Spaces Under 500 sqm: Key for Light Manufacturing and Business Services

While demand in Mexico increasingly favors more extensive industrial facilities, compact spaces ranging from 100 to 500 square meters help optimize and streamline supply chains.

In Mexico’s industrial market, Class B compact spaces—particularly in the Bajío region—offer a practical alternative strategically located near key logistics routes. These spaces significantly benefit light manufacturing and business product and service sectors.

Ken Tsutsumi is the Managing Director of Panasonic México, which operates a 200-square-meter warehouse in the Bajío region. Photo: SiiLA.

By: SiiLA News

11/15/2024

In Celaya, Guanajuato, the hum and rhythm of mass production in the 180,000-square-meter automotive giant Toyota Automotive Park resonate over 23 kilometers away from “small” distribution and manufacturing spaces of 200 square meters, offering a relatively quiet contrast. In the JGN Celaya II Building Fb, companies like Karo and Forbo Group share nearly 3,300 square meters of Class A industrial space, operating in compact modules far from the vast industry's echo, where every square meter is used to maximize production efficiency.

Although industrial absorption in Mexico leans toward medium and large spaces, for many companies, large or small, smaller spaces are strategic resources. For large corporations, these spaces offer an agile way to bolster supply chains, while for smaller firms, they provide an accessible entry point into the industrial market. Generally, these modules enable logistics points close to key markets without building or leasing complete facilities. They also facilitate scalability for growing companies and reduce costs by sharing infrastructure and essential services where possible.

Did you know some warehouses can house over 20 tenants? The Business Park Sendero - 02 in Querétaro demonstrates how well-planned logistical segmentation can transform over 6,000 square meters of Class B space into a highly versatile area. This facility, along with an adjacent warehouse, offers a total of 49 adaptable modules. These examples remind us that, in the industrial market, effectiveness doesn't always hinge on size. That's why, in this edition, SiiLA REsource offers an in-depth look at distribution and manufacturing spaces ranging from 100 to 500 square meters.

Compact but Strategic

Business Park Sendero in Querétaro. Photo: JGN.

In Mexico, spaces under 500 square meters are typically used for light manufacturing and business products and services ranging from raw materials, components, equipment, and supplies to consulting, maintenance, technology, transport, and logistics services.

According to SiiLA Market Analytics for Q3 2024, companies most frequently using “small” industrial spaces belong to sectors like capital goods (28%), business products & services (10%), construction, transportation & logistics (8% each), food, vehicles & parts (6% each), as well as metals, electronics, and fossil fuels (5% each). These nine subsectors represent 80% of module occupancy under 500 square meters across Mexico's major industrial markets. Notable companies like Panasonic, Petrogas, and Siemens choose these spaces to complement their national infrastructure networks.

These companies look for more than just square footage; they demand strategic proximity and efficiency in every corner. Their interest in compact spaces reflects an optimization logic beyond size, focusing instead on convenient location and efficient functionality. SiiLA data show how these priorities shape the concentration of industrial modules in critical regions and explain the preference for Class B facilities in Mexico.

An analysis of 100 industrial spaces under 500 square meters across major real estate markets in the country reveals that 77% are Class B, concentrated primarily in the Bajío region. With markets like Querétaro and Guadalajara leading the way, this area has become a nerve center for companies prioritizing proximity to key logistics routes. However, expanding the sample to include spaces up to 1,000 square meters shows a more diverse distribution, capturing the dynamism of these regions more accurately. The vast majority (80%) are still located in the Bajío, while the north, led by Monterrey, concentrates 17%, and the Mexico City metropolitan area holds 5%.

Striking a balance between large logistics centers and smaller segmented warehouse spaces is essential and empowering for companies looking to optimize the efficiency and adaptability of their modern supply chains. Large-scale warehouses offer capacity and centralization, which is ideal for mass production and storage. However, compact spaces bring companies closer to their consumer markets, reduce response times, and optimize last-mile costs. This combination is a competitive advantage for many companies in highly dynamic environments like Mexico.

Are you looking for a warehouse tailored to your needs? Visit SiiLA SPOT, Mexico's most comprehensive platform for industrial, office, and coworking spaces. With its advanced filters, you can search for properties for sale and lease based on the building's total area and vacant space, making it easy to find the perfect space for your business.

Latam

Mexico

National

Industrial

Market Analytics

Tenants In The Market

ABOUT SiiLA

Founded in 2015, SiiLA is the industry leading REsource for comprehensive commercial real estate market insights, news and events across Latin America. The SiiLA suite of innovative products drive greater accuracy, efficiency, and strategic advantages for top players in the commercial real estate industry.