Ricardo Chávez
CEO
Intelligent Group
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View from the Top

See the Bigger Picture to Create Opportunity

Tue, 11/01/2016 - 15:41

Q: How would you describe the context of Mexican infrastructure?

A: Profit is the center of infrastructure development in Mexico and quality is quite low. Only a few have acquired LEED platinum certification and the rest have no interest in meeting these international standards. Investors often end up selling structures that are not adequately designed as they prioritize low investment per square meter without considering efficiency or durability. Unfortunately, Mexico has gained a reputation for being behind on trends. This is reflected by the quality of infrastructure in the country. Developers tend to not care about creating a crisis as they find these situations to be an opportunity to obtain cheap square meters that can be sold in three to four years at a higher price. Companies sometimes acquire up to 1 million square meters at a devalued price.

Consultancies can help them realize that investing only 15 percent more in a project can place a structure easily within international standards. We focus on making sure that our projects emit less carbon dioxide in the atmosphere by creating buildings that consume less energy and retain less heat to require less air conditioning. It is favorable to create structured projects that have a larger capacity in terms of the integration of technologies that will obtain a better cost-benefit ratio. Intelligent Group recently implemented a lightening control and energy savings system to achieve a LEED Platinum Certification in in the Reforma 180 tower.

Q: What role can the government play in creating a new consciousness in Mexican culture?

A: The government does not regulate the market strictly enough but it is starting to set a limit of greenhouse gas emissions. The authorities need to adopt a sustainable conscience and find the significance in investing time to ensure the construction of well-planned structures that do not completely revolve around profit. Fortunately, Mexico is starting to actively participate in the global paradigm shift. Situations such as an earthquake and an unstable political context are activating a transformation that is creating new vertical markets and technology. LEED certifications were created to set a benchmark and encourage a new market that incorporates a different set of standards. Not all companies have the ability to compete, as the benchmark has been set quite high. Companies with lower capacities tend to focus more on receiving rents and not making a bigger effort in adapting to the market.

Q: How is technology advancing in Mexico in comparison to other countries?

A: Technology is progressing in Mexico but it is not being targeted adequately. The issue is that clients are confused by the mass market and premium clients start to doubt the necessity of buying higher quality products that are more expensive. Other countries such as the US commonly build structures financed by joint ventures and are used to investing a higher percentage to create better-quality structures that comply with international norms. These clients do not question having to pay slightly more for durable and efficient material. It may require more capital but they recognize the value of being LEED certified. Mexico is more focused on creating cheaper projects without considering the level of quality. Companies may not realize that they are a few points away from being platinum or gold LEED certified and miss investment opportunities. Specialists in Mexico need to understand the bigger picture before offering their clients a construction budget.

Q: What challenges does the infrastructure industry face?

A: We find it difficult to convince developers to invest in higher quality material because they are not worried about the durability of the projects. After construction is completed, all responsibility is handed to administrators, who are not concerned about durability or cost efficiency. Intelligent Group is building a 270,000m2 commercial center in Cuernavaca. Our client ignored our recommendations and opted to buy inexpensive lights from China that only last six months. Developers need to know the requirements of the certifications to move their structures in the right direction. Technology facilitates the work and companies need to take advantage of this. We need to demand a higher standard of quality before selecting developers.