2020 Q3 has been a great season for the Bajio Region. It has seen a great rise in industrial real estate investment, in part due to the USMCA. By the end of the quarter the region showed a net absorption increase of 28%, which is the equivalent of 268 thousand square meters more than Q3 2019.
Bajio shows great signs of growth and development, driven in part by the USMCA
The industrial real estate market in the Bajio Region had a very positive closure to Q3 2020. According to the Industrial Report of the Bajío and Metropolitan Area of Guadalajara, economic reactivation of this sector keeps moving forward in the region. It has been most prominent in Guanajuato and Queretaro, and has been driven by all the new investments and recent expansions.
“It is expected that the USMCA will provide an additional boost to confidence in the region, which has the largest industrial development area in the country. Although Build To Suit projects are most common in this area, by the end of the quarter a project is being developed for an e-commerce tenant to meet the increase in demand for logistics space caused by the pandemic.”
There are over 400 thousand m² of construction projects in the Bajio Region. Guanajuato leads the region with 48% of these projects registered, followed by San Luis Potosi with 27%, and Queretaro with 20%. One of these new projects is being requested by Austrian firm Pollmann, which produces and develops complex high volume mechatronic sets, high in metal and plastic composites.
Pollmann announced that their newest inversion in Mexico has been encouraged by what is offered in the USMCA. They have been planning on entering the Mexican market for over four years, but it was until now that they decided to establish in the Bajio Region.
They settled in Polígono Empresarial San Miguel de Allende with the help of VYNMSA. This is their fifth international production location besides Austria, China, Czech Republic, and the United States.
“In Pollmann we think of Mexico as a second important location module for the entire USMCA region. We can tend our American clients with our Illinois venue and supply our Central and South American production facilities from Mexico,” stated Stefan Pollmann, project manager of Pollmann Mexico.
The USMCA has been very beneficial for Mexico and the Bajio Region. It has stimulated the economy and proven, yet again, the importance of the industrial real estate market.
What is the importance of industrial real estate in the Bajio Region?
Industrial real estate in the Bajio is a crucial element of the Mexican economy. Not only does it provide a space for production lines, it also plays a major role in global and regional supply chains. It provides infrastructure for companies to manufacture, develop, and trade new products and technologies.
Other key drivers of the industrial real estate demand include e-commerce and consumption. This all leads to reliable cash flow and resilient valuations, which is one of the main reasons investment can be so profitable in this sector.
The demand for industrial real estate in the Bajio is mostly driven by trade and consumption, both playing a major role in all economic activity. This market fuels the global trading system by making supply chains possible. It can also help smaller companies upgrade their outdated facilities to newer, and larger buildings.
Investing in industrial real estate is a step in the right direction for any company looking to expand or enter a new market.
What is a good investment in the modern industry?
The Bajio Region offers great opportunities for companies seeking to invest in a new project. How to be sure investing in Mexico is the right call? As obvious as it might seem, a good investment is the one that meets with the following criteria:
- Fits your company’s financial goals.
- Is within your company’s risk tolerance.
- Makes your company money.
The focus of investment should always be on what your company can do with what it has. It needs to be considered that what was a great investment for one business might be a bad one for another.
There are several reasons investment in industrial real estate in the Bajio Region has been growing. One of them is that the area lines up with all the characteristics of a great investment.
- It is a strategic area that offers a great competitive advantage for anyone entering the region.
- It has consistent industrial revenue and earnings growth.
- The Bajio Region, and Mexico in general, is fairly priced.
- The Mexican industry is resilient.
Even after the economic effects of the pandemic, the Bajio Region is still receiving the largest Direct Foreign Investment, closely followed by Nuevo Leon and Mexico City.
Mexico and the Bajio Region show a great panorama in industrial investment. The positive signs brought by the strong closure of the Q3 2020 paint a prosperous picture for the Mexican industry in 2021. Thus, here at VYNMSA we would like to assist you in settling in this country.
We are one of the leading industrial real estate developers in Mexico. Plus, we have over 30 years of experience and have delivered over 500 projects to fully satisfied customers. We are also fully equipped to assist you in developing your BTS projects. All while offering lease and sale solutions that always have a win-win approach.
We also are Broker Friendly and have around 20 inventory buildings ready for immediate occupancy. This is a total space of 2 million SqFt across Northeast and Central Mexico.
Contact us and set shop in Mexico with VYNMSA and invest in industrial real estate in the Bajio Region.
Sources: Líder Empresarial, Inmobiliare, The Balance
