Government Must Step up Its Game

From land availability to infrastructure failings, there is no shortage of issues facing developers as the country’s manufacturing expands and more companies move into Mexico. “In the wake of a boom like in the automotive industry and the emergence of sectors such as aerospace, markets consolidate as industrial hubs and land availability decreases exponentially,” says Roberto Cantú, Director General of Roca Desarrollos. That is what is happening now and higher land prices are the result, he says. “Three or four years ago, a wave of aerospace companies made their way into the region, creating a scarcity of land and consequently raising the market’s prices,” he says. “Cities like Juarez have gone through slower expansion cycles, resulting in stable prices similar to those seen five years ago.” Once land is purchased, there is the issue of infrastructure to contend with and Cantú says it is a concern the whole industrial real estate segment is dealing with, especially the question of energy. “We can find appropriate plots of land but if the infrastructure is not in place to facilitate operations, they become unfeasible for us,” he says. “Sometimes, constructing the right energy infrastructure can be more expensive than buying the land.”

He puts the onus for improvement squarely on the government. “As CFE is a publicly owned company, it is the sole responsible authority for this. On the other hand, advanced markets, which are open to private investment, have a stronger willingness to invest in infrastructure. The same goes for drainage and water supply systems. There is no question that the government needs to step up its game and push for advanced investment capabilities from public agencies.”