Sunday, June 16, 2024

Newmark executive hails Mexico’s manufacturing potential

Mexico has the potential to become a key player in global manufacturing, particularly in industries such as automotive, electrical, household appliances, and metalworking according to Sergio Pérez Castilleja, executive managing director of Newmark, a global commercial real estate firm. 

“Mexico is prepared to become a leader in the manufacturing sector, with a different production and supply structure. And we are ready for it,” Pérez said speaking at the Real Estate Symposium in Mexico City. 

Pérez Castilleja is the executive managing director of Newmark, a global commercial real estate firm. (Sergio Pérez Castilleja/Facebook)

According to Pérez, nearshoring has opened opportunities to attract foreign direct investment (FDI) given the current geopolitical situation and the rise of electric and self-driving vehicles. 

“Two fundamental things are about to happen,” Pérez anticipated. “Electric and self-driving cars will totally change the entire assembly and supply base, representing an immense opportunity.”

The United States Department of Commerce (DOC) has said that the market for electric vehicles, or EVs, is “evolving rapidly in Mexico as automakers have announced ambitious strategic goals to transition their offerings from gasoline to electric vehicles.” 

BMW, Tesla, Volkswagen and Chinese companies BYD and SEV are among the automakers with plans to make EVs in Mexico.

Nearshoring has also increased industrial demand, Pérez said, but there is not enough space with the required infrastructure to meet it. “While there is land in the country, little land has infrastructure, primarily electric,” Pérez said.

According to Pérez, the availability of industrial space in Mexico is currently at merely 1.5%, a historic figure that poses a challenge for property developers.

Although the number of vacancies in the national industrial market is shrinking fast, custom-made projects are still being undertaken and Mexico is responding to this great challenge in an important way, Pérez said.

As for which region in Mexico is the most valuable for industrial space, Pérez mentioned Mexico City and its metropolitan area due to the level of income, logistical use and because much lighter construction is required.

Meanwhile, he also highlighted the central region of the country due to its competitiveness in engineering centers, patent development centers, back office and shared services companies and digital commerce. 

With reports from Forbes and El Economista

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