Retail Continues to Recover: Seven Projects in Mexico City and Monterrey to Add 356,000 sqm to the Real Estate Market!

Currently, at least seven retail projects in Mexico City and Monterrey will contribute approximately 356,000 square meters, according to data from SiiLA. These projects reflect the dynamism in Mexico's real estate market as they respond to factors such as space demand, economic growth, investment opportunities, and infrastructure development in one or more regions.

Although these developments' construction has not yet begun, as they are in the design and planning stage, their characteristics allow us to glimpse trends in new inventory offerings in a sector recovery context. In this sense, it's important to remember that space demand in Mexico City's and Monterrey's retail markets is recovering. As of the second quarter of 2023, Monterrey had the highest occupancy rate (90.8%) in three years, while Mexico City is very close to reaching pre-pandemic occupancy levels, with a 92% occupancy rate at the end of June this year, according to SiiLA Market Analytics data.

What are investors betting on?

The seven projects that will be delivered in the coming years are: in Mexico City, Antara Fashion Hall’s expansion, Conjunto Estadio Azteca, Portal Britania, Punto Basilica, and Reforma Colon; and in Monterrey, Altea Lopez Mateos and Altea Paseo Hidalgo.

Four projects are medium and small, with gross leasable areas (GLA) ranging from 16,800 to 31,500 square meters. The three remaining developments (Conjunto Estadio Azteca, Punto Basilica, and Reforma Colon) have projected areas ranging from 60,000 to over 119,000 square meters, representing 67% of the seven projects' total combined GLA.

Regardless of their size, five of the seven properties are Community Centers and Lifestyle Centers. This means these developments are designed to be multifunctional spaces offering various services and amenities for the local community. Community Centers usually include retail stores, restaurants, entertainment spaces, and common areas for social activities. On the other hand, Lifestyle Centers offer shopping and lifestyle experiences, focusing on high-quality fashion brands, gastronomy, and entertainment.

It is also important to highlight that in Monterrey, the projects will be developed in the Apodaca and San Jeronimo-Obispado submarkets, while in Mexico City, the projects will be in Aragon, Coapa, Insurgentes, Periferico Sur, and Polanco. These locations are strategic for the commercial sector as they have a high population density and sustained economic growth, ensuring a constant demand for services and products. Additionally, they are in areas with easy access to important transportation routes and infrastructure, facilitating customers' and suppliers' mobility.

Learn more about this and other commercial real estate market topics! At SiiLA REsource, you'll find information on industrial, office, and retail assets. For more information, contact us at contacto@silla.com.mx.