Opportunities in Mexico’s Resilient MarketBy Cinthya Alaniz Salazar | Wed, 02/09/2022 - 11:49
Q: Accelerated by the COVID-19 pandemic, the digital transformation created a market of both opportunities and challenges. How has Tinsa adapted to this market?
A: Since Tinsa Mexico’s main line of business is the mortgage market, we were initially concerned about how banking institutions, our main clients, were going to be impacted or react to the COVID-19 pandemic. The Mexican market has proved to be resilient but 2020 was a difficult year that forced the company to cut costs and rebalance its spending portfolio. During 2020, Tinsa capitalized on early technology investments, helping the company make a smooth transition into remote and hybrid work.
Tinsa Mexico’s commercial strategy was amended not as a reaction to the COVID-19 pandemic but from the realization that the company needed to expand into new markets to not depend on a single client base and the market’s cyclical lulls.
Q: What data from Tinsa’s Business Intelligence platform are clients most interested in and how does it provide added-value?
A: Our Business Intelligence platform provides added-value to our clients by using market intelligence to generate greater certainty, which is necessary to make informed and sound business decisions.
For clients navigating the valuations market, Tinsa’s INCOIN Analytics system provides consultancy services to all our clients. We publish all of our technical expertise, projections and reports on the system. Our research and findings are transparent and guided by the best international standards, which puts a seal of quality on our reports.
All consulting data is collected in our trimestral census reports and added to an analytics platform, which our clients can use to create automated reports and watch them change in real time as new data is introduced. Our clients can also access the data sets available and use them to draft their own reports. Our intelligence platform is relevant to all market participants as its main purpose is to help real estate actors, from investors to developers, make informed business decisions regarding development projects.
Q: Why do clients choose Tinsa to carry out their valuations?
A: Tinsa’s service is superior thanks to our data indicators and methodology, as well as the relationship we have built with evaluators that conduct on-site revisions. This work is improved by cross-referencing our database by market subsectors, location and time. This supplemental work is crucial to evaluate the evolution of the value of assets, identify and flag unforeseen risks and, most importantly, formulate strategic solutions that deliver results.
Q: How has the COVID-19 pandemic impacted your clients' portfolios and what trends have emerged?
A: The COVID-19 pandemic hurt some subsectors within the real estate market, especially the office segment and hotels. With remote and hybrid work models here to stay, the emerging trend is to reconfigure hundreds of available square footage of office space into co-living and apartment complexes.
While the retail subsector steadily declined in international markets due to the e-commerce boom, in Mexico the market has remained uniquely resistant and even grew during the past two years. In many parts of the country, there are delays in availability, a trend that has not gone unnoticed by developers.
Within the residential market, the elimination of federal subsidies and capital flight have forced developers to move away from social interest and multi-use residential projects, often leaving these projects unfinished, even in principal markets. Developers have instead pivoted toward middle and residential projects, which have proven to be remunerative in a market defined by limited floor space and with affordability still a major barrier.
Overall, since development projects can take from 12-24 months to complete, depending on their complexity and location, the sector was unable to react immediately to new needs generated by the pandemic, such as open social spaces, spare rooms for offices and yards. This year, however, new development projects likely will include some of these new market demands.
Q: What objectives does the company have for 2022?
A: Tinsa Mexico’s objective for the past two to three years has been to target new commercial segments and proptech is our doorway in. We are about to launch a new platform, RADAR, with which the company will target the wider consumer market. The platform aims to give homeowners accessibility to our expert consultancy services so they can better understand the rentability and value of their assets. This product is different in an already saturated market because proptech is based on verified market data. We are also working on the development of an automatic valuation model that we believe is the future of the sector.