A Better Horizon for Real Estate in 2021By Pedro Alcalá | Mon, 01/25/2021 - 19:32
The results are in. 2020 was such a decisive year for the Mexican economy, that its outcome is beginning to influence the expectations of institutional investors for 2021. The real estate sector is no exception to this trend. According to a recent article from Inmobiliare, the national economy was expected to grow 4 percent in 2021. Nevertheless, that expectation has been revised and changed to a possible contraction of 8 to 12 percent. These forecasts from private institutions are more or less aligned to those of SHCP, which is anticipating a contraction between 7 and 10 percent. However, the same article also claims that at a global level, residential real estate demand did not falter in 2020 and is expected to remain stable in 2021.
Another Inmobiliare article addresses how real estate demand has been distributed in Mexico, claiming that housing purchase needs have concentrated in Mexico City despite the COVID-19 pandemic and the home office scheme. This is particularly true for three municipalities within the city: Cuauhtemoc, Benito Juarez and Miguel Hidalgo. The article also mentions that interest rates have continued their downward trend, while the value of homes is still climbing at a rate of 8.9 percent for new housing and 14.3 percent in the secondary market.
From an industrial perspective, the sector has been in an even better state thanks to increasing demand for warehousing space and industrial parks, due to the larger role that e-commerce and automated manufacturing and distribution have recently played. A third report from Inmobiliare shows that during 4Q20, industrial park development in Mexico City and its metropolitan area, predominantly in the State of Mexico, has increased by 2.8 percent against 4Q19. In an announcement made by E-Group, a company owned by the El-Mann family, the company unveiled its “T-MEC Park” project, an immense logistical hub to be built close to the new Felipe Ángeles Airport in Santa Lucia. According to a report from Forbes, the project represents an initial investment of over US$1.2 billion and is expected to generate 65,000 jobs.