Among the different types of real estate, the segment of industrial warehouses has become the most dynamic due to its occupations, price increases and demand; however the start of construction of projects of this type, faces challenges in the short term.
According to the “Panorama of the industrial market in Mexico 1Q22”, presented by Datoz, in the first three months of the year, the start of industrial works for its construction They were located at 574,121 square meters (m2), which represented the lowest rate of new construction for a first quarter in the last six years.
Thus, the empty space in the country stands at 3 million 871,810 square meters, although in a sample of 21 markets, only three (Hermosillo, Nuevo Laredo and Aguascalientes) increased their annual availability rate in the first quarter of the year.
Sergio Mireles, general director of Datoz, explained that despite the demand and plans of companies to establish themselves in Mexico, the low availability of space is also due to the lower construction works.
“The rhythm of the construction Compared to the demand, we would possibly be seeing increases in the issue of starting prices for the next quarter,” he commented.
Although the main corridors in the country, such as Mexico City, Tijuana and Ciudad Juárez, among others, registered the start of works in progress, not all did so at the same rate as in the first three months of 2022.
“At the beginning of the construction11 of the 21 markets investigated by Datoz had at least one start of construction so far this year. Of these, seven had more beginnings of construction than in the first quarter of last year”, explained Pablo Quesada, director of new product development at Datoz.
“The increase in the cost of construction and energy has caused developers to be more cautious with the start-up of new projects, in some cases we have noticed a preference for building buildings of the Built to suit (BTS) type, whether for rent or sale, instead of speculative”, Quesada explained.
It should be noted that the BTS buildings are built under parameters requested by the tenant, so the space in construction you practically have a certain client, while speculative spaces can house almost any type of industry, but you do not have a guaranteed occupant.
Thus, in the first quarter of the year, the total inventory of industrial space registered a total of 88 million 813,963 square meters throughout the country, reported Datoz.
Possible effects on industrial buildings
For Mireles, the caution about starting new works will have two effects on the industry, on the one hand, the rise of secondary and tertiary markets will be seen, that is, areas that are not as popular as Mexicali, Saltillo or other border areas.
In addition, said the specialist, it will be possible for investors from other real estate segments to join the construction in the industrial market, if they have well located sites to have energy, in key cities.
“We have seen that there have been investment funds that want to enter the industrial market, (but) that are not operators,” he explained.
North, promoter of works
In the first three months of the year, the northeast region, which includes areas of Nuevo León, Tamaulipas and Coahuila, leads the start of industrial constructions.
| Zone | Percentage of the national total |
| northeast | 35% |
| Northwest | 29% |
| Hub | twenty% |
| Bajío-Occident | 16% |
| Source: Dataz |
constant demand
Pablo Quesada commented that the demand for industrial space in Mexico has been good, due to the trade war between the United States and China, the war in Ukraine and the preference for reducing the distance in supply chains, so the search for industrial space in Mexico remains constant.
The constant demand for space has influenced the reduction in vacancy rates and price increases, as well as gross absorption data.
“The year 2022 is a continuation of the dynamism of 2021 or possibly even exceeds last year, which broke many records in various indicators,” said Sergio Mireles.
Input prices, the brake on developers
For Datoz specialists, the inflation registered on the materials of the construction and the increase in land prices has raised the cost of construction, so developers are evaluating whether this increase is cyclical or not, since they run the risk of having to rent at a premium, if later there is an adjustment in the costs.
At the end of last March, inflation on materials for the construction It was 15.57% compared to the same month of 2021, according to Inegi figures.
The upward trend in inputs for the construction It is not recent, because only in December 2021, the materials registered an annual growth of 17.38 percent.
“These increases are cyclical, they do not necessarily come to stay,” said the general director of Datoz.
“You have to think that if you as an investor today build with high prices, you are left with a high product and if suddenly the price of the material drops, you are left with a price of constructionn higher and to remain competitive in the following years you would have to go out at a higher value than another organization”.
Beginning of works
In the first quarter of 2022, only four markets in the country began to build more than in the same period last year.
| Runner | Growth in construction starts |
| San Luis Potosi | 143% |
| Tijuana | 26% |
| Guadalajara | 43% |
| Saltillo | 4% |
| Source: Dataz |
Energy, another stone in the shoe
For both specialists, the perception of a shortage of energy has also modified the plans of the developers, since before starting a work, it is necessary to analyze whether it will be possible to have a sufficient supply of energy, especially in activities such as manufacturing and of transformation.
“Not so much generation, but what we perceive is that the Federation, through the Federal Electricity Commission, in wanting to give it importance, has focused on generation, but has neglected investment in transmission and distribution, so that it reaches the development centers around the country,” Mireles said.
For Datoz, it is necessary to channel investment for the distribution of energy throughout the country, otherwise it will be an obstacle for the arrival of new investments in the markets most affected by the electricity challenge.