Mexico City and its metropolitan area (ZMCM) are one of the most important areas for manufacturing at regionally.  The municipalities of Cuautitlan, Tepotzotlan and Tultitlan concentrate the highest number of square meters at the industrial real estate sector.


 


Here, companies from sectors such as logistics, manufacturing, automotive and of food, have found the strategic location to distribute their products and provide their services.


 


Among the main operations of companies that acquired an industrial space during 2018 standout the one of Mercado Libre, Federal Mogul and Hasbro, to mention a few.


 


As of the fourth trimester 2018, the net absorption at the industrial area of Mexico City registered 110,000 square meters; meanwhile, the accumulate of the year regarding trade within the industrial market reached 580,000 square meters, said CBRE Mexico.


 


“The scenario of construction for the industrial market in Mexico City seems fine, recording a closing of 627,000 square meters, from which 37 % are pre-leased and 63 % available for its marketing,” he added.


 


At the end of the year, construction was reactivated in Cuautitlan and it positions with 37 %, this means is the submarket with the highest number of square meters in development; Tultitlan with 31 %; and Tepotzotlan reported 16 percent.


 


Regarding the new offer, CBRE Mexico referred that during 2018 604,000 square meters were reported.


 


Regarding the sectors that demanded more industrial space surface, the Logistics and Distribution sector obtained 45 %, followed by the manufacturing sector, with 20 percent.


 


By the end of the fourth trimester of 2018, the inventory class A of the industrial market from Mexico City closed in about 8.25 million square meters, which represents an annual increase of 7 percent.


 


Cuautitlan was the submarket with the highest inventory of 38 %, followed by Tepotzotlan with 19 % and Tultitlan with 18 percent.


 


The Mexican Chamber of the Construction Industry (CMIC, by its Spanish initials) estimated that this year there will be a maximum growth of 2 % in the construction sector.


 


The Federation Expenses Budget (PEF, by its Spanish initials) in infrastructure is of 679,377,000 pesos, which represent 2.7 % of the Gross Domestic Product (GDP.)


 


Eduardo Ramirez, national president of the Chamber, said that the industry could be encouraged by the private initiative if there are conditions to invest in the country; likewise, he said that in 2018 the construction industry grew 1.6 %, thanks, thanks to the private investment which was of 2 billion pesos approximately.


 


SPACE FOR MANUFACTURING


 


Meanwhile, Sergio Perez Castilleja, executive director of Newmark Knight Frank Mexico, highlighted that as result of the USMCA, the three nations are seeking to increase competitiveness in the region, establishing a responsible and fair environment of employment and commerce creation, to place this trade block on a privileged position of competitiveness and in a continuous growth with players increasingly sophisticated and powerful.


 


The real estate market is involved on this goal.  The sense of real estate developers, of properties as well as institutional in facing the Agreement, is positive for the positions that have been developed.


 


Likewise, thanks to the designation of origin, to the needs of e-commerce and the growth of the internal market, a higher absorption of space is expected for the manufacturing of products in the region.


 


“All this will be reflected on a quick growth of the industrial inventory on main markets, such as the Monterrey, which has an inventory higher than 5.72 million square meters class A; or the one from Tijuana which added more than 100 thousand square meters to its inventory in only one trimester of the current year, same that already have had an absorption of 80 % on that same period,” he said.


 


He underlined that Mexico City integrated on that period 162 thousand 800 square meters to its already massive inventory of 10.1 million square meters, with an increase in construction of 16.1 percent.


 


“As referent, the total national industrial inventory has grown since 2008 of 36.7 million square meter to 62.3 million this year, this means 42 % nationally with markets such as Guadalajara experiencing a growth of more than 523 %, Aguascalientes 484 %, Queretaro 190 % and Guadalajara in 140 % in the last decade,” underlined Sergio Perez.


 


The industrial real estate market in the Latin American region showed, during the first semester of 2018, at steady rate reaching a total inventory of 38.89 million of square meters, more than 2.6 million square meters than the first semester of 2017.


 


According to the Newmark Knight Frank report for the area, during the first semester of 2018 the activity of construction is kept without drastic changes with 1.96 million square meters.


 


“Mexico’s case showed a slow pace ascribed to the election period; however, at the beginning of the transition process decisions were made from national and foreign investors, added to the NAFTA 2.0 negotiations which had a good destination in 2018,” said Giovanni D’Agostino, president for Mexico and regional director for Latin America for Newmark Knight Frank (NKF.)


 


The industrial inventory of Mexico City and its metropolitan area (ZMCM) showed the highest semesterly growth of the region with the income of 218 thousand square meters, and closed the second trimester very close to 10 million square meters among the 9 industrial corridors on the ZMCM.  The construction surface was increased to 435 thousand 661 square meters, verifying the good health of the market.


 


Another positive indicator was for the recovering of the trimester absorption, which increased to 237 thousand 978 square meters and reduced 5.5 % availability rate.


 


It is important to underline the expansion of the electronic commerce as an agent increasingly important in Mexico City.  An example of that is the company Mercado Libre which closed the acquisition of more than 97 thousand square meters in the Tepotzotlan corridor, northern of the city.  With that, the accumulated absorption increased to 357 thousand 600 square meters.


 


The activity in construction showed an increase of 10 % compared with the previous semester, excelling the industrial buildings located in the municipality of Tultitlan, with more than 37 thousand square meters.


 


INVESTMENT IN TLAXCALA


 


The secretary of Economic Development (SEDECO, by its Spanish initials) in Tlaxcala announced that as result from the customized service provided to businessmen and from the promotion of the competitive advantages of the entity, Tlaxcala registered an investment from the industrial sector higher than 223 million dollars in 2018.


 


The office underlined that eight new investment were concreted, while other companies expanded their operations in the entity, generating new direct jobs in benefit of Tlaxcala families.


 


Among the industries arriving to Tlaxcala standout the French company Lohr Mexico from the automotive sector and the beginning of operations of the German company Krombert & Schubert at the beginning of 2019; regarding the generation of renewable energies, Ennel Green Power from Italy started the construction of a photovoltaic solar park with more than 550 thousand panels.


 


Also, among the Mexican companies that decided to invest in the entity are Ensambles Bancor, Arcomex Planta Atltzayanca, Divisa Quimica Asociados, Centro de Arrendamiento de Inmuebles y Servicios.


 


Likewise, the expansion of the companies Kimberly Clark and Flowserve from the United States was concreted, also of Knipping Automotive from Germany, among others.


 


The arrival and expansion of industries resulted from strategies such as the expansion of the Investment Promotion Program which centered in serving investors with projects that are directly integrated to the sectors with more dynamism and growth in Tlaxcala.


 


With these actions, Tlaxcala consolidates in the central area of the country by using the competitive advantages it has such as its strategic geographic location, security rates and economic stability.


 


PUEBLA


 


Puebla is one of the States that had higher automotive investment.  The entity continues with the performance sustained on the manufacturing sector, mainly in the automotive industry, due to las year the economy grew 6.8 percent.


 


According to the six months period analysis Regional Sector Situation 2018, announced by BBVA Bancomer which belongs to the years 2014 to 2018, the Foreign Direct Investment (FDI,) was centered on the states of Puebla and Nuevo Leon; the Korean company KIA, with a plant established in the northern state, invested 3,000 million pesos in 2016 for the model Hyundai.


 

While in the same year, Audi invested 1,300 million pesos for the Q5 model; 1,000 million pesos were invested by Volkswagen to assembly the models Tiguan and 658 million pesos for Jetta A7 on March 2018.