Almost one-quarter of office space in Mexico City was empty at the end of last year, a record high.

There were 1.76 million vacant square meters of office space in the final quarter of 2021, which is almost 24% of the 7.48 million square meters pertaining to the city’s 10 main office districts, according to the real estate company JLL.

Office space in the city’s north corridor, which covers areas near Mexico City’s Northern Ring Road as well as the México state municipalities of Cuautitlán and Tlalnepantla, was 51.4% empty. In Lomas Altas, in the city’s west, 40.9% of office space was vacant. Further west in Interlomas, in Huixquilucan, México state, 35.2% of office workspaces were without tenants.

JLL spokesman Héctor Klerian told the newspaper Milenio that a fall in demand and increase in supply had caused a spike in vacancies.

“There is currently 20% more space available compared to the same period last year,” he said. “The vacancies derive from the impacts of COVID-19, coupled with the incorporation of new buildings into the inventory and oversupply that has existed since 2020 … in 2018 and 2019, when the pandemic was unforeseen, buildings were being constructed.”

“With the [pandemic], developers decided to stop their projects,” he said.

Klerian explained that around 43% of the vacant office space is currently furnished, a market adaptation that resulted from the pandemic. “Before this did not happen,” he said. “All the available offices were completely unfurnished and the tenant had to adapt the space. This complicates the picture for those who are still letting unfurnished spaces.”

However, Klerian added that the market was showing signs of recovery: in the final quarter of 2021, there was an increase of 126,056 square meters of unused office space, down from an increase of 173,905 square meters in the previous quarter.

“We expect that trend to continue in 2022. We are seeing more activity and many more requests and renewals, which is a good sign,” Klerian said. “I believe that when the quarter ends, we will see more positive data than we did in 2021.”

Other real estate experts in Mexico also predict a gradual recovery.

Gonzalo Robina, who heads the real estate investment fund Fibra Uno, said that growth was likely after such a huge contraction. “The office market, I think, has already bottomed out. We are at the lowest occupancy levels on record, and from here on out, I only see growth … there is a huge number of potential tenants,” he said.

Jorge Avalos Carpinteyro, head of the real estate investment fund Fibra Monterrey, said that he expects office occupancy to return to pre-pandemic levels before 2025.

With reports from Milenio