Prologis Issue 68

Prologis Issue 68

Warning: foreach() argument must be of type array|object, bool given in /home/mexiconow/public_html/sites/mexiconow/wp-content/themes/mexiconowwpnew/single.php on line 254

Prologis:

A Look at Development in Mexico

MEXICONOW Staff Report

Overview


With the largest platform of logistics and distribution facilities in the country, Prologis is the leading owner, operator and developer of industrial real estate in Mexico. Focusing on six key markets, Prologis is well-positioned to assist customers with both offshoring and near-shoring for their logistics and light manufacturing operations, as well as regional distribution to Mexico’s most important growth markets.

Prologis Mexico’s platform currently includes 189 facilities and over 800 acres (335 hectares) of land for development. Their dynamic is to have a focused strategy for Mexico, which at this time features a robust macroeconomic frame and strong operating fundamentals.

On Mexico


Mexico is one of the preferred emerging markets for industrial development. The country’s steady GDP growth, low inflation, stable currency, and excellent foreign investment make Mexico a desired location for distributions and logistics facilities. Recently, the federal government began working on the structural reforms needed to provide continued stable growth for the country and to become even more competitive in terms of GDP growth, employment and especially lower costs through energy reform.

“The Mexican economy is doing quite well,” according to Eugene F. Reilly, CEO of The Americas for Prologis. He points out that Mexico has, “…an increasingly sophisticated manufacturing sector, an educated workforce, and a relative currency valuation, that has recently made its export business much more robust. The trend in U.S. companies for near-shoring instead of off-shoring their manufacturing is increasing, especially in the automotive sector.”

As for manufacturing trends, Prologis objectively expects Mexico to be a strong contender for industrial development as the country recovers, largely due to its competitive labor force. There are many benefits to companies looking to expand in Mexico including decreased costs, a wealth of quality professionals, and a strategic location near the U.S., where the trade of high tech products is growing. Mexico´s future is indeed bright.

Integrated local Platform


Prologis is the leading global provider of industrial real estate, offering customers approximately 562 million square feet in markets across the Americas, Europe, and Asia. Their goal is to help customers maximize the efficiency of their global supply chain for distribution, logistics and light manufacturing. Prologis leases its operating portfolio of approximately 3,000 industrial facilities in 21 countries, where their colleagues serve local and global customers in 14 languages.

By far, Prologis is the largest provider of logistics and distribution facilities in the Americas. The company is well-positioned to serve regional as well as global customers across Mexico. Their scale of operations in the region offers customers the broadest selection of facilities, an unparalleled land bank and access to deep development expertise.

Portfolio of High Quality Standards


Prologis customers with industrial space in Mexico are primarily in manufacturing, electronics, transportation, and retail industries. Mexico is now a desired location particularly for manufacturing due to high fuel costs and increases in labor costs in China, especially for auto, aerospace, electronics, and white goods sectors. These are merely a couple of the many factors which have contributed to the increase in demand for space in markets across the Mexico/U.S. border


Markets in Mexico have seen recovery in 2012 and 2013 where border markets such as Tijuana, Juarez and Reynosa are experiencing growth with manufacturing companies driving the demand. Other companies are moving operations to major cities like Monterrey, Guadalajara and Mexico City, but most of the growth comes from existing customers.
Recent and current development projects in Mexico include:

•Prologis Park Tres Rios: two buildings totaling 723,494 sf, Prologis Park Toluca, 179,215sf and Prologis Park Izcalli 387,400sf all of them in Estado de Mexico

•Prologis Park Apodaca in Monterrey, Nuevo Leon: a total of 100,000 square feet

•Prologis Park Los Altos in Guadalajara, Jalisco: one building of 231,448 square feet

Prologis seeks to provide customers with the most innovative distribution real estate solutions to meet their supply chain strategy needs. With superior standardized specifications, Prologis provides high-quality functional spaces, ample roads and operational buildings with vast storage rooms.

Flexible Design for manufacture and logistics


Every multi-tenant building in Prologis’ portfolio has been designed according to specifications that are ideal for light manufacturing. This allows for lowered costs in both release and time delivery.

Differentiated strategy from the competition


Prologis’ portfolio is their most important differentiator. The company has the largest of Class A assets and features a fully integrated local platform with the following characteristics:

•Hard-to-build operating platform in emerging markets

•76 professionals in Mexico with 6 offices providing day-to-day customer contact

•A strong service-oriented culture

•80.8% customer retention rate for the last quarter; 80% for the last 5 years

•60% growth based on a customer base of 320 clients 


Markets in Mexico


Market-leading governance and alignment of interests:

•The six largest industrial markets for logistics, in trade and manufacturing.
•Prologis commands a leading market share in Mexico City (25%), Guadalajara (30%) and Reynosa (20%).
•Portfolio leased at 92.5% showing an upward trend in the high 80´s.
•Portfolio leased $4.89; this is 5% below market and 15-20% below the market peak.
×