Mexico's Industrial Sector Booms: Record High Occupancy Rates and Double-Digit Price Growth

Mexico's industrial sector has experienced significant growth, with high levels of absorption and tenant relocation due to expansion needs. According to SiiLA's Market Overview for Q1 2023, this sector is experiencing historically low availability rates, with an occupancy rate of over 98% and double-digit growth in the average price per square meter.

While the industrial sector has an oversupply at the national level, it is expected that supply and demand will level off from this year onwards. Alejandro Delgado, Country Manager Mexico at SiiLA, noted that unlike the first few months of 2023, when the delivery of new inventory slowed down, the coming months would see a significant development of spaces, with at least 80 warehouses projected to be delivered per quarter.

Delgado also indicated that Mexico's Northern and Bajio regions stood out in the last three months for their performance. Bajio has the most extensive inventory nationwide, while the North includes more active markets, with greater arrival and expansion of companies, especially those looking to take advantage of nearshoring opportunities. In the Center, Delgado emphasized its importance for the logistics and last-mile sectors.

In the North, for example, Monterrey was the market with the highest gross absorption in the country, with significant investments such as Tesla's in Santa Catarina, which will drive development in the region from Ramos Arizpe to Saltillo, in Coahuila. Conversely, Tijuana had the highest occupancy levels in the country, with little difference between the starting and closing prices, largely due to the high competitiveness of all its submarkets.

In Bajio, Guadalajara stood out with more net absorption than new inventory due to the arrival of manufacturing and logistics companies. In the Center, Mexico City highlighted Zumpango as the area with the most inventory under construction in the Valley of Mexico, thanks to a new international airport (AIFA) that made it more attractive. And Queretaro, along with Mexico City, forms one of the most important commercial corridors in the country for logistics and transportation industries.

During the Market Overview, Alejandro Delgado also stated that the country's high competitiveness and diversification of industries will continue to attract investments. In the North, automotive, capital goods, and electronics companies predominate, while in Bajio, the manufacture of vehicles and parts is prevalent. In the Center, transportation and logistics is the predominant industry, followed by the automotive and commercial sectors.

SiiLA's Market Overview is an exclusive quarterly event for our clients. To access this updated overview or our solutions for the commercial real estate market, visit SiiLA or write to us at contacto@siila.com.mx.