So far in the third quarter of 2022 (3T22), northern Mexico continues to give good results; Saltillo, Reynosa and Ciudad Juárez record growth in sectors such as industrial, logistics and transport, according to CBRE.
CBRE explained that the industrial market in Saltillo is in full expansion cycle at the end of the second quarter. Gross absorption alone was the highest recorded in a quarter, while the vacancy rate continues on a downward trend.
Industrial activity in the city continues to be dominated by the manufacturing and automotive sectors, where new investments for the electric vehicles and export manufacturing sector stand out.
For the second half of the year, a positive outlook is expected due to the pipeline of projects currently under development and the deliveries of pre-leased spaces that are under construction.
According to data from the National Institute of Geography and Statistics (INEGI), Coahuila remained one of the leading entities in the export of goods at the end of the first quarter of the year.
The state exported 12% of the national total, which is equivalent to 13.9 billion dollars for Coahuila. This figure represents a growth of 13.5% in relation to the same previous period, which places it in second place nationally, only surpassed by Chihuahua.
At the end of 2T22, the inventory in Saltillo closed at 3.79 million square meters (m²), an annual increase of 7.3%. Of which, more than 137 thousand m² of new industrial spaces were delivered in the last quarter. According to the report, 68% of this area is located in three Built To Suit projects in the Ramos Arizpe submarket, which remains the largest in the city, with 62% of the total.
The vacancy rate was 3.5% during 2T22, which showed a steep annual decrease of 3.5 percentage points. Now, the Saltillo submarket is positioned with the highest rate in the city, showing a slight growth compared to the previous quarter. For its part, Ramos Arizpe concentrates the largest amount of available space, with more than 75 thousand m².
During the second quarter, the industrial market of Reynosa remained very active, driven mainly by the logistics and transport sector, which accumulates 74% of the gross demand of 1S22.
For its part, the vacancy rate remains at historic lows, which keeps rent prices high in the city, a situation that has reactivated the pipeline of speculative buildings still under project, so it is expected that more than 50 thousand m² will start construction during the second half of the year.
The inventory ended 2T22 with 2.94 million m², an annual increase of 1.2%. During the last year, the new offer totaled around 35 thousand m², which was delivered in full during this last quarter. This growth was located in the submarket of the Pharr Bridge, which continues as the largest in the market, with 53% of the total existing inventory.
At 2T22, the vacancy rate closed at 0.3%, showing an annual decrease of 2.2 percentage points and reaching a historic low for class A inventory. All this offer is concentrated in a single property in Puente Pharr and equals 8 thousand m² available existing. This contraction is related to the increase in industrial demand in Reynosa in recent months.
Its industrial market closed in the second quarter of 2022 with the largest net absorption of the second quarter recorded in Juárez after the lease of the little existing space remaining in the market and the delivery of completed construction projects.
The space under construction was at its peak and the trend of speculative pre-lease space accelerated as the vacancy rate dropped to almost zero and tenants rushed to secure the space. The average rents requested for speculative space continue to grow as construction materials prices fluctuate and demand for industrial space in Juárez remains high.
The industrial construction portfolio continues to play an important role in market activity as the existing available space disappears. Of the 16 new lease contracts that were signed during the quarter, 10 are for special projects that are under construction or that will begin construction soon.
In addition, a bespoke construction agreement was signed for a project that will total more than 90 thousand m2 once completed. These agreements will contribute more than 195 thousand m2 of absorption once the construction is completed and delivered.
CBRE also monitors users’ demand for space in the industrial market of Juárez. It revealed that the second quarter of 2022 ended with users looking for almost 278 thousand m2, exceeding the average of the last 45 quarters by 39.9 thousand m2. Users look for spaces ranging from 5 thousand m2 to 37 thousand.
Of the total demand, more than 75% is accounted for by the electronics manufacturing, automobiles, parts manufacturing and transport/logistics/3PL industries. Almost all the demand for industrial space is through companies that already have a presence in the Juárez market and want to expand their operations.