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Record Periods of Gross Absorptions for Industrial Assets in CDMX

By Carla González, SiiLA



One of the most representative industrial investment markets is the one comprising the CDMX and the Metropolitan Zone of the Valley of Mexico, mostly focused on logistics centers.


The industrial market of Mexico City is known as the main logistics center in the country, due to its geographic location in the center of the Mexican Republic, its rail, road and air connections (since March 2021, it has two international airports, AICM and AIFA, for cargo and passenger transportation), and for being the metropolis with the largest population (approx. 20M inhabitants) in Mexico.


The industrial market of Mexico City is known as the main logistics center in the country, due to its geographic location in the center of the Mexican Republic, its rail, road and air connections (since March 2021, it has two international airports, AICM and AIFA, for cargo and passenger transportation), and for being the metropolis with the largest population (approx. 20M inhabitants) in Mexico.


Source: Market Analytics, by SiiLA


Prior to 2019, the market had an important growth in industrial buildings, caused by the continuous demand of square meters by foreign companies that came to establish themselves and by the expansion of those already established, mainly for warehouse use.


2020 was the year with the lowest absorption since 2019, this caused in part by the COVID-19 health crisis; which, in turn, would drive demand for new spaces, due to the growth of e-commerce and investment from startups in the same line of business and logistics. This growth would initially be seen in the CDMX and later in other states; however, in 2021, the market's highest monitored gross absorption was recorded with 1,133,820 m2. As of the first quarter of 2022, approximately 250,000 m2 have been absorbed, which represents a 7% increase compared to the same quarter of the previous year.



Source: Market Analytics, by SiiLA



In Industrial CDMX, some of the main tenants belonging to the previously mentioned sectors, and which absorbed the largest amount of square meters during 2021 were: Amazon, in the Vallejo-Azcapotzalco and CTT submarkets in spaces managed by PARKS and O'Donnell. Mercado Libre, in the Tlalnepantla and CTT submarkets, located in parks developed by Litos, which also has 69% of warehouses with LEED Certification. As well as DHL in the CTT submarket in a Grupo Advance park.


Source: Market Analytics, by SiiLA



With the rapid growth of these and other companies in the same or similar lines of business, the demand for last-mile spaces focused their interest in submarkets such as Iztapalapa, Vallejo, Naucalpan and Tlalnepantla. A competition was created among them as to who offered the best and fastest service, which would make them look for smaller spaces of less than 1,000 m2 to no more than 5,500 m2, to store a few products; some of these companies to which we refer are: Mercadeo, 99 minutos, Joker, Rappi, Baz Entregas, Paquete Express, Fedex, Nutenta, etc.



For this 2022, in the CTT submarket, for example, the developer O'Donnell will deliver a build-to-suit (BTS) property of around 25,000 m2 to Estafeta, a company that provides logistics services. In addition, according to information provided by Expansión, this company will migrate its operations from the AICM to Nextlalpan.