Industrial Real Estate for Manufacturing in Mexico

March 8, 2013

Solana Beach, CA, March 8, 2013 – Mexico’s industrial real estate market experienced a period of revitalization from 2011 to 2012 and is set to reach a new peak in 2013. There is a markedly growing demand for industrial space as more foreign companies are setting up operations for manufacturing in Mexico. The wide production of everything from smartphones to kitchen appliances and the rise of automotive and aerospace manufacturing, all reflect this trend.

The current resurgence in demand is due to such factors as wage and transportation inflation throughout Asia, Mexico’s economic stability, its free trade zone status and competitive manufacturing and distribution costs. Companies searching for manufacturing across the border typically look for proximity and ease of transportation, making maquiladoras in Juarez, Tijuana, or Mexicali especially promising. Additionally, a combination of low debt and inflation, high reserves and foreign direct investment, shelter services and the feasibility of just-in-time manufacturing, contributes to the growth of the market.

The maquiladora industry presents an increasing contrast with other emerging economies. Brazil is projecting slower growth. China’s rising wages and freight costs are stifling. The Organization for Economic Cooperation and Development states that Mexicans are “…spending the most total time working (paid plus unpaid work) in the OECD, on average nearly 10 hours per day, compared to an OECD average of just over 8 hours.”

Manufacturing in Mexico is even poised to compete with manufacturing in the Eurozone due to its growing financial crisis.

A highly educated workforce coincides with a demand for high-end manufacturing space. According to Rafael McCadden, Director of Industrial and Logistic Real Estate, Colliers International: “There has been a lot of interest in setting up aerospace manufacturing parks In Mexico, training centers and even universities that offer aerospace engineering programs.”

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