Monterrey, Most Attractive City for Industrial Sector: Newmark
Mexico’s Northeast is among Mexico’s main destinations for foreign direct investment (FDI), which has spurred the construction of industrial parks. Currently, cities like Monterrey have shown real estate availability rates below 1%. Newmark says this region offers competitive advantages beyond cheap labor costs, making Monterrey is one of the most dynamic cities in the country.
Newmark highlights that foreign companies look to open operations in Mexico because of its availability of a long-term workforce characterized by plenty of young, skilled workers. The high concentration of population in urban centers appears to be another advantage of Mexican cities, as the firm highlights the case of Monterrey, which holds over 92% of Nuevo Leon’s population.
According to Newmark, cities like Monterrey, Torreon, Saltillo, Nuevo Laredo, Matamoros and Reynosa have been registering continuous growth in the manufacturing sector, especially in the production of appliances, metallurgic products, vehicles and IT-related products.
The firm highlighted the importance of Monterrey for nearshoring, citing the recently announced construction of Tesla’s Gigafactory in Santa Catarina, which is part of Monterrey’s metropolitan area. Newmark reported that another advantage is the city’s relatively low emigration rate, as well as its balance between offer and demand for the labor force.
Another advantage of Monterrey is its skilled workforce: the company said the city is perceived as a talent factory closely connected to both foreign and domestic companies. Monterrey also has more than 100 universities: the Tecnológico de Monterrey and the Universidad Autonoma de Nuevo Leon are among the most prestigious in the country.
Monterey also harnesses its proximity to Texas, one of the most prosperous states in the US in terms of GDP. This makes the city the access door to the US market.
Nuevo Leon hosts over 3,500 foreign companies, which are mainly located in the Apodaca, Santa Catarina, Guadalupe, Pesqueria, Escobedo, Salinas Victoria and Cienega de Flores municipalities. The state features 13 clusters focused on strategic sectors like automotive, software development, IT and appliances. Over 90% of the state’s production is destined for exportation.
According to Newmark’s Latin American report in 2022, Monterrey was among the markets with the most frequently-traded industrial properties in Latin America. In Mexico, Monterrey is the second largest market for Newmark, registering 786,000m² of gross absorption during 2H22 and availability of space of over 0.5%.