The office market in Mexico has been one of the real estate investment sectors that has had to deal with the greatest challenges in order to approach a similar balance to the one it had prior to the onset of the pandemic.

Cities such as Monterrey, Guadalajara, Tijuana y Mexico City, which had grown at a significant rate during the period 2017 to 2019, generated an important turning point as a result of the appearance of Covid-19 that affected indicators such as demand, vacancy and rental prices.

For example, the office rental price in January 2020 for Mexico City was $22.3 dollars per square meter per month, followed by Guadalajara, Tijuana and Monterrey with $21.3, $18.5 and $18.4 dollars per square meter per month. Other corporate markets that had been developing, such as Puebla and Querétaro, reached rents of $15.3 and $14.2 per month per square meter at the beginning of 2020, respectively.

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The pandemic was decreed by the Monthly Health Organization (WHO) in March 2020, which meant that in the main capitals of the country a significant vacuum of assistance to corporate spaces will be created, motivated by the fact that only those personnel could return to work. of activities that the state designated as essential.

From then on, there were many changes that companies and workers negotiated to mediate between those who could carry out their work remotely and those who had to return to the offices, complying with guidelines and regulations that would be mandatory.

Office rental prices during the remainder of 2020 and part of 2021 registered downward adjustments in almost all markets nationwide, while demand contracted and vacancies were increasing, mainly in Mexico City .

But in mid-2021 some adjustments began to be identified, mainly in markets such as Guadalajara, Monterrey and Tijuana, where gross demand was slightly activated again, while in Mexico City the gap in net demand was closing, although it was still in negative territory. it was approaching the stage where demand would exceed vacancies.

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Already, office rental prices in mid-2021, although they had been adjusting downwards, did so at a slower rate of adjustment and we saw average rental prices in July 2021 for offices at $21.4 in Mexico City, $19.9 in Guadalajara, $19.7 in Tijuana and $17.8 dollars per monthly square meter in Monterrey.

This trend has continued until the end of July 2022 and currently the average rent prices in corporate markets nationwide have recovered and are 5% below the rents registered in the pre-pandemic period.

The average rental price of Mexico City recovers 6% below what was registered before the pandemic, 5% in Monterrey, 7% in Puebla and 8% in Tijuana, although the gross demand for the end of July 2022 already exceeds double the gross demand registered at the end of July 2021.

Although this important segment of real estate investment still faces great challenges such as oversupply and the brake on new construction, its long-term time horizon condition will continue to keep it in the preferences of the main investment portfolios in Mexican territory.