The industrial real estate sector is expected to recover in the short term

The industrial real estate market is expecting a staggered recovery in the short term as a result of its multi-purpose use in manufacturing and logistics, according to the real estate sector market research consultancy firm, Solili. 

At present, with the entry into force of the USMCA, the industrial real estate sector is still expecting a gradual recovery, representing an opportunity for new investment and new projects.

In view of the above, Asian companies are expected to relocate, seeking a strategic location in Mexico that gives them access to the U.S. market and tariff advantages. 

The firm specializing in the real estate sector estimated that the manufacturing sector will recover in late 2020 and early 2021, following an increase in demand. In addition, the growing search for space by companies dedicated to the logistics, e-commerce and retail sectors will continue to have sustained growth that will mitigate the negative effects of the downturn in the manufacturing industry.

The firm’s analysts announced that rental prices at the end of the second quarter of the year sustained a downwards adjustment, a situation that will stabilize towards the second half of the year.

Analysis of the dynamics of industrial real estate in the first half of 2020

Solili analyzed the effect of the pandemic on the country’s logistics centers so far this year, detecting that the industrial sector had two sides. On one side logistics centers boomed, but the manufacturing sector suffered from the cessation of activities. 

According to the analysis, the pandemic caused varied behavior in industrial real estate investments in response to the redefinition of production supply chains. However, with the entry into force of the USMCA, opportunities are opening up to attract new industrial investments. 

The first half of this year, which saw the creation of the Social Distancing Program, impacted the two subdivisions of the industrial real estate sector (manufacturing and logistics) in different ways.

On the one hand, manufacturing was negatively impacted, and this resulted in a reduction in demand for space due to the collapse of value chains, unemployment in production, and a decrease in urban consumption. 

On the other hand, the logistics industry found the opportunity to continue growing and boosting the demand for logistics spaces despite the pandemic. 

Oradel Industrial Center is a competitive option for the rental and purchase of industrial real estate for manufacturing operations, as companies can request spaces that are tailored to their needs.