Mexico City Real Estate

MORE GROWTH AHEAD

FOR MEXICO CITY

A new airport and a growing middle class population will drive Mexico City’s economy and real estate market

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Mexico City leads the Latin American region in real estate development. Despite the global economic downturn and fall in oil prices, Mexico’s economy has held stable due to the strengthening of the nation’s automotive, telecommunications, logistics and retail sectors, among others.

Additionally, Mexico City’s economy has benefitted from major investments in infrastructure, including its new international airport, which is currently under construction to the east of the city. The first phase of development, scheduled to complete in the early 2020s, is expected to provide capacity for up to 50 million passengers and 550,000 flights a year. Once all construction is completed, the airport’s capacity is expected to increase to 120 million passengers and one million flights a year by 2050.

Mexico City’s growing middle class, known for its youth and high rate of consumption, has spurred the development of large mixed-use projects within the city’s main office sub- markets, including Paseo de la Reforma, Polanco, Lomas de Chapultepec and Insurgentes. These sub-markets also feature a number of buildings that have been redeveloped as modern housing and office buildings, as well as new, high quality shopping centers. The Mexico City office market has seen robust construction activity in recent years, with inventory that currently exceeds 50 million sq ft, and is expected to top 80 million sq ft by 2020. In fact, the city’s office inventory has grown by 200% since 2000, with 170 new buildings. Most of these new spaces are eco-friendly and meet high quality standards.

Mexico City’s industrial market has also grown substantially over the last decade, in order to meet the level of demand for consumer goods generated by a population exceeding 20 million people. With more than 80 million sq ft of industrial space, Mexico City’s industrial inventory, which is concentrated within the Cuautitlán, Tultitlán and Tepotzotlán corridors, is second only to Monterrey’s.

Absorption levels have been solid, as more international companies from the automotive, food and beverage, technology and logistics sectors have established operations in the country. This reflects investors’ strong interest in Mexico City, which historically has received constant foreign direct investment inflows and is the entrance to new emerging markets in Latin America.

FOREIGN DIRECT INVESTMENT  INTO MEXICO, 2015
Foreign direct investment into Mexico, 2015
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