Industrial Market 4.0 and Its Demand For Industrial Spaces
Industrial’s market 4.0 demand for manufacturing and logistics spaces created a land deficit across Mexico with low potential occupation. Today, developers are prioritizing rapid construction to cover the future market’s needs with industrial building over residentials.
The land deficit for industrial development has been mainly identified in Tijuana, Jalisco and Ciudad Juárez, along with the Cuautitlan-Tultitlan-Tepotzotlan (CTT) logistics corridor, however, Mexico City and the State of Mexico still have a 4.3 percent availability, according to real estate leaders gathered at the EXNI summit.
“The land deficit forces companies to consider construction locations that have less accessibility and call for better, but non-available, infrastructure development,” said Leticia Valenzuela, Industrial Director, Cushman & Wakefield.
One of the reasons behind industrial land shortage is attributed to real estate developers' fast building. This technique does not wait for tenants to occupy available industrial spaces, but rather focuses on building rapidly against potential future demand.
However, most of these industrial spaces are unoccupied as potential tenants are expected to increase demand in the next two to three months. In the meantime, the challenge is to build easily adaptable spaces that adjust to the new manufacturing requirements, argued Bruno Martínez, CEO, Alveo Kapital.
The new demands include building heights between 12 and 14 meters, having to measure in cubic meters instead of square ones and adapting the facility for its automatization, allowing the entrance of robots to execute a 24-hour shift operation.
On the other hand, the logistics sector reported continuous demand and growth in the country, with Tijuana, Monterrey and Mexico City taking the lead given their 24-month industrial occupation. This tendency has favored industrial building over residential development, which according to Raúl Arroyo, Managing Director, R.E.I., “has caused the real estate market to be more aggressive.”
This tendency was reported by Victor Lachica, President and CEO, Cushman and Wakefield to MBN.
“In 2019, we saw significant growth in logistics and distribution and we expect that segment to continue growing. International trade has reached significant levels with an important influx of merchandise from all over the world and with increasingly integrated global production chains that depend on players in different regions,” said Lachica.
Regarding e-commerce, Mexico fast-forwarded five years of growth in2020, as “courier services, including e-commerce, handled 76.5 percent of the inputs that are of national origin, turning it into an integrator of the national economy,” said Elena Robles, Legal and Government Relations Director, Estafeta Mexicana.
For Robles, land deficit represents good news but the urgency of solving the space-related issues have to be dealt with government agencies and various chambers of logistics services in Mexico.
“The location of our distribution centers is important and to start operating quickly becomes paramount, so contract negotiations with developers are critical, as well as understanding the legal status of the properties we are leasing,” said Robles.