CENTRAL www.datoz.com
3Q20
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 the activity of 24 industrial real estate markets and 5 corporate office markets throughout MĂŠxico. 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 search 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.
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Index
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3Q20 Central
We are Datoz
1
Index
2
Economic outlook
3
Market location
4
Inventory
5
Vacancy rate
6
Gross absorption
7
Asking and closing prices
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Construction activity
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Summary
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Glossary
11
Methodology
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Contact information / Privacy policy
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ECONOMIC OUTLOOK 3Q20
Economic Outlook According to INEGI (Instituto Nacional de EstadĂstica y GeografĂa), national industrial activity decreased 11.6% annually in July 2020. This is due to the drop by 23% and 9.5% in construction and manufacturing, respectively. Nevertheless, monthly industrial output rose by 6.9% when comparing September with August. Analysts at Monex Financial Group highlighted the urge of manufacturing in the gradual industrial recovery. Manufacturing employment contracted by 4.7% annually as of July 2020, while the monthly rate had an increase of 0.9%, according to INEGI.
In July 2020 consumption decreased by 15.1% year over year, this is the lowest in the last two months.
Inflation growth reached 4.05% in August 2020, driven by an increase
in the prices of some agricultural products, according to INEGI.
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Market Location
CENTRAL
Hidalgo
CDMX
Edo. de México
Tlaxcala
Puebla
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INVENTORY 3Q20
Inventory
The central region’s total inventory, which includes the markets of Mexico City, Hidalgo and Puebla, closed 3Q-2020 with a total of 185.0 million ft2 of GLA, approximately 4.21% more than the same period a year earlier.
Mexico City’s market drove this increase, adding over 7.2 million ft2 of GLA in the last 12 months, reaching a total inventory of 143.8 million ft2.
Hidalgo
Market Inventory measures the total size of a real estate market taking into account delivered building as well as those planned and under construction from all classes (A, B and C).
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*ft2
MARKETS
INVENTORY
CDMX
143,786,726
Puebla
28,976,684
Hidalgo
12,264,195
Total
185,027,605
6%
CDMX
16% Puebla
78%
**Central
© Source: Datoz
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VACANCY RATE
3Q20
Vacancy rate
2019
2020
CDMX
4.52%
7.53%
Puebla
2.30%
4.68%
Hidalgo
1.48%
1.48%
Average
3.95%
6.69%
In the third quarter of 2020, a vacancy rate of 6.69% was recorded for the region, roughly 12.4 million ft2 of GLA. An increase in inventory and weak absorption elevated this rate by 274 basis points compared to the previous year. Mexico City’s vacancy rate increased to 7.53%, with 10.8 million ft2.
Hidalgo
2019
Puebla
2020
CDMX *Central
The ratio of available space to total inventory is described as vacancy rate.
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0%
1%
2%
3%
4%
5%
6%
7%
8%
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Š Source: Datoz
GROSS ABSORPTION
3Q20
Gross Absorption
YTD gross absorption amounted to 6.2 million ft2 with Mexico City absorbing most of the space. During the 3Q-2020 the central region totaled 1.0 million ft2 of gross absorption, a decrease of 34.23% compared to the previous quarter and 39.52% year-over-year. Mexico City had six transactions for logistical activities.
MARKETS
3Q 2020
CDMX
1,005,758
Puebla
-
Hidalgo
-
Total
1,005,758
1,200,000
1,000,000
500,000
Gross absorption refers to the amount of space leased or sold to and end-user during any given period.
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0 *ft2
**Central
Š Source: Datoz
CDMX
Puebla
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Hidalgo
ASKING AND CLOSING PRICES
3Q20
Asking and closing prices
In the third quarter of 2020, the weighted average lease asking price for industrial space in the central region stood at $0.43 USD/ft2/month, while the average lease closing price was $0.49 USD/ft2/month.
Mexico City traditionally has one of the highest closing rates in the region and the country, currently averaging at $0.49 USD/ft2/month.
$0.60
MARKETS
ASKING
CLOSING
CDMX
$0.49
$0.49
Hidalgo
$0.41
-
$0.40
Puebla
$0.39
-
$0.30
Average
$0.43
$0.49
$0.50
$0.20 $0.10
The asking price is the rate per ft2 at which a building’s space is offered. On the other hand, the rate at which a space has actually been leased or sold is the closing price.
$0
*USD/ft2/month **Central
CDMX
Asking
Š Source: Datoz
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3Q20 Central
Hidalgo
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Puebla
Closing
CONSTRUCTION ACTIVITY
3Q20
Construction activity
During the 3Q 2020 Mexico City was the only market in the region to record construction starts adding two built-to-suits amounting to over 498,000 ft2 of GLA, 61% less than the same period a year earlier.
Featured projects
NAME
PARK
GLA
OWNER
MARKET
BTS - Alpura
San José Park IV
275,332
E Group
CDMX
Tepotzotlán
BTS – Alpura 2
San José Park IV
223,396
E Group
CDMX
Tepotzotlán
Construction Activity measures the total amount of construction initiated during any given period including speculative, built-to-suit (BTS) and built-to-own (BTO) spaces. *ft2 **Central ***GLA (Gross Leasable Area) © Source: Datoz
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SUBMARKET
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SUMMARY
3Q20
Summary The central region’s markets (Mexico City, Hidalgo and Puebla) closed the third quarter of 2020 with a total inventory of 185.0 million ft2, a 4.21% year-over-year increase. By the end of 3Q-2020, the region’s vacancy rate was 6.69%, around 12.4 million ft2. Mexico City’s vacancy rate stood at 7.53%. YTD gross absorption totaled 6.2 million ft2. Meanwhile, 3Q-2020 recorded a gross absorption of 1.0 million ft2. The weighted average asking price for industrial space in the central region closed the 3Q-2020 at $0.43 USD/ft2/month, while the weighted average closing price stood at $0.49 USD/ft2/month. During the 3Q-2020 construction starts in Mexico City recorded 498,713 ft2.
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3Q20 Central
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GLOSSARY
3Q20
Glossary Inventory (ft2): Measures the total size of a real estate market taking into account delivered building as well as those planned and under construction from all classes (A, B and C). Vacancy rate (%): The ratio of available space to total inventory. Availability (ft2): Measure of the total space available for lease and sale including delivered buildings as well as those under construction and planned from all classes (A, B and C). Gross absorption (ft2): Refers to the amount of space leased or sold to an end-user during any given period. Asking price: The rate per square foot at which a building’s space is offered. Closing price: The rate at which any given space has actually been leased or sold. Ongoing speculative construction (ft2): Speculative space under construction at the end of any given period. Construction activity (ft2): The sum of construction starts including speculative, built-to-suit (BTS) and built-to-own (BTO) projects.
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3Q20 Central
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METHODOLOGY
3Q20
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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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.
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