Office Market Reactivation in Mexico in 2024. Trends and Investment Opportunities

After an extended period during which offices remained empty due to the pandemic, companies gradually returned to in-person work. This shift is evident in office occupancy rates.

In Mexico, for instance, although we have yet to reach the absorption and new inventory delivery levels seen in 2019, before the coronavirus pandemic, the office market has gained momentum by adapting to the new needs of businesses. According to Alejandro Delgado, Country Manager Mexico at SiiLA, this has been achieved by implementing flexible workspace models, including coworking, pre-build, and plug-and-play inventory.

Innovation and adapting office offerings are crucial factors in retaining tenants and boosting commercial real estate market absorption. Consequently, like in other sectors, several trends shape the office sector during this recovery phase.

Three Office Market Trends for 2024

1.- Plug & Play. This office model refers to an office that has been previously renovated and furnished and is ready to accommodate a new tenant. The marketing of this type of property has become more common due to the reabsorption of spaces after the pandemic, making it ideal for companies looking to save installation costs.
In the latest SiiLA Market Overview, Alejandro Delgado pointed out that approximately half of the national absorptions in 2023 occurred in pre-build and plug-and-play spaces. This trend arises in the context of core-and-shell new inventory decrease and the reabsorption of spaces that tenants previously adapted.

For example, Grupo FREL's corporate office, The Summit Santa Fe, offers plug-and-play spaces ranging from 900 to 2,000 square meters. Located in the Santa Fe submarket, one of Mexico City's fastest-growing areas, The Summit Santa Fe is a high-quality office tower (Class A+) with commercial spaces, terraces, and outdoor areas. Discover availability at The Summit Santa Fe through SiiLA SPOT, Mexico's most extensive and detailed database for available industrial, office, and coworking spaces!

2.- Collaborative Spaces. A primary trend in the office market is hybrid work, which has directly impacted office design. Collaborative spaces do not have designated workstations. Employees typically share desks, rotate positions, and do not have fixed locations. In Mexico, several coworking companies, such as IZA Business Centers, IOS Offices, and Regus, offer collaborative workspace solutions across the country.

A recent example is Spaces' latest facilities at Revolucion 1877 in Mexico City. In late September, the company specializing in creative work environments inaugurated nearly 2,000 square meters of corporate space with a contemporary and modern aesthetic, combining neutral colors and vibrant accents to create an inspiring and versatile environment.

3.- Sustainable Environment. Sustainability and ESG criteria are becoming increasingly important in the office market, and concern for environmental impact from construction to daily maintenance has become necessary. Potential tenants often narrow their search for properties with environmental certifications that feature energy or water-saving attributes, such as solar panels, open spaces, and designs that maximize natural light usage.

An example of a sustainable property is FIBRA Uno's (FUNO) Torre Mayor, one of the most iconic office buildings in Mexico City, which holds LEED Platinum certification in the Operations and Maintenance of Buildings (O+M) category. This Class A+ building offers nearly 84,000 square meters of gross leasable area (GLA) in the Reforma submarket. As of the third quarter of 2023, it recorded an occupancy rate close to 80%, according to SiiLA Market Analytics. Explore availability at Torre Mayor through SiiLA SPOT!

For more information on these and other trends in the commercial real estate market, contact us at contacto@siila.com.mx.