Office Absorption Up 60% in 2Q25 in CDMX

Mexico City’s office market registered increased activity in the 1Q25, with a notable rise in net absorption and a continued decrease in the overall vacancy rate, reports real estate services and investment firm CBRE. The market’s net absorption stood at 60% during the quarter, when compared to 2024.

CBRE reports the market's inventory remained at 7.4 million m², with minimal additions of new supply during 1Q25. The construction pipeline shows 290,000m² expected for delivery between 2025 and 2028, with construction beginning on 7,000m² in the Reforma corridor in 1Q25. It is estimated that 191,000m² will be integrated into the inventory as new supply becomes available throughout 2025 across five projects located in the Insurgentes, Polanco, and Reforma corridors. Additionally, 119,000m² under active construction in the submarkets of Polanco, Insurgentes, and Reforma are projected for completion during 2Q25 and 3Q25.

Mexico City recorded 70,000m² of net absorption in 1Q25, representing a 60% increase compared to 44,000m² registered in 1Q24. Goss absorption, or commercialized spaces, was 130,000m² in 1Q25, a 3% annual growth. This figure surpassed 100,000m² and included renewals, expansions, subleases, and pre-leases completed at the start of 2025.

The vacancy rate continued its downward trend, closing 1Q25 at 19.49%. This figure represents a decrease of 2.54 percentual points compared to 1Q24, reaching the lowest rate recorded since late 2020. The occupied space in the market reached 5.9 million m² in 1Q25. Corridors showing the largest decreases in their vacancy rates, ranging from 3 to 8 percentage points, included Lomas Palmas, Polanco, and Perinorte. The Business Center, encompassing Reforma, Lomas Palmas, and Polanco, closed 1Q25 with a vacancy rate of 13.81%, a decrease of 4.26% compared to 1Q24's rate of 18.08%.

CBRE noted the context of this market activity includes Mexico City concentrating almost 40% of the country's FDI in 2024, reaching a total of US$36.872 billion. Furthermore, according to IMSS data, Mexico City reported 3.5 million formal jobs. Of these, 43% are in the business, personal, and household services sector, which added 29,000 formal employees in 1Q25 compared to February 2024. 

Gross absorption in Mexico City was notably concentrated in three corridors, with 60% of the 130,000m² commercialized space occurring in Polanco 36,000m², Santa Fe 24,000m², and Reforma 21,000m². The Business Center represents 41% of the total corporate space inventory and accounted for 42% of net office demand in 1Q25, with average transactions around 1,200m². Of the vacant Class A and A+ corporate spaces commercialized in Mexico City, 50% corresponded to conditioned, Plug&Play, or sublease spaces, representing 717,000m². This was a 5% increase compared to 721,000m² in 1Q24. The remaining half of vacant offices were in grey shell condition. The primary industries driving activity in the Business Center, accounting for 84% of the activity, were the Energy sector 42%, Corporate Services 24%, and Transport and Logistics 18%.

Regarding transactions closed in 1Q25, 56% were for conditioned and Plug&Play spaces. Of these, 67% were concentrated in two main corridors, Polanco 44% and Insurgentes 22%. Mexican companies accounted for 70% of the corporate spaces demanded, with transactions primarily consisting of renewals 55%, expansions 27%, and new contracts 18%. The remaining 31% of the companies that finalized a contract were foreign companies, mostly engaging in new contracts.