28 April, 2023 | #DatozByDatoz
By the end of the first quarter of 2023, the asking prices of industrial buildings in the 21 most dynamic markets in Mexico reached their historical highs. The national average asking price per square meter per month was $5.16 USD, which is 10% higher than the same quarter in 2022, according to information from Datoz’s Analytics 2.0 tool.
It is worth noting that for the first time, the national asking price of industrial buildings exceeded $5.00 USD, as they were priced on average at $4.00 USD in the last five years. The increase in prices picked up speed as of 2020, so that between 1Q 2020 and 1Q 2023 the increase in asking prices at the national level was 22%.
During a meeting with the media, Pablo Quezada, Partner and Product Manager at Datoz, explained that the scarcity of industrial space supply in some important markets, such as Mexico City and Ciudad Juarez, influenced the increase in asking prices.
It is worth noting that during 2021 and 2022, the gross absorption exceeded 6 million square meters, compared to the previous three years when around 3 million square meters were absorbed nationwide.
In addition to the scarcity of industrial space, other factors such as the increase in construction input prices like cement, difficulty in energy supply to industrial parks, and finally, the rise in interest rates caused by the Central Bank to control inflation, have also contributed to the increase in asking prices, as pointed out by Pablo Quezada.
The Northwest was the region with the highest asking price, as the industrial spaces in commercialization were priced at an average of $6.21 USD/m2/month, increasing 14.5% compared to 1Q 2022. In this region, three out of the four industrial real estate markets recorded prices above $6.00 USD/m2/month, these were Tijuana with $7.43 USD/m2/month, Ciudad Juarez with $6.89 USD/ft2/month, and Chihuahua with $6.14 USD/m2/month.
Moreover, the markets mentioned above have experienced the greatest increase in prices between 1Q 2020 and 1Q 2023. In Ciudad Juarez, prices increased by 57%, in Chihuahua by 42%, and in Tijuana by 44%.
Silvia Gomez, Market Analyst at Datoz, explained that the border markets have had a greater impact on rental prices due to the demand for spaces and the challenges the region faces in terms of energy, as energy supply costs are passed on to the tenant.
Pablo Quezada reiterated that the increase in interest rates is the factor that most affects asking prices, and the upward trend is likely to continue in the following quarters.