The corporate markets at the national level in Mexico have shown signs of a decrease in vacancies after the pandemic will further accentuate the oversupply. Mexico City, the office market that currently groups 71% of national inventories manages to participate in 61% of the demand that was generated at the end of 2Q 2022 and that reached 111 thousand square meters nationwide.

These movements give rise to vacancies having been adjusted slightly downwards. Queretaro and Guadalajara are the markets where the largest annual contractions of 6.8 and 5.8 percentage points have been reflected. 

Other markets where the same trend is observed are Tijuana, Monterrey and Mérida with downward adjustments of 4, 3.1 and 2.6 percentage points, respectively.

Of interest: Office real estate sector resumes course in Mexico City

In the case of Mexico City, different projects that began to be built in periods prior to the pandemic are still advancing, so nearly 835 thousand square meters would still be incorporated in the next two years. 

To a lesser extent, works in progress in Monterrey and Guadalajara would be advancing for 235 and 45 thousand square meters that, upon completion, would increase the inventories of these two markets by 11% and 4%, respectively.

Although this may represent a risk of an increase in vacancy in the medium term, demand has been advancing slowly and it is necessary to incorporate the fact that inventories contracted their growth in these two years after the pandemic, so it is quite likely that the slope can be sustained. of adjustment to the downside that we have seen in the vacancy of these markets.

Another very important point is the vacancies that reduce gross absorption and that at a certain moment can also influence the performance of vacancy, but even under these circumstances if the growth of gross demand continues to be maintained, the recovery can be sustained over time, although we would be projecting this trend in the medium term.

Towards the immediate future, companies have already adapted a large part of their new habits in the occupation of spaces and the phenomenon of optimizing them has been a constant in all national corporate markets.

See also: Office prices in Mexico recover, they are 5% below pre-pandemic

But since the oversupply still maintains significant levels, the market must still absorb a large part of the new works that are completed during the next 12 months, so it is unlikely that developers will perceive that it is time to start new corporate projects.

It is a reality that demand adjusted its downward behavior after the pandemic and the return to a balance scheme like the one seen in previous periods will depend mainly on investment guarantees and the signals that the economy sends to developers in the midst of a volatile world market and a highly inflationary outlook.