The characteristics of the GLA projected for 2024-2026, equivalent to 9% of the more than 6.5 million square meters of retail space in Mexico, indicate an adjustment and shift compared to the inventory delivered from 2020 to 2023.

On the one hand, there is a trend towards developing larger properties with less diversified formats designed to offer more personalized shopping experiences, focusing on social interaction and integrated services. According to SiiLA Market Analytics, shopping centers expected to be delivered in the remainder of 2024 will have an average size of about 30,000 square meters, while those delivered in 2025 and 2026 will exceed 50,000 square meters.

This average size hasn't been seen since 2021-2022, and even before the pandemic. It's important to note that in the last six years, new inventory deliveries have been centered on medium and large properties, with an upward trend in the development of mixed-use buildings and facilities operating as micro-cities, combining services and amenities that promote a lifestyle integrated with corporate, residential, and hotel spaces. However, economic uncertainty since 2020 and the recessionary cycle that began in 2023 slowed this trend. Thus, the projected reactivation for the coming years reflects renewed investor confidence.

On the other hand, the distribution of properties by type follows a similar trend to previous years, with a significant shift towards the development of larger, mid-sized properties optimized for high spatial efficiency and greater commercial performance.

In the coming years, lifestyle centers of 55,000 square meters will represent approximately 58% of the new inventory area. In previous years, this type of shopping center accounted for between 35% and 40% of incorporated GLA, with an average size of 50,000 square meters. In contrast, the delivery of community centers will remain close to 20%, as it has been for the last six years, but with an average size of 23,000 square meters, surpassing the previous average of 19,000.

Additionally, smaller shopping centers formats, such as outlets and power centers, will have minimal or no presence in the new inventory deliveries, while larger shopping centers, like regional and super regional malls, are in decline, going from representing more than 30% to just over 20% of new deliveries in recent years. Furthermore, their sizes have decreased, from an average of over 80,000 to around 60,000 square meters.

Overall, the shopping center market in Mexico is entering a phase of transformation supported by significant investors, including FIBRAs (Real Estate Investment Trusts).

The reactivation of construction in the retail sector, driven by the delivery of new projects in the coming years, reflects a significant shift in development trends. This shift is towards more extensive, less diversified properties that are highly efficient and focused on consumer experience.

Although a decline in traditional formats such as regional and super regional malls is evident, the focus on larger lifestyle and community centers indicates that the market is adapting to new consumer demands and current economic dynamics. This shift is driven by changing consumer preferences, the rise of e-commerce, and the need for more efficient and experiential retail spaces. This suggests that the sector, far from stagnating, is redefining itself to remain competitive and relevant in a challenging economic environment.

To learn more about the development and performance of the commercial real estate market in Mexico and Latin America, explore SiiLA REsource or contact us at contacto@siila.com.mx.