The office real estate market performed well during 2023, achieving record gross absorption levels starting in 2020, even surpassing pre-pandemic levels. Meanwhile, the availability and vacancy rate of corporate spaces decreased. In this regard, the first quarter of 2024 continued this trend with a decrease in office space availability in the four most dynamic markets in the country: Mexico City, Monterrey, Guadalajara, and Querétaro.
In the first three months of the year, these markets recorded decreases in available space ranging from 4% to 20%. Although only the Mexico City market registered absorption levels higher than 1Q 2023, caution in launching new construction projects has been a measure to reduce vacancy rates.
Mexico City
During 1Q 2024, the largest office market in the country, Mexico City, registered an 11% decrease in availability, dropping from 2.8 million m² of gross leseable area (GLA) in 1Q 2023 to 2.5 million m². This was driven by the strong absorption in the last quarters of 2023 and in 1Q 2024, which reached over 114,000 m².
Josué Roncancio, office market analyst, mentioned in a press meeting that the availability of office spaces in Mexico City decreased compared to last year due to a strong start of the year in terms of absorption. Additionally, the lack of new projects made the drop in availability more evident, as building construction has remained steady in recent quarters.
Monterrey
Monterrey was the office market that reduced availability the least, with only a 4% reduction between 1Q 2023 and 1Q 2024, around 15,000 m². It had 327,000 m² of available net leasable area (ANR) and an availability rate of 16% at the end of 1Q 2024.
Ana Gabriela Bastidas, office market analyst, explained that Monterrey started a competition years ago to develop the tallest building, leading to the market entry of buildings like Torre Santa María with over 26,000 m², of which 20,000 m² are still available. This competition means a single building can be responsible for the high availability in one of the corridors.
Guadalajara
In the corporate market of Guadalajara, availability decreased by 30,000 m² in the past year. However, being a small market, this reduction equates to 20% of the available space. By the end of 1Q 2024, the total available space was 126,000 m², with a vacancy rate of 12%.
Ana Gabriela Bastidas said that there is a great need for corporate spaces in Guadalajara, as it is one of the states with the most foreign direct investment, which translates into a dynamic real estate market. Additionally, it is a market with great growth potential.
Querétaro
In Querétaro, availability dropped by 18%, from 108,000 m² available in 1Q 2023 to 88,000 m² in 1Q 2024, with a vacancy rate of 11.5%.
Josué Roncancio explained that the availability of corporate spaces in Querétaro continues to decline due to the good performance of the market. Despite being small, there is a constant absorption of space, showing that it is an interesting market for corporate offices and is displaying positive numbers.
