Monterrey's Industrial Real Estate Sees Record Prices

Monterrey, Nuevo Leon, has seen a significant increase in industrial real estate prices, with some transactions surpassing the US$1,000/m² mark in 1Q24. The uptick is attributed to a strong demand for space driven by companies attracted by nearshoring. However, experts caution that market speculation could lead to an inflated real estate bubble.

Over the last decade, the average selling price per square meter of industrial properties in Monterrey has increased by 15% to 20%, according to real estate data platform SiiLA.

Some transactions in Monterrey have exceeded US$1,000/m², though prices typically range between US$500 and US$700/m². Alejandro Delgado, Regional Manager, SiiLA México, emphasized the significant growth in value of industrial properties, both in Monterrey and other markets. "It is important to be cautious when making these investments, as excessive speculation about future rental growth and appreciation could create a bubble," he noted.

Since 2020, Monterrey’s industrial real estate sector has shown consistent growth, with developers keen on capitalizing on nearshoring. In the first five months of 2024, over 925,000m² of new constructions were reported, divided into over 40 industrial warehouses, reports Solili. "Projections indicate that this trend will continue throughout the rest of the year, attracting new investments and sparking numerous projects in the northern market, consolidating Monterrey as a key market in Mexico," the analysis reads.

Mexican Real Estate Investment Trusts (FIBRAs) have played a crucial role in industrial property transactions. Institutional investors have carried out multimillion-dollar acquisitions ranging from US$3 million to US$60 million per transaction in Monterrey in 2024, reports El Economista.

FIBRA Monterrey (FMTY) made a significant acquisition from Nexxus, purchasing eight properties, two of which are under construction, in the municipalities of Apodaca, Cienega de Flores, Escobedo, and Guadalupe. FIBRA Terrafina also acquired an industrial warehouse in Cienega, with a rentable area of 51,000m², currently leased to DHL.

Analyzing the purchase price by submarket reveals that the US$1,000/m² threshold is more common in Apodaca. Average selling prices there have exceeded those of other Monterrey submarkets by up to 30% over the last four years, says SiiLA.