- Industrial parks in Tijuana attract foreign investment

Industrial parks in Tijuana attract foreign investment






  • Tijuana is one of the fastest growing industrial real estate markets in Mexico, reporting a very high leasing activity.




  • During the first half of 2022, Tijuana reported an industrial real estate inventory of 415,447 square feet. Industrial halls rented out at an average price of USD ¢50 to ¢70 per square feet, reveals Mr. Alejandro Mungaray Lagarda, Secretary of Economic Development of Tijuana.

    “Value chains are on the road to recovery. The Pandemic meant a steep decline in production levels, particularly for certain production lines like microchips and associated products, which led to a shortage. Fortunately, production is finally reaching normal levels; microchips are essential for the automotive industry, household appliances, for everything really. Economic activity is on the rise again, which means more manufacturing and therefore increased demand for industrial parks,” says Mr. Mungaray Lagarda.

    Tijuana has 78 industrial parks, it is a border town with a ceaseless demand for industrial spaces. “Any square foot available for industrial space is currently under construction. This trend may continue in the future, but I believe there will be more planning involved. It is essential to coordinate the manufacturing processes in Tijuana with what is going on in international markets, particularly in California. The situation today is that every single space is taken and any new activity has to wait for a space to be freed,” explains the official.

    Mr. Mungaray Lagarda expresses that Tijuana is particularly attractive because of its location. It is easy for companies to arrange for materials and base products to be delivered from the US into Mexico swiftly and just in time.

    On the other hand, Mr. Sergio Mireles, founder of Datoz, an intelligence platform for real estate, mentions that demand for industrial spaces in Northern Mexico is propelled mainly by nearshoring or the relocation of manufacturing companies, primarily from Asia, that choose to move to Mexico. “Other important factors are the unprecedented growth of ecommerce brought by the COVID-19 Pandemic and the need for logistic spaces that came with it, as well as the development of data centers that has resulted from broader digitalization. Finally, let’s not forget Mexican skilled labor is world-class.”

    Mr. Mireles mentions that in 2021, several Mexican border towns recorded the highest demand for industrial spaces in a decade and probably in their history. “About 55% of the gross absorption occurred in Northern Mexico with Monterrey leading, followed by Tijuana, Ciudad Juárez and Mexicali. These last three cities had a demand of 16 million square feet, which accounts for 25% of the national activity measured in the main 24 markets in Mexico.”

    Likewise, Mr. Mireles emphasizes that border towns are making an effort to build new industrial parks. “Although there is the will to build new industrial parks, some places face inherent entry barriers such as shortage of land or energy, and this has obviously slowed down the process, but Tijuana is a dynamic market and there is a big push to do it.”

    In terms of industrial space pricing, Mr. Mireles says the average price per square foot in the seven border markets in Mexico is USD ¢47 per month. “One of the most expensive locations nationwide is Tijuana, prices in April 2022 reached USD ¢59 cents per square foot. Matamoros, for example, has an average price per square foot of USD ¢36. There is really quite an array of prices in Mexico. The national average per square foot is USD ¢42 and the average across the border USD ¢47 per square foot. Mexico City and Tijuana are the two most expensive locations in the country for industrial real estate.”

    Mr. Alejandro Mungaray Lagarda concludes by saying that sizes of industrial halls is standard, between 75,000 y 150,000 square feet, while shapes are usually built on spec, depending on the clients and their processes.

    “Most of our demand has to do with expansions of companies that are already based here in Tijuana, are part of the community and feel comfortable here. Most of the industrial real estate growth in the area has to do with expansions,” says the Secretary of Economic Development of Tijuana.



    “Most of our demand has to do with expansions of companies that are already based here in Tijuana, are part of the community and feel comfortable here. Most of the industrial real estate growth in the area has to do with expansions.” Mr. Alejandro Mungaray Lagarda, Economic Development Secretary for Tijuana.




    Sectors that demand industrial real estate in the Northern border

    Tijuana’s main industries are electronics, assembly plants and medical devices, but also aerospace, automotive and medical tourism, which picked up during the Pandemic.

    “Electronics, assembly plants and medical devices are strong, dynamic industries with high demand for both industrial spaces and labor in Tijuana. This city is home to 601 assembly plants which account for 26% of the city 's employment. The medical sector really picked up during the Pandemic, medical tourism spiked and with it hotels and restaurants, which together account for 52% of the employment,” informs Mr. Alejandro Mungaray Lagarda.

    Mr. Sergio Mireles mentions that the consumer economy has been instrumental for the growth in demand for industrial spaces in Mexico in general, and more so in cities like Tijuana. “Demand for industrial spaces is propelled mainly by nearshoring or the relocation of manufacturing companies, primarily from Asia, that choose to move to Mexico. Other important factors are the unprecedented growth of ecommerce brought by the COVID-19 Pandemic and the need for logistic spaces that came with it, as well as the development of data centers that has resulted from broader digitalization. Finally, let’s not forget Mexican skilled labor is world-class.”

    He adds that the industries that have shown higher demand for industrial spaces in Northern Mexico are medical devices, electronics, auto parts and industrial base products. “There are textile plants or metal-mechanic plants that manufacture different products aimed at different industrial sectors. We have also witnessed increased activity in logistics and warehousing companies.”



    “About 55% of the gross absorption occurred in Northern Mexico with Monterrey leading, followed by Tijuana, Ciudad Juarez and Mexicali. These last three cities had a demand of 16 million square feet, which accounts for 25% of the national activity measured in the main 24 markets in Mexico.” Mr. Sergio Mireles, founder of Datoz.




    Vesta Park Mega Region is built in Tijuana

    The construction of Vesta Park Mega Region, an industrial park in Tijuana, officially started in October last year. The industrial park will have six buildings spread over a 30 hectares surface.

    The Mexican company Vesta will invest USD $101 million in Vesta Park Mega Region and a 320,000 square feet mega warehouse for the company Coppel, located in the Alamar area.

    “Vesta is a public company that has capital to invest. The construction of one million square feet will be fast. There are two buildings already under construction, one of them under contract,” declares Adriana Eugenia Alaniz, VP of New Businesses at Vesta.

    She reveals that the construction is expected to be finalized by the end of 2023. “Vesta Park Mega Region is an industrial park like no other because of its location and certified industrial halls, all spread out over one million square feet, definitely not something you see every day.”

    The buildings are flexible and will allow tenants to keep the entire hall or just a part of it, depending on their needs, and they will all have access to a cross dock building. “Our project offers a menu of options, so companies can self-serve. Industrial parks are usually inflexible, offer less options than us,” says Ms. Alaniz.

    Vesta Park Mega Region will operate as a smart park and energy will definitely be a commercial differentiator. “We are automating access, security and meters to know exactly what is going on in the park. Access will be QR coded and intelligent meters will be installed to obtain information in real time.”



    “Vesta Park Mega Region is an industrial park like no other because of its location and certified industrial halls, all spread out over one million square feet, definitely not something you see every day.” Adriana Eugenia Alaniz, VP of New Businesses at Vesta.





  • www.datoz.com
    www.tijuana.gob.mx
    www.vesta.com