Nubank's strategic expansion in Mexico is not only evident in its exponential growth in customer numbers but also in its physical presence in the office real estate market. Between December 2023 and January 2024, the fintech, which offers digital financial services such as savings accounts, credit cards, and investment products, expanded its customer base by 31%, adding 1.3 million for over 5.5 million. This customer increase was strategically aligned with its expansion in the office market, where it currently occupies a gross leasable area (GLA) equivalent to a seven-story building.

According to SiiLA Market Analytics, in 2022, Nubank tripled its office space. The company now occupies over 7,500 square meters at the Work Polanco building and more than 2,600 square meters at Masaryk 111. These Class A+ and A properties in the Polanco submarket, located in Mexico City's central business district (CBD), solidify its presence in one of Mexico's most critical productive regions for financial institutions.

As of the first quarter of 2024, finance companies were the main tenants in Polanco and Mexico City, accounting for 16% of occupancy in both cases. In Polanco, Nubank ranks as the fourth financial institution in terms of GLA occupied, trailing only BBVA, CI Banco, and American Express, which occupy between 14,000 and 70,000 square meters each. According to data from SiiLA, the more than 10,000 square meters occupied by this fintech represent 6% of the GLA occupied by financial institutions in Polanco.

Over the next decade, Nubank aims to become one of Mexico's most significant banks, a goal that seems well within its reach. For the past year and a half, following the acquisition and merger with another entity that was no longer operating, the Brazilian company has been operating as a popular financial society (SOFIPO) and plans to become a multiple banking institution by 2025. Its growth has been remarkable in the sector of non-bank institutions regulated by the CNBV, which includes SOFIPOs and SOCAPs, solidifying its influence on Mexico's financial sector.

Although SOFIPOs' assets represent only 0.2% of the Mexican financial system, Nubank has made a significant difference since December 2022, controlling 40% of these assets and catalyzing the sector's growth. According to the Bank of Mexico, SOFIPOs grew by 81.1% in real annual terms until September 2023, driven by digitalization and Nubank's leadership. This raised the resource capture in SOFIPOs to 35,537 million pesos (nearly 2,000 million dollars), equivalent to 0.1% of Mexico's GDP, highlighting their growing importance in the financial market.

The Financial Sector in Polanco

Between the first quarter of 2020 and the same period in 2024, the GLA occupied by financial companies in Polanco increased by 38%. These companies contribute to the real estate market's stability due to their economic capacity and tendency to sign long-term lease agreements, ensuring a sustained revenue flow for investors and property owners.

This is particularly relevant in a context where Polanco recorded, for the first time since 2021, a negative net absorption, partly due to the slow recovery of gross absorption that worsened with the departure of significant tenants—like Konfio, Mane, and HDI—who vacated more than 27,500 square meters during the first quarter of 2024. Data from SiiLA Market Analytics indicates that the vacancy rate in Polanco has increased by 59% over the last four years. However, it has gradually decreased since 2022 to reach a level close to 17%, with levels above the 10% or 11% seen before the pandemic.

Despite vacancy and net absorption rate fluctuations, average market prices in Polanco have remained stable, exceeding $25 per square meter. This stability is a testament to the resilience and long-term value of the submarket, reassuring investors and property owners about its potential. As the economy rebounds, a more robust recovery and an increase in demand for high-quality office spaces are expected, painting a promising picture for the future.

SiiLA tried contacting Nubank to prepare this text but did not receive a response before publication. For more information about the performance and trends in Mexico's office market, explore SiiLA REsource or contact us at contacto@siila.com.mx.