The Potential Massive Growth in Mexico's Industrial Sector: 173 Projects Could Add 4.5 Million Square Meters

At least 173 Class A and B projects in Mexico have the potential to add over 4,500,000 square meters to the industrial sector. If these projects were completed today, the national industrial inventory would experience a 6% growth. This represents almost a third of the average annual growth rate seen in Mexico's industrial real estate market over the past four years, according to SiiLA Market Analytics data.

These projects indicate dynamism within the national real estate market. They respond to various factors, including the demand for space, economic growth, investment opportunities, and urban development in different regions across the country. These real estate projects are still in the design and planning phase, which involves activities such as feasibility studies, market analysis, financing searches, blueprint and technical document preparation, as well as obtaining the necessary permits and licenses.

Of the mentioned projects, 47% are concentrated in Mexico City's metropolitan area, specifically in the industrial market. Another 39% is in northern states, particularly in Monterrey and areas near the border with the United States. The remaining 14% is distributed among the markets in the Mexican Bajio region. It is worth noting that larger-scale projects are primarily found in Mexico City, where the average size exceeds 49,000 square meters. Similarly, Monterrey (Nuevo Leon) and Ciudad Juarez (Chihuahua) have an average project size exceeding 20,000 square meters. The projected construction area in the rest of the country ranges from 8,500 to 19,500 square meters, as per SiiLA's data.

In some instances, planning large industrial warehouses may be driven by the saturation of available space near urban centers and the increasing demand for industrial facilities in these areas. However, it can also be a strategic decision aligned with companies' growth and consolidation plans to expand their production capacity and streamline operations in a single location. Moreover, larger industrial warehouses offer economic advantages in economies of scale, logistics costs, and production efficiency. Overall, the demand-driven increase in larger industrial warehouses presents an opportunity for the economic development of the regions where they are planned to be constructed.

Among the notable projects, six exceed 100,000 square meters in size. These projects are all situated within the Zumpango - Nextlalpan submarket of Mexico City, specifically in the T-MEX Park industrial park. Earlier this year, there was significant speculation about the potential involvement of Tesla, the renowned automotive company, in this location. Due to the scale and quantity of projects in this suburban area in Central Mexico, Zumpango - Nextlalpan alone accounts for 33% of the planned gross leasable area (GLA) at the national level, making it the submarket with the highest potential for expansion.

Given the dynamic nature of the commercial real estate market, staying informed about the latest trends, projects, and developments is crucial to maximize investment potential. To learn more about Mexico's industrial sector, visit SiiLA or contact us at contacto@siila.com.mx.