Tijuana Industrial Market Expands

Last year, Baja California was among the top five states in México to receive the highest amount of foreign direct investment, and second among the northern border states, with a total of 1.2 billion dollars invested through the third quarter in 2017.

In the midst of healthy foreign investment, the Tijuana industrial real estate market dynamics have been stable with continued to expansion. There are currently 1.9 million square feet of new industrial space under construction in Tijuana, 59% of which has been pre-leased. The large majority (71%) of the warehouses currently under construction are those of modern Clase A global standards.

Just three of the seven industrial submarkets currently have projects under construction. The El Florido-Blvd. 2000, Otay-Alamar, and Pacifico-Nordika submarkets represent 41%, 31%, and 28% of the total construction activity. The scarcity of developable land in several submarkets within the Tijuana market has led to the development of projects in the El Florido and Pácifico-Nordika submarkets, which currently have space within existing industrial parks and good connectivity to the U.S. border. Developments located in the land scarce Otay-Alamar submarket are primarily via the demolition of existing buildings followed by the construction of modern Class A warehouses. The redevelopment is justified by high demand in Otay for modern space, primarily driven by its close proximity to a U.S. border crossing, competitive infrastructure, and a cluster of prominent international companies.

The Tijuana industrial market is anticipated to increase by 2.7% in 2018 reaching a total inventory of nearly 72.5 million square feet.

The majority of projects under construction are by prominent industrial developers such as Vesta, Atisa Industrial, JMR, Roca Desarrollos, and Grupo DCI concen, in response to a vacancy rate of just 2.4%.

According to information on the Solili platform, 709,000 square feet of industrial projects are anticipated to break ground in the first half of 2018 among four submarkets, continuing the market’s growth of modern industrial inventory in Tijuana.

Source: Solili