February 22, 2023 | #DatozByDatoz
In the last three years, nearshoring has been the main driver of demand for industrial spaces in Mexico, with historical absorptions in 2021 and 2022. The latter year reached 69 million square feet (ft2) of gross absorption, with Monterrey being the market that captured the highest number of leases with 15.6 million ft2, according to Datoz’s Analytics 2.0 tool.
The nearshoring trend refers to the relocation or creation of a new plant in a site close to the consumer. Asian companies, mainly Chinese ones, are one of the main players in nearshoring, as they are moving their factories to Mexico to avoid US tariffs and relieve supply chains.
Monterrey’s industrial market has been one of the favorite locations for Chinese companies to establish their manufacturing operations in Mexico, attracted by the proposal of the Santos family and their partners Holley Group, Futong Group in the Hofusan Industrial Park.
Real estate lawyer César Santos’ vision led to the transformation of his family ranch, covering 850 hectares, into Hofusan Industrial Park, with the help of Chinese investment funds Holley Group, Futong Group, who were looking for land near the US border and the ranch was located north of Monterrey, one of the most industrialized markets in the country, 2 hours 30 minutes from Nuevo Laredo by road. The park was officially inaugurated in 2016.
Hofusan Industrial Park has become the home of Chinese companies in Mexico, which can lease an industrial building developed by the Santos family and their partners or buy the land to build their own factories. This park contemplates three stages, and the first, which was built on 200 hectares, is already finished.
Three years ago, there was only one building, but currently, seven companies have opted to lease spaces in the three buildings developed by Hofusan, which add up to 610,020 ft2 of GLA. In addition, eight companies have purchased land to build their factories, so with the constructions that have already started, Hofusan surpasses 4.1 million ft2 of inventory, according to Datoz’s Analytics 2.0.
Among the tenants are electronics company Hisense, which will invest $260 million; furniture maker Sunon Furniture, which will invest $80 million; gardening equipment manufacturer Skyish and furniture maker Man Wah Holdings, which acquired land to build their plants in Hofusan.
The construction of Man Wah Holdings’ furniture factory stands out, with an investment of $200 million, which will offer more than 8,000 jobs. The plant started construction in 2022 and will be finished during the second quarter of 2023.
Meanwhile, furniture company Kuka Home decided to lease a build-to-suit (BTS) from Hofusan.
According to the park’s owners, in the next two years, there will be 35 companies and they project that 15,000 people will work in Hofusan, of whom 1,500 will be Chinese managers. Therefore, they also plan to build restaurants and housing.
To learn more details about inventory, space under construction, availability, absorption, and more, visit Datoz’s industrial real estate market analysis platform, Analytics 2.0.