Real change
The way people consume, socialize, and work will never be the same again and, in effect, the real estate market has had to completely restructure its portfolio, particularly office and retail, to meet new demands in the sector. “Huge shopping centers will experience a transformation and a redesign,” said Victor Lachica, President & CEO of Cushman & Wakefield, in an interview with The Business Year. “Stores will become smaller so that customers can see the products, order them online, and have them delivered to their homes.” Lachica predicts these trends to change the quality and location of spaces.
Players that were not traditionally in the e-commerce sector are now also investing heavily in the segment. While some stores have had to close due to the drop in foot traffic, those that invested heavily in e-commerce have benefited. This has opened many areas of opportunity for warehouses and logistics in the industrial real estate market. “Right now, retailers are working with distribution centers to deliver their products to their customers better and faster,” said Lachica.
In the office segment, Cushman & Wakefield told The Business Year the new way of working is causing redistribution as the trend is toward more technology, but fewer offices. “In the next two years, we will experience a downturn in terms of demand, which will translate into softer prices, and companies will plan offices with less space for fewer people,” said the director of the commercial real estate services company. “On the other hand, others are seeking to redefine their spaces with more room per person. We were reaching an average of 10m per employee, and in the future we will have 13-15m.”
While the commercial market faces volatility, the housing market has experienced strong levels of growth in the last decade, according to BBVA Research in its Mexican Real Estate Outlook report in 1Q2021. It found that the rate of homes, at 2.3%, grew faster than the population at 1.2% over the last decade. This implies an accelerated level of demand for homes in Mexico.
However, the country faces important challenges when it comes to assuring foreign investment in the housing market in the country. “There are currently two challenges Mexico is facing: its ability to provide certainty and security to investors that want to put money in our country, and how it can provide legal protection and confidence to any company in the business environment,” shared Federico Cerdas, CEO of Global Businesses Inc. “If we are able to provide such assurance to foreign investors, we will be able to attract large amounts of FDI into the country,” he concluded.