Mixed-Use Developments Hit Jackpot in Mexico

The Mexican company Be Grand, specialized in the development and commercialization of high-quality real estate projects in AAA zones, reported positive 3Q20 results with a 7 percent increase in its total income compared to last year and profits of MX$732 million (US$34.5 million). In light of this favorable situation, Be Grand announced investments for more than MX$8.2 billion (US$387.3 million) for the development of two new projects: Be Grand Bosques and Be Grand del Valle, according to El Economista.

Be Grand has various residential developments, offices and shopping centers in Mexico City, the City Shops Valle Dorado shopping center in the State of Mexico and Plaza San Roque in Guanajuato. It also has residential and office projects in the most exclusive areas of Mexico City, including Polanco, Reforma and Insurgentes, which Amy Henderson, Vice President of CBRE Mexico, labeled as "the highest-demand corridors in Mexico City for AAA spaces” in an interview with Centro Urbano. Henderson explained that Polanco and Reforma have the greatest demand within the business segment, while Insurgentes stands out thanks to its good location. She also explained that mixed-use real estate projects are in greater demand, referring to those that mix corporate spaces with amenities like food courts, recreation spaces, gyms, green areas and other elements that have demonstrated to increase productivity.

Ten years ago, less than 15 percent of real estate developments were mixed-use, according to KPMG Mexico. Now, that number has increased to 30 percent. An example of this trend appears in the creation of IOS Offices in 2017, which aimed to transform offices from spaces that generate a “sense of obligation” among workers into places for professional development. Today, IOS Offices has more than 20,000 members, which makes it the largest business community in the country with more than 36 centers in 12 cities.

Part of the success, according to Adrián García Iza, President of IOS Offices, was "not copying the industry space rental model but changing it to create more attractive spaces of higher quality, with more technology and better service.” For Javier García Iza, CEO of IOS Offices employee motivation is the key to success. “Our spaces are designed to support both companies and employees in achieving it," he said in an MBN exclusive article, stating that the best opportunity to promote happiness in people is by creating happy workspaces, as that is where they spend most of their time.

A reason behind the growth of the mixed-use model is the switch from traditional model to an "I want everything in the same place and with the greatest comfort" model. Moreover, the urban growth of Mexican cities and the maturity of the real estate market has allowed developers to follow worldwide trends. Also, the use of public and private capital has allowed for the creation of new schemes that generate high confidence for investors, according to KMPG.