Rise of micro industrial parks for ecommerce and logistics

  • With the increase in demand for logistics spaces in Guadalajara and its metropolitan area, developers have turned to creativity and innovation to meet the needs of their new customers. Such is the case of the so-called micro industrial parks, spaces for small users with areas ranging from 6,458.35 to 21,527.82 square feet.

  • “During 2020, the net demand in the industrial market, which excludes renovations and pre-leases, increased 6.4 percent, and is expected to grow 7.8 percent this year, driven mainly by the logistics and manufacturing sectors,” says Mr. Francisco Muñoz, Senior Vice President of Industrial and Logistics for CBRE.

    He also indicates that the drivers of demand in the industrial market during 2020 focused on Monterrey, Guadalajara and the Metropolitan Zone of Mexico City, areas that centralized almost 50 percent of the net demand of the national market.

    The capital of Jalisco and its Metropolitan Zone registered an all-time record in cumulative net absorption with 3,535,944.57 square feet, 28 percent higher than reported as of the fourth quarter of 2019 due to the delivery of build-to-suit space and new transactions aimed at the logistics and ecommerce sector, with 25 percent of new space built in 2020.

    Despite the 11-week interruption of activities due to the pandemic, the construction of seven new industrial spaces was completed at the end of the quarter, totaling 2,055,906.89 square feet. Of the total number of spaces, 60 percent were speculative, and 40 percent were build-to-suit. The predominant transactions correspond to the logistics, transportation, distribution, and warehousing sector, according to CBRE.

    It’s in this context that the inventory of micro industrial parks has grown up to 54 percent, driven by the demand for spaces for ecommerce and logistics activity, says Mrs. Yadira Torres-Romero, director of Market Research at CBRE. "The differentiation in this segment is in line with the different sizes of each format: medium-sized buildings with areas of less than 107,639 square feet and subdivisions of less than 21,527.82 square feet, micro parks with a gross rentable area of between 236,806 and 301,389.49 square feet and modular spaces starting at 6,458.35 square feet.”

    At the end of 2020, the inventory of micro industrial parks amounted to 6,953,486 square feet distributed in 38 micro parks in the main submarkets of the Guadalajara Metropolitan Zone, reveals CBRE.

    Among the characteristics that distinguish micro industrial parks and make them attractive for small and medium-sized logistics and distribution companies that operate in Class B industrial spaces are their versatility in construction, their location and connectivity with the Guadalajara Metropolitan Zone, their proximity to the main industrial corridors, neighbors of the urban spot, as well as the integration of a mix of complementary services.

    Micro industrial parks have been integrated into the industrial market as an alternative to large-format industrial parks. "The greatest demand has been focused on condominium formats built mainly by local developers, so that the accumulated reserve for this type of development amounts to 13,993,083.54 square feet available. By the end of 2020, logistics and warehousing will dominate the demand for these spaces with 55 percent, followed by the food and beverage sector with 22 percent," declares Mrs. Torres-Romero.

    The availability rate closed in 2020 at 9.4 percent and 653,369.36 square feet. At the submarket level, Zapopan Norte has the most vacant space. Likewise, the average rental price for micro industrial parks closed at 102.40/m2 pesos, predominantly in local currency. The submarket with the highest average price was Zapopan Norte and the lowest, El Salto. In terms of gross absorption, from 2019 to February of this year, just over 2,690,977.6 square feet of spaces with areas of less than 53,819.55 square feet were marketed, including pre-leased spaces, according to CBRE.

    What is a micro industrial park?

    1. Its format stands out for its configuration: warehouse, office, profitable space of seven to 10 percent and its capacity of showroom integration.
    2. Lease contracts range from one to three years.
    3. They correspond to classes A and B.
    4. Construction materials are mainly metal and block, and there is one platform per module.
    5. Security with access control and CCTV.
    6. Adaptable parking and unloading spaces with expansion capacity.
    7. Hydraulic concrete roads.
    8. LED lighting.
    9. It is estimated that the demand for these spaces will continue to grow due to the change in consumption habits during the COVID-19 pandemic.

  • http://www.cbre.com/