The pandemic was a severe blow to an institutional market such as the corporate one, which had been accumulating a significant oversupply, although it maintained the interest of national and international portfolios that competed for iconic properties, milestones of modernity due to their heights, facades, amenities and endowments, time marked by the pre-leases that set the tone for the negotiations.

Perhaps the most revealing indicator of the crisis that this sector went through was the unemployment that took place in an accumulated form throughout the city.

With average contract periods of 3 to 5 years, multiple negotiations began, either for the delivery of part of the spaces or for their non-renewal, once the contract periods expired.

Check here: Mexico City has not started new office projects for 4 years

In addition to this, the vacancy was also adjusted upwards, although the steepest adjustment slope occurred between 2Q 2021 and 2Q 2020 with an increase of 42%, which would then soften between 2Q 2022 and 2Q 2021, where it only increased by 3%.

On the other hand, another fundamental indicator to understand where the corporate market is heading is the behavior of the gross demand of Mexico City, which by registering at the end of 2Q 2022 just over 137 thousand square meters, manages to recover 85% of what registered in 2Q 2019, where the effects of the pandemic had not yet been drastically marked.

Now, if we join the gross demand with the vacancies, we will obtain the evolution of the net demand, which has managed to reach 80% of that registered prior to the pandemic.

The fact that we could live together and adapt to the evolution of infections has been key to resuming productivity activity and with it the return to the offices, in one of the most populated cities on the planet, where the economic effects of confinement were more expensive. for society than to take the risks for a return to business as usual.

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At the end of 2Q 2022, the Reforma, Norte, Insurgentes y Polanco submarkets concentrated 63% of the lease in Mexico City, where the closings mainly correspond to existing buildings, where companies are making short-term decisions that we see reflected in the type of real estate that they rent and in the terms of the contracts.

The environment of high inflation and the current volatility of the economy in general do not allow decisions to be made with a longer time horizon like what we saw 3 or 4 years ago where various companies planned the occupation of their spaces for 5 to 10 years.

Despite the setback that the net demand of Mexico City registered during the first quarter of 2022, where the Omicron strain once again raised doubts about a safe return, the current positive figure of almost 63 thousand square meters that the capital of the country registered, could continue advancing towards the last two quarters of the year, since the decision not to start new office works has been beneficial in favor of balancing the market that still has 835 square meters that are advancing in the submarkets that make up this city.