On January 17th, SiiLA's Country Manager in Mexico, Alejandro Delgado, presented an updated outlook for the commercial real estate market (Market Overview) as of the fourth quarter of 2022. SiiLA releases a quarterly report on real estate trends in Mexico's retail sector.

In this edition of SiiLA's Market Overview, Alejandro Delgado indicated that the retail market in Mexico City performed well in the last two quarters of 2022. Gross absorption remained high, net absorption was positive, and the amount of available square meters reduced, compared to 2021. The current occupancy rate is over 90%.

Alejandro Delgado also highlighted that retail in Mexico City had a strong performance in the last six months of 2022, with positive net absorptions of over 120 thousand square meters each quarter, and an upward trend in gross absorptions, indicating a market recovery process.

Moreover, in the third quarter of last year, there was an incorporation of 120 thousand square meters with the Mítikah mixed-use building, and an additional 110 thousand square meters incorporated in the last quarter of the year. This reflects a growing inventory with new commercial spaces delivered with a 95% occupancy rate.

In Mexico City, the most crucial submarket is the North, with an inventory of over one million square meters, followed by the Aragón, Iztapalapa, Insurgentes, and Santa Fe submarkets. Their inventory ranges between 340 and 490 thousand square meters, depending on each case.

Regarding the inventory under construction, Coapa, Santa Fe, Insurgentes, and Polanco are noteworthy. Last year, the delivery of new inventory increased by 77% compared to 2021, with the incorporation of over 365 thousand square meters.

In the case of Monterrey, Alejandro Delgado reported that there was little incorporation of new inventory but positive net absorption. Overall, the outlook for this market is positive, with the Apodaca, San Pedro, and San Jeronimo Obispado submarkets predominating, with construction inventories over 180 thousand square meters.

Monterrey's retail asset had good and increasing levels of gross absorption in the last three years, and by 2022 net absorption had recovered significantly. In addition, the availability of space declined in the previous year, closing the year with an occupancy rate above 89%.

Despite the increase in vacancy in 2021, Monterrey's retail real estate market has started to recover significantly. Available space declined, and the year closed with an occupancy rate of 89.1%.

SiiLA is the leading analytics and intelligence platform for the commercial real estate market in Latin America, with offices in Mexico, Brazil, and Colombia. SiiLA's Market Overview is exclusive content for clients. If you are interested in obtaining more information and insights on Mexico's commercial real estate market, please contact us at contacto@siila.com.mx.