Flexible Solutions for Companies of All SizesThu, 09/01/2016 - 08:20
Q: What are Advance Real Estate’s main solutions and how can they present a competitive advantage to your clients?
A: Advance Real Estate is an industrial development firm based in Queretaro that operates with Mexican and foreign capital, offering two main products. First, we provide industrial parks and industrial buildings primarily for the automotive, aerospace and logistics industries. Second, we offer business parks designed to target the needs of Mexican SMEs. These companies represent approximately 70 percent of the manufacturing activities in the country yet they are mostly ignored by the larger players in the industry. For Advance Real Estate, however, it is important to support them through uniquely designed services. These parks have been well received by the industry and there are a few large automotive companies that have certified SMEs in our parks that can become their suppliers.
Our regional operations include Mexico City, the State of Mexico, Queretaro, Guanajuato, Leon, Aguascalientes and San Luis Potosi. While central Mexico has recently become popular as an industrial hub, we have been operating in the area for over 15 years accumulating experience and knowledge. Advance Real Estate is growing quickly and in the next five years we want to own 750,000m2 of gross leasable land. To achieve this, we formed an alliance with Equity International, a company involved in many sectors of the Mexican economy. They support us mostly in our capital structure and many of our clients feel confident working with such a strong and transparent institution. We also recently started collaborating with a large Canadian pension fund. Both of these relationships give us the funds and the capacity to develop industrial parks and industrial buildings, which is our main advantage over companies that only operate as investment funds and those who only contribute to infrastructure development.
Q: What do the automotive and the aerospace industries represent for Advance Real Estate?
A: Advance Real Estate is taking advantage of the development of these two sectors. Our parks are highly flexible and fully capable of adapting to existing real estate demand. Although we manage more automotive clients, especially in Guanajuato and Puebla, the aerospace sector is gradually catching up due to all the new activities in the area.
Q: What would you define as the primary hurdles for Mexican industries and how does Advance Real Estate support its clients addressing these?
A: The automotive industry is facing a problem in terms of infrastructure, especially in terms of electricity. Not enough infrastructure, high prices and an unclear regulatory structure create entry barriers for many clients who wish to expand into Mexico. To support our clients, we invest in the development of the entire electric infrastructure of our parks.
Availability of qualified human capital has also been a challenge. While certain states are developing large quantities of qualified professionals, companies in other states are struggling to find operators. Advance Real Estate has a social program in place to support education in local communities, in which college graduates enroll in a teaching program to provide better education for junior and high-school students in rural areas.
Q: What challenges has Advance Real Estate faced regarding land availability?
A: Our clients are now much more capable of identifying their own needs, instructing us on how to address them. They are now able to choose a specific location considering not only their budget but also the local economic and regulatory climate.
Nevertheless, it is hard to find land with all the required services and permits and even harder to find good prices in a market as dynamic as real estate. However, our list of international clients and state-of-the-art fully operational parks catering to the automotive, aerospace, logistics, food and technology industries have helped us show land sellers and local authorities the benefits of these projects for the local economy.