The massive injections of liquidity that the central banks of various countries have placed in their economies affect the rise in prices that has been observed worldwide.

The lag in demand for a large number of products and services generated significant economic contractions that have affected multiple sectors, although not all equally.

In the specific case of industrial construction, there are two groups of factors that affect price performance in this market: extrinsic and intrinsic.

Among the extrinsic factors, the increase in the prices of raw materials, such as steel and cement, has affected builders and real estate developers, making it more expensive to build industrial buildings or homes.

In general terms, inflation in Mexico stood at 5.75% per year in the first half of July, as published by the National Institute of Statistics and Geography, INEGI. The indicator thus spun four and a half months above the Banco de México target of 3%, with a possible variation of one percentage point.

Check here: Banxico estimates inflation at 5.7%, raising the reference rate by 25 basis points

In the intrinsic and inherent factors of each market in particular we have the balance between supply and demand, of a product that on average is built in 6 to 9 months and that each time incorporates new elements of technology and design.

The new demand for increasingly larger lots can extend the settlement of the buildings that are built.

In these markets where supply fails to satisfy demand, which has been in continuous growth, prices tend to rise as reflected in Solili's results in the Industrial Report 2Q 2021.

In national terms, the average rental price of industrial warehouses in Mexico closed at $ 4.5 dollars per square meter per month, a figure that represents an increase of 7 cents on a quarterly basis and 9 cents on a dollar in annual terms.

Saltillo and Puebla registered the highest quarterly increases with 30 and 20 cents per square meter per month, respectively.

In the particular case of these markets, the vacancy was reduced considerably, in the case of Puebla the quarterly reduction was 1.3%, the maximum reduction at the national level and in Saltillo the vacancy decreased by 0.4% to close at 6.2%.

Guadalajara, Tecate, Reynosa, San Luis Potosí and Guanajuato reflected the stability of rental prices, keeping the prices of the previous quarter constant.

Monterrey, the second industrial market in the country for its amount, has increased the rental price by almost 25 cents, taking as a reference since the pandemic began, closing at 4.25 dollars per square meter per month.

Of interest: Industrial rental prices in Mexicali at historical levels

Ciudad Juárez, which maintained a gross demand of 113 thousand square meters as of 2Q 2021, also adjusted its rental price upwards by 10 cents, having decreased its vacancy by 21 thousand square meters.

The industrial real estate market in Mexico has been strengthened by the pandemic and developers have been competing to take advantage, improve holdings in their portfolios, diversify in those areas they consider most profitable and renegotiate loan terms.

Another fact to highlight is that the start of new construction represented 72% of the demand at the national level, which indicates an important correlation between indicators in terms of inventory replacement, which did not manage to reach the level demanded by demand and this finally affects the rent price increase.

Investment in large industrial parks with modular warehouses that can form large surfaces, of much higher heights than the market was used to with rising rental prices seems to be a scenario that is expected to remain in the remainder of 2021.