Anticipated Surge: Industrial Real Estate Sector Foresees Growth in 2024

Industrial Construction in Mexico Surges to 5.6 Million Square Meters by Year-End 2023

Recent data from the Solili platform reveals that industrial constructions in Mexico reached approximately 5.6 million square meters by the end of 2023, marking a 5.7% increase compared to the close of 2022.

Notably, key industrial markets in the country, including Monterrey, Mexico City, and Saltillo, surpassed the average growth with increments of 20%, 36%, and 24%, respectively.

Specialized Works

The construction industry, as a whole, contributes an estimated $133 billion to Mexico's economy in 2023, representing 7.6% of the national GDP. This sector encompasses three subsectors: building construction, specialized construction works, and civil or heavy engineering projects.

Solili reports that another significant indicator, industrial vacancy, reached 1.97% by the end of the fourth quarter in 2023, playing a pivotal role in forecasting upcoming demand and construction trends.

7 Key Trends

Prologis Research recently identified seven key trends for the industrial real estate market in the United States and Latin America for 2024. Anticipations include a potential reversal of the global freight recession, accelerating land and port traffic. Another notable trend foresees a slowdown in industrial construction in 2024, coinciding with industrial rent prices continuing to rise, reaching double digits in markets facing vacancy depletion.

Logistics Facilities

The fourth trend anticipates an acceleration in annual demand in China, surpassing excess supply from previous years. The fifth trend focuses on technology, particularly artificial intelligence, increasing energy requirements in logistics facilities, driving a doubling of solar capacity in warehouses.

Solili estimates that the final two projections are related to financial matters, such as a decline in interest rates facilitating real estate financing. Lastly, it is expected that capitalization rate movements will reverse, reducing capital costs in the United States and Europe but increasing in Japan as monetary policy tightens, impacting investment trends.