Mexico has received 42 new companies in 2023 due to nearshoring: Market Analysis
By Market Analysis
November 6, 2023
As of September 30, 2023, Market Analysis recorded the arrival of 42 new companies in Mexico under the concept of nearshoring. These companies did not have any type of production or logistics process established within the national territory.
According to the quarterly records of the leading market intelligence company, throughout these three semesters of 2023, new companies in Mexico generated a gross absorption of 4.72 million square feet concentrated mainly in the industrial markets of Monterrey, Querétaro, Tijuana and La Laguna.
Regarding the country of origin of the companies, 28 came from China, eight from the United States and two from Taiwan; while the remaining four companies came from Korea, Mexico, Germany, and Italy.
According to figures from Market Analysis, at the end of the third quarter of 2023, the industrial market of Aguascalientes consolidated a gross absorption of 413,600 square feet, thanks to the closing of four transactions.
Most of the absorption of industrial space was carried out by companies from Turkey (42.9%), as shown in the graph. While the rest of the demand was generated by U.S., German and Japanese firms.
The companies responsible for the transactions registered in Aguascalientes during this second quarter were, the Turkish company Mata Automotive (Tesla supplier) (177,600 SF), Tenneco (126,000 SF), Balluff (61,300 SF) and Parker (48,500 SF); with the participation of FINSA and GC Peasa as developers.
The Chihuahua industrial market recorded four transactions at the end of the third quarter of 2023, equivalent to a gross absorption of 991,800 square feet. This figure is 2.5 times higher than that recorded during the same period last year.
Given its proximity, the United States continues to be the origin of most of the capital invested in this market (72%), while Mexican and British companies share the remaining percentage
Based on quarterly information from Market Analysis, the representative transactions of this market as of September 30, 2023 were carried out by the companies Honeywell (670,000 SF), LD Logística (192,000 SF), GKN Aerospace (86,000 SF), and Dana (40,000 SF) destined mainly to manufacturing processes and distributed in the Intermex Carolina industrial park, Parque Sur and FINSA El Saucito; with the participation of developers such as Intermex, MPA Group and American Industries.
Guadalajara was the third market with the highest absorption in the Bajío at the end of the third quarter of 2023, according to figures compiled by Market Analysis. This market registered a gross absorption of 1.23 million square feet, with El Salto being the submarket that concentrated most of the demand.
Guadalajara's vacancy rate as of September 30 was 3.57%, with 1.49 million square feet available, distributed in the El Salto and South Periférico submarkets. Despite the fact that the availability of industrial space in this market is not limited, Guadalajara has a high rate of projects under speculative construction, currently having 2.08 million square feet under this type of construction, equivalent to 46.7% of the speculative construction currently being developed in the Bajio region.
Gross absorption in this market showed a year-on-year decrease of 49%, however, the size of the industrial market has been increasing due to the constant delivery of new developments.
90% of the gross absorption of the market was concentrated in inventory spaces, while the rest of the absorption corresponded to expansions. Manufacturing is the end use of 51% of the spaces in demand, given that some logistics sectors have begun to gain relevance.
The five most important transactions in the first half of the year in Guadalajara were carried out by Walmart (269,000 SF), Pisa Farmacéutica (242,000 SF), Aptiv (168,000 SF), Arrow Electronics (107,000 SF) and Aptiv (128,000 SF) by developers such as FINSA, Prologis, Alveo Capital and Proverde.
Market Analysis has recorded that in the industrial real estate market of Guanajuato, a gross absorption of more than 3.68 million square feet distributed in 22 consolidated transactions was achieved at the end of the third quarter of 2023; It is also the third market with the highest absorption of industrial spaces nationwide, only behind Monterrey and Mexico City.
Lintel, Skyplus and Artha Capital were the developers in charge of the buildings that were part of the representative transactions of the market, carried out by companies such as Donaldson (678,000 SF), Norman Mexico (678,000 SF), Mercado Libre (460,000 SF), Scherdel (270,000 SF) and Zorro Abarrotero (206,000 SF).
56% of the spaces absorbed correspond to leases and most of the transactions were carried out in the submarkets of León and Silao. The absorption of industrial spaces in Guanajuato for Q3 2023 was 2.2 times higher than that recorded during all of 2022.
Guanajuato closed this third quarter as the market with available space in the region, with just over 1.93 million square feet available concentrated mainly in the Celaya and Silao submarkets, and a vacancy rate of 3.97%
The origin of the capital settled in Guanajuato during this semester is diverse, Taiwan and the United States contributed more than 60% of these.
At the end of the third quarter of 2023, Ciudad Juárez's industrial real estate market has positioned itself as the fourth market with the highest absorption of industrial spaces, registering 18 transactions equivalent to 3.07 million square feet, concentrating 9% of national demand.
At the end of the third quarter, Juárez accounted for 14% of speculative construction nationwide, with more than 2.95 million square feet under this type of project. Likewise, Market Analysis recorded an industrial growth of 4.30% in this market, thanks to the delivery of several projects totaling more than 3.16 million square feet.
Manufacturing accounted for 66% of the final use of the spaces absorbed in these three quarters of the year. However, for the market in which manufacturing originated, the increase in the presence of logistics activity shows a reconfiguration of the industrial composition of the market caused by the nearshoring effect.
Following the trend of the previous quarter, supply chain was the sector that generated the largest share of space absorption in Juarez, followed by the automotive, electrical/electronics, food and beverage, packaging, e-commerce, and medical industries.
Companies from the United States had the highest participation at the end of the third quarter (32.7%), followed by Canadian (15.6%), German (14.9%), Mexican (11.3%), Taiwanese (7.8%), among others.
Data from Market Analysis show that, at the end of the third quarter of the year, the absorption of industrial space remained unchanged and so far there is only one transaction recorded by the U.S. company CTS with a demand for space of 107,000 square feet in the West submarket.
Manufacturing was the final use of the leased building, which is quite logical since it is a region focused mainly on this type of industry given its proximity to the northern border of the country. In this market, industrial diversification is low and until September 30, the electrical/electronics industry was the only one that generated demand for spaces.
At the end of this third quarter, the Matamoros market had a vacancy rate of 0.75%, this being the lowest in its history; equivalent to about 153,400 available square feet in Class B inventory buildings distributed in both submarkets.
According to data from Market Analysis as of September 30, 2023, logistics was the final use of all the spaces absorbed in the Mexico City market, thanks to the fact that the expansion of this sector has been favored by the rise of e-commerce and the relocation of distribution centers in order to reduce operating costs by trying to make the last part of the distribution process more efficient.
So far in 2023, this market has been quite dynamic; However, the lack of available industrial space limits the closing of transactions. The absorption recorded so far is equivalent to 50% of the total for 2022.
Regarding the availability of spaces, Mexico City has just over 380,000 square feet available. Precisely because of the limited availability and the strong increase in the demand for space in most markets, Mexico City is the second market with the highest rates, only behind Tijuana; closing this first half with a range of $0.64-$0.69 dollars per square foot.
At the end of Q3 2023, 3.58 million square feet under speculative construction were accounted for, distributed mainly in the submarkets of Tultitlán, Coacalco, Cuautitlán and Tlalnepantla.
Most of the investments registered in this market up to September were made by companies from: Argentina, Mexico, the United States, Germany, China, France, Dubai and Denmark.
At the end of the third quarter of 2023, as usual, Monterrey's industrial real estate market registered the highest demand for space in all of Mexico, with a gross absorption of 10.63 million square feet distributed in 73 transactions; with the Apodaca submarket having the highest participation rate (49%), followed by Ciénega de Flores (24%), Santa Catarina (10%), Escobedo (8%), Pesquería (6%) and Guadalupe (4%).
Leasing consolidated 92% of gross absorption through the end of Q3, while the purchase of industrial space continues to increase, as many companies have decided to permanently move their operations to Monterrey.
Being the most important industrial market in the country thanks to the high demand for industrial spaces, the availability of real estate continues to be limited and at the quarterly cut-off, the vacancy rate stood at 0.82% with just over 1.17 million square feet distributed in the submarkets of Apodaca, Escobedo and Ciénega de Flores.
Market Analysis forecasts that the availability of industrial space in this market will continue to decline, mainly caused by the nearshoring effect.
Because of the above, the construction of new warehouses continues to rise and currently this market has 6.06 million square feet in spaces under speculative construction and 2.23 million square feet in BTS space development.
Rates in this market have reached an all-time high due to growing demand and low vacancy rates, and prices in this market were in the range of $0.54-$0.57 per square foot.
According to Market Analysis' records, the five representative transactions in this market were carried out by the companies LGMG (592,000 SF), DHL (538,000 SF), Constellation Brands (340,000 SF), Northern Tool (311,000 SF) and Polaris (297,000 SF); Nexxus, Tredec, Vesta, and VYNMSA are the developers of these spaces.
The industries responsible for most of the absorption of industrial spaces until the end of the third quarter of the year were automotive, supply chain, electrical/electronics, construction, food and beverages, metalworking, plastics and chemicals, and pharmaceuticals, among others.
Regarding the country of origin of the companies that have decided to occupy the spaces within this market during these three quarters: U.S. companies continue to lead the demand for spaces, being responsible for 32.7% of the registered absorption; followed by Chinese (23.8%), Mexican (20.2%), Korean (6.5%), German (5.2%), to mention the companies with the largest share.
At the end of the third quarter of 2023, the industrial real estate market in Nuevo Laredo registered two transactions in the West submarket, thus having a gross absorption of 404,200 square feet, being 7.6 times higher than that recorded throughout 2022.
With a vacancy rate of 0.00%, and a relatively low demand compared to the other markets in the northeast region, Nuevo Laredo has no record of spaces under speculative construction or BTS.
The absorption of this market was concentrated in two inventory spaces leased by the companies Medline (224,130 SF) and Cargoquin 3PL (180,131 SF) in the Rail Center and Oradel Industrial Parks, with the participation of Oradel and FINSA as developers.
Absorption by type of industry was mostly generated by the medical industry, which managed to absorb 55% of the spaces in Nuevo Laredo, followed by the supply chain that managed to occupy the remaining 45%.
Information generated by Market Analysis indicates that, as of September 30, 2023, the industrial real estate market of Puebla achieved a gross absorption of 504,600 square feet thanks to the closing of four transactions.
Gross absorption in this market during the first six months of the year was 12% higher than that recorded throughout the previous year.
68% of the demand for industrial space in the Puebla market was generated by the French company Schneider, while the remaining absorption was generated by companies from Germany, Spain and Ireland.
The representative transactions of this market were carried out by the companies Schneider Electric (343,600 SF), Kirchhoff (96,300 SF), Serra Soldadura (35,700 SF) and Adient (29,200 SF) with the collaboration of developers such as FINSA and Fibra Upsite.
With a vacancy rate of 1.06%, equivalent to 215,000 square feet available in the Cuautlancingo submarket. Despite the low vacancy rate, so far, Market Analysis has not recorded any buildings under construction. In addition, taking into account the low demand that this market presents, it seems unlikely that buildings will begin to be developed in the short term.
As of September 30, 2023, gross absorption in the Querétaro industrial market amounted to 2.21 million square feet thanks to the consolidation of 21 transactions; thus positioning itself as the second with the highest absorption of industrial spaces in the Bajío, only behind Guanajuato.
According to Market Analysis figures, this market has a high availability compared to the other markets in the country, with a vacancy rate of 4.25%, equivalent to 1.81 million square feet, with buildings available in both Classes (A and B) in two of the three submarkets that compose it.
Despite being the second market with the highest availability, Querétaro is the leading market in the construction of industrial warehouses in the Bajio region, with 1.66 million square feet concentrated in speculative projects and more than 720,000 square feet in Build To Suit spaces. The developments are concentrated in the Airport and North submarkets.
79% of the spaces absorbed were allocated to manufacturing processes, with the automotive, electrical/electronics, supply chain and chemical/pharmaceutical industries demanding the largest share of spaces.
Up to the end of the third quarter, 80% of gross absorption corresponded to leases, mostly concentrated in the Airport submarket. Absorption of Class B buildings accounted for only 12.5%, given that Class A buildings are still available in two of the three submarkets.
The five most important transactions in this market at the end of the third quarter were carried out by Avery (266,000 SF), RP Tech (210,000 SF), CJ Logistic (214,000 SF), Shanghai MFT (170,000 SF) and Magna (132,000 SF); with the participation of developers FINSA, Vesta, Construye Industrial IAMSA and EQT Exeter.
As part of the nearshoring effect on the northern border of the country, industrial diversification in the Reynosa market has been modified and the supply chain was the sector to which most of the absorbed space was allocated.
On the other hand, U.S. companies were responsible for 83% of the takeover; followed by companies from India.
According to figures from Market Analysis, four transactions have been completed in this market, totaling a gross absorption of 359,000 square feet. The transactions in this market were carried out by the following companies: GXO (138,000 SF), Baja Fullfilment (103,000 SF), Shresh (60,000 SF) and RR Donelly (57,000 SF) with the participation of the developers, Stiva, Centinela Property, Roca Desarrollos and ISG.
The industrial spaces available in Reynosa have been increasing; currently having a vacancy rate of 1.38%, equivalent to about 533,000 available square feet, mainly concentrated in the West submarket.
71% of the occupancy corresponded to the demand for inventory space and the remaining percentage to expansions of companies already established in the market.
At the end of the third quarter of 2023, the strengthening of the automotive cluster in the industrial market of Saltillo as a result of the nearshoring phenomenon has caused 54% of the industrial spaces demanded to be allocated to processes related to this industry.
So far, Saltillo has had a gross absorption of 1.96 million square feet, distributed in 17 transactions, mostly consolidated in the Ramos Arizpe submarket. Inventory space occupancy accounted for about 77% of the market absorption, while BTS space absorption accounted for the remaining 23%.
Regarding the availability of industrial space, Saltillo has a vacancy rate of 0.76%, with only 386,000 square feet available; of which only 94,000 correspond to Class A spaces located in the Derramadero submarket.
Despite the extraordinary demand presented during the past year by the nearshoring effect and the demand so far in 2023, the construction of spaces is not as high as in other markets in the region, and so far, there are just over 301,000 and 213,000 square feet under speculative construction and BTS, respectively; concentrated in the submarkets of Ramos Arizpe and Arteaga.
Representative transactions in this market were carried out by the following companies: Bic (195,000 SF), American Axle (181,000 SF), SA Automotive (176,000 SF), Kongsberg Automotive (167,000 SF) and Jiaxipera (156,000 SF); aimed entirely at manufacturing processes and with the participation of developers such as Davisa, VYNMSA and Amistad.
U.S. companies are the main responsible for the recorded absorption (48.4%), followed by companies from China (17.2%), France (16.2%), Mexico (9.8%) and Norway (8.5%).
San Luis Potosi
The industrial real estate market of San Luis Potosí registered the consolidation of 10 transactions, equivalent to a gross absorption of 1.11 million square feet, mainly concentrated in the WTC and Las Colinas submarkets.
The strength of the automotive cluster was noted and this industry demanded 88% of the industrial warehouses in this market; while the electrical/electronics industry and furniture manufacturing absorbed the rest of the space.
46% of the space demanded until the end of the third quarter was demanded by companies of U.S. origin, while companies from China, Germany and France demanded 29%, 14% and 11% of the space, respectively.
San Luis Potosi has a vacancy rate of 4.69%, the highest in the country, with more than 1.34 million square feet available. In addition to having more than 247,000 square feet under speculative construction and 321,000 under development of BTS projects.
Market Analysis points out that the representative transactions in the San Luis Potosí market were carried out by the following companies: Borgwagner (247,000 SF), Unison (226,000 SF), Continental (147,000 SF), Terrex (Faurecia) (120,000 SF) and Taxan Swe (73,500 SF); with the participation of developers such as Fibra Mty, Lintel, Seica and Argo.
Market Analysis recorded that Tijuana's industrial real estate market has the highest rental prices in all of Mexico, at $0.70-$0.74 per square foot ($7.53-$7.97 per square meter).
This is due to the fact that Tijuana is one of the markets that has benefited the most from the nearshoring effect, largely thanks to the fact that its border location allows it to be one of the favorite destinations for investors to relocate companies, which has not only generated a strong demand for industrial spaces that has reduced the vacancy rate considerably despite the development of multiple projects in the United States. the last few months.
Currently, the vacancy rate of Tijuana's industrial market stands at 1.14%; with about 976,000 square feet available primarily in the Rosarito and Libramiento submarkets.
Precisely because of the low vacancy rate, projects under construction continue to increase, with 2.26 million square feet under speculative construction and 630,000 square feet in BTS spaces.
At the end of the third quarter of 2023, 23 transactions were completed in Tijuana, equivalent to a gross absorption of just over 2.88 million square feet. Inventory spaces were the ones with the highest demand, concentrating 53% of the absorption, while the absorption of BTS spaces satisfied 44% of the demand and expansions occupied the remaining percentage.
Representative transactions in this market were carried out by the following companies: Scantibodies (4460,000 SF), Maerks (296,000 SF), Waldos (258,000 SF), TLC Moka (223,000 SF) and DHL (222,000 SF); with the participation of FINSA, Atisa, Frida, REI and Vesta as developers.
The countries of origin of the companies that occupied these industrial spaces were the United States, China, Germany, Denmark, Mexico, Korea and Italy.
Market Analysis has announced that the Toluca industrial market closed the third quarter of 2023 with a gross absorption of just over 367,000 square feet; presenting a decrease of 86% compared to what was recorded during the previous year.
The decrease in absorption is basically due to the scarcity in the availability of spaces to occupy within the market, since currently the vacancy rate stands at 1.89%, with 718,000 square feet available, equivalent to 54% of the available space in the entire central area of the country.
The total industrial space absorbed up to the end of Q3 corresponds to leases made in the submarkets of Toluca, of which 52% corresponded to the demand for Class A buildings.
The construction of spaces at the end of the third quarter in the Toluca market is without significant variations since the beginning of the year, totaling 370,000 square feet under speculative construction and without development of BTS projects.
Despite the fact that the industrial diversification of this market is usually quite broad, due to the low dynamism of these quarters, only the automotive industry and the supply chain managed to occupy spaces.
Capital originating in the United States, Mexico and Spain is responsible for the absorption registered in this market so far.
The representative transactions of this market were carried out by the companies Autotek (193,100 SF), Dicka Logistica (103,400 SF), and ALSUR (70,600 SF); with the support of developers such as Artha Capital, Prologis and Paragon.
More than 46% of the demand for industrial space generated by the new companies that arrived in the country during the first nine months of 2023 corresponds to the automotive industry; while the construction, electrical/electronic, metalworking, plastic, beverage and food industries, among others, demanded the rest of the spaces.