Reynosa, in Tamaulipas, has established itself as a crucial hub in the cross-border economy, mainly due to its manufacturing focus on the automotive and electronics sectors, with most exports shipped to the United States through Texas. In fact, the commercial proximity between Reynosa and Texas has driven the expansion of American companies, which currently occupy 60% of the over 3.5 million square meters of Gross Leasable Area (GLA) in the region, according to SiiLA Market Analytics.

Reynosa's productive capacity, proximity to the United States, and road infrastructure make it a strategic enclave for the export economy within the North American logistics network. This role is clearly reflected in the composition and performance of its industrial sector.

According to SiiLA data, in Reynosa, the manufacturing sector, with a predominant (35%) focus on vehicles and parts, constitutes 44.5% of the industrial GLA. This concentration in manufacturing is complemented and reinforced by the presence of consumer goods and transportation & logistics industries, which represent 25% and 8% of the industrial inventory, respectively.

Reynosa's strong industrial profile is linked to foreign direct investment spurred by nearshoring, and its productivity is the foundation of its international trade performance. In this regard, data from the Mexican Economy Secretariat (SE) indicates that Reynosa's global sales—which include exports, services, and other revenues in foreign markets—reached $16.1 billion in 2023, marking the second-highest sales volume since 2006. Of this amount, 96.5% corresponded to exports to the United States, primarily monitors and projectors, auto parts, and electrical wires and cables, accounting for 29.5% of total sales.

Transportation and logistics have been critical to this export boom. The communication routes played a fundamental role, exemplified by the Luis Echeverria Bypass. This major ring road facilitates urban mobility and connects to key industrial destinations like Matamoros and Monterrey in Mexico, extending its reach to the McAllen–Edinburg–Mission cluster in the United States. Additionally, the bypass provides direct access to the McAllen–Hidalgo–Reynosa International Bridge, which in 2023 was the fourth-busiest border crossing for loaded containers by rail and truck, representing 8% of loaded container traffic among 27 border bridges.

U.S. government data shows that cargo crossings at this bridge increased by 6% last year, with over 510,000 registers, marking the highest level since 2015. This increase occurred in a broader context: In 2023, land freight transportation by truck and train from Mexico to the United States saw a record growth of 21%, totaling nearly 6.8 million registers. This dynamism underscores Reynosa's central role in North American trade and logistics.

Real Estate Trends in Reynosa's Industrial Market

While Reynosa's overall industrial market outlook is solid, it faces significant challenges. Early this year, it experienced a moderate slowdown in gross absorption, leading to a rise in the vacancy rate in the first quarter of 2024, reaching 4.4% and exceeding the national average of 2.5%. This slowdown is linked to a decline in new foreign direct investments in Mexico over the past year due to factors like high-interest rates in the U.S. and Mexico, the potential for a global economic recession, and armed conflicts in Eastern Europe and the Middle East. Despite these challenges, the industrial market in Reynosa has shown resilience by maintaining stable market prices above five dollars per square meter.

Moreover, in contrast to global economic challenges, the first quarter of 2024 also brought good news for Reynosa, with the absorption of three significant spaces, totaling over 46,000 square meters of GLA, occupied by major companies like Aleph in the electronics sector, GXO Logistics in transportation and logistics, and HCP Packaging in the health sector. This highlights the market's ability to adapt and grow in an uncertain global economic environment.

Furthermore, nearly 160,000 additional square meters of industrial space are expected to be added in the coming quarters, representing a significant increase compared to the over 12,300 square meters delivered in the first quarter of 2024.

Available data on Reynosa anticipates a complex investment scenario, as this industrial market remains a vital driver of the cross-border economy between Mexico and the United States. For more information about the performance of Mexico's commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.