Housing has been one of the most resilient real estate segments in the face of the pandemic, partly because supply fails to satisfy demand in cities where a large number of population is concentrated, as in the case of Mexico in its main metropolitan areas, such as Mexico City, Monterrey and Guadalajara.

The Mexican residential market and mainly its capitals are advancing in the institutionalization of this product, which has reached a high degree of development of the concept where national and international developers with proven experience in each of its places compete.

The rental housing market in Mexico is made up of nearly five million properties, which represents 15% of the total housing market in the country.

However, at this time the institutional rental market is very small, if compared to international standards in the United States.

An inventory of only 3,000 units is estimated, concentrated in Mexico City, Monterrey and Guadalajara, so the opportunity is served.

Previously, many of these residential developers built homes for sale, but in recent years they have been entering the residential rental market. When a market manages to establish income products in an institutional way, it could be located as a mature market.

The multifamily is characterized by the ownership of the building in the head of a single owner and whose residential units are only available for rent. This product has had a high penetration in the United States and therefore Mexico is an expected territory for its expansion.

According to a recent report in the newspaper El Financiero that about six large multifamily and coliving developers estimate to build 11,000 new apartments in Mexico over the next 4 years. The development groups would be CIM Group with 5,500 units, Greystar with 3,800 units, Multifamily Fibra with 1,150 units, Up to Capital with 500 units and Retna with 200 units.

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CCLA Group, an alliance between CIM Group and Compass Group, already operates in Mexico and owns three buildings that it rents under this concept in Mexico City: Nomad Lago Alberto, Nomad Santa Fe and Nomad Mitikah with 357, 333 and 498 units, respectively.

They are also located in Monterrey with Nomad Garza Sada with 600 units, Nomad La Capital with 217 units and Nomad Latitud with 217 units.

Greystar, already located in Mexico since 2013, maintains 1,500 units in Mexico City and since 2018 has offered 219 units for rent in a 14-story building in Guadalajara.

Fibra Multifamily also operates in Mexico since 2018 with residential rentals in Mexico City and Guadalajara. In May 2021, it made its debut in BIVA seeking to raise up to 3 billion pesos through the sale of real estate trust stock certificates (CBFI).

With the resources of the offer, it will develop six rental housing projects, which will make up its initial portfolio, whose units are located mainly Guanajuato, Querétaro, Jalisco and Nuevo León; They will comprise a total of 1,142 homes that will be ready for operation between 2023 and 2024.

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Another business model that handles purchase and rent in parallel is Retna orients its concept to coliving with modern and functional spaces for rent. It offers to buy a timeshare apartment from 500 thousand pesos where you can use the Infonavit credit, which will then generate income even when it is unoccupied. It has locations in Mexico City, Guadalajara and Puebla.

Grupo Marhnos, for its part, also entered the pandemic at the beginning of 2020 with its Rent + product on the Livix building, with 36 apartments located in Polanco. The apartments for rent, of avant-garde and functional design, are equipped and furnished.

The advantage of this product is the stability in its cash flows, since the buildings generally have a high volume of units, which minimizes the risk when renewing contracts, if we compare it with residential buildings with few units.

At the same time, this product presents a great hedge against inflation, since a large amount of income in stable markets is adjusted with factors equal to or greater than this indicator.

On the other hand, both delinquencies and vacancies tend to be low when properties are centrally located and have professional tenants who could withstand a crisis with greater strength.

In addition to the added value that the building can achieve, this product will undoubtedly be a benchmark in investment portfolios in Latin America and Mexico, specifically where there is a large market size together with the growing demand for residential and residential space plus.