Guillermo Medrano, general director of the real estate investment trust Fibranova commented that inflation in construction is 75% in dollar terms in the last 30 months.

The businessman explained that it is clear that for the purchase of a property to result in cash flows to investors, "we do not make transactions below 11%", so the Cap Rate has to exceed its cost of financing.

Check here: Querétaro developers boost industrial supply in the face of sustained demand

In a conversation with the journalist Mariel Zúñiga in the #En Concreto Contigo program, she explained that in the transition in which we find ourselves, "high inflation means that the replacement costs of our buildings are not reflected in the rents of the existing portfolios, the portfolios they are with lease contracts and these are linked to general inflation levels but construction inflation is 75% in dollar terms in the last 30 months”.

Technically existing portfolios should be renting 30% higher, he warned.

And he pointed out that the biggest factor is not construction, "it is money, the rate triples in the particular case of us, the income-investment ratio is at levels of 11%, we are clear that we must have profitability for investors and that It is seen in an increase in the Cap Rate”.

The only way to maintain profitability is to increase the Cap Rate and have business in real estate projects in dollars with a matrix rate guarantee, he said.

Of interest: Industrial construction in Mexico experiences boom in large buildings

And he said that regardless of the fact that the demand for industrial buildings is going through an excellent moment, the lack of infrastructure, not only electricity, drainage, water, can be a brake and at the same time "it is an interesting situation and a challenge for developers," he said.

In Solili you can consult industrial warehouses available in Mexico City and Guadalajara

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