In recent months, the industrial real estate market has been dominated by northern cities. In this sense, in the northern border there was a shortage of supply due to the increase in demand that is presented, for which rental prices increased by up to 23% in different submarkets.

An example of this is Tijuana y Ciudad Juárez, which closed the first quarter of 2022 (1Q2021) with rental prices of 5.40 and 4.72 dollars per square meter (m²) per month.

While, Tecate and Mexicali showed increases of 15% and 14%, respectively, with prices of 5.30 and 4.72 usd/sqm/month.

Check here: Developers explore new areas north of Mexico City due to land shortage

The considerable increase in rental prices registered as of 1Q2022 is a consequence of the null vacancy that the border markets present. In that sense, Tijuana, Ciudad Juárez and Tecate remained with a vacancy of 0.6%; while Saltillo and Reynosa reported availability of 3.7% and 3.1%, the lowest levels recorded in the last two years.

On the other hand, the increase was also affected due to the growing inflation suffered by Mexico, registering 7.45% in March. Said increase is motivated by the increase in the prices of LP gas, gasoline and basic foodstuffs.

At the end of 1Q2022, the industrial markets of the northern border of the country managed to accumulate 54% of the national gross demand. Under this premise, Monterrey totaled 25% of the national gross absorption, registering 463,000 m². While Ciudad Juárez and Tijuana ranked fifth and sixth nationally with 172,000 and 130,000 square meters.

Of interest: Industrial sector pushes demand towards the north of the country

This increase in demand is due to the multiple processes of relocation of manufacturing production, together with the growth of the logistics sector. Therefore, real estate developers are working on the construction of industrial warehouses that are better located and with more technology to meet demand.

A reflection of this is the beginning of the construction of industrial buildings in Monterrey with 44,000 m², Saltillo with 84,000 m² and Tijuana with 78,000 square meters.

However, the visible increase in construction material costs will be directly transmitted to industrial rental prices. Despite this, construction activity is expected to continue throughout 2022 and portfolio movement among the main developers will maintain prosperity on the border.

In Solili you can consult industrial warehouses available in Guadalajara and Ciudad de México

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