The speculative demand that we saw activated at the national level in mid-2022 has had its effects in slowing the decline in vacancy in several Mexican industrial markets.

One of the direct effects when vacancy reaches minimum levels is that many applicants for industrial space compete for the few spaces that are offered, which generates an increase in prices. Although this situation creates specific opportunities for developers in the short term, it brings with it distortions in the stability of the business in the medium and long term.

Check here: In the northern markets of the country, industrial rental prices have increased at a faster rate

When reviewing the gross demand figures for the four quarters of 2022, we observe that four markets concentrated more than 80% of their demand in speculative projects such as  Tijuana, Ciudad de México, Guadalajara and Puebla. These four markets registered vacancy at the end of 2022 of 0.8%, 2.1%, 0.6% and 1.3%, respectively. Although these vacancies are relatively low, in the last three months they have managed to stop their decline or maintain less marked downward slopes.

Another half dozen markets registered throughout 2022 a proportion where speculative demand represents between 40 and 60% of the total annual gross demand, leaving the rest concentrated in custom-made projects. Such is the case of Querétaro and Guanajuato, which almost reached 70% of the speculative demand, while another market in the lowlands such as San Luis Potosí registered a similar proportion of demand for custom and speculative projects.

Of interest: Even with little vacancy, net industrial demand in Guadalajara grew by more than 30% in 2022

If we look at the vacancy in these markets, Querétaro reversed the decline in vacancy in recent months and closed the year with 3.3% after registering 2.6% in September 2022. Guanajuato continues to decline continuously since July 2022 where it registered 6.18% until the end of December, closing with 4.5% and which still continues to be the highest vacancy nationwide.

Regarding the northern markets Ciudad Juárez, Monterrey and Mexicali tilt the balance towards speculative demand, concentrating 63%, 58% and 44% there, respectively. It should be noted that in many of these markets pre-leases were already closed as soon as the works began, which influences the fact that once construction is finished they already enter the inventory occupied.

Gross demand for custom-made projects is leaning in markets such as Saltillo, Reynosa, Chihuahua, Aguascalientes and Tecate, where it represents more than 60% of the total accumulated in the year ending.