After the recent cut by the Bank of Mexico, the funding rate is now at 10.5%, its lowest level since September 2022. This decision reflects the central bank's intention to stimulate the economy by reducing the cost of credit for encourage new investments.

As for inflation, it showed an acceleration during the second half of October, with a biweekly variation of 0.43% compared to the previous fortnight. This increase brought the annual rate to 4.69%, which indicates that inflationary pressures, although moderate, are still present. Despite these adjustments, annual inflation remains on a relatively controlled trajectory compared to the levels observed in 2022, reflecting the cumulative effect of the policies implemented by the Bank of Mexico.

In this context, the inventory that includes the eight office markets in Mexico closes the month of October 2024 with a total of 17.4 million square meters. The office vacancy rate nationwide stands at 17.4%, reporting an annual decrease of 1.5 percentage points.

The demand for the office market nationwide ends in October 2024 with a total of 73 thousand square meters, being half of the occupancy reported during the month of October of the previous year. The markets that concentrate the leasing activity are Mexico City with 64% of occupancy, followed by the markets of Monterrey and Guadalajara with 14% and 10%, respectively. During the period from January to October 2024, the accumulated demand for offices in Mexico reached 670 thousand square meters, reporting a 28% decrease compared to the accumulated demand during the first ten months of 2023.

The office move out activity nationwide in the month of October, closing with 33 thousand square meters, being 45% in proportion to the office leasing activity that occurred in the month. Mexico City is the market that reports the highest volume of freed space, accounting for 90% of office move outs in the country.

The construction of corporate buildings in Mexico at the end of the tenth month of 2024 reports a total figure of 1.2 million square meters, remaining within the same levels reported in the month of October 2023. During the month, no new corporate construction starts were reported in any of the country's office markets.

The average office rental price nationwide remains around $20.00 USD/m²/month, without significant changes compared to 2023. Tijuana and Mexico City continue as the markets with the highest prices in the country, being the only ones that exceed the national average. In Tijuana, the rental price reaches $21.70 USD/m²/month, while in Mexico City it is $20.88 USD/m²/month.

The contraction in accumulated demand throughout the first ten months of the year suggests a tendency of adjustment in the sector, a phenomenon that could be linked to a series of economic factors such as changes in national and international economic dynamics, the increase in remote work and the adoption of hybrid office models. As a result of this decline in office leasing activity, developers and landlords are responding cautiously to market conditions, focusing on stabilizing current occupancy levels before considering launching new projects.