New Industrial Inventory 2023: Expansion in the North, Contraction in Central and Bajio Regions of Mexico

The sectoral composition of companies in Mexico's Northern, Bajio, and Central markets also influences the size and distribution of industrial warehouses. On the one hand, SiiLA Market Analytics data indicates that although the predominance of vehicle & parts, capital goods, electronics, and transportation & logistics companies in the North and Bajio is very similar, their market logic is quite different.

In the North, these industries occupy 67% of the GLA, reflecting the importance of export manufacturing through cross-border trade. In this context, productive and commercial activities demand more extensive facilities to accommodate complex production lines, storage of parts and finished products, and large-scale logistics operations. This trend has been more evident in significant markets such as Monterrey, Ciudad Juarez, and Tijuana, where the warehouses delivered in 2023 were between 11% and 76% larger than the average warehouse.

In the Bajio, these industries represent 56% of the occupied GLA. However, in this region, there is a notable need for facilities focused on transportation & logistics, especially for capital goods and electronics companies, for which innovation and agility are critical. The evolution towards more compact industrial warehouses in this region aligns with the need for spaces with more efficient distribution, especially for high-turnover products and immediate consumption goods. This is essential in a market increasingly oriented towards satisfying demands for instant delivery. However, an exception has been Queretaro, where the new deliveries exceeded the average size in the market by 6%. Beyond that, there were decreases between 11% and 55%, more marked in Aguascalientes, Guadalajara, and Guanajuato.

Additionally, there's the Central area. In this zone, companies specializing in transportation & logistics, consumer products, food, and vehicles & parts represent 53% of the industrial GLA. These companies demand spaces suitable for last-mile distribution and logistics in markets with minimal land availability, close to areas of high urban concentration. This market configuration is consistent with the trend towards smaller industrial warehouses, mainly due to the proximity to consumption centers, which is crucial for operational efficiency and reducing delivery times.

This implies that the availability of land and associated costs have also influenced the difference in regional behavior. In areas with high demand and limited land availability, as is common in the Central and Bajio regions, the price of land tends to be higher, which can limit the viability of developing large-scale industrial properties, with clear exceptions, such as the Liverpool PLAN in the metropolitan area of the Valley of Mexico, which has facilities with a GLA of 230,000 square meters. In contrast, in the northern part of the country, the availability of land at relatively more accessible prices has allowed the construction of larger industrial warehouses.

The direct influence of the sectoral composition on the configuration of the industrial real estate market reveals the importance of regional economic dynamics in the design and planning of industrial infrastructures. Companies must adapt their investment and development strategies to the characteristics of each region, considering current needs, future market trends, and the emerging demands of the predominant industrial sectors. This adaptability ensures the relevance and competitiveness of industrial facilities and increases the potential to maximize their long-term value in an ever-evolving market.

For more information and analysis on commercial real estate market trends, explore SiiLA REsource or contact us at contacto@siila.com.mx.