At the end of the 3Q of 2024, the office market in Mexico continues in a recovery phase. The arrival of new investments in the sector shows the positive progress in the main indicators throughout the year, reaffirming the interest of companies in the corporate segment.

Inflation in the country continues to slow down, and closes the first half of September 2024 with an annual rate of 4.6%, below the expected projections. This behavior reflects greater economic stability and greater control of market prices. The decrease in the IPC could result in continued cuts in the interbank reference rate by the Banco de  Mexico, which is at 10.5%.

The exchange rate is positioned at $19.60 pesos per US dollar, reporting a depreciation of 8% in the last year, according to figures reported by the Official Gazette of the Federation.

In this context, the national office inventory closed the 3Q of 2024 with 17.4 million square meters, reporting an annual increase of 2.3%. The new market supply added 6.7 thousand square meters of offices that were incorporated into the inventory.

The only office markets that completed the construction of buildings are Mérida with 4.1 thousand square meters and Querétaro with 2.6 thousand square meters.

The national vacancy rate is at 17.5%, reflecting an annual decrease of 1.4 percentage points. This decrease in the indicator is due to the moderate behavior of the move outs of office spaces in the last year along with a demand that has remained constant.

The city of Tijuana registers the lowest vacancy rate, with 6.1%, followed by Mérida, which closes with 7.5%. In contrast, the markets of Puebla and Mexico City have the highest vacancy rates, with 25.2% and 19.3%, respectively.

At the end of the third quarter of 2024, the total leasing of the eight office markets in the country reports 170.5 thousand occupied square meters. Mexico City leads the demand, concentrating 69% of the occupancy during the quarter, followed by Monterrey with 14% and Guadalajara with 8%.

The demand for offices during the course of 2024 shows a stable behavior, with an accumulated figure that amounts to 600 thousand square meters. This figure is equivalent to 75% of the accumulated demand in the same period of 2023.

The average rental price for offices nationwide is at $20.01 USD/m²/month for the end of the 3Q of 2024 and reports no variations compared to the same period in 2023.

The Tijuana office market remains in first position with the highest rental prices in the country reaching $21.53 USD/m²/month, followed by Mexico City with a rental price of $20.91 USD/m²/month, being the only markets in the country that exceed the national average price.

Likewise, the lowest office rental prices in the country are found in the markets of León, Guanajuato, with a price of $11.90 USD/m²/month followed by the Puebla market which reports a price of $14.42 USD/m²/month.

The construction activity of corporate buildings in the country at the end of the third quarter of 2024 reached 1.2 million square meters under development, remaining at levels similar to those reported throughout the last year. National developers reaffirm the cautious approach they have adopted in the face of market behavior, and no new project starts were recorded during this penultimate quarter of 2024.

Mexico City and Monterrey continue to be the main growth centers of the corporate sector, concentrating 58% and 18%, respectively, of the total space under construction.

The office market in Mexico continues to stand out as an attractive option for both national and international companies, thanks to its strategic location, global connectivity and competitive costs

The corporate market has experienced positive signs, evidenced by a sustained demand that reflects the interest of companies to invest in the country. The decrease in vacancy levels, together with the stability in rental prices, represents an encouraging outlook for the office real estate segment.

However, the sector still faces important challenges, which has led developers to be cautious about the detonation of new projects. In this context, the corporate market remains highly competitive, requiring companies to adapt to new dynamics to remain relevant and efficient in a constantly changing environment.