Q3 2025 has passed under the sign of global economic caution, a factor that, while moderating expectations of accelerated growth, reaffirms Mexico's strategic position. Internationally, key economies, particularly the United States, have continued their adjustment process in the face of persistent inflation, maintaining a high interest rate environment by the Federal Reserve, which increases the cost of capital and moderates expansion decisions. This dynamic is compounded by geopolitical tensions that continue to incentivize supply chain diversification strategies, a structural driver for the Mexican industrial real estate sector.

The Mexican economy has shown a trajectory of moderate growth. The Gross Domestic Product has remained in positive territory, although with a slowdown in industrial activity compared to previous quarters. Inflation has continued its downward trend, allowing the Bank of Mexico to initiate and maintain a cycle of benchmark rate cuts. However, companies have faced a combination of a strong Mexican peso and more selective gross fixed investment, requiring stricter cost management. These economic indicators create a scenario in which the value and location of real estate assets become decisive for operational efficiency.

In this context, the industrial real estate market in Mexico closed September 2025 with a nationwide inventory of 109 million square meters, reporting annual growth of 5%. The markets that saw the largest increases during the third quarter of this year were Monterrey, with more than 600,000 square meters of new supply, followed by Mexico City and Saltillo, which each exceeded 200,000 square meters. The total number of new industrial buildings completed during the quarter nationwide was 84 buildings, a figure slightly lower than that reported in the previous quarter and the same period last year.

With such high volumes of new supply, industrial vacancy nationwide continued to rise, closing the quarter with a total of 4.8 million square meters of vacated space, 2 million more than the figure reported for the same quarter last year. The national vacancy rate ended at 4.4%, a still healthy figure, although alarm bells are already ringing due to the high volumes in markets such as Tijuana, with an 8% vacancy rate, and Mexicali, Reynosa, and Ciudad Juárez, which are hovering around 6%. The situation with the aforementioned markets is that vacancy is increasing, as is move out activity, and demand remains at levels well below those typically reported in the last five years. In contrast, the markets with vacancy rates below 2% are Mexico City, Saltillo, Puebla, and Aguascalientes.

The supply of industrial space in markets such as Tijuana, Monterrey, Ciudad Juárez, and Querétaro is extremely diversified in size, location, and price. This broad diversification has intensified competition, forcing developers to adjust their commercial policies to maintain their competitive spaces.

Vacancy in industrial space has undergone a notable reconfiguration, especially in the north of the country. Just two or three years ago, markets such as Tijuana, Reynosa, and Ciudad Juárez reported vacancy rates close to 0%. Currently, these same markets lead the way in terms of available space. In contrast, markets in the Bajío region have seen a decrease in vacant industrial square meters. This phenomenon is mainly explained by a combination of factors, including the slowdown in the pace of construction and the sustained increase in leasing activity.

Despite continued vacancy growth, the national average rental price maintained the growth rate reported over the past five years. The average rental price closed at $7.27 USD/m2/month, representing an increase of almost 0.50 compared to the same quarter of the previous year. It is notable that no market reported a price decrease. At worst, some markets such as Monterrey, Reynosa, and Querétaro showed stability with very slight variations.

Markets with notable price increases above the national average are Mexico City and Saltillo, which exceeded 10% annually. This phenomenon is explained by consistently stable demand, healthy and even low vacancy levels, and an increase in the construction quality of new buildings, among other key factors.

Regarding construction, although figures remain above the volumes reported in pre-pandemic periods, activity has experienced a significant decline over the last year. This pace has slowed, especially at the end of 2024 and so far in 2025, as a direct consequence of the high vacancy rates experienced in several of the country's main markets.

Construction activity closed Q3 2025 with a total of 4.8 million square meters, which was 1.5 million square meters less than reported in the same quarter last year. Monterrey and Mexico City stand out, together accounting for 50% of the national construction figure. Also notable in terms of volume are Saltillo, Querétaro, Guadalajara, and Tijuana, where developers remain very active.

This quarter, construction began on 52 new industrial projects in the country, totaling 1.2 million square meters. Mexico City is the most active in this indicator with a total of almost 400,000 square meters, followed by Monterrey with 175,000 square meters.

Leasing activity, although higher than last quarter, is below what was reported for 2024. During Q3 2025, the gross absorption figure was 1.4 million square meters. The markets of Mexico City and Monterrey remain the leaders, with very close figures, around 300,000 square meters each.

The markets that have decreased in the last year in leasing space, that is, in the demand indicator, have been the border markets, such as Tijuana, Ciudad Juárez, and Reynosa.

Net absorption of industrial space shows a similar trend to leasing, having fallen over the last year. At the end of the quarter, the Tijuana and Reynosa markets were the only ones that reported negative net absorption figures, meaning move outs were higher than occupancy.

Industrial demand for the Mexican market is currently more mature, sophisticated, and strategic. While the nearshoring wave remains strong, more demanding demand is being observed, with a focus on the quality of industrial park infrastructure, energy availability, and environmental certifications. The nearshoring phenomenon is facing a period of growth stabilization, with challenges that must be addressed in the coming quarters. The main challenges focus on basic infrastructure and political and commercial uncertainty.

Electricity shortages and water availability and management represent bottlenecks for the development of new industrial parks and the operation of large manufacturing and logistics companies with high consumption requirements. Looking ahead to the end of 2025, international geopolitical uncertainty, potential revisions to the USMCA, and the imposition of trade tariffs, particularly in sectors such as steel, are generating investment caution. While demand for high-quality, sustainable space remains strong, and nearshoring remains the long-term driver, the industry must focus on sustainability and adapting supply to the operational needs of new tenants.