Mexico’s office real estate market closed 3Q 2023 with a noticeable recovery in demand for corporate spaces, following being the segment most affected by the economic crisis triggered by the COVID-19 pandemic. In other words, after three years, the offices in Mexico City, Monterrey, and Guadalajara are beginning the path to recovery with increased gross absorptions (lease and sales transactions) and reduced availability.
Mexico City
From January to September 2023, the gross absorption of office spaces in Mexico City reached 240,000 square meters of gros leasable area (GLA), surpassing the absorption levels of the entire years 2020, 2021, and 2022. Undoubtedly, this will be the best year in terms of the number of square meters leased or sold in this market since the pandemic, as levels of absorption exceeding 250,000 square meters had not been recorded since 2020, and everything indicates that this year will surpass this barrier, according to Datoz.
Companies linked to industrial activities have taken a leading role in the demand for office spaces, with around 30,000 square meters associated with logistics and manufacturing companies. Additionally, information technology (IT) companies are also demanding significant spaces in this market.
This absorption has also contributed to reducing the high availability of offices in Mexico City, as it decreased by almost 5% in the last year, registering 2.6 million square meters available in inventory and under construction, with an availability rate of 21.3%.
Monterrey
In the first three quarters of the year, the office market in Monterrey achieved a gross absorption of 65,000 square meters of gross leasable area (GLA), bringing it within 300 square meters of surpassing the total demand of 2022. Compared to previous years, which were 30,000 square meters in 2021 and just over 20,000 square meters in 2020, this will be the best post-pandemic year for Monterrey.
Similar to Mexico City, the demand for offices in Monterrey is linked to the demand for industrial spaces, as a large percentage of the absorption came from logistics and manufacturing companies. It’s worth mentioning that the largest operation in the market accounted for 17% of gross absorption.
Hand in hand with the high absorption levels, the availability of spaces managed to decrease by 11.5%, offering only 332,000 square meters of available spaces. As a result, the availability rate stood at 16.20%.
Gudalajara
In Guadalajara, there was a gross absorption of office spaces totaling 52,000 square meters between January and September 2023, a significant increase compared to 2022, when it only reached 39,000 square meters. In other words, the demand for offices exceeded that of the entire 2022 by 33%.
Technology and information technology (IT) companies such as Luxoft and Tech Mahindra, among others, continue to drive the demand for offices in Guadalajara, accounting for 11% of the total absorption.
This absorption helped reduce availability by 24.6%, accumulating 143,000 square meters of available gross leasable area (GLA), with an occupancy rate of 14.1%, the lowest level in the pandemic years.
