The nearshoring has led to a significant demand for industrial buildings in the country, especially in border cities such as Tijuana, Ciudad Juárez, and Reynosa. In addition to other factors, this has directly impacted the industrial spaces’ lease price in these real estate markets.
Only after Mexico City, the border cities of Tijuana, Ciudad Juárez, and Reynosa had the highest industrial lease prices in the country at the end of 1Q 2024, at $8.08, $7.23, and $6.85 USD/m2/month, respectively, according to Datoz’s Analytics 2.0 tool.
Similarly, industrial buildings prices have increased more aggressively in these markets due to the dynamics caused by nearshoring. From 1Q 2020 to this quarter, prices in Tijuana increased by 58%, by 65% in Ciudad Juárez, and by 73% in Reynosa. Over the last few years, the lease price of industrial spaces per square meter has risen by almost $3.00 USD/month in these three border cities.
In addition to nearshoring, there are other reasons why the price of industrial spaces in border cities has increased significantly, such as the cost of energy. The shortage of state energy forces developers to invest in more energy infrastructure within industrial parks, which affects the lease price of spaces.
Similarly, the limited availability of industrial land and the high demand for it have increased its cost, particularly in Tijuana market, which is also reflected in the lease price of industrial warehouses.
The increase in the lease prices of industrial warehouses has been widespread across the 24 most dynamic industrial real estate markets in the country due to the rise in the Construction Materials Price Index or inflation, which stood at 4% as of December 2023. However, the highest inflation point was reached in December 2021, reaching 15%. This has influenced the historical lease price trends in recent years, specifically since the nearshoring boom and the COVID-19 pandemic.
However, the dynamics of demand for industrial spaces and the increase in costs of land, energy, and construction materials are factors that will continue to directly influence the rise in lease prices of industrial warehouses in the country, especially in border cities. Therefore, this trend is expected to continue in the following quarters of the year.
