Serving the Industry`s Multitude of REal Estate NeedsTue, 09/01/2015 - 13:18
Q: Which services that Colliers provides have proven most popular in the automotive industry, and why?
A: Site selection is our most popular service in the sector. The automotive industry is very static from a real estate point of view, meaning that companies do not move from place to place on a regular basis. On some occasions they do need help to dispose of their properties, but that only happens when a given property is surrounded by a metropolitan area, which is not a frequent occurrence. The necessity for site selection is a standard within the industry’s supply chain, which includes suppliers, manufacturers, and dealers. Zoning is a particular challenge when it comes to dealerships because they need smaller locations in areas of high consumer volume. Due to the multiplicity of developments within the same space, getting the right permits can be rather complex. We could encounter a mixture of maintenance shop areas, as well as office and exhibition space, which makes it challenging. Additionally, while having to find big spaces, we also have to keep price ranges reasonable. The price does not fluctuate much unless we are seeing a new unexplored market area. In that regard, if somebody is taking a risk in terms of a location, we could see a 50-60% price rise. However, dealerships are usually set up in business locations that have proven to be successful and fruitful, which would not represent a large peak in the price fluctuation.
Q: What have been your most important projects in Mexico to date?
A: We have been involved in several projects with major automotive brands in the industry, from OEMs to suppliers in different tiers. The company has helped out with manufacturing plants, supply chain companies, and dealership centers, which are the most obvious projects. However, our involvement extends to providing the necessary business solutions that a company needs. For example, after one of the recent market crises, one of our clients approached us to evaluate every dealership site they owned. This helped them to acquire the necessary credit and overcome the crisis by offering those properties as collateral. As such, we worked alongside their credit and finance department to help them ascertain the right value of the property. Although we share a lot of best practices on a global scale, we must follow international trends that will allow us to learn from more developed and mature markets, putting us ahead of the curve. We offer training courses for these types of solutions through what we call Colliers University course packages.
Q: What makes a good location for different companies in the automotive industry, and what are the differences between those types of locations?
A: There is quite a large difference between them all. For instance, the manufacturing plants need a location with a good source of labor, and decent infrastructure for communication purposes, water, gas, and electricity. We attribute a lot of importance to the work force capabilities of any given state, which will in return allow the company to consistently reach their goals. In terms of distribution, location and infrastructure are very important in order to have reliable communication for logistics. Finally, when it comes to dealerships, exposure and location is essential. Having the right location means having the appropriate place in accordance to the demographics that the company is targeting. As such, it is common to see different brands occupying the same space.
Q: What are Colliers’ major advantages over some Mexican industrial real estate firms?
A: One of our major advantages is the ability to combine the best of local and international markets. We have international quality, experience, and relationships, coupled with a strong, 70-year local presence in the Mexican real estate market. In that regard, the combination of domestic expertise, processes, and relationships, along with international standards, makes us quite a unique company. Through our specialized teams, we are able to provide our clients with a range of services from an office, industrial, retail, and distribution standpoint. Finally, and most importantly, our national presence throughout Mexico’s major cities, which matches the needs of the automotive industry, allows us to partake in Mexico’s major areas of growth. We do not offer our own properties, nor do we invest in properties, so there is not a conflict of interest. That is how we guarantee our clients that the best available products in the market are being offered.