The oversupply of office spaces, mainly in Mexico City, determined for at least a couple of years that the market is dominated by demand, leading to it being the one that somehow determines the rules of the market, among them rental prices contained.

For example, throughout the year just ended 2021, among other trends we observed was that when leases expired, tenants downsized to smaller spaces or renegotiated the price of rent if they maintained the amount of space, even in other cases, they moved to better locations for the same amount of rent they paid.

Check here: CDMX registers a 15% increase in demand during 4T2021

In this regard, an analysis by Solili indicated: “During 2021, a large number of spaces leased by companies were expiring their contractual terms and demanded a decision either to reduce areas, to renegotiate amounts for the same space or to partially or totally deliver the property”.

The oversupply that prevailed, together with the effects of the economic activity and the effects of the pandemic on corporations, was reflected in the market prices for rent, which at the end of 2021 were below those of 2020.

In this regard, Solili stated that "the rental prices of the main office markets in the country, such as Mexico City,  Monterrey and Guadalajara, were located (at the end of the year) below the prices reported at the beginning of 2021" .

Faced with a scenario that still does not clearly show the direction that office demand will take and the scenario of oversupply in practically all the country's markets, prices have not been able to take a path of recovery and are even below the reported in 2020.

Of interest: Real estate sector manages to overcome difficulties in 2021, is on the way to recovery

Another relevant change was described by the Real Estate Market over the past year, we refer to the reconfiguration of office spaces under construction to three market options: Housing, hotels and hospitals, some of them as mixed uses with these components.

This was an important change that can be seen as an alternative since 2020 and that began to materialize in 2021.

"At Solili we estimate that developers will continue to be inclined towards mixed-use projects, which under the current circumstances of the pandemic and the possibility of spreading the market risk among the various by-products, makes this type of investment attractive, mainly in emerging markets."

In Solili you can consult available offices in Polanco, Reforma and Insurgentes

Original note