Investments in industrial real estate markets attracted by nearshoring are arriving in the Bajio, led mainly by companies in the automotive sector, so the vacancy rate continued to decrease in the second quarter of the year.
El Bajío recorded 240,000 square meters (m2) of net absorption in the first half of 2023 (1H22), 50% higher than the figure reported in 1H22. Gross absorption reached 263,000 m2, 49% higher than the figure reported in January-June 2022.
According to a CBRE study, the vacancy rate continues to decrease to close the second quarter (2Q23) at 3.9%, among the lowest since 2018. For the following months, the reactivation of speculative projects is expected, mainly in Querétaro and Guanajuato.
It is also estimated that commercialization activity will increase during 2023, as a result of the companies installed in the region that have announced expansions, including new investments in the automotive sector.
Investment in industrial market arrives in the Bajio
In recent years, the Bajío region has been characterized by the expansion of companies located in the region, with Guanajuato and Querétaro leading industrial demand. At the close of the second quarter, both entities accounted for 76% of net absorption, representing 183,000 m2 , the demand is divided between light manufacturing and demand for logistics tenants.
In turn, San Luis Potosi's typical tenants are looking to purchase industrial land for the development of their buildings, while Aguascalientes incorporated business expansion inventory, and also registered tenant turnover, which decreased its vacancy rate to 2.3 percent.
It is expected that the investment in industrial markets on the U.S.-Mexico border that nearshoring has attracted, will also reach the Bajío region, mainly from companies in the automotive sector, which is an important cluster in the region, in San Luis Potosí and Guanajuato. "Querétaro is also expected to continue with logistics demand, and with the diversification of light manufacturing industry as it has been doing so far," said Rodrigo Folgueras, vice president of the firm in the Bajío region.
Construction activity has been characterized by the development of Build-to-Suit (BTS) projects. At the end of 2Q23 alone, more than 479,000 m2 were under development, of which 51% are projects with these characteristics that are already pre-leased and are expected to be delivered between September and December 2023.
And thanks to the reactivation of construction activity, the expansion of logistics companies is expected to continue, which will improve distribution processes, while light manufacturing and the automotive industry will demand industrial space in the region, attracted by the logistical advantages, skilled labor force and infrastructure of the industrial parks in the Bajío. There is also speculation that the commercialization of industrial land with infrastructure within parks will continue in the region.
Markets with higher inventory
During 2Q23, the Bajio region closed with an inventory of 13.4 million m2 , an annual increase of 3.0%. The markets with the highest inventory growth were Querétaro and Guanajuato, with Querétaro accounting for half of the new supply in the first half of the year. The analysis highlighted that, in the region, half of the construction activity corresponds to BTS projects with delivery dates in the second half of the year.
Availability
The vacancy rate closed at 3.9% in 2Q23, this is 0.3 percentage points lower than at the close of 2Q22. He highlighted that this is the lowest vacancy rate since 2018. Of the four entities that make up the region, Aguascalientes reported the lowest vacancy rate (2.3%), and Querétaro was the market with the highest vacancy rate (4.5%), derived from new supply entering vacancy.
At the end of 2Q23, the Bajío region reflects a recovery derived from advanced negotiations during the end of 2022 and 1H23. During the year, demand is expected to be driven mainly by the expansion of tenants already installed in the region in the light manufacturing and automotive sectors, it was indicated.
Half of the construction activity is pre-leased, so net demand is expected to continue to recover during 2023. At the same time, speculative construction projects have been reactivated, indicating a possible increase in the vacancy rate if construction space is not pre-leased first.
He estimates that the starting price will continue with upward adjustments due to the new supply of projects under development that are expected to conclude in the following quarters with prices above the current average.
Source: realestatemarket.com.mx
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