CDMX Office – Tech Viral Tips

After another period of uncertainty, the country’s most important corporate market closed in 2021 with the lowest net absorption in recent times. This could be seen, months after, in which net demand continued to adjust to the work habits created by the COVID-19 pandemic.

The perceptions of the main players analyzing the market have differing nuances, but they are matched by the impact of the macroeconomic environment that did not pick up the fall of 2020 and the caution with which tenants define adjustments to the surfaces of spaces. Cushman & Wakefield (C&W) sees from negative net absorption of 264,100 m2, the average availability rate across the corridors making up the CDMX market is 19.2%, which is projected to increase due to the above factors.

Another trend that began to be observed in 2021 was a new equilibrium in the starting prices of buildings, the product of a large supply, with air-conditioned and furnished buildings, apart from the projects launched in the market. Therefore, the prices of Class A buildings rose 6.9% in 2021 with average prices of $23 per square metre.

In spite of everything, the developers, although they slowed down the pace of construction of new projects, did not stop completely and the building remains active, especially in corridors such as Reforma where the list of types is 157,000m2 and with rebels 124 thousand will be 600m2. ,

Overall, CDMX has building inventory across 10 registered corridors of 511,300 m2, according to C&W. The main reason for this perspective of market equilibrium is based on the need that companies will have space to foster collaboration and recognition.

An example of the above are some representative leases such as the 11,860m2 that Ford Motor Company absorbed in Corportivo Magnus de Santa Fe and the 9,226m2 that Siemens took over in Dos Patios de Polanco.

There is a similar perspective generated by Newmark for the same period, which saw growing inventory of 62,526m2 in the same quarter and an availability rate of up to 23.7%, the highest in history after eight quarters of growth.

However, the average availability percentage, which represents 1,822,000 m2 of offices, had a marked effect on the Periférico, Lomas-Palmas and Rebel corridors, with increases of 73.7%, 49.9% and 43.9%, respectively, over the reference period.

The different accent in their estimate is that net absorption, although it maintains negative numbers, recorded the best level in seven periods since the start of the pandemic, with -38,141 m2.

Although gross absorption is still far from 2019 levels, Newmark sees a recovery process reflected in the resistance to erosion of the Polanco, Interlomas and Bosque corridors that the market has experienced since the start of the pandemic .

This situation, according to its report for the last quarter of 2021, is also a distinct reflection on prices, which present their lowest levels in the past six years, due to an increase in the peso-dollar exchange rate, a decrease in the rhythm of the spaces. absorption and recess.

Compared to 2019, for 4Q, the typical starting price of A and A+ buildings in the city fell by an average of 7.1%, with monthly rents rising from $23.66 per m2 to $22.09. But they were Lomas Altas, Reforma and Rebel, where the reductions reached 17.3%, 8.6% and 8.5% in each case, despite the fact that the adjustment was normalized.

The report argues as a sign of stabilization that there is a low rate of unemployment and improving absorption. These last 2 factors and the way in which new tenants express the possibility of an eventual recovery or return with new ways of doing things, help the office business to continue the long awaited recovery amongst investors, developers and service providers in the market. will allow.