity falls from 169,382 MVA in 2016 to 109,591 MVA in 2017, while some lower-voltage line categories show similarly abrupt classification shifts — for example, 115 kV, from 5,644 to 47,853 km — suggesting a change in coverage or classification and making comparisons across the break inadvisable without methodological reconciliation. The 161–400 kV transmission series used in the text does not show this break; 2017 is used to maintain a common and conservative time base for the infrastructure analysis. Source: SENER, 2025–2039 Electricity Sector Development Plan, Tables 2.3 and 2.4.

² To harmonize the real estate and electricity series, the eight industrial markets monitored by SiiLA were geographically assigned to the National Electric System or Regional Control Management (GCR) area containing them, in accordance with SENER/CENACE regionalization: Tijuana to the Baja California Interconnected System (SIBC); Ciudad Juárez to the North GCR; Monterrey to the Northeast GCR; Aguascalientes, Guadalajara, Querétaro and San Luis Potosí to the Western GCR; and Mexico City to the Central GCR. When an electrical region contains more than one SiiLA market, their inventories were combined to avoid duplicating the regional electricity variable. The resulting panel was constructed at an annual frequency for 2020–2024, the latest common period with consolidated and comparable data, and compared changes in industrial inventory with electricity consumption and peak demand in the corresponding regions. To prevent scale differences across markets and regions from driving the results, the series were analyzed both in levels and using 2020=100 indexes, growth rates and metrics relative to inventory size. The robustness of the associations was evaluated using Pearson and Spearman correlations, contemporaneous and lagged comparisons, and specifications in levels and changes. Correlations observed in levels weakened or disappeared after controlling for time trends, regional scale and annual changes, so the analysis does not interpret the association between real estate expansion and electricity variables as evidence of causality. Likewise, consumption and demand in each electrical region correspond to all users within it, not exclusively to the industrial properties monitored by SiiLA; therefore, the exercise compares the growth rates of two systems that share the same geography rather than attributing electricity consumption to individual buildings or companies. Sources: SiiLA Market Analytics; SENER, 2025–2039 Electricity Sector Development Plan, with CENACE data.

³ The comparison uses SiiLA’s cumulative annual net absorption and new inventory flows between 2021 and 2024. In the Central region, cumulative absorption was approximately 1.72 million square meters compared with 1.69 million square meters of new inventory; in the Northeast, 1.50 million compared with 1.46 million, equivalent to a ratio of approximately 1.02 in both cases. In the North and Western regions, the ratios were 0.87 and 0.84, respectively. These ratios are for descriptive comparison only and should not be interpreted as occupancy rates or as an accounting identity between the two flows.

⁴ The 2025–2039 Binding Program for the Installation and Retirement of Power Plants (included in PLADESE) calls for 73,754 MW of additional net generation capacity, excluding distributed generation. Meanwhile, the National Transmission Grid expansion and modernization program lists 223 mandated projects, of which 213 remain active, with an estimated investment of 191.75 billion pesos to add 6,342 circuit-kilometers of lines, 19,759 MVA of transformation capacity and 12,103 MVAr of compensation. Projects identified for the Northeast region include P25-NE2, designed to address electricity supply in the southeastern portion of the Monterrey Metropolitan Area. Of the overall project portfolio, 73 short-term projects had been reevaluated for 67.79 billion pesos.