During 2Q 2020, the health crisis derived from the Covid-19 pandemic, forced the government to take drastic measures to prevent the spread of the virus, a fact that led to the suspension of most economic activities in the country, including those administrative; which would imply a new way of working, interrupting the use of offices nationwide and the transfer of this activity to the home.

A year after the measures implemented to reverse the contagion, the real estate corporate segment maintains the effects of this, since many companies chose to reduce space, sublet and in some cases completely close their offices due to the economic adjustment to overcome the crisis.

All of the aforementioned has directly impacted the largest corporate markets nationwide, such as Mexico City, Monterrey and Guadalajara; because the leasing configuration in these cities are varied and they are made up of companies from different sectors.

The second quarter of this year was marked by having a corporate gross demand that maintained a volume slightly lower than that of 1Q 2021, but 10% above the same period of 2020. That is, the demand shows an upward trend, as less in this quarter, compared to the same one in which the pandemic began and when the effects of it were perceived stronger in this sector.

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As expected for at least a year in the most important office market in the country, Mexico City, the start of construction of new corporate buildings has been almost nil, even changing the trends in design, location and volumes that were considered even before the pandemic; however, progress was maintained in the works that were in execution.

During 2Q 2021, only 15 thousand square meters started construction, which shows that developers have projects still on hold and in the planning phase, until there is a significant reactivation in demand.

It has been a quarter where many concept evaluations were carried out, in addition to the fact that the Government of Mexico City gave permission to convert some office buildings into housing; inventory rearrangements that can be quantified at the end of the current year.

This trend is in line with American and European cities, where local governments have intervened with tax advantages to encourage construction activity to resume part of the rhythm it had before the pandemic.

There is still a significant amount of vacancy that is still much higher than the gross demand, but in cases like Monterrey this value reflects a similar amount with the demand, which gives signs of a market that is adjusting.

During this second quarter of the year, the new national corporate offer was just over 100,000 square meters, 80% of the figure concentrated in Mexico City and Guadalajara.

The developments that completed works added 1% to the national inventory in this quarter and almost 5% annually; values much lower than what was reached in previous years when annual growth at the national level was between 8 and 10%; in medium and small markets this figure was higher.

In Mexico City, the growth rate has slowed down, as some works extended their delivery times and are still under construction to be completed in the coming semesters. The rental price in the capital increased by 10 cents compared to 1Q 2021 and by 61 cents compared to 2020, which speaks of a market that manages to maintain the value of its product in the midst of the complexity of the pandemic.

In Guadalajara, despite the fact that demand slowed down by 28% compared to the previous quarter, construction began for 5.2 thousand square meters; in a city where the available supply opens possibilities for different applicants with spaces between 2.5 and 7.5 thousand square meters. The largest project has plants of 2.5 thousand square meters with a minimum divisible from 600 square meters.

Monterrey registered a vacancy increase of 30 basis points, its average rental price achieved an increase of 90 cents on the dollar, gross demand exceeded 80% the figure for both Q1 and the previous year; however it did not start construction. The behavior of the available supply in relation to the demand is part of the justification for having increased the rental price, maintaining the market equilibrium that continues as a bet of investors and developers.

Querétaro, the most prominent corporate market in the Bajío region, completed a significant amount of square meters of new supply in the last year, increasing its inventory by 15% per year. It slightly reduced its vacancy compared to 1Q 2021, closing with 23%, but it continues as the highest figure in the country. With its inventory of 420 thousand square meters at the end of 2Q, it remains in fourth position nationwide based on its amount, wide variety in size of available spaces and the presence of institutional developers.

Tijuana, León and Mérida maintained the size of their corporate inventories this quarter and did not register the start of new buildings, maintaining vacancy rates ranging from 12 to 14%, the lowest values registered at the national level.

Both Tijuana and León adjusted their median rental price up by 40 cents on the dollar and Mérida increased by $ 1.70, the highest increase nationwide. Another common element in these three markets is the low vacancy reported in the period.

The future of the office sector still has to go through multiple challenges to reinvent itself, such as the simultaneous presence of personnel who went to second term, an office with fewer fixed positions assigned, areas that can be used for multiple purposes; spaces where connecting remotely opens up new possibilities for collaborative work.

Read: National Real Estate Report Solili Offices 1Q 2021

Reconfigurable meeting rooms, teleworking areas in which the personnel who so decide will remain within the facilities 2 to 3 days a week and those who design the internal distribution of workers together with the furniture, must ensure that the spaces represent the essence of the corporate culture in each company.

Although some companies have announced the return of their employees to offices in a hybrid system, most still keep their teams working from home, however, the positive part is that some have made corresponding adjustments to the budget allocated for rent of offices, which represents the second highest egress of a company, only behind its payroll; therefore, from the second half of 2021, the leasing of corporate spaces could begin to increase.