Monterrey continues to consolidate along with the country's capital as a thriving and modern industrial city, up to the standard set by the United States.

So far this year, the gross demand of Monterrey and Mexico City is at similar levels, when in pre-pandemic periods the demand of the capital of the country was significantly higher than that of Monterrey.

Between the period January-August 2021, the gross demand in Monterrey was 702 thousand square meters, highlighting the manufacturing, automotive, logistics, e-commerce industries, among others, as the main demand for space.

If we compare the gross demand in Monterrey at the end of the first semester of 2021 with the same period of the previous year, the increase reaches 55%, which indicates the strong activity that this market registered.

Within the city's configuration, the Apodaca submarket concentrates 40% of the inventory of the total Monterrey market as of August 2021, followed by Ciénega de Flores and Santa Catarina with 15% and 12%, respectively.

Apodaca is considered as the premium submarket of the city, in which companies seek to settle thanks to its privileged location and infrastructure.Thanks to this, this submarket has 2.5 million square meters in class A inventories.

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In the last two years the industrial real estate market of Monterrey has experienced increases in the exit and closing prices of industrial buildings. 

The increase in demand has been the most determining factor for this behavior to be taking place, however, we have identified some others that have an impact, such as the shortage of premium land and infrastructure and the increase in prices in the main construction supplies.

In addition to this, the market has raised its construction standard where we have seen taller industrial buildings, greater than 12 meters in height, greater spaces between columns, larger platforms with increasingly sophisticated lifting equipment, maneuvering yards with turning radii efficiency, improvements in the quality of floors and ceilings, special lighting installations, among others, all this results in the final cost and is an element that also impacts rental prices.

To generate an analysis of the evolution of prices, Solili maintains constant contact with the city's industrial developers, monitoring the prices of both offers and closings. 

The price statistics are prepared in those properties that were rented in the period on the starting price indicated by the developer.

Taking the aforementioned as a reference, and according to the analysis prepared by Solili, the industrial market of Monterrey registered between 2019 and 2020 an average increase in the rental price of just over 5%, for spaces classified as class A and B. 

So far in the first two quarters of 2021 compared to 2020, the price is already slightly higher, and that under the current cost and inflation parameters the gap is expected to increase towards the end of the year.

The average price of industrial real estate for rent in Monterrey at the end of 2020 was $ 4.24 dollars per square meter per month, compared to the one registered at the end of 2019 for $ 4.03 dollars per square meter per month.

In the case of Apodaca, which becomes a high-demand submarket, the difference in average rent prices has been higher than the average for the city, registering an 11% increase between 2019 and 2020.

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In this same period, the price increase of Class A leased spaces registered 7.6% and Class B registered even higher levels. 

The demand for these latter buildings also increased and as the warehouse is in a strategic location, any change in its operating characteristics can be recovered through the rental price.

In an additional analysis we have identified that tailor-made projects, or also called BTS, have reported rising closing prices, driven by elements similar to what happens with speculative but adding some additional characteristics that consist of equipping the ship specificities that the tenant requests for their operation, which directly impacts the closing price.

Until August 2021, the Monterrey industrial market reports more than half of the total construction footage in tailor-made projects, which provides a broader panorama of the importance of these types of projects and this in turn in the impact on the city's average closing price.

The projections of the rental price expected in Monterrey for the end of 2021, based on the results of the first semester of the year, indicate that the price will continue its upward behavior given that they continue to drive the increases in demand and inflation that advances influencing the increase in construction cost.