Investor and entrepreneur confidence in Mexico's office market is reflected in the duration of lease agreements, where coworking companies such as Regus, IZA Business Centers, and Comunal often sign contracts 20% longer than the average, extending to almost five years. This indicates stability in the sector and a firm commitment to economic growth and business profitability in the country's major cities.

According to data from SiiLA, over the past three years, coworking companies in Mexico have signed lease agreements with an average duration of 58 months, surpassing the national average of 48 months, equivalent to four years. The duration of lease contracts indicates stability in office markets because it reflects tenants' confidence in the economic environment, their long-term business projections, and landlords' expectations for profitability and future property values.

Moreover, the durability of contracts reflects mutual trust between tenants and landlords. On the one hand, tenants seek more extended contracts when they anticipate stable growth and want to secure their space in the long term. On the other hand, landlords prefer more extended contracts to ensure occupancy and continuous income. Thus, the duration of these contracts is a vital thermometer for measuring the solidity and certainty of investments in the real estate market.

The increased contractual durability in the coworking sector highlights the strengthening of more flexible and collaborative work models in Mexico's corporate sector. As coworking companies continue to grow in popularity, driven by the demand for adaptable workspaces and the rising entrepreneurial culture, a positive impact on the commercial real estate market is expected. This impact is not only due to the competitiveness they bring by opposing traditional office models and opening up the market to companies with limited resources or changing needs. 

Coworking also benefits landlords and tenants, as these companies typically pay stable, long-term rents in areas larger than 1,000 square meters and adapt and convert spaces with quality infrastructure, fostering innovation and enhancing business networks, contributing to the dynamism and diversification of the office market in Mexico.

At SiiLA REsource, we have analyzed the impact of coworking in Mexico's major cities. Until last year, these companies were the third most crucial tenants regarding square meter occupancy nationwide, only after the finance, public administration, and services sectors. Additionally, data from SiiLA Market Analytics indicates that between 2019 and 2022, the number of companies offering coworking services in Mexico increased by almost 30%, especially in high-quality spaces (A+ and A classes), representing about 90% of their gross leasable area.

For more information on this and other trends in the commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.