Market Report, "Mexico Real Estate Report Q3 2014", published

From: Fast Market Research, Inc.
Published: Tue Jul 29 2014


We are forecasting Mexico's commercial real estate industry to show a consistent, yet unremarkabl e performance over 201 4 , with rental rates across all sub-sectors expected to remain flat as the standoff between the market's long-term potential and macroeconomic headwinds continues. The country has one of the most stable growth outlooks in the region and an operating environment which is seeing tangible improvements and rising longer-term prospects . Nevertheless, the poor financial condition of many of the country's residential developers is a threat . As such , we are forecasting growth to remain flat in the sector in 2014, with the only obvious signs of growth coming in the office and retail real estate sectors in Tijuana.

To the detriment of the near-term growth of Mexico's real estate sector, the macroec o nomic backdrop in Mexico is not as strong as it once was . Real GDP growth in 2013 arrived even lower than our expectations, at 1.1% against our forecast for 1.6% , due to a weaker-than-expected performance by the manufacturing and construction sectors in recent months. However, we forecast an acceleration in growth in 2014 to 3. 1 %, driven by an improvement in private consumption and investment in light of the government's ongoing reform drive and stronger US demand.

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Our in-country interviews and data confirm the market sentiment that commercial rental growth in Mexico had been fairly stable over recent years, particularly in the office and industrial sub-sectors. Minimal growth in rents is expected in 2013, amid a continued slowdown in the US that has increased caution among international investors. Nevertheless, we maintain an overall positive long-term view about the potential of the commercial real estate sector in Mexico.

Recent Developments

* Mexico's commercial real estate industry is likely to grow at an annual rate of 6% in 2014, reports Nearshore Americas, citing a study by The Mexican Association of Real Estate...

The Mexico Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Mexico Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Mexico.

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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