Mexico Will Implement Strategic Financing to Boost the Industrial Real Estate Sector Amid the Nearshoring Boom

In a strategic move to bolster its economy and capitalize on nearshoring-related investments, Mexico is expanding its financial support for the industrial real estate sector. Recently, the National Foreign Trade Bank (Bancomext) and the National Finance Corporation (Nafin) announced a series of financing measures to contribute to the growth and development of industrial infrastructure, including construction and equipment.

The expectations are high, and the efforts have been noteworthy. Over the past four and a half years, Bancomext has granted 49,000 million pesos (around 2.7 billion at an average exchange rate of 18 pesos per dollar) in loans to the sector. This investment, coupled with the nearshoring prospects, leads the agency to estimate that the industrial market could grow by up to 20% annually over the next three years, potentially translating into investments exceeding $7.5 billion.

According to SiiLA, the industrial real estate market has grown at an average annual rate of 7% in the last two years. In a golden era for sector development, characterized by a rising number of deliveries, historically low vacancy rates, and record-high average market prices for industrial properties, the industrial real estate market is likely to grow in leaps and bounds.

As per Alejandro Delgado, Country Manager Mexico at SiiLA, Mexico's industrial real estate market has the potential to double its inventory in the next decade, especially with the boost from nearshoring and the growth of e-commerce nationwide. However, this development will not only depend on investments but also on overcoming infrastructure and basic service challenges, as well as developing new industrial regions in the country, as seen in the case of the Mexican Southeast.

Investment Plans in Mexico

Bancomext and Nafin aim to provide financing to users of industrial parks and suppliers to the maquiladora industry. How? Through conventional support methods such as direct loans, funding for stabilized properties, build-to-suit constructions, and additional credit lines for working capital or real estate inventory. Additionally, they will offer loans and guarantees of up to 30 million pesos (around 1.7 million at an average exchange rate of 18 pesos per dollar) for needs such as working capital, investment projects, equipment, and the importation of capital goods through financial intermediaries associated with Bancomext and Nafin.

The facilitation and flexibility of investments through traditional financing schemes and complementary working capital lines can stimulate investment in real estate and industrial projects, potentially increasing the construction of industrial parks and business expansion. This growth in industrial projects and infrastructure often leads to job creation in surrounding areas.

However, Bancomext and Nafin are well aware that to strategically boost nearshoring and make Mexico's industrial real estate sector more competitive, it will be necessary to diversify the economy by financing 17 key sectors.
In this regard, for Bancomext and Nafin, the metallurgical, plastics, transportation and logistics, textile and clothing, electrical and electronic, tourism, iron and steel, automotive and aerospace, pharmaceutical, and telecommunications sectors present strategic opportunities to drive significant industrial parks on a national scale.

To obtain more information and insights about the real estate market in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.