Between January and April 2023, the Tijuana industrial real estate market achieved close to 231,000 square meters of gross absorption, placing it in third position nationwide, preceded by Monterrey and Mexico City.

However, the construction activity and the strong increase in rental prices are the indicators that reach all-time highs in this important market on the border with the United States.

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At the end of April 2023, the construction exceeded 570,000 square meters of warehouses in various phases of execution, with surfaces from 4,000 to 39,000 square meters.

The fact that more than three quarters correspond to speculative projects stands out, and many of them are over 20,000 square meters, which represents an important advance in the risk taking assumed by developers in this region.

Almost 55% of the new industrial areas being built are located on the El Florido-Boulevard 2000 corridor, another 27% is located on the Pacifico-Nordika corridor, while the rest advances mainly towards the southwestern areas.

More than a dozen developers are currently carrying out projects and seek to differentiate themselves with innovative real estate products in terms of construction characteristics and that allow potential tenants to develop a long-term relationship through the possibility of later expanding their operations.

The cost of land and the incorporation of electricity supply have been key to being able to compete in this market. For example, the lack of land in traditional areas of industrial use has allowed potential growth submarkets such as Rosarito and Tecate to promote themselves as a more competitive and attractive real estate product for tenants looking for warehouses near the border.

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The vacancy that had reached its minimum level in September 2022 with 0.4% has been recovering gradually and at the end of April it reports 1.3%, so it seems that this market will have the capacity to meet part of the demand from the second and third quarters of anus.

In turn, the dynamism between supply and demand has allowed average rental prices to exceed $7.7 dollars per monthly square meter, one of the highest nationwide.

Strong demand from the logistics, medical supplies, B2B companies, and miscellaneous manufacturing industries will continue to put pressure on new construction to continue in the remaining quarters of 2023.