Industrial Space Developers to Invest US$1.9 billion in 2024

The nearshoring phenomenon is expected to drive significant investments in new industrial spaces, given that current availability rates are below 5%, dipping to 1% in certain areas. To meet this rising demand, the industrial real estate sector is projected to invest at least US$1.9 billion between 2023 and 2024, the Mexican Association of Private Industrial Parks (AMPIP) noted. 

According to Sergio Argüelles, President, AMPIP, there are 50 new industrial parks that are to be developed by the association’s members between 2023 and 2024 with an investment of US$1.9 billion. He noted that between 2019 and 2022, the number of industrial parks went from 273 to 432, a variation of 58.2%. 

According to Argüelles, between January and August 2023, over 22% of the absorption of industrial space among AMPIP members was a consequence of nearshoring, representing over 3 million m². He also noted that between 2023 and 2024, there will be a demand for 2.5 million m² of warehouses, nearly doubling what was absorbed in 2022.

According to BBVA, the firms hosted by AMPIP members are 20% domestic and 80% foreign, with 97% having an export focus. Furthermore, AMPIP estimates members will receive 453 companies within the next two years, 20% of which come from China. It also estimates an average of 227 new companies per year between 2023-2025, representing an annual growth of 9.1% when compared to the 2020-2022 period. El Financiero reported that manufacturing accounted for 36% of the space used for nearshoring, followed by logistics and distribution at 33%, automotive at 15% and e-commerce with a 9% share.

Mexican Real Estate Investment Trusts (FIBRAs) focused on industrial properties have also benefited from the nearshoring boom. Just in 1Q23, FIBRAs expanded by approximately 1 million m² of gross leasable area (GLA) due to nearshoring. For instance, Fibra Monterrey jumped from 35 to 78 industrial properties in just one year, acquired the Zeus industrial portfolio from Finsa for US$662 million and increased its GLA to 1.4 million m². 

Similarly, Fibra UNO (FUNO), the first and the largest FIBRA, reported a portfolio of 3.4 million m² at the end of 2022. By 1Q23, it went up to 6 million m². As FUNO identified opportunities in the industrial sector, on Sep. 8, 2023, it announced its intention to discuss the possibility of launching an initial public offering to create another FIBRA to concentrate its industrial properties, which comprise 54.5% of its portfolio, as reported by MBN.