Uncertainty surrounding tariffs and trade agreements with the United Stateswill slow investment and growth for Mexico’s industrial real estate companies, Fitch Ratings estimates .
The rating agency noted that companies with greater exposure to the manufacturing sector are likely to be the most affected, due to recent changes that have altered the outlook for the relocation of production lines in Mexico, i.e., nearshoring .
“These obstacles are mitigated by the sector’s conservative business models, solid occupancy rates, and stable financial profiles,” the firm emphasized.
Approximately 80% of the manufacturing sector ‘s customers are exporters, with the United States being the primary destination for their products. In this regard, the automotive industry , one of the most vulnerable to tariffs , represents almost a quarter of the gross leasable area (GLA) of Fitch-rated companies in the sector.
“As of the first quarter of 2025 (1Q25), rated issuers presented a balanced GLA mix between manufacturing (47%) and logistics/consumer goods (53%), with the northern region of Mexico accounting for the majority of GLA (46%) and ongoing development projects (56%). The majority of logistics/consumer goods GLA is located in the central region of the country and is almost entirely allocated to the local market,” he explained.
It’s worth noting that Fitch Ratings forecast that Mexico’s Gross Domestic Product (GDP) will decline 0.4% in 2025 before recovering 0.8% in 2026, due to the global trade war that began this year and has generated uncertainty among investors and in various markets around the world.
“While the magnitude, scope, and permanence of the tariffs and potential retaliatory measures remain unclear, the uncertainty is already prompting Mexican real estate companies to reevaluate the timing of their investments and consider alternative scenarios as demand slows,” he stressed.
He noted that companies such as Fibra Prologis and Fibra MTY acquire operating assets rather than developing them from scratch, which reduces start-up risk.
On the other hand, he emphasized that Vesta and Fibra MTY have a high leverage margin, although the latter has greater exposure to the manufacturing sector, so it could be more affected by the tariff war.
The rating agency expects rated real estate issuers to maintain stable capital structures in 2025 and indicated that they are likely to reduce investments to maintain occupancy rates amid lower demand.
According to CBRE , a commercial real estate services and investment company, in 2024 total sales or national gross absorption registered an annual growth of 5% , while the share of nearshoring with respect to total accumulated sales was 28% , which meant a figure similar to that of 2022 and 2023.
Last year, demand for industrial real estate due to the relocation of production lines in Mexico exceeded two million square meters (m2) , according to the firm.
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