At the end of the last quarter of 2022, 454,000 square meters of industrial buildings are under construction in Ciudad Juárez, a figure that represented a historical record for this border market.

Of these projects currently under construction, a quarter corresponds to custom-made warehouses and the remaining percentage is concentrated in speculative projects that seek to stop the decline in registered vacancy. As these speculative projects began to be built, the tenants who demanded spaces advanced by closing pre-leases so as not to run the risk of being left without the property.

For its part, vacancy at the beginning of 2020 stood at 4.13% and closed 2022 registering 0.5%, after three years where gross demand maintained a growing pace.

Check here: Mexico City, Tijuana and Guadalajara concentrate industrial demand on speculative projects

The cumulative gross absorption in 2021 exceeded 612,000 square meters, which generated significant pressure on all the indicators in this market and although in 2022 the amount was 23% less, the accumulated amount boosted construction activity both in Ciudad Juárez and in the rest of the markets of the northern border strip.

A good part of this pressure came from the relocations that reached Mexican soil and from the companies that already operated in the region and that now required expansions to make their business models viable.

In the second quarter of the year, we saw investment announcements in the regional press such as the Roca Independencia Industrial Park, which will have an investment of approximately 45 million dollars and an extension of 620,000 square feet of construction.

Other investments reviewed by local media during 2022 correspond to the developers Prologis, Fibra Upsite, Grupo IGS and Real Estate Management and Services Group (RMSG).

Fibra Upsite, as part of its expansion project in the Mexican border area, will invest 120 million dollars to build an industrial space in the city, which will be used for the manufacturing sector.

Grupo IGS also started a new industrial park that has an area of more than 50,000 square meters and is built on eight hectares of land in the southeast of Ciudad Juárez, where the group has available land. 26 million dollars have been allocated to this investment since the beginning of the work.

The RMSG company also announced that it will invest 490 million dollars in Ciudad Juárez in the construction of an industrial megapark that is projected to house some 65 companies in the next five years. The new industrial park will have 140 salable hectares, which will house the first two industrial warehouses with an additional investment of between 500 and 800 million dollars.

If a tenant currently wants to locate an available industrial warehouse that is currently under construction, the options range from 13.3 to 43.4 thousand square meters with 64% availability of the total of 20 projects in various construction phases.

Of interest: In the northern markets of the country, industrial rental prices have increased at a faster rate

Nearly a dozen developers currently compete with their options, which encourages an offer in sizes, quality, and prices that result in benefits for potential tenants.

The geographic distribution of these constructions is concentrated in 73% on the South submarket, leaving the remaining 23% and 5% in the Southeast and Southwest submarkets, respectively.

In turn, prices also react to the low supply with an annual increase of 16.8%, reporting $6.01 dollars per square meter per month at the end of 2022. The highest rental prices in the last quarter of the year were registered in the South submarket, which reported $6.11 dollars. per square meter per month.

In the economic context of high inflation that has a direct impact on the construction of industrial buildings, they will continue to be the determining factors for the successful completion of the projects that are being started. In the case of markets on the Mexican border such as Tijuana, Ciudad Juárez, Mexicali, Tecate y Reynosa also have labor costs that have traditionally been higher than those of the central Mexican region.