Nearshoring promotes the growth of the industrial market in Monterrey

At the third quarter of 2022, the industrial market in Monterrey continues to expand with historical levels of construction, vacancy, and rental prices. Quarterly gross absorption exceeded 414,000 m² (in its accumulated figure) registering 1.39 million m², a figure 52% higher than that registered in the same period of 2021.

The firm CBRE Group details that, despite the complex international economic and political scenario, the city remains attractive to investors seeking to meet the demand for North American consumption and nearshoring projects.

Likewise, it details that the manufacturing sector, as well as investments of Chinese origin, are positioned as the main drivers of this industrial activity at the end of the quarter.

“Monterrey´s proximity to the US border, along with its skilled workforce, infrastructure, and solid supplier network, make it an extremely advantageous location for occupants and investors. An increase in investment and development have turned the city into one of the main industrial markets in Mexico,” said Ramon Flores, executive vice president of “CBRE Noreste”.

Indicators of the industrial market in Nuevo León

The Ministry of Economy reported that Nuevo León closed the first half of the year with a Foreign Direct Investment (FDI) of more than 2,661 million dollars, the equivalent of 9.7% of the entire country and second place nationally.

This investment equates to 104% growth compared to the same period of the previous year, as well as 82% of the annual value of 2021.

“This growth is the result of expansion projects of companies that already had a presence in the state and are growing to meet the demand of the United States, as well as the arrival of new investments due to nearshoring”, refers the information.

Likewise, the Chamber of the Transformation Industry of Nuevo Leon (CAINTRA) reported that the industrial sector continues to grow, as all manufacturing indices were within the expansion threshold at the end of July, with the exception of imports and exports that showed a slight recoil.

“The state’s economic environment previously described is reflected in the growth of industrial inventory in Monterrey, where the closing of the third quarter of 2022 added 251,000 m² in 16 new properties, closing at 12.17 million m² of existing inventory”, details the firm.

He adds that construction remains at all-time highs with more than 927,000 m² distributed in 33 projects. 79% of this area corresponds to pre-leases, leaving only 194,000 m² to the speculative market.

“This trend has intensified in recent months due to low vacancy of existing buildings and companies looking for larger-than-average properties on the market,” says CBRE Group.

The firm reports that, at the end of the third quarter of the year, the manufacturing sector continues to lead the industrial demand in Monterrey and its metropolitan area, taking 70% of the total leased space.

The Automotive and High Technology sectors follow in second and third place, with 14% and 12% respectively.

"These three sectors have been the main drivers of activity in the cumulative up to the third quarter of 2022," he points out.

Finally, he refers that China continues as the main country of origin of new investments, with 46% of gross absorption. Investments from Germany rank second with 22%, leaving the United States in third place with 19%.