The occupancy of industrial parks in Mexico is closely linked to the U.S. economy, since the United States is by far Mexico’s most important partner in trade and investment. During 2009, the U.S. economy registered practically no growth, with an unemployment rate of 10 percent. This economic performance was reflected in Mexico’s Foreign Direct Investment inflows (FDI). For January-September 2009, FDI was $9,750 million, 37.3 percent less than the same period in 2008 ($15,560 million USD).
According to Javier Lomelin, president of Colliers International in Mexico, the North border of Mexico is the most affected by the crisis in the U.S. market. Vacancy rates in Tijuana, Mexicali and Chihuahua are 18 to 20 percent, while Juarez, Reynosa, Matamoros and Monterrey vacancy rates are 12 to 14 percent. Historically, the Mexican cities closest to the U.S. border have been more attractive for manufacturing facilities, because of their proximity to the supply chains on the other side of the border.
On the other hand, locations such as Mexico City, Toluca, Guadalajara, Querétaro and San Luis Potosi register an average vacancy rate of 10 to 14 percent, with the exception of Puebla, which has a vacancy of four percent. Although there are important manufacturing operations in Central Mexico, there is a boom of distribution centers in regions like the Metropolitan Zone of Mexico City, Toluca, Querétaro and Puebla. That is why there is a steady demand for distribution centers by logistics operators in the central part of Mexico.
The Sailfish building from the IAMSA group in Mexicali contains photovoltaic equipment as a part of the park’s energy saving initiative.
For 2010 the panorama looks a little better for industrial developers, due to an increase of prospects’ visits to the country. It is likely that as the automotive market improves in the United States, the Mexico recovery could take place, in the form of new manufacturing initiatives or actions to reactivate projects that were halted due to the crisis. Yet, new industrial real estate developments probably won’t start until 2011, due to the current high availability of inventory space.
Therefore, the development of new industrial projects will depend on better market conditions, as well as strong cash positions from investors, as the global economy gains momentum. Some analysts affirm that market improvement is not expected until 2011. Consulting firm Global Insight forecasts U.S. car sales to increase to about 11 million units in 2010, although annual sales of 15 million units is needed for profitability in the industry. Any better condition in the U.S. automotive market will definitely be reflected in future industrial projects in Mexico, although other key sectors, such as aerospace and appliances will also impact new investments in the country.
Sustainability’s Competitive Advantage
The Queretaro Industrial Park is one of the first ones in Mexico that has earned the PROFEPA Environmental Quality Certification.
In November 2008, the Mexican Association of Industrial Parks (AMPIP) signed a Memorandum of Understanding with the Federal Agency for Environmental Protection of Mexico (PROFEPA), to promote the "Certificate of Clean Park," as a part of the National Program of Environmental Audit. The objective of the program is to identify, evaluate and control industrial processes that could be operating under risk conditions or provoking contamination to the environment.
When a company fulfills all the environmental regulations established by the program, it is recognized with the "Certificate of Clean Company." In addition, when the common areas of an industrial park comply with the program, the recognition status for the park is the "Certificate of Environmental Quality." The sum of certified tenants and certified industrial parks provides the "Certificate for Clean Industrial Parks" which is the highest ranking environmental recognition in Mexico. Although there isn’t yet an industrial park with this certificate, AMPIP is pushing hard to promote the first one in the country.
Another certificate that is becoming very popular is the "Mexican Standard for Industrial Parks NMX-046-2005" issued by the Ministry of Economy, which contains general criteria of infrastructure quality to provide certainty to potential investors.
One of the first parks recognized with the Environmental Quality Certificate and with the IP Standard is the Querétaro Industrial Park (PIQ). Director Abel Baca is aware of the importance to provide certainty to potential clients. He believes that the concept of an industrial park implies consistency not only in legal aspects but also in the quality and efficiency of the infrastructure 24 hours a day, as well as on environmental issues.
Luis Tapia, Director of Parque Logistico San Luis Potosi, commented "if competition is tough, any company needs to be ready to offer extra added value to clients, otherwise you are out." This is why the park he represents has developed an integral industrial and logistics center which offers free-trade-zone benefits and also complies with the IP Standard and with the Environmental Quality Certificate from PROFEPA. According to Tapia, recognitions from external authorities are a valuable asset for their business, since it highlights that their project is ecologically balanced and working according to best practices.
ProLogis, with operations in Mexico, is convinced that the IP Standard is a worthwhile extra step. Silvano Solis, managing director for the Mexican division, noted that even though the Standard is not yet an obligation for developers, by making the additional effort to gain third-party validation of the quality of their facilities, ProLogis is able to reinforce its position in the market.
A ProLogis industrial park in Mexico with the NMX-046-2005 Industrial Park Standard Recognition.
IAMSA is a development company located in Mexicali, Baja California, currently with five industrial parks containing about 40 tenants. For Jaime Roberts, company president, it is critical to differentiate your business from others to compete globally. The company applied for the IP Standard because it is a way to officially verify the quality of their infrastructure.
The PROFEPA Certificates are equivalent to other international sustainable standards, such as the U.S. Green Building Council’s LEED Certification, which is gaining acceptance in Mexico among industrial developers, since most of their clients are U.S. companies familiar with LEED. Another is the HQE (Haute Qualité Environnementale) from France, which certifies commercial buildings that comply with best practices in terms of environmental quality, among others.
Without a doubt, sustainability has become the cornerstone for future industrial developments. Global real estate player Hines is promoting the LEED certification among its industrial buildings worldwide, particularly Ecologistics I, the first building in Mexico to have a LEED certification. The project was recently built within the Parque Logistico in San Luis Potosi. Ricardo Serrano, marketing director for Hines Mexico noted that the company is also implementing sustainable offices under the campaign "Hines Go," to develop consciousness within the organization about all green practices.
For all these reasons, one of AMPIP’s major goals for 2010 is to have the first Certified Clean Industrial Park in Mexico, and to continue promoting innovative ways to promote industrial parks.