Pre-Leased or BTS Industrial Warehouses. A Growing Trend Reflecting a Strong Market in Mexico

The growing demand for industrial properties in Mexico is changing how these spaces are marketed and occupied. Over the past four years, the delivery of newly pre-leased inventory has increased by a third. This means there are now more built-to-suit industrial properties for specific clients, that is, committed spaces, before even being put on the market.

According to SiiLA data, in 2019, 67% of the new industrial inventory was delivered fully occupied. Additionally, 12% was partially occupied upon delivery, and the remaining 21% entered the market as fully available.

Over the years, the proportion of speculative industrial inventory delivery has gradually decreased. By the first half of 2023, only 10% of industrial warehouses were speculative, meaning they were built without a tenant secured beforehand. This decrease in speculation has resulted from a more cautious approach by developers and a market prioritizing strategic planning in industrial investment. The rest of the industrial warehouses delivered during that period were tied to specific commercial agreements before or during construction, demonstrating greater stability and alignment with actual sector demands. While 87% entered the market fully occupied, 3% were delivered with partial occupancy.

An important aspect is the average size of the delivered industrial warehouses. On the one hand, speculative inventory has tended to be smaller than built-to-suit spaces and those partially pre-leased. While speculative warehouses averaged 12,000 square meters over the last four years, built-to-suit warehouses averaged almost 15,000 square meters, and partly pre-leased ones tended to be even larger, with an average of nearly 20,000 square meters.

The reduction in speculative construction and the focus on built-to-suit properties show a transformation in how industrial spaces are marketed and occupied in Mexico. This trend reflects a more consolidated industrial landscape, where decisions are based on solid data and projections, minimizing risks for investors and developers. Moreover, it means that market demand directly drives the supply of industrial properties. This synergy between careful planning and agile response to market needs has created a more efficient and adaptive ecosystem.

The emphasis on built-to-suit properties also underscores the importance of thoroughly understanding clients' operations and requirements before initiating a project's construction. This personalized approach not only maximizes the use of property space but also enhances customer satisfaction by providing precisely what they need. As the manufacturing and logistics industry continues to evolve, flexibility in design and adaptability have become essential investment factors.

If you want to learn more about the commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.