Construction of new industrial parks in Mexico is on the rise, sector leaders noted this week — with the expansion due primarily to nearshoring.
Speaking at Monday’s annual Confederation of Industrial Chambers (Concamin) assembly, Jorge Avalos said 93 new industrial parks are being built, bringing the total in Mexico to 460.
Avalos, president of the Mexican Association of Private Industrial Parks (AMPIP), said there is great optimism in the sector as demonstrated by the 33% increase in investment. He attributed the growth to the growing nearshoring phenomenon in Mexico.
“Never in the 25 years of AMPIP’s existence have we experienced such enthusiasm,” Avalos said. “With US $4 billion in investment this year, we’ve easily surpassed last year’s US $3 billion total.”
Even more impressive, added Avalos — cofounder of the Fibra Mty investment fund, which focuses on long-term real estate investment — is that much of the funding is coming from Mexican investors. Among them is Thor Urbana which recently purchased nine industrial parks in the northern state of Coahuila.
In addition, there is still considerable optimism from abroad with 80 U.S. investment funds participating in the construction projects, Avalos said.
Avalos then shared a conversation he had with Fred Smith, CEO of FedEx, who had asked Avalos how confident he was about investing.
When Avalos told him that his company Fibra Monterrey had invested US $1.5 billion in industrial parks over the past two years, Smith was impressed, Avalos said, remarking that FedEx’s growth rate in the United States was only 3.9%.
Other speakers at the assembly admitted that there is still work to do in Mexico, however, especially regarding the transmission and distribution of energy, of particular concern because industry and manufacturing already consume nearly 60% of power generated in Mexico.
Residential consumption is at about 24%.
In addition, the rise of nearshoring has prompted an increase in demand for industrial real estate space. This, in turn, will produce greater demand for electricity, said assembly panelist Salvador Portillo, president of the National Chamber of Electrical Manufacturers (Caname).
Portillo said public-private investment projects are the way to proceed because power-generation infrastructure projects could cost upward of US $82 billion by 2038. Projects addressing energy transmission and distribution could cost an additional US $6.4 billion by 2030.
Another factor to consider is the necessity for renewable energy since many manufacturers increasingly require clean energy sources to meet U.S. customer demand for clean energy components in imported goods.
With reports from El Economista and La Crónica de Hoy
