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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 Northwest
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
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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
NORTHWEST
Sonora Chihuahua
Baja California
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INVENTORY 3Q20
Inventory The northwest region’s total inventory, which includes the markets of Chihuahua, Ciudad Juárez, Hermosillo, Mexicali, Nogales and Tijuana, closed 3Q-2020 with a total of 209.4 million ft2 of GLA, approximately 1.43% 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 Northwest
MARKET
INVENTORY
Tijuana
71,978,829
Ciudad Juárez
68,040,831
Mexicali
25,009,978
Chihuahua
19,354,587
Nogales
12,620,922
Hermosillo
12,370,973
Total
209,376,119
Ciudad Juárez drove this increase, adding over 1.5 million ft2 of GLA in the last 12 months, reaching a total inventory of 68.0 million ft2. Tijuana, the largest market in the region, recorded a total GLA of 72 million ft2
Ciudad Juárez
Tijuana
33%
34% Hermosillo
6%
12% 6%
9%
Nogales *ft2 **Northwest © Source: Datoz
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Mexicali Chihuahua
VACANCY RATE
3Q20
Vacancy rate
MARKETS
2019
2020
Hermosillo
5.99%
6.69%
Chihuahua
5.67%
5.03%
Tijuana
5.61%
4.33%
Ciudad Juárez
5.13%
5.32%
Mexicali
4.79%
4.60%
Nogales
3.21%
2.92%
Average
5.24%
4.80%
During the third quarter of 2020, the region recorded a vacancy rate of 4.80%, roughly 10 million ft2. This figure represents a decrease of 44 basis-points compared to the previous year By the end of 3Q-2020, Ciudad Juárez and Tijuana’s vacancy rate stood at 5.32% and 4.33%, respectively
2019 2020
The ratio of available space to total inventory is described as vacancy rate. 0%
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1%
2%
3%
4%
5%
6%
7%
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*Northwest © Source: Datoz
GROSS ABSORPTION
3Q20
Gross Absorption
MARKETS
The northwest region recorded a YTD gross absorption of 5.5 million ft2. Tijuana has been the most active market with a YTD gross absorption of 2.7 million ft2.
3Q-2020
Ciudad Juárez
1,146,583
Tijuana
826,162
Mexicali
90,040
Chihuahua
-
Hermosillo
-
Nogales
-
Total
2,062,785
During 3Q-2020, regional gross absorption amounted to 2.1 million ft2. About 40% more than the previous quarter but less than 20% from the previous year. Ciudad Juárez was the top performer for the quarter with 1.1 million ft2 across eight transactions, followed by Tijuana with over 825,000 ft2 of gross absorption.
1,200,000 1,000,000 800,000 600,000 400,000 Gross absorption refers to the amount of space leased or sold to an end-user during any given period.
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200,000 0
*ft2 **Northwest © Source: Datoz Ciudad Juárez
Tijuana
Mexicali
Chihuahua
Nogales
Hermosillo
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ASKING AND CLOSING PRICES
3Q20
Asking and closing prices
MARKETS
ASKING
CLOSING
Tijuana
$0.50
$0.48
Nogales
$0.48
-
Hermosillo
$0.44
-
Ciudad Juárez
$0.40
$0.47
Chihuahua
$0.38
-
Mexicali
$0.35
$0.40
Average
$0.43
$0.45
In the third quarter of 2020, the weighted average lease asking price for industrial space in the northwest region stood at $0.43 USD/ft2/month, while the average lease closing price was $0.45 USD/ft2/month. Tijuana traditionally has one of the highest rates in the region, currently averaging at $0.48 USD/ft2/month.
$.60 $.50 $.40
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.
$.30
Asking
$.20
Closing
$.10 *USD/ft2/month **Northwest
$.0 Tijuana
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Nogales
Hermosillo
Ciudad Juárez
Chihuahua
Mexicali
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© Source: Datoz
CONSTRUCTION ACTIVITY
3Q20
Construction activity
During the 3Q-2020, Ciudad Juárez and Tijuana recorded construction starts adding up to 542,114 ft2 of GLA across five buildings, a year-over-year decrease of 64.13%. Speculative buildings represent 93.46% of ft2 under construction.
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.
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NAME
PARK
GLA
OWNER
MARKET
SUBMARKET
Horizon Park III
Horizon Industrial Park
108,350
Inhoga
Tijuana
Central /El Lago
Bravos IX
Los Bravos III
179,385
Grupo Los Bravos Ciudad Juárez
Sureste
Expansion Boyd
Juárez Industrial
108,806
Roca Desarrollos
Suroeste
Ciudad Juárez
*ft2 **GLA (Gross Leasable Area) **Northwest © Source: Datoz
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SUMMARY
3Q20
Summary The northwest region (Chihuahua, Ciudad Juárez, Hermosillo, Mexicali, Nogales and Tijuana) closed the third quarter of 2020 with a total inventory of 209.4 million ft2, a 1.43% year-over-year increase. By the end of 3Q-2020, the region’s vacancy rate was 4.80%, around 10.1 million ft2. Ciudad Juárez and Tijuana’s vacancy rate stood at 5.32% and 4.33%, respectively. YTD gross absorption totaled 5.5 million ft2. Meanwhile, 3Q-2020 gross absorption amounted to 2.1 million ft2. The weighted average asking price for industrial space in the northwest region closed the 3Q-2020 at $0.43 USD/ft2/month, while the weighted average closing price stood at $0.45 USD/ft2/month. During the 3Q-2020 construction starts in Ciudad Juárez and Tijuana added 542,114 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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3Q20 Northwest
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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.
Contact 01 (81) 2721 0850Â www.datoz.com Calzada San Pedro No.104-A. Col. del Valle.Â
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