Retail MX: Small Spaces Are Up to 7 Times More Expensive Than Larger Stores

Kiosks, small spaces of around 10 to 20 square meters, are the most expensive in Mexico's shopping centers. With monthly rents exceeding 3,100 pesos (or $180) per square meter, plus an additional 540 pesos ($30) in maintenance costs, the high price reflects their prime locations in high-traffic areas, such as main corridors and entrances, where exposure is maximized, and sales opportunities are greater. Additionally, their flexibility to accommodate various types of businesses makes them highly sought after. For retailers, these kiosks offer high profitability in a small space, with more accessible absolute costs than larger stores. Shopping centers, on the other hand, capitalize on this demand by setting proportionally higher prices for these strategically valuable spaces.

Other relatively small spaces, like food court outlets and "small" stores, with average gross leasable areas (GLA) of 40 and 162 square meters, respectively, have more accessible prices than kiosks but still represent a significant investment.

The rents for these spaces range between 550 and 600 pesos (between $34 and $47) per square meter, plus 100 to 150 pesos (or $6 to $9) in maintenance costs. These prices reflect the importance of their location within the shopping center and the nature of the business they house. Food court spaces, for example, attract well-known brands in the food industry, ensuring a steady flow of customers and positioning the shopping center as a dining destination. On the other hand, small stores, with their intermediate size, offer flexibility for various businesses, enriching the tenant mix. Although their absolute monthly cost is higher than kiosks due to their larger size, their ability to attract brands and customers makes them key components within the shopping center.

In contrast, larger spaces, such as "large" stores, anchor stores, and megastores, with GLAs ranging from 700 to 3,300 square meters, have proportionally lower prices than smaller spaces like kiosks or food court outlets.

Rents for these large spaces range between 440 and 500 pesos (between $25 and $30) per square meter, with additional maintenance costs varying between 80 and 90 pesos (around $5). Although more economical per square meter, these spaces represent significant investments due to their total size. However, their importance to shopping centers is undeniable. Anchor stores and megastores, occupied by large and well-known brands such as Cinépolis, Liverpool, or Walmart, attract substantial visitors, increasing foot traffic throughout the shopping center. This, in turn, allows landlords and tenants to negotiate lower rent prices per square meter with long-term leases, providing financial stability to the shopping center. Moreover, the presence of these retail giants attracts other brands and smaller retailers, creating a dynamic and appealing commercial ecosystem for consumers.

Finally, in the mid-range are spaces classified as "mini" and "medium," with GLAs ranging between 60 and 400 square meters. These spaces average 560 pesos ($32) per square meter, with additional maintenance costs of around 100 pesos ($6) per square meter. This means their prices are neither as low as those of larger ones nor as high as those of smaller ones, with their absolute total cost also falling in an intermediate range.

Strategically, these spaces differ from the smaller ones, like kiosks, by offering more space that allows businesses to expand their offerings and establish a more significant presence without requiring the enormous investment that larger spaces, such as anchor stores and megastores, demand. Additionally, these spaces, which can house everything from boutiques to small offices, are an attractive option for businesses seeking a balance between visibility, cost, and space, contributing to the diversity and dynamism of the shopping center.

In general, the pricing structure and maintenance costs in shopping centers reflect the differences in the size and location of the spaces and their strategic role within the commercial ecosystem. From small kiosks to anchor stores and megastores, each type of space plays a crucial role in attracting and retaining consumers, ensuring both the diversity of the offerings and the financial stability of the shopping center. This delicate balance is what allows shopping centers to remain attractive and competitive destinations in an ever-evolving market.

For more insights into the development and performance of the retail market in Mexico, explore SiiLA REsource or contact us at contacto@siila.com.mx.