2021 ended and in the last quarter of the year the countries of the entire world faced an enormous challenge balancing between the recovery of their economies and the health fight against a virus that showed a facet of mutation that once again put the world population on alert .

In Mexico, recovering the dynamism prior to the pandemic was the slogan for 2021 where the economy previously grew at average annual rates of 2.7%; However, after the strong contraction of 8.3% registered in 2020, the average growth of 5.59% estimated in the latest survey of expectations carried out by Banxico could be part of the rebound effect in the Mexican economy.

On the other hand, with the inflation expectations for 2022 registered by the Bank of Mexico, which are already above the goal of 3%, the rise in prices aims to continue throughout the year, favored by external factors that drive this increase is even more so as the withdrawal of stimuli and the low growth projection by the United States Federal Reserve (FED).

Regarding the trade balance with the main partner United States, at the end of November 2021, Mexico and Canada remain even with a 14.3% share of each of them, which will continue to underpin the conditions of the T-MEC and its impact on the Mexican economy, in the midst of some controversies such as the recently started dispute over rules of origin with the automotive sector.

For the different sectors of the Mexican economy, the recovery has been uneven, the same situation that happens in the real estate industry. Within the real estate activity, some segments have been marked by the slowdown in investment, while others have taken advantage of a panorama of changes in consumption habits, such as the industrial sector, which has shown to be the one with the greatest resilience. and transformation.

The average growth of the industrial real estate inventory in Mexico reached just over 5% in a market that has been strengthened in the face of the crisis, standing out for its competitiveness and dynamism in the main cities of the country.

In relative terms, the markets of Guadalajara, Mexicali, Saltillo and Querétaro registered the highest annual increases in inventories between 7 and 10%. In absolute terms, the Metropolitan Zones of Mexico City and Monterrey are ahead.

Regarding prices, the trend was that most markets reported increases, mostly influenced by the pressure generated by low availability rates, the increase in the prices of construction materials, as well as the need to generate spaces with more and more technology and quality in construction, which implies higher cost increases for developers.

Markets such as Mexico City reported increases of more than 50 cents in the rents of industrial spaces. Tijuana, as a result of its low vacancy, was the market where the largest increase in income of one dollar per square meter was recorded at the end of 4Q 2021.

With elements such as the shortage of available spaces in some markets, the impulse that recovered demand during the year and the increase in tailor-made projects, construction in the country has had a significant rebound, closing 2021 with a total of 3.7 million square meters. At the forefront of construction activity, Monterrey remains with 935 thousand square meters that are progressing in various phases, followed by Mexico City and Tijuana with 742 and 435 thousand square meters, respectively.

The country's industrial market closes with growing inventories, healthy vacancy figures, prices with an upward trend, the same case as construction. On the demand side, the indicator continues to show historical levels in some markets and at the end of 2021 the total annual figure for the country is 6.6 million square meters, which represents almost 70% more than what was demanded in 2020. Monterrey became the leader at the national level, displacing Mexico City to second place.

This important northern market with differential characteristics, such as high quality of life, logistical connectivity, security and coordinated support of the municipal and state authorities with the business fabric have allowed gross demand to exceed one million 400 thousand square meters per year, little more than a fifth of the total national demand.

The incorporation of cutting-edge production techniques in multiple sectors led manufacturing to new demands on the physical infrastructure, which prompted the construction of tailor-made or BTS projects nationwide.

The relocation of production processes that temporarily harmed Asia favored countries like Mexico, which had the ideal location as a neighbor of the United States, where a sustained demand for goods and services is concentrated, driven by the fiscal and investment stimuli launched to reactivate their economy and that historically they have permeated into our country.

Consolidating the base of regional suppliers was the pivot in companies on the northern border and the Bajío, which reduced vacancies considerably with the largest contractions in Puebla, Monterrey and Ciudad Juárez with downward adjustments of more than 2.5 percentage points, compared to the 4Q 2021 with the same period of the previous year.

Logistics also showed a very favorable end of the year for Mexican developers where technological incorporation prevails in large storage areas that were installed in Mexico City, Guadalajara and Tijuana, seat of new distribution centers that exceed 50 thousand square meters, the the vast majority of them also on the made-to-measure format.

The trend will continue towards a globalized world dependent on technology with increasingly informed customers and that will advance in quality and immediacy requirements for the delivery of its products.

In this year, which is just beginning, the uncertainty of the pandemic will continue to condition the impulse of the industrial sector where the country's advantages are reinforced by having modern infrastructure, with qualified labor at competitive prices.

Although perhaps the most important thing is represented in the institutional ecosystem and the maturity of an economic sector of developers and investment instruments that favor open competition to scale industrial portfolios to the next level.

Key risk factors such as the rapid increase in the prices of raw materials that underpin exports, the shortage of some inputs such as semiconductors and the way the government handles the energy issue will allow or not to consolidate the value chains in Mexico, allowing that the country has safer suppliers with guaranteed delivery capacity on time.

Most production processes will continue to migrate towards sustainability and the reduction of the carbon footprint, a change that industrial spaces emulate and where there will be great changes during 2022 in terms of industrial design.

It is also expected that the marked competition that occurred in 2021 will be sustained throughout the year, so we will see multiple purchase and sales operations among the main industrial portfolios.