The retail sector in Mexico has shown signs of partial recovery after the pandemic. In major national markets –including Mexico City, Monterrey, and Guadalajara– a downward trend in availability has been observed, along with a budding revival of new deliveries and increased activity in absorptions. This indicates that the retail sector is regaining ground. According to data from SiiLA, an interesting trend of medium-sized shopping centers development, such as lifestyle centers, is observed in this recovery dynamic.

Lifestyle centers are a subtype of shopping centers focused on simplifying people's lives. These places bring together businesses that aim to satisfy various needs in one location, where people can shop, eat, have fun, work, and even live. Unlike traditional shopping malls, lifestyle centers are more compact spaces with a gross leasable area of 15,000 to 45,000 square meters. They are characterized by open architectural designs with outdoor spaces, emphasizing the user experience, entertainment, and amenities.

In the past two years, lifestyle centers and regional malls were the subtypes of shopping centers that added the most properties to their inventory. According to SiiLA Market Analytics, lifestyle centers accounted for over 249,300 square meters of newly delivered stock, while regional malls incorporated over 187,000 square meters. Although the increase in new inventory is moderate, the retail sector shows a growing trend toward developing spaces focused on complete and personalized shopping experiences in strategic and high-quality locations.

This trend intensified with the pandemic due to the users' need for places that would allow them to meet multiple needs in one secure location. SiiLA data indicates that the demand for spaces in lifestyle centers increased by 108% between the first quarter of 2021 and the first quarter of 2023. One example is the arrival of companies such as H&M, Lacoste, Carter's, Innovasport, and New Era at the Mitikah lifestyle center in Mexico City during the first three months of this year.

The growing popularity of lifestyle centers is not only due to a shift in consumer preferences and behaviors. These shopping centers are also viable and attractive investments due to factors such as land availability and local demand. In densely populated urban areas with limited space, lifestyle centers can adapt better and utilize existing spaces more efficiently. This allows them to be developed in strategic locations close to high-income areas, increasing their appeal to both consumers and investors. To learn more about trends in the Mexican retail market, visit Market Analytics or contact us at contacto@siila.com.mx.