The industrial real estate market in Mexico continues to be favored by a change in the commercial strategy that, although before it leaned towards investments in Asian countries, today world production and the development of suppliers clearly outperform Latin America due to its cost competitiveness. and delivery times.

At the beginning of 2023, the Inter-American Development Bank quantified the value of exports derived from nearshoring in Latin America at 78 billion dollars. Of this amount, Mexico would estimate a participation of close to 35 billion dollars, thus becoming one of the economies that would take the greatest advantage of this commercial phenomenon.

Foreign direct investment in the country accumulated 18.6 billion dollars during the first quarter of 2023, according to figures issued by the Ministry of Economy. This amount exceeded by 48% what was reported in 1Q 2022.

The elements that directly affect the country's investments are the interest rate, the exchange rate and the slowdown in inflation. Regarding the interest rate, the latest decisions of the boards of both the US Federal Reserve and the Bank of Mexico. Banxico, which had increased the reference rate by 50 and 25 basis points at its meetings in February and March 2023, kept the 11.25% rate unchanged at its last meeting in May of this year, resulting in greater control over the increase. of prices, the evasion of capital flight, and the maintenance of a stable exchange rate.

The exchange rate at the end of June 2023 reached $17.10 Mexican pesos against the dollar, which has generated benefits internally, showing stability in the national currency, which represents a lower risk for the arrival of investments.

Finally, inflation continues its path of deceleration and stands at 5.84% at the end of May 2023, according to what was released by the National Institute of Statistics and Geography.

The activity reported in the gross demand of the industrial real estate segment accumulates almost 1.7 million square meters nationwide at the end of the second quarter of 2023. The eight markets of northern Mexico maintain their attractiveness for the relocation and settlement of the productive processes of both expanding companies, as well as tenants arriving in the country for the first time, allowing the region to concentrate 60% of gross demand.

Although some markets in the north of the country reported greater demand than others throughout 2022, it is therefore expected that in the rest of 2023 those markets that combine factors such as proximity to the border, availability of land and the support of local governments , will detonate their potential to serve companies in need of relocation.

When consulting the net demand on the Solili platform, which takes move outs into consideration, an increase of 8% is observed at the national level. Both Monterrey and Mexico City register very close values for this indicator, in the order of 260,000 square meters quarterly.

Various productive sectors such as electronics, automotive supply chains, furniture manufacturing, miscellaneous manufacturing, and specialized industries such as aeronautics and data centers continue to shape demand in the country.

It is observed that more and more investments are aimed at completing supply chains for key industries in each market, which is reflected in an increase in the added value of production. State governments and private investment clusters are the great architects that drive this trend.

Industrial construction at the national level exceeds 5.6 million square meters, registering an increase of 10% compared to the constructions reported in the second quarter of 2022. The greatest activity continues to be concentrated in the north of the country, with Monterrey leading the way with 1.7 million square meters under construction, followed by Tijuana with 653 thousand square meters. Mexico City, Saltillo and Juárez also rebound, each exceeding 500,000 square meters of construction.

On the other hand, the Bajío markets total 900 thousand square meters of buildings under construction, Guanajuato being the market that registers the highest volume with the advance of 367 thousand square meters. The markets of Guanajuato, Querétaro and San Luis Potosí have been very active during the second quarter of the year with international tours to attract investment, which could be reflected with increases in demand in the remainder of 2023.

Vacancy has continued with an annual decrease in some markets, where the decrease of one and a half percentage points stands out in Monterrey, Mexico City and Saltillo, which registered figures of 1%, 2% and 1.5%, respectively, at the end of June 2023. However, Tijuana, Ciudad Juárez and Guadalajara managed to slightly increase their vacancies, reversing the decline as a result of a greater participation of speculative demand. Half of the country's industrial vacancy is located in Mexico City, Guanajuato, Querétaro and Monterrey.

Rental prices maintain the upward trend; This is due to the continued increase in construction prices, and partly due to the additional costs that industrial developers must face in terms of infrastructure to guarantee the electrical supply and water supply, as well as the appreciation of the type of change since the strengthening of the Mexican peso against the dollar has caused an annual increase of 15% in dollarized rental prices, since the prices that are marketed in Mexican pesos are now higher for those who sign contracts in this currency (Mexican pesos ).

On the border, the markets of Tijuana and Ciudad Juárez register the highest rental prices with $7.90 and $6.60 USD/m2/month. Monterrey, Tecate and Reynosa are also incorporated as the markets where the highest increases in industrial rental prices have been registered, while the markets of the Bajío region have registered moderate increases.

Access to information and constant research to monitor and interpret market trends is increasingly becoming one of the key factors to meet the needs of owners or tenants who demand industrial space within the Mexican territory.