Expand in Tijuana’s Competitive Market with G-global Expanding Capabilities

Real estate business is booming here in Mexico! 

Overall, Mexico is experiencing a constant growth of construction building complexes for different sectors and the transforming industry is skyrocketing. In the last five years, foreign companies have moved operations to growing cities such as Tijuana because of the large real estate offer for growth but space has become limited as time has passed. Tijuana has played an important role and with rapid, continuous development to feed the local and foreign demand. Having insight and perspective of the real estate market in Tijuana will help you take informed decisions for 

Why has Tijuana fueled the industrial real estate market for cross-border e-commerce? Let’s look at 4 points: demand, market, logistics, and politics.

1. DEMAND: Tijuana’s proximity to the huge consumer market of Southern California and the expansion of cross-border e-commerce fulfillment centers are fueling a high demand for industrial space in the city with vacancy rates reaching new lows, according to real estate firms.
2. MARKET: Despite the coronavirus downturn, Tijuana’s industrial real estate market reported a net absorption of 1.85 million square feet by the end of 2020 Q3, according to Cushman & Wakefield. Moreover, the firm also reported a vacancy rate of 2%, the lowest ever reported.
3. LOGISTICS: “Logistics is a (relevant) issue in Tijuana, not to meet domestic demand but rather that of Southern California….It is a new component that has greatly promoted absorption”, said Juan Carlos Rodríguez, managing director at Cushman & Wakefield’s Tijuana office.
4. POLITICS: Known as a manufacturing assembly base, Tijuana (pop. 1.6 million) is poised to grow in attractiveness due to the enactment of the new USMCA trade agreement and the US commercial tensions with China. The demand for industrial real estate could be a first sign of this

Nowadays, Tijuana, Baja California, is characterized by low availability of inventory and for this reason, the Florido-Blvd 2000 sub-market stands out, which continues to grow with more than six projects under construction, most of which are under a signed letter of intent simultaneously and therefore very possibly will be leased before the end of the following semester. With this scenario taking shape, awareness of new operations coming to the market is growing. It is expected to see one of the highest takeovers in recent years.

Taking into account that most of the 185 thousand square meters (m²) under construction are out of the market and the speculative options are limited contributes to the lowest availabilities of the last five years.

The creation of the Otay-Alamar corridor had one of the most significant closures with the lease of the E4 building, the first operation of one of the largest e-commerce companies in the world in Baja California, which will bring more logistics activity to a city. This giant topped as the largest inventory in Tijuana with about 2 million m² but operating with an availability rate of 0.04%.This project is a perfect example of a successful deal and summarizes the 4 points of interest we mentioned. The high interest in Tijuana organically created a competitive real estate market.  

On the other hand, Libramiento industrial area has the highest availability rate with 1.14% and a total area of ​​1.15 million m².

On the average market price, the report indicates a small increase in the second quarter reaching $ 5.70 USD / m². Rents continue to increase in the Otay-Alamar and Florido-Blvd 2000 submarkets, being the areas with the greatest interest in new operations. The increase seen in Tijuana was due to prices in the Florido area, some reaching up to $ 7.00 USD / m². 

How does this scenario affect growing enterprises? G-Global has ensured you have a place to grow here in Tijuana. Our warehouses and expert teams have been designed to ensure your expansion with a guarantee for the future. Our vision for Tijuana as an area of great commerce has always been present and our history in this border-city has brought great experience for the changing and competitive market. G-Global opens our door for developing businesses looking for new cost-effective and tailored solutions!