Construction & Real Estate
From The Report: Mexico 2018
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Traditionally a barometer of a Mexico’s economic health, the construction sector saw investment slow in 2017 as a result of a dip in public spending on infrastructure works and uncertainty among private investors over the possible outcome of the renegotiation of the North America Free Trade Agreement. This could further push up the already rising costs of materials brought by the February 2018 hike in interest rates to a nine-year high of 7.5%. Although the sector will continue to gain steam in 2018, such growth will be tepid, given that the factors impeding expansion remain. The real estate sector of Mexico saw record occupancy in 2017. Competitiveness as a manufacturing hub and job growth is fuelling a hike in demand for residential properties and retail space. The expanding population is also driving continued growth in housing demand, as the housing shortage remains above 25%. These factors are all solid indicators of a market that is far from saturated, demonstrating substantial opportunities for investment and growth. This chapter contains an interview with Luis Gutiérrez Guajardo, President, Prologis Latin America.

Articles from this Chapter

Overview

Public works: Moderate expansion to return despite political uncertainty
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Traditionally a barometer of a Mexico’s economic health, the construction sector saw investment slow in 2017 as a result of a dip in public spending on infrastructure works and uncertainty among private investors over the possible outcome of the renegotiation of the North American Free Trade Agreement (NAFTA). This could further push up the already rising costs of materials brought by the February 2018 hike in interest rates to a nine-year high of 7.5%. In 2017 construction’s output contracted…

Analysis

Repair and rebuild: Federal and local governments are working to support victims of the September 2017 earthquakes
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Tragedy struck in September 2017, when two earthquakes killed hundreds of people and caused billions of dollars of damage to public and private property in Mexico City and the states of Guerrero, México, Morelos, Oaxaca and Puebla. The second, 7.1-magnitude quake on September 19, damaged approximately 40,000 houses and toppled 44 buildings in Mexico City alone. However, repair work and rebuilding will provide a boost to the construction sector, which has seen performance decline annually since 2014.…

Interview

On the upswing: Luis Gutiérrez Guajardo, President, Prologis Latin America, on how changing policies and practices are increasing demand for industrial parks
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Interview :Luis Gutiérrez Guajardo What are the principal drivers of growth in the industrial real estate segment? LUIS GUTIÉRREZ: The growth in industrial parks is driven by two main factors – consumption and the manufacturing industry – which, incidentally, are two of the most important areas for economic growth in Mexico. For the past decade, mass consumption has been the principal internal driver of growth, resulting in both urbanisation and high levels of employment. This trend…

Overview

Solid foundations: Record office occupancy, a stable housing deficit and exponential expansion in retail space indicate a healthy market
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In 2017 Mexico saw record occupancy in real estate. Despite uncertainty surrounding the potential renegotiation of the North American Free Trade Agreement (NAFTA), import duties imposed by the US in May 2018 and the new presidential administration, the sector is expected to remain strong. Competitiveness as a manufacturing hub and job growth are fuelling a hike in demand for residential properties and retail space. The latter segment has benefitted from 30% growth in sales since 2015, a trend expected…