Industrial real estate in northern Mexico continued its upward trend during the first six months of the year, according to a study by real estate services and investment firm CBRE.
The cities that have recorded the most growth include Monterrey, Ciudad Juárez and Saltillo. Overall, Mexico saw an increase over 30% in the commercialization of industrial spaces.
Monterrey: Q2 saw the highest space increase on record
The northern city of Monterrey, Nuevo León, saw an annual growth of 14.1% in its industrial inventory in the first half of the year, totaling 15.3 million square meters.
During Q2, the city added 539,000 square meters to its inventory, marking the highest increase on record. Notably, 74.4% of this addition was for preleased inventory — properties that had a tenant in place before construction — meaning that there were only 137,000 square meters for new speculative offerings.
The diversified manufacturing sector — companies that manufacture a wide range of often unrelated products — remains the primary driver of industrial demand in Monterrey, occupying more than 378,000 square meters, or 53% of the total square meters available.
The logistics and transportation sector came in second, accounting for 24% of all square meters of industrial space rented or subletted in Monterrey. The automotive industry came in third, accounting for 18%.
United States companies accounted for 53% of the occupied industrial space, followed by Mexican companies with 13% and Chinese firms with 10%.
In its study, CBRE said that Monterrey’s outlook for the rest of the year “remains positive given the completion of the electoral processes in Mexico and the pipeline of industrial projects under development.”
Saltillo: demand outpacing construction
Saltillo, Coahuila, saw a 27% increase in industrial warehouse leasing in the first half of the year. It ended the first semester with a total inventory of 4.69 million square meters.
However, of the 292,000 square meters of newly built industrial space delivered in the first semester, nearly all of it was taken before construction by preleasing and build-to-suit customers, meaning only about 10,000 square meters was available for new customers, a minuscule increase of 0.03%. That indicated, according to CBRE’s report, “a market where the pace of demand and absorption has outpaced that of speculative construction.”
The diverse manufacturing and automotive sectors were the main drivers of industrial leasing activity in Saltillo’s metropolitan area, adding over 92,000 square meters of inventory during Q2. The Ramos Arizpe area remains the city’s most dynamic submarket, amounting to 60% of the demand.
The United States accounted for 43% of Saltillo’s occupied industrial space, followed by Canada with 20% and China with 19%.
Ciudad Juárez: more new space but in the wrong place?
Q2 ended in the Chihuahua border city’s industrial real estate sector with a quarter-on-quarter growth of 15,000 square meters and a year-on-year growth of 226,700 square meters, the second-largest midyear year-on-year growth ever recorded.
The majority of that growth resulted from custom-built projects and speculative preleasing.
CBRE reported that despite the delivery of new vacant inventory and ongoing construction, the market remains tight, with most leasing occurring as part of new construction agreements.
One expert interviewed by the newspaper El Financiero pointed out what he foresees as a further major issue for Ciudad Juárez’s industrial real estate market: a geographical one.
“Ciudad Juárez has more than enough capacity to develop industrial parks, but in [its] center … The parks are being developed in the north,” Giovanni D’Agostino, Mexico president and regional director for Latin America of Newmark, told El Financiero.
“The problem is [power] transmission,” he said. “There is no [energy] where the development is taking place, so it has to be transported, and that is a very large investment that CFE [Mexico’s state-owned Federal Electricity Commission] has to make.”
“I think we’re falling behind on that,” D’Agostino said.
Mexico News Daily
