The northern border has historically generated commercial, industrial and transit activity for goods and people with multiple benefits for both economies.

At present, world geopolitics, with the development of the war between Russia and Ukraine, still brings serious consequences for many of the countries of the world, however, Mexico has remained strong and stable, especially in terms of industrial demand which grew by 66% at the end of 2021, far exceeding investor expectations.

At the end of the first quarter of the year, the northern and border markets again take the lead, grouping 57% of gross demand and Monterrey is now the market with the best performance, which manages to concentrate 27% of the national gross demand in 1Q 2022 .

The northern markets detonate a frenetic pace of industrial construction where more than two million 500 thousand square meters are built at the end of the first quarter of the year to meet the growing manufacturing and logistics demand in the area, where Monterrey is also at the forefront with the half of these constructions in process.

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The northern part of the country continues to capitalize on the crisis condition that originated from various causes, to which are now added the confinements in cities in China due to the increase in new cases of Covid, which will again affect the flows of merchandise to America.

Examples abound, such as the American toy manufacturer Mattel, which invested 50 million in the expansion of its plant in Escobedo, which now occupies 200,000 square meters and becomes the largest in the world, surpassing the centers in China, Vietnam and Malaysia. . Lines such as electronics, mass consumption, automotive, furniture, food and various logistics and storage formats cover the demand.

The predominance of Class A in the gross demand is evident and the BTS project formats also account for just over 70% of the demand, although there is precise knowledge on the part of the developers of the need to push speculative projects in a market of very little vacancy.

Chihuahua and Saltillo are the northern entities with the highest vacancy, which are around 4.8% and 3.7% at the end of 1Q 2022, respectively, while the minimum levels are concentrated in Tijuana y Tecate, which reported figures below 1.0%.

Of interest: Monterrey continues leadership in demand for industrial real estate

The effects of an excessively low vacancy will be reflected in rental prices, which in the case of Tijuana is $6.00 per square meter per month, which makes it, along with Mexico City, the market with the highest price on a national level.

Another important effect that is observed in the northern markets is that since there is such a large volume of new buildings in the inventory, the participation of warehouses with cutting-edge characteristics, sizes, heights and facilities that tenants require increases, and thus a circle is generated. virtuous in these markets.

Financial schemes and negotiation options also broaden the range of demand requirements in a time of high inflation where the direct costs of building a new facility can become a competitive advantage for developers experienced in construction processes and specifically with proven capabilities to manage supplies at the border.