The strong pressure exerted by industrial demand in Mexico has been decisive in the significant depletion of available inventories and has led to strong adjustments in rental prices in some markets.

Tijuana, Ciudad Juárez, Mexicali and Mexico City in the last year adjusted their rents upwards by $1.2, $0.90, $0.80 and $0.70 dollars per monthly square meter, respectively.

Mexico City and Tijuana reached the top of rental prices at the national level with $6.20 dollars per square meter per month, followed by Ciudad Juárez with $5.40 dollars per square meter per month.

Monterrey, Querétaro, Reynosa and Guadalajara at the end of June 2022 share the increase in the annual rental price of $0.20 dollars per monthly square meter, registering rental prices that range from $3.80 in Reynosa to $5.00 dollars per square meter that Guadalajara registered.

Check here: 3.5 million m² of industrial buildings were leased in the country during the first half of 2022

Another key factor in the increase in prices in some markets is due to the fact that the most recently built warehouses and built to higher standards and large maneuvering yards are the ones that make up the transactions for the period, as is the case of Guadalajara in which It's from the year 2022.

At least four factors accelerate the increase in rental prices of industrial goods, including the scarcity of land with infrastructure, the escalation of inflation that affects direct costs when building, the competition of companies that seek to obtain a good for rent, well for expand operations or to enter a new market, and, finally, the constructive and technological changes that seek to offer increasingly competitive ships.

The first factor occurs in those markets where the extension of the industrial footprint has occupied most of the land where zoning ordinances allow industrial development, be it light or heavy industry or intermediate manufacturing. To this must be added that there is availability for an adequate electricity supply and white water supply, which often determines these new initiatives.

Second, inflation that reaches 7.99% as of July 2022 and a current interest rate of 7.75% affect developers who are currently carrying out industrial projects, which directly points to the final rental price.

Of interest: Half of the country's industrial markets with vacancy rates below 2%

The growing scenario of demand in the midst of a vacancy that adjusts downwards in most markets in an environment of few bidders finds an outlet in the price increase. In turn, the new constructions that advance need to be coupled in compliance with environmental criteria and the supply and disposal of resources.

Finally, the improvements that we currently observe in the new industrial buildings such as much higher ceilings, larger areas for maneuvering yards and platforms, as well as the provision of electricity and white water supply and efficient disposal of wastewater, where compliance with environmental certification criteria have affected higher costs that increase the starting price of the new industrial supply.

As these four factors will continue to remain in force in the remainder of 2022, rental prices still have room to increase, unless speculative construction is significantly activated, which could slow down the rise in rental prices.