Future Cities
Mexico City
2024 North America Industrial Big-Box Review & Outlook
April 29, 2024 5 Minute Read
Demographics
Mexico City is the world’s fourth-largest city, with 30 million people living within 50 miles of its core. This is nearly 10 million people more than Northern/Central New Jersey and by far the most of any market tracked in this report. 84.4 million people live within 250 miles, including the populations of Guadalajara, Veracruz and Puebla.
Figure 1: Mexico City Population Analysis
The local warehouse labor force totals 378,139 people and is expected to grow by 14.7% by 2034. The average wage for a warehouse worker is only USD $3.19 per hour.
Figure 2: Mexico City Warehouse & Storage Labor Fundamentals
*USD
Location Incentives
CBRE’s Location Incentives Group reports that top incentives offered in Mexico City are discretionary cash incentives and tax abatements. The federal government may subsidize part of the base salary and social security for workers aged 18-29 during their first year of employment. The state government can also provide:
- Linkage with institutions such as the Institute of Ecology and Federal Electricity Commission
- Assistance from the City Employment Office in recruitment and selection of the labor force
- Consulting to companies on federal, state and municipal procedures
Figure 3: Mexico City Top Incentive Programs
Note: The extent, if any, of state and local incentive offerings depends on location and scope of the operation.
Logistics Driver
Mexico City is the start of the “NAFTA Highway,” running from Central Mexico towards Ciudad Juarez, along the Mexico-U.S. border. Mexico City is also connected to major Mexican ports: Veracruz, Manzanillo and Tampico, with estimated driving times from four to seven hours.
Mexico City is the start of the “NAFTA Highway,” running from Central Mexico towards Ciudad Juarez, along the Mexico-U.S. border.
Supply & Demand
With 68 million sq. ft. of total inventory, Mexico City is Mexico’s largest big-box market. Strong demand lowered the direct vacancy rate to 0.3% in 2023, from 1% in 2022, the lowest in North America. Transaction volume totaled 8.5 million sq. ft., slightly lower than the previous year’s 8.9 million sq. ft. Strong leasing led to another year of positive net absorption, at 1.9 million sq. ft. Food & beverage companies leased by far the most space in 2023, at 54.6% of the total volume. Companies expanded to serve the significant population in and around Mexico City.
Figure 4: Share of 2023 Leasing by Occupier Type
Source: CBRE Research.
Figure 5: Lease Transaction Volume by Size Range
Source: CBRE Research.
Figure 6: 2023 Construction Completions vs. Overall Net Absorption by Size Range
Figure 7: Direct Vacancy Rate by Size Range
Figure 8: Under Construction & Percentage Preleased
Figure 9: First Year Taking Rents (psf/yr)
Source: CBRE Research.
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Around 11.9 million people live within 50 miles of the market’s core, the third-most of any U.S. market in this report, with a projected 0.4% five-year growth rate.
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Over 15 million people live within 50 miles of the market’s core—the second-largest population of any U.S. market in this report, with a flat expected five-year growth rate.
Industrial & Logistics Research
John Morris
President, Americas Industrial & Logistics, Advisory Services
