Logistics plays an important role in the recovery of the industrial sector - Oradel
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3 September, 2020
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3 September, 2020

Logistics plays an important role in the recovery of the industrial sector 

The performance of real estate sector was diametrically opposed to manufacturing and the logistics; the former due to of mandatory social distancing that meant the shutdown of a large number of production plants due to the reduction in demand for space; and the latter as a result of the need to purchase inputs through electronic channels, showed positive signs in recent months.

During this time, the growth of e-commerce due to social distancing has caused logistics to play an important role in the recovery of the industrial sector. 

Firms such as CBRE, NKF and Solili have reported that the upward trend that the logistics industry has begun to show is the result of commercial operations on electronic platforms.

This helped identify an important demand for spaces for product distribution in Mexican industrial centers.

In the case of the logistics segment, not only is there a solid demand for space to establish Distribution Centers (Cedis), but also, thanks to competition among distributors in delivery times, there has been a rush to find space in cities to cut down delivery times, known as last mile delivery.

The industrial manufacturing sector has been less fortunate and has seen the demand for new spaces slow down due to the critical global health environment.

The Monthly Index of Industrial Activity for the months of April and May confirms the collapse in this segment, both in construction and the production of goods, the annual variation recorded in April was -38.4% and -35.5% respectively, while in May, construction was at -35.9%, and product manufacturing at -35.6%.

In Mexico, the automotive industry is one of the largest manufacturing activities as well as being a key component of exports. By May, the transportation unit manufacturing industry had recorded a drop of 80.7% year on year.

This rate, along with domestic and international consumption, have affected industrial manufacturing real estate segment figures, as can be seen by the:

  • Decrease in global manufacturing activity.
  • Drop in Mexico’s foreign trade.
  • Reduction in consumption.
  • Decreased consumer confidence.
  • Decrease in demand for short term semi-durable and durable goods

Undoubtedly, the construction of new spaces for industrial purposes slowed down until June, when the new normality began and construction was considered an essential activity. However, despite this trend, the sector is expected to significantly pick up in the second half of the year.

The features of the Oradel Industrial Center allow operations to be developed in lots over more than 100 continuous hectares, and the opportunity to construct industrial warehouses for both manufacturing and logistics operations, driving the Mexican industrial segment.

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