Identifying Clients Needs Before They Do

Q: What are Advance Real Estate’s competitive advantages and how does it support its clients?

A: Advance Real Estate is an industrial development firm based in Queretaro, which offers two main products. Firstly, we offer industrial parks and buildings primarily for aerospace, automotive and logistics companies. Our second area covers business parks, which are essentially smaller scale industrial parks designed to improve the quality and working environment of smaller Mexican companies. SMEs represent about 70 percent of manufacturing in Mexico, yet are often ignored by larger industry players. These parks have led some large automotive companies to certify SMEs in our business units so they can become their suppliers.

We mostly operate in the center of the country, in a triangle between Puebla, Guadalajara and Monterrey that covers Mexico City, the State of Mexico, Queretaro, Guanajuato, Irapuato, Leon, Aguascalientes and San Luis Potosi. Our main competitive advantage is that we are local developers with 15 years of experience in the area and are therefore fully aware of the sector’s operations, such that we sometimes know our clients’ needs long before they do. We have both the funds and the capacity to develop industrial infrastructure, which differentiates us from other developers. Our association with Equity International has allowed us to secure capital and our clients feel confident working with such a strong, transparent institution.

Q: How are you targeting growing demand in the sector?

A: Our parks can adapt to meet demand, such that while automotive clients dominate our clientele, aerospace is catching up. Part of our strategy to target this sector is to develop aerospace parks next to airports, exemplified by our parks in Queretaro, Guanajuato and Guadalajara, neighboring their respective airports.

The aerospace sector has grown exponentially over the past 10 years, especially in Queretaro. Today, our clients are much more capable of identifying their own needs and instructing us on how to address them based on location, budget and the local economic and regulatory climate.

Aerospace clients have very specific requirements, such as similar specifications to those of their plants in Europe or the US, so they generally prefer our build-to-suit options.

Q: What hurdles is the company helping its clients to overcome?

A: The most problematic area is a lack of infrastructure, especially in terms of power supply. Limited electricity infrastructure, high overheads and an unclear regulatory structure for the free power market create barriers to entry to the Mexican industry. The Energy Reform has promised to improve this situation but a degree of uncertainty remains as to how this will evolve. As well as investing in the development of the entire electric infrastructure in our parks, we support local educational institutions and also offer training programs through alliances with technical universities. Advance Real Estate also manages a social program to support education in local communities, through which college graduates enroll in a teaching program to provide better education for secondary and high-school students in rural areas. This encourages companies to remain in our parks where they can attract the professionals they will need.

Q: Where is Advance Real Estate focusing its development of new parks?

A: This year we are focusing on starting operations in three parks in Queretaro, another in Guadalajara, one in Irapuato and we are consolidating our park in Puerto Interior next to the International Bajio Airport and our new park, Celaya III. Our new industrial park next to the airport in Queretaro started operations in mid-2016 and will eventually incorporate up to 150,000m2 of industrial buildings, mostly for the aerospace and logistics industries. .

Finding land with the necessary services and permits is difficult and even more so at good prices. However, our list of international clients and cutting-edge operational parks has helped us to persuade land sellers and to convince local authorities that these long-term investments boost the local economy and generate employment. Advance Real Estate is growing extremely fast and in the next five years, our goal is to own 750,000m2 of gross leasable land.