Industrial Real Estate Investment Needed for Nearshoring Success
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Industrial Real Estate Investment Needed for Nearshoring Success

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María José Goytia By María José Goytia | Journalist and Industry Analyst - Tue, 11/01/2022 - 09:38

The isolation caused by the COVID-19 pandemic severely affected the real estate market, especially in the corporate sector. The implementation of the home office decreased the occupancy rate of office space, affecting the recovery of the real estate sector in this branch. However, for the industrial segment, a different market development yielded an unexpected acceleration in growth.

The growth of e-commerce was responsible for this trend. The increase in demand for last-mile parcels (B2C) and the arrival of essential players such as Amazon, Mercado Libre, J&T Express, Shoppee and 360 Lion Express increased the occupation of available inventories in all industrial and logistics markets in the country, to be used as their Distribution and Cross-docking Centers.

The Jalisco market is no exception. Guadalajara is one of the most important industrial hubs in the country, positioning itself as the third-most important city in the country behind Mexico City and Monterrey. Factors such as its strategic location and an efficient land, port and rail connectivity have positioned the city as an attractive center for industrial investment. In addition to these conditions, Guadalajara has outstanding human capital due to its specialization in electronics, technology, communications and manufacturing, which has also successfully adapted to the transatlantic, 3PL/4PL and last-mile logistics segments.

This has led Guadalajara to experience exponential growth in demand for its industrial space. "For a healthy industrial market, the vacancy level should range between 4 and 6 percent. Guadalajara presents an availability of 1.5 percent at the close of 2Q22, with more dramatic figures projected for 2H2022 due to the lack of projects that know how to adapt to high standards of companies," explained Cristina Pérez, Market Intelligence representative in Guadalajara, Coldwell Banker Commercial.

Currently, Guadalajara has 5.2 million m² of Class A space available, which, according to Pérez, is insufficient to meet short-term demand. Although a high level of occupancy may seem positive for the industry and the region, the lack of new spaces capable of meeting the growing demand causes stagnation in the economy and the generation of new jobs.

"Guadalajara is one of North America's cities with the greatest industrial potential. Its university structure, connections with ports, road infrastructure, international airport, and the high generation of jobs. Investing in the development of Industrial Warehouses and Distribution Centers in the city is today one of the most solid alternatives," commented Carlos García, Senior Vice President and Regional Director at Coldwell Banker Commercial Mexico.

With the second wave of nearshoring, cities like Guadalajara have an excellent opportunity to attract industrial investment to boost their regional economy. "After the challenges generated during the global supply chain pandemic, companies identified the need for local supply chains, creating great opportunities for markets like Guadalajara," Pérez said.

The market supply is progressively recovering with new projects, but this remains insufficient. Today, a potential new supply of more than 300,000 m2 is still under construction, with delivery dates estimated for late 2022 and throughout 2023. "This means that we will still have six months with very few additions in terms of supply, which limits the rotation of buildings in a high-demand market," said García.

In a strategic alliance committed to the continued development and growth of Jalisco, Grupo García Ascencio and Grüncorp, together with Coldwell Banker Commercial's advisory and consulting services, have planned the launch of LA PIEDRERA, an industrial park project strategically located on the Anillo Periférico Sur. The project will have two phases, each catering to a specific segment: AAA companies and equity investors, respectively.

La Piedrera is a sustainable project with the highest environmental, sustainability and governance (ESG) standards. The project is located in an area where for many years stone, basalt, flagstone, and gravel were extracted, all materials that have been reused for the park's development.

The megaproject also has four bodies of water nearby that together with the rainwater collection and water treatment systems will supply the complex's domestic and industrial water supply. Mixed-use amenities have also been considered within the project to provide coworking services, a commercial area due to its proximity to the Guadalajara International Airport and an executive hotel for users of the industrial park, among others.

"The complex has the advantage of being in the industrial corridor of Periferico Sur, it caters to the last mile environment and provides flexibility, services and amenities above the standard. Hoping to lead by example, La Piedrera will deliver its first stage during 2023," concluded Juan Pablo de Obeso, COO, GrünCorp.

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