The relocation of production processes has allowed Mexico to benefit from the situation of reorganization of production chains. The strength that the cities of the northern border maintain is evident, not only because of their proximity to American demand, but also because the development that takes place behind the border permeates them.

The same thing happens in economic terms where it is difficult for what happens across borders not to affect the economies of cities like Tijuana, Ciudad Juárez, Reynosa, Mexicali y Tecate, where both income and costs tend to rise since they are separated by steps from neighboring American cities.

In turn, the monetary policies that both countries have considered in the fight against inflation have had in common the vision of recently adjusting inflation rates by 75 basis points, and the economic teams in both countries aim at their next meetings to do what consider necessary to stabilize prices in the medium term and maintain the balance of the value of financial assets between both countries.

Of interest: Faced with an industrial vacancy that is running out, construction of 125 thousand m² begins in Monterrey in 2Q 2022

Inflationary pressure, among other market factors, affects the rise in rental prices, which at the end of 2Q 2022 have seen the lowest extremes in Reynosa with $3.80 dollars per square meter per month to the highest extreme registered in Ciudad de Mexico and Tijuana with $6.20 dollars per monthly square meter.

When we review the northern border markets, the maximum is located over Tijuana, followed by Ciudad Juárez, which registered by the end of the second quarter of 2022 the rent of $5.40 dollars per square meter per month.

At the rate of a quarterly demand of 95 thousand square meters, this market, which groups 5.2% of the national demand, has registered rental price increases of 4.1% between January and June 2022 and 14.3% in annual terms.

Check here: Low vacancy rates lead to increases in industrial rents

The average rental price for the second quarter of the year corresponds to the closure of operations in the Southeast and Southwest corridors, where three quarters of the spaces were occupied by manufacturing firms. In terms of size, where the largest number of areas is concentrated, it is under the format of 10 to 20 thousand square meters.

Public investment is underpinning the increase in industrial activity in Ciudad Juárez and they announced in May 2022 the commitment of the Federal Electricity Commission (CFE) for the construction of two electrical substations that will each have a capacity of 100 megawatts with an investment of 500 million dollars and that will be located in the area of Conejos Médanos.

The issue of water, drought and the normal supply of the municipalities is another point of interest that will affect the good performance of industrial operations.

Rental prices are expected to continue to push upwards in the remainder of 2022, although 435,000 square meters are under construction in this important northern market, which would increase the existing inventory by 6.3% once completed.