Throughout 2021 and during the first quarter of 2022, the impulse to build new corporate buildings has been dosed and the few projects that have begun correspond to small-format buildings, on average from 1.5 to 3 thousand square meters, located on areas with strategic location where the oversupply probably does not register the high values that we have seen in some submarkets of the main Mexican cities.
For example, at the end of the first quarter of 2022, Mexico City started four new constructions, even in the midst of an average vacancy of 23.1%.
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The new constructions have been located on the Insurgentes and Reforma submarkets, in categories A and B and some of them in the format of boutique projects that, due to the current conditions left behind by the pandemic, manage to capture the interest of tenants who they tip the balance towards open spaces with recreation areas such as balconies and terraces, attributes that these buildings include.
Also noteworthy in these areas is the marked presence of the residential component that generates less displacement for tenants, in areas that have improved their safety profile based on the mix of uses.
The mix of commerce at street level with office buildings interspersed with multi-family buildings have been the great attraction taken from emblematic neighborhoods such as Roma, Condesa, Napoles and Narvarte, but now they can be built on areas of greater seismic safety.
Another new project that began during 1Q 2022 is building in Mérida on the Blvd. García Lavín submarket in the México neighborhood, which has 50% offices and added 3.8 thousand square meters to the construction schedule in the Yucatecan city.
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This neighborhood continues to be in the sights of developers who have already announced two other new mixed-use projects with boutique offices to meet the demand of companies that need to be close to the city center.
In 2021, practically no new construction began in the rest of the medium-sized and emerging markets, although in the case of Bajío with Querétaro during 2022 three projects could begin, combining the trends of changes in use from offices to furnished apartments.
What is a constant is that the office projects that start or will start in 2022 will limit the investment sizes on the selection of net areas that are easily absorbed accompanied by a risk measured on the basis of the investment size.
The mixed-use format is another key that makes it possible to minimize exposure to the risk of building only offices, at least until the panorama of companies is cleared up and the vacancy gap is closed.
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