August 15, 2023 | #DatozByDatoz
Several factors have influenced the lack of a visible recovery in the office real estate market in Mexico. Nevertheless, during the first half of 2023, the three main markets (Mexico City, Monterrey, and Guadalajara) experienced strong demand for office spaces, which could potentially drive the recovery of this real estate segment.
In a meeting with the media, Sergio Mireles, CEO of Datoz, mentioned that there has been an increase in the demand for office spaces in recent quarters. If this trend continues, it could signify the recovery for the segment during 2024.
While certain sectors, driven by nearshoring, have propelled the office market through the demand from technology, manufacturing, and logistics companies, this has been insufficient to expedite the recovery of this segment.
Another factor that could hinder the office market’s recovery is that companies are seeking flexibility and hybrid work models. “This drives the activity of coworking spaces but diminishes the appetite for traditional office spaces,” emphasized Sergio Mireles.
Overall, from January to June 2023, the three most significant office markets in the country recorded a gross absorption or transactions in lease and sales of over 215,000 square meters (m2) of gross leasable area (GLA). This marked a 35% increase compared to the same period of the previous year.
The demand for spaces in Mexico City is reaching pre-pandemic levels, as in the first half of 2023, there was a gross absorption of over 130,000 m2, which is 57% higher than 1S 2022.
This demand for spaces and the cautious approach towards initiating new projects contributed to a nearly 4% decrease in availability, with 2.7 million m2 available and an availability rate of 21.9%. Although it is still far from its lowest level, availability has gradually been diminishing.
In the first half of 2023, the demand for corporate spaces in Monterrey exceeded 60,000 m2, marking a 131% increase compared to the same period of the previous year. It is on the verge of reaching the total absorption of 2022, which amounted to over 65,000 m2.
Even though the absorption was driven by two transactions of over 10,000 m2 each, overall, it was a highly dynamic semester for Monterrey, fueled by the demand from logistics and technology companies.
This robust absorption contributed to a 14% reduction in availability, resulting in an offering of 330,000 m2, leading to an availability rate of 16.1%.
During the first half of 2023, the gross absorption in Guadalajara remained at levels similar to those of 2021 and 2022, at around 24,000 m2. Companies in the pharmaceutical and electronics sectors led the absorption. While these figures are modest, in the second half of the year, Guadalajara could increase its absorption and make further progress in its recovery.