Gross industrial demand continues to advance steadily in the Tijuana border market. If we compare the demand in the second quarter of 2022, the reported figure of 77,000 square meters would more than double, towards the end of 2Q 2023, since only between April and May 2023 it managed to exceed 107,000 square meters.

Developers have responded by building a significant number of industrial buildings that exceed 585,000 square meters, the largest number in the last five years. The proximity to a market as institutional as Los Angeles and San Diego creates advantages in terms of response time and delivery times, which generate great appeal over ships that are built on the border.

Of interest: Falls in vacancy rates: a challenge for the growth of industrial demand

Competition between developers has become more intense as a result of the desire to occupy a space in the region. Fibers and various portfolios with an industrial vocation have reinforced their strategies to increase their presence in the largest number of markets in the northern Mexican region, as is also observed in Ciudad Juárez, Monterrey and Saltillo. 

Regarding vacancy, we have seen a slight recovery that has been maintained in the last 9 months, reporting 1.6%, so it has not yet reached a level that we could consider stable.

The scenario of average rental prices has continued to rise to report $7.6 dollars per monthly square meter at the end of May 2023, which represents an annual increase of 23%. Under the current circumstances, we could anticipate that there was still room for growth for rental prices to continue rising.

Consult here: Monterrey reports a promising rate of recovery in demand for offices

With this interaction between the main real estate indicators, the speed of absorption has not only increased, but most of the time when a warehouse is vacated almost immediately it becomes rented without giving it the opportunity to re-incorporate the vacant spaces. This situation causes unemployment levels to remain at their minimum values.

Currently, this market has more than thirty industrial buildings that mostly range from 5,000 to 20,000 square meters, but if it is about large surfaces between 20 and 35,000 square meters, we would be facing 5 or 6 options. . In turn, the demand for the first quarter of 2022 focused on warehouses between 5 and 12 thousand square meters, which is why those modular projects that allow more than one size to be configured are quickly absorbed by the market.