Avison Young in Mexico City
Avison Young started operations in Mexico City with a team of ten people in December 2015 and doubled our size in 2016, with plans to double again in 2017.
In 2016 we acquired a seven-member capital markets team and recruited one investment sales vice-president and two brokers to head tenant representation and office agency teams in Mexico City.
We can successfully cover needs of clients in tenant representation (office and industrial), office agency, capital markets, debt/equity, investment sales, project management, facilities management, retail, market research and real estate marketing.
Mexico City has a long, rich history. It is known for being one of the largest financial centerson the continent as well as the largest Spanish-speaking city in the world. As of 2016, the population of the country was 128 million and the city is estimated at 8.9 million.The metropolitan area, however, is much larger, with 21.2 million people, making Mexico City the most populous metropolitan area in the Western Hemisphere.
Mexico City today is home to large numbers of immigrants and expatriates from Canada, the United States, South America (especially Colombia and Argentina), Central America (particularly Guatemala and El Salvador), the Caribbean (mainly Cuba and Haiti), Europe (particularly Spain and Germany) and the Middle East (especially Egypt, Syria and Lebanon.) Most recently, there has been an influx of immigrants from Asia-Pacific countries including South Korea and China.
At its lowest point, Mexico City sits at 7,200 feet above sea level in a valley in Central Mexico surrounded by mountains and three volcanoes, one of them still active. With close to US$500 billion in GDP, Mexico City represents more than one-fifth of the country’s total GDP.
The greater Mexico City area comprises 10 submarkets totaling 60.4 million square feet (msf) of class A and A-plus office space. The CBD submarket, represented by the Lomas Palmas, Polanco and Reforma corridors, represents about 41% of the total market inventory. Together with the Insurgentes and Santa Fe submarkets, these are the preferred location for multinational corporations and Mexican companies with a national presence. An additional 15 msf will be added to the inventory by 2019.
Due to the city’s high employment and income levels, the retail sector has expanded steadily over the past 10 years. Mexico City has attracted increasing numbers of American and European retailers to an area that, until the 1990s, ranked well below other cities in the Americas in retail area per inhabitant. In coming years, the Mexico City retail market will continue to witness the expansion of new retail centers of all types. New brands and chains will also enter the Mexican market, and it is quite likely that Mexico City will be the home of their anchor stores.
Mexico City has transformed from a production location 20 years ago to a logistics and distribution hub. With roughly 93.6 million square feet of class A industrial space, greater Mexico City area industrial vacancy is at one of its lowest points in the past decade. Land availability and a complicated permitting process are the biggest challenges for large industrial developers.
Institutional investors – notably FIBRAS (the Mexican equivalent of the REITS), along with local and foreign private investors, have invested billions of dollars. They continue to be attracted to Mexico City as they search for quality and stable commercial real estate assets, which have become scarce in a market where many of the established participants are reluctant to sell. This combination has driven cap rates to their lowest levels since the 2008 financial crisis.