Guadalajara an Office Hub?

While entire skyscrapers filled with office spaces sit empty and vacant in the heart of Mexico City, real estate investors and urban planners are wondering what the future holds for this particular category of property. Perhaps more importantly, companies are wondering what logistical function office spaces will play for individual companies in different industries.

Perhaps a good indicator of the future can be found in what real estate firm Jones Lang LaSalle has decided will be the highest growing market for office space in all of Mexico in 2021: Guadalajara. The nation’s second largest city is experiencing positive economic conditions: 51,699 new jobs were created in the state of Jalisco throughout 2019. According to a report from Inmobiliare, this put the state at the top of the national rankings in job creation. It was also the state that received the fourth-largest amount of foreign direct investment during 1Q19. That alone would perhaps not be enough to explain why Guadalajara sits atop this privileged position in terms of office space. 

A more deciding factor is the fact that 40 percent of Mexico’s IT industry is housed in the city. This represents over 600 companies that include international majors such as HP, Dell, Oracle and IBM. While it might seem like these companies are more adept at home office connectivity than others, the truth is that they possess an intrinsic need for physical office space due to the role that networking infrastructure, such as routers, cabling and server farms, play in their functions and daily tasks, not to mention the 24/7 onsite staff necessary to perform emergency service and repair on said infrastructure. IT firms share this characteristic with banking and insurance, two other sectors with great demand for office space that have had to resort to grouped shifts at their offices during COVID-19 lockdowns since a certain amount of their functions cannot be performed through home office.