The industrial real estate markets of Baja California, such as Tijuana, Mexicali y Tecate, have been the ones that have reflected the greatest downward adjustments in their vacancies at the national level.

It is no coincidence that being part of a border as dynamic as the one that develops between the United States and Mexico, they receive all the pressures of the exhaustion of industrial inventories of markets in southern California.

Tijuana and Tecate together, closed the first quarter of 2022 with the lowest vacancies nationwide, below 0.6%, reaching availability levels of 47 thousand, 3.4 thousand square meters, respectively.

The annual growth rate of inventories in Baja California, analyzing Tijuana and Tecate between 1Q 2022 and 1Q 2021, reaches 6.4% after coming from 3% between 1Q 2021 and 1Q 2020. This allows us to point out an increase in growth of more than double, driven by the large number of constructions that are revitalized after the pandemic.

Check here: Behavior of FIBRAS during Covid-19

It must be considered that the gross demand, specifically in the case of Tijuana, grew between 2020 and 2021 at a rate of 63%, closing 2021 with almost 770 thousand square meters that placed it in third place nationally, only below Monterrey and Mexico City.

While in Tecate, inventory growth was much smoother at a rate of 5% per year.

In these cities there was a confluence of both BTS and speculative projects, although the latter initially had less participation, which has been changing in recent quarters.

Now if we analyze the corridors in Tijuana, corridors such as El Florido-Boulevard 2000, Otay-Alamar and La Mesa Rapida do not currently have available spaces and almost 65% of the entity's inventory is concentrated there.

This situation has been the trigger for the rental price in these submarkets to reach $6.00 dollars per square meter per month, the same level registered in Mexico City.

Of interest: National industrial vacancy is less than 3%, decreasing by more than half in just one year

Likewise, in Tecate, the current availability is concentrated in Mexicali-Tecate, where the 3.4 thousand square meters vacant in this border market are located. Let us also remember that in the case of Tecate, it was one of the few markets where negative net demands were registered during the first half of 2021, a situation that was subsequently reversed towards the end of that year.

The coming quarters will continue to be influenced by the high competition from institutional developers who live on the border, where we believe there will be more momentum for the development of land with industrial services due to the scarcity of finished warehouses in these markets.

Likewise, we should expect a greater participation of speculative projects in intermediate sizes between 3 and 7 thousand square meters where there is a balance between the amount of investment and risk that is very attractive for the border industrial developer.