Industrial Business Review: Central 2Q 2022
2Q 2022 CENTRAL Index We are Datoz
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Methodology
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Centro region
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Markets
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Economic outlook
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Summary
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Inventory (ft2)
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Vacancy rate (%)
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Asking prices (USD/ft2/month)
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Gross absorption (ft2)
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Construction (ft2)
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Net absorption (ft2)
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Looking forward
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Glossary
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Legal notice
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Contact
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2Q 2022 CENTRAL
We are Datoz We combine continuous commercial real estate research with cutting edge software to provide transparency to the industry through impartial and constantly updated market intelligence. Our research team monitors and records real estate activity throughout México, covering 24 markets in the industrial segment, 5 markets in the corporate segment and 14 markets in the retail segment. Research efforts include field verification activities that reinforce our data precision and provide our researchers with physical evidence to support our monthly market updates. Datoz proprietary software allows users to connect online any time and from anywhere. Our suite of products offers the possibility to browse verified available spaces, download property brochures, view details from thousands of lease and sale transactions, customize data-sets, download statistics and indicators in friendly and customizable formats, among many other features.
Methodology We work with an extensive network of market participants and maintain constant contact to update information on a monthly basis. In this manner, we ensure that key market data comes directly from the professionals involved in diverse activities that affect commercial real estate in each and every market. Our researchers verify all collected data and visit markets regularly to corroborate information that can only be validated through physical surveys and on-site inspections. We continuously work to standardize number formats, calculations and ratios in order to present our results in a simple and comprehensible manner. Once data has been thoroughly verified and meets quality standards, it is merged and loaded unto our database, which in turn compares it against other entries pertaining to the same property and market to validate its place in a building’s historic timeline. Furthermore, our analysts continually review our data-sets in order to proactively amend anomalies and in doing so help maintain the highest standards of quality for real estate data in Mexico
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2Q 2022 CENTRAL
Central region
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2Q 2022 CENTRAL
Markets
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2Q 2022 CENTRAL
Economic outlook During April 2022, industrial activity continued to accelerate, as all sectors recorded growth in their production levels. Industrial activity grew 2.9% annually and 0.6% compared with the previous month, this was the best result in the last three months. Manufacturing activities were the country's industrial driver, according to INEGI (Instituto Nacional de Estadística y Geografía.) Employment in the manufacturing industry grew 0.1% on a monthly basis during April, and 2.8% annually, according to INEGI. With these figures, employment has risen 11 consecutive months. Consumption registered a 0.8% monthly increase in April 2022. Moreover, when compared to February 2020, just prior to the pandemic, consumption has shown a full recovery of 3.8%, according to INEGI. Inflation continued to rise in June 2022 and reached 7.99%, its highest level since January 2001. This was due mainly to the increases in energy and agricultural product prices, according to INEGI.
Summary 1. The central region’s markets closed the second quarter of 2022 with a total inventory of 203.3 million ft2, roughly 3.25% more than 2Q 2021. 2. By the end of 2Q 2022, the region’s vacancy rate was 3.46%, equivalent to 9.4 million ft2. Mexico City’s vacancy rate stood at 5.08%. 3.
During 2Q 2022, the region accumulated 6.8 million ft2 of gross absorption.
4. Weighted average asking price for industrial space in the central region stood at $0.43 USD/ft2/month. 5.
Construction starts in the region recorded 3.1 million ft2 in 13 projects.
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By the end of 2Q 2022, the net absorption in the central region was -748,834 ft2.
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2Q 2022 CENTRAL
Inventory (ft2) The central region, which includes the markets of Mexico City, Hidalgo, and Puebla closed 2Q 2022 with a total inventory of 203.3 million ft2 of GLA, an increase of 3.25%. Mexico City drove this growth by adding 6.4 million ft 2 in the last 12 months, to reach 161.4 million ft2. 180,000,000 160,000,000 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000
0 Ciudad de México
Hidalgo
2021-06-30
Puebla
2022-06-30
Vacancy rate (%) By the end of 2Q 2022, the region's vacancy rate stood at 3.46%, this is equivalent to 9.4 million ft2 available space. This rate has dropped 134 basis points year-over-year. Mexico City’s vacancy rate stood at 5.08%, with 8.2 million ft2 of available space. 0
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Ciudad de México
Hidalgo
Puebla
2021-06-30
2022-06-30
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2Q 2022 CENTRAL
Asking prices (USD/ft2/month) The weighted average lease asking price for industrial space in the central region stood at $0.43 USD/ft2/month. Mexico City has had an increase in prices and its average asking rate at the end of the quarter was $0.57 USD/ft2/month. Meanwhile, Hidalgo and Puebla had year-over-year decreases in their average asking prices. 0.70 0.60 0.50 0.40 0.30 0.20 0.10
0.00 Ciudad de México
Hidalgo 2021-06-30
Puebla
2022-06-30
Gross absorption (ft2) During 2Q 2022, the central region accumulated gross absorption of 3.2 million ft2, a decrease of 13.27% year-over-year. Mexico City had a gross absorption of 3 million ft2, 9.50% lower than the same period in 2021. Puebla also recorded lower absorption, while Hidalgo did not have leasing and sale activities. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Ciudad de México
Hidalgo 2Q-2021
Puebla
2Q-2022
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2Q 2022 CENTRAL
Construction (ft2) By the end of 2Q 2022, only Mexico City registered construction starts in the central region, adding up to 3.1 million ft2 of GLA across 13 buildings, a year-over-year increase of roughly 184%. One of the market’s prominent corridors, CTT (Cuautitlán – Tultitlán – Tepotzotlán) concentrated more than 77% of total construction activity. 0
500,000 1,000,0001,500,0002,000,0002,500,0003,000,0003,500,000
Ciudad de México
Hidalgo
Puebla
2Q-2021
2Q-2022
Net absorption (ft2) By the end of 2Q 2022, the net absorption in the central region was -748,834 ft2. CDMX recorded the highest negative absorption with -840,776 ft2, while Puebla had positive net absorption, with 188,818 ft2. Ciudad de México
Hidalgo
Puebla
400,000 200,000 0 -200,000 -400,000
-600,000 -800,000 -1,000,000 2Q-2021
2Q-2022
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2Q 2022 CENTRAL
Looking forward The central region is one of the most dynamic on a national scale. CDMX stands out for its high demand, mainly from logistics companies to streamline supply chains. Strong market absorption has caused the vacancy rate to decrease during the last two years pressuring speculative construction activity in order to supply this demand. This is a great opportunity as well as a challenge for developers since land availability is scarce and thus has a high price compared with other large markets in Mexico. pushing asking lease prices upward along with recent increases in construction costs. The CTT corridor, made up by the submarkets of Cuautitlán, Tultitlán, and Tepotzotlán, recorded the strongest demand during 2Q 2022 with 24 transactions totaling 2.5 million ft2. There are currently three large industrial parks being developed in CTT, which plan to be ready by the end of the year. All in all, we expect the dynamism in the region to continue.
Glossary Inventory: sum of the area of all buildings type A, B and C according to most developers and institutional brokerage companies at the last day of the period. Availability rate: available area divided by inventory at the last day of the period. Asking price: weighted average asking price weighted by the available area at the last day of the period. Gross absorption: sum of leased, subleased and sold area during the period. Net absorption: gross absorption minus the sum of the following areas during the period: available area because of a move out and build-to-suit building area. Construction: sum of the following building areas during the period: build-to-suit, speculative and own construction.
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2Q 2022 CENTRAL
Legal notice The material presented in this document by Datoz Real Estate refers to information collected from the market and provided by trusted sources. The contents shall be exclusively informative without legal value or effect or of any other nature, so Datoz Real Estate is not responsible for any damage that results from or may derive from the use or misuse that is made of these contents. For more information about this report or any other investigative material of Datoz consult our website www.datoz.com.
Contact
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