Mexico City has been developing a gradual decrease in its industrial vacancy, which reaches its lowest level in the last three years, registering 0.7% at the end of the fourth quarter of 2023.

This situation occurs in a scenario where nearly 640 thousand square meters are still under construction, which although it seems a high figure if compared to the historical figures registered in the capital market, it does not manage to supply the demand in a timely manner.

However, there are corridors in the capital that report industrial vacancies below the average, as is the case of those that make up the CTT (Cuautitlán, Tultitlán and Tepotzotlán with percentages of 0.5%, 0.1% and 0.2%, respectively). If we refer to vacant surfaces, the corridors of Tlalnepantla, Toluca and Cuautitlán have 324, 310 and 225 thousand square meters, respectively. These three corridors contain 61% of the vacant industrial spaces in Mexico City.

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By the end of Q4 2023, gross industrial demand totaled 192 thousand square meters, slowing down the pace that it had in the third quarter of 2023, where it accumulated 327 thousand square meters of industrial warehouses. The composition of demand was equitable throughout 2023 if we analyze the three groups of sizes less than 10 thousand square meters, between 10 and 20 thousand square meters and surfaces above 20 thousand square meters.

The corridors of Toluca, Ixtapaluca and Tultitlán registered during Q4 2023 a total of demanded areas of very similar industrial warehouses between 41 and 57 thousand square meters, the latter amount belonging to Tultitlán. Other corridors such as Cuautitlán and Vallejo were also present in the demand areas this quarter with participation close to 14% and 8%, respectively.

This market, where both construction and demand have shown a strong inclination towards the speculative modality, has had throughout the year the presence of factors such as the scarcity of land with an industrial vocation that has limited further growth in speculative activity.

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Energy supply issues and the strength of the Mexican peso that affects the impact of income from contracts denominated in dollars are other elements that developers must also consider when undertaking an industrial project.

2024 will bring significant challenges for capital developers since vacancy is at unhealthy levels, which could lead the rental price to reach double-digit figures by the end of the year. Currently, this market reports an industrial average rental price of $7.20 per square meter per month, reflecting an increase of close to 22% annually.