NORTHEAST 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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We are Datoz
1
Index
2
Economic outlook
3
Market location
4
Inventory
5
Vacancy rate
6
Gross absorption
7
Asking and closing prices
8
Construction activity
9
Summary
10
Glossary
11
Methodology
12
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
NORTHEAST
Coahuila Nuevo Leรณn
Tamaulipas
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INVENTORY 3Q20
Inventory The northeast region’s total inventory, which includes the markets of La Laguna, Matamoros, Monterrey, Nuevo Laredo, Reynosa and Saltillo, closed 3Q-2020 with a total of 252.6 million ft2 of GLA, approximately 2.09% more than the same period a year earlier.
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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3Q20 Northeast
MARKET
INVENTORY
Monterrey
125,002,250
Saltillo
51,387,177
Reynosa
34,402,760
Matamoros
17,140,688
La Laguna
14,124,209
Nuevo Laredo
10,542,443
Total
252,599,527
Monterrey’s market drove this increase, adding over 3.3 million ft2 of GLA in the last 12 months, reaching a total inventory of 125.0 million ft2.
Matamoros Reynosa La Laguna
14%
7%
6%
4%
20%
Saltillo
49% Monterrey
*ft2 **Northeast © Source: Datoz
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Nuevo Laredo
VACANCY RATE
3Q20
Vacancy rate
MARKET
2019
La Laguna
7.44%
10.64%
Nuevo Laredo
6.86%
8.58%
Monterrey
7.86%
7.88%
Matamoros
6.02%
6.54%
Saltillo
4.90%
5.67%
Reynosa
5.36%
3.89%
Average
6.72%
6.98%
In the third quarter of 2020, a vacancy rate of 6.98% was recorded for the region, roughly 17.6 million ft2. This represents a decrease by 26 basis points when compared year-over-year.
2020
Only Reynosa, out of the 6 markets that make-up the northeast region, experienced a a year-over-year decrease in vacancy rate. Monterrey's rate increased slightly, by 2 basis points.
2019 2020
*Northeast Š Source: Datoz
The ratio of available space to total inventory is described as vacancy rate. 0%
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3Q20 Northeast
2%
4%
6%
8%
10%
12%
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GROSS ABSORPTION
3Q20
Gross Absorption
MARKETS
3Q-2020
Monterrey
1,700,805
Reynosa
470,566
Saltillo
93,851
La Laguna
-
Matamoros
-
Nuevo Laredo
-
Total
2,265,222
The northeast region recorded a YTD gross absorption of 6.6 million ft2 driven by Monterrey which totaled 4.7 million ft2 of gross absorption during the first three quarters of 2020. During the 3Q-2020 regional gross absorption amounted to 2.3 million ft2, 44.88% more than 2Q-2020, but a year-over-year decrease of 49.11%. Monterrey was the top performing market in the region, with gross absorption of 1.7 million ft2 across 19 transactions mainly for manufacturing and logistical activities, followed by Reynosa and Saltillo with 470,566 ft2 and 93,851 ft2, respectively.
2,000,000 1,600,000 1,400,000 1,200,000 800,000 Gross absorption refers to the amount of space leased or sold to an end-user during any given period.
400,000 0 Monterrey
Reynosa
Saltillo
Nuevo Laredo
La Laguna
*ft2 **Northeast Š Source: Datoz
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3Q20 Northeast
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Matamoros
ASKING AND CLOSING PRICES
3Q20
Asking and closing prices
MARKETS
ASKING
CLOSING
Nuevo Laredo
$0.42
-
Saltillo
$0.38
-
Matamoros
$0.38
-
Monterrey
$0.38
$0.40
Reynosa
$0.37
$0.43
La Laguna
$0.32
-
Average
$0.38
$0.42
During the third quarter of 2020, the weighted average lease asking rate for industrial space in the northeast region stood at $0.38 USD/ft2/month while the average lease closing price was $0.42 USD/ft2/month. Reynosa had the highest closing rate, with an average of $0.43 USD/ft2/month, followed by Monterrey with a rate of $0.40 USD/ft2/month.
$.50 $.40 Asking
$.30
The asking price is the rate per square foot 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.
Closing
$.20 $.10
*USD/ft2/month **Northeast Š Source: Datoz
$0 Nuevo Laredo
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3Q20 Northeast
Saltillo
Matamoros
Monterrey
Reynosa
La Laguna
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CONSTRUCTION ACTIVITY
3Q20
Construction activity
During the 3Q-2020, Monterrey, Saltillo and Reynosa recorded construction starts, adding 1.2 million ft2 across 14 projects. Approximately, 17% less than the same period a year earlier. Speculative construction represented roughly 91% of construction starts. The remaining 9% of construction starts pertain to built-to-suit projects.
Featured projects
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.
NAME
PARK
GLA
ATP- B019
Apodaca Technology Park
148,373
Business Park 1-8
Garza Ponce Escobedo
104,194
Inventory Building II
Industrial Partners
140,722
OWNER CPA
MARKET SUBMARKET Monterrey
Apodaca
Garza Ponce Monterrey
Escobedo
Finsa
Saltillo
*ft2 **Northeast ****GLA (Gross Leasable Area) Š Source: Datoz
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3Q20 Northeast
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Arteaga
SUMMARY
3Q20
Summary The northeast region (La Laguna, Matamoros, Monterrey, Nuevo Laredo, Reynosa and Saltillo) closed the 3Q-2020 with a total inventory of 252.6 million ft2 of GLA, about 2.09% higher than a year earlier. By the end of 3Q-2020, the region’s vacancy rate was at 6.98% around 17.6 million ft2. Monterrey’s vacancy rate stood at 7.88%. YTD gross absorption totaled 6.6 million ft2. Meanwhile, 3Q-2020 recorded a gross absorption of 2.3 million ft2. Weighted average asking price for industrial space in the northeast region closed the 3Q-2020 at $0.38 USD/ft2/month. Closing price averaged $0.42 USD/ft2/month. During the 3Q-2020 construction starts in the region recorded 1.2 million ft2.
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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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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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