05/07/2010 | By Jason C. Flynn
By Jason C. Flynn
According to experts at CB Richard Ellis (CBRE), the commercial real estate market in Mexico is poised for growth after weathering the recent economic downturn far better than its neighbors. During a recent podcast, CBRE analysts discussed the reasons why Mexico fared better than most would expect, as well as the strong potential for growth that exists in the country's first- and second-tier markets.
Raymond Wong, executive director of Americas research operations for CBRE, explained that Mexico saw a relatively mild downturn because the market wasn't expanding as rapidly as other regions. What setbacks that did occur weren't local, such as multi-national firms downsizing their office space, he said.
Lyman Daniels, president of CBRE Mexico, stated that the natural ebb and flow of the sale and purchase of major office space in Mexican markets have not drastically changed. They were put on hold, he said, and no major shifts occurred during the downturn. Unlike the market downturn in the United States, which saw a number of distressed properties available for purchase, the real estate market in Mexico was not as adversely affected.
"The bargain hunters were turned away, since the majority of assets in Mexico are not distressed," Daniels said.
According to Ernesto Rodriguez, senior vice president of tenant representation for CBRE Mexico, the major growth in Mexico will continue to be centered in three markets: Mexico City, Guadalajara and Monterey.
"The Mexican economy is shifting, from an industrial economy to a service economy. And the three big markets are shifting to this kind of service-based economy," Rodriguez said.
Rodriguez said that because of this shift, the office market is becoming more sophisticated throughout Mexico. Eventually, those opportunities will filter down to second-tier markets, such as Hermosillo, Acapulco and Tepic, he said. Even with the increasing potential for growth throughout the entire country, Mexico City remains the dominate real estate market. Sergio Perez, senior vice president of tenant representation for CBRE Mexico, said that several different types of companies, mainly those in the service industry, are the main drivers in the Mexico City market right now.
"The types of companies that have been establishing themselves in this market are home appliances, electronics, pharmaceutical, groceries and third party logistics," Perez said.