The industrial real estate market in Mexico is experiencing a significant boom, driven by a surge in demand and a growing need for new inventory, which has been accelerated by the arrival and expansion of companies through nearshoring. According to Alejandro Delgado, Country Manager Mexico at SiiLA, there is a surplus demand of spaces, leading to a notable reduction in availability rates and an increase in market prices nationwide.

Data from SiiLA Market Analytics indicates that in the first quarter of 2023, there was a demand for over 1.7 million square meters in the major industrial markets nationwide. This demand exceeded the figures recorded in the first quarter of each year since 2020, suggesting that this year could witness record levels of gross absorption, particularly in Northern Mexico, where tenant arrivals have been exceptionally significant. For example, the industrial market in Monterrey has been the most dynamic nationwide this year, with over 400,000 square meters absorbed. It is closely followed by Mexico City and Tijuana markets, with nearly 350,000 and 200,000 square meters absorbed, respectively.

While the Bajio region boasts the largest inventory at a national level, the Northern region exhibits the highest level of activity. Over the past year, demand in the industrial markets of Northern Mexico has outpaced that of the Central and Bajio regions, and even the average availability has been higher. SiiLA reports that while the average occupancy rate in Northern markets is above 99%, it stands at over 97% in the Bajio and Central markets.

The high demand and occupancy levels in these Mexican regions make the country attractive to investors and developers. According to Alejandro Delgado, "currently, 80 industrial spaces are being delivered per quarter nationwide, which is twice the levels seen three years ago." The Northern region is particularly appealing due to its proximity to the United States, while the Bajio and Central regions stand out for their logistical routes and last-mile capabilities, respectively, for both domestic and international trade of manufactured goods.

Demand in Three Key Regions of Mexico

During the first quarter of 2023, over one million square meters were absorbed in Northern Mexico, primarily by companies in the industrial, capital goods, and automotive sectors. Notable companies that absorbed significant spaces during this period include Skyjack in the Amistad Chuy Maria Industrial Park in Saltillo and Genie and Maxon in the Nexxus ADN parks of Monterrey.

On the other hand, nearly 330,000 square meters were absorbed in the Bajio region in the same quarter. The arrival or expansion of companies in the automotive, food, and e-commerce sectors, including Amazon, Barcel, and automotive firm Jiangsu Rongtai Industry Co., stood out. And in the Central region of Mexico, significant absorption activities were observed in the pharmaceutical, automotive, stationery, and retail sectors. Companies such as CEDROSA, Pycapsa, and Zebrands absorbed nearly 90,000 square meters in the logistics corridor of Cuautitlan, Tultitlan, and Tepotzotlan in the metropolitan area of Mexico City.

SiiLA will continue to monitor the performance of the industrial markets nationwide. For more information and insights, access Market Analytics or contact us at contacto@siila.com.mx.