Private industrial developers, investment funds, Real Estate Investment Trusts (FIBRAS, or REITs) and state governments’ real estate trusts offer a wide range of industrial buildings ‘Class A’ in inventory, or tailor-made constructions for sale or lease, as well as shelter services for the establishment of new enterprises in industrial parks in Mexico.

Besides looking for skilled and specialized workforce, strategic location, infrastructure, connectivity and access to dynamic markets, transnational corporations demand industrial spaces to operate in Mexico. Tailored-made buildings (built-to-suit), sale or lease of industrial buildings, according to the requirements of companies, is what developers of industrial parks in the country offer.

The director Industrial & Logistics of Colliers International Rafael McCadden said that to settle on the right industrial park multinational companies require certainty regarding services and land, plus they will arrive to a place where there will be electricity, water, sewage, security, connectivity, manpower and technical schools. He added that in the industrial market the most basic scheme offered to customers is the land for the construction of the plants, or lease them an existing industrial plant, which they call speculative industrial buildings. “The next scheme is to make a built-to-suit, which is making an industrial plant for the needs of the company, or a built-to-suit turnkey, which is an industrial plant even more equipped.”

Rafael McCadden commented that nowadays one of the new demands of the companies is that the largest industrial parks have access to the railway and that it has an intermodal terminal.

In an interview, Cristina Torres, director of Real Estate Advisory of KPMG, considers that in Mexico all industrial buildings are triple-A. “If you’re going to analyze any developer or FIBRA, all the available plants are triple-A. If I have a company of whatever, in Mexico I can find a plant that complies with quality requirements and I can plug it in a week, which is basically the scheme ‘plug and play’.”

Regarding the issue of leasing industrial plants she declared that “what industrial developers and investment funds are doing in Mexico is amazing. How do they lease? I do not lease anyone if I do not have a guarantee of the parent company, which can be in Denmark or wherever, but I’m asking guarantees from the parent company to lease to companies in Mexico. So at a security level for investors is great. The level of quality in the investment can be overcome in Mexico. I realize that in this country we are in first league, your investment is safer here.”

Gonzalo Robina, president of the Mexican Association of Real Estate Investment Trusts (AMEFI) and the deputy director general of Fibra Uno, pointed out that to industrial parks in Mexico arrive world-class quality companies to establish in the long term. “The vast majority comes to install a manufacturing plant, whether we are the ones who make the investment from a real estate perspective, what they end up investing is in special installation plants, in machinery. They are all looking for contracts of minimum 10 to 15 years of life.”

He noted that due to the demand for industrial parks, the FIBRAS are investing in properties that have a practically guaranteed return. “The market is set out there, requesting this type of property, and then somehow it is something that has helped us.”

According to Luis Gutiérrez, president for Latin America for Prologis, industrial developers are agents in charge of providing first-class infrastructure to manufacturing companies and logistics distribution centers. “In that sense industrial parks have become attractive as topic and register good growth compared with other type of properties, for example, commercial, office and residential buildings. What industrial parks have is that they are faster to do, then they have less risk and besides, customer´s permanence is higher, and in that sense the risk is lower than in other sectors.”

He indicated that the trend is the lease of industrial buildings, providing flexibility for company’s growth. “If you are in an industrial park and there is more space is easier to unfold operations within the same locations, but also when you decrease. Many see the advantage that if they were owners then they would have a little stiffness to be able to increase or decrease their operations, or change for some reason the city or the space.”

Gutiérrez declared that the current portfolio of Fibra Prologis is made up of just over 33 million square feet of leasable industrial area. “We keep doing more developments as we rent the ones we already have. More or less the pace we have is between 100 and 150 million dollars of investment in markets, and this should give us about two to three million square feet per year, which is a growth of seven to 10 percent of our total.”

Sergio Argüelles González, president & CEO of FINSA, said his company focuses on the existence of available product in the market with first class infrastructure that complies with international standards and at competitive prices to facilitate the beginning of operations of its customers in Mexico.

“We care that our developments have spaces designed for people who work within them, such as kindergartens, health clinics and recreational areas. Furthermore, the design of our parks and industrial buildings is based on the creation of value for users, both in the architecture and in the operation, which translates into significant savings for our customers, plus we have installed sophisticated security systems and access control,” remarked Argüelles González.

He added that the strength of FINSA allows them to access global capital markets to support leasing programs and expansions. In the next three years FINSA will double its portfolio of leases, that today amounts two million square meters. “We will continue growing and consolidating in Mexico. In the next three years we will be announcing eight new developments, focusing on the markets of northern, central and Bajío, and strengthening our presence in the Northwest.”

In an interview, Raúl Murrieta Cummings, former undersecretary of Infrastructure of the Secretariat of Communications and Transportation, concluded that industrial parks cannot operate without the strengthening of the national road infrastructure, so that in this administration will be end 52 highways, 80 works of modernization and expansion road, all with a logistically sense. “You can have an industrial park with equipment out of the ordinary from the fences inward, but if you do not have good connectivity, good accesses, proximity routing, etc., then the park is not going to take off.”

He reported that the Secretary of Communications and Transports Gerardo Ruiz Esparza, has entrusted them to make Mexico a world-class logistics center, which means having better roads that leads to better ports, that coexist with trains and lead to airports.

Marco Medina Zaragoza, FIBRAS analyst of the Bank Ve por Mas, emphasized that the development of industrial buildings in Mexico goes hand in hand with the logistics topic. “They have all the necessary elements if new investments arrive. For example, the case of Amazon, that requires certain elements to carry out its operations. I think the FIBRAS have shown their ability to be able to adjust.”

Sustainable industrial parks
In Mexico, industrial parks incorporate best practices of environmental protection to be more attractive to investment and evidence its competitive advantages. Therefrom, in addition to offering industrial buildings designed to meet the needs of advanced manufacturing and distribution, real estate developers as VESTA provide industrial buildings built with industry standards and green building manual developed by the German agency DEG.

“When we acquired land reserves we look for the best locations and to be able to provide all the services. Our developments include measures to streamline water consumption, collection systems and reuse of rainwater, optimized energy performance of the plant, LED lights system for outdoor lighting and renewable energy for electricity production, among others,” explained in an interview Lorenzo D. Berho, operations executive vice president of VESTA.

He added that VESTA developments are world-class modern buildings, built with eco-efficient standards and strategically located in the industrial corridors with access to the largest market in the world and in a country with abundant skilled labor.

The president & CEO of FINSA, commented that they have modernized their portfolio on several occasions because that want their buildings to obtain LEED environmental certification, in fact, they built the first LEED Gold certificated building in the state of Nuevo León. Also, they look for the operation of industrial parks to be certified as ‘Environmental Quality’ by the Federal Attorney for Environmental Protection (PROFEPA). “Thanks to this we have the recognition of financial institutions, and we have managed to sustain an annual growth rate of 20 percent in recent years. And, most importantly, more than 50 percent of the growth of the portfolio comes from our existing customer base and their references.”

The new role of the airports
In a context in which airports have changed the scope of its services, beyond their role as centers of connectivity for passengers, companies like Grupo Aeroportuario Centro Norte (OMA) have chosen to turn their air terminals development centers to stimulate and strengthen economic activity in the states where they are located, allowing them to attract various sectors of the economy and integrate into real estate complexes that offer a wide range of services, in this case industrial parks.

In an interview, Héctor Cortés, director of Diversification and New Businesses of OMA, reports that a competitive advantage for companies manufacturing of high value is the logistics of land-air communication, used to add value and differentiate industrial parks of the airports of others.

In 2012, OMA signed a strategic alliance with VYNMSA for the construction and operation of OMA-VYNMSA Aero Industrial Park, the first industrial park within the OMA airports. “The adjacency of the OMA-VYNMSA Aero Industrial Park with the Monterrey International Airport and with the bonded area of the Customs Section of the airport itself favors the logistics activity, air and land cargo as well as other operations of the companies to be installed in this industrial development,” mentioned Cortés.

He added that currently OMA’s airports are under evaluation for the possible development of industrial parks, so that the potential of each destination will be measured.

The Aerotech Industrial Park is another industrial space located a few steps from an airport in 140 hectares of land, where there are still about 35 hectares available.

“We have speculative buildings that accommodate companies that need spaces from 2,700 to 15,000 square meters. We also have the option of building a space tailored to the needs of each client and lease,” explained in an interview Larisa Sandoval, Sales & Marketing manager of Aerotech Industrial Park, located next to the Intercontinental Airport of Querétaro, in the municipality of Colón. She stated that the Aerotech Industrial Park has achieved to generate success stories thanks to its services. “By having two partners specialized in the industrial part, on one hand Abitat Construction Company that provides services in the construction of industrial and commercial spaces; and on the other hand, American Industries, which provides support to manage all business processes, from human resources to logistics service, except  production.”

Larisa Sandoval affirmed that the purchase price is high but is offset with the costs. Besides, she said that rent is a good choice for companies that prefer to initially invest on their equipment’s or use the money to improvements in their processes, that does not necessarily have to do with the industrial plant.

The Aerotech Industrial Park is another industrial space located a few steps from an airport in 140 hectares of land, where there are still about 35 hectares available.