The office real estate market in Guadalajara, the capital of Jalisco, has experienced changes recently that could impact its future. The city is emerging as a key player in integrating a logistics corridor for commercial and business exchange in Mexico, which could lead to new opportunities for the regional office real estate market. Guadalajara has become one of Latin America’s most influential technology hubs since the mid-1960s, earning it the nickname “Mexican Silicon Valley.”
While large technology companies such as Microsoft, Meta, and Twitter have announced significant personnel cuts, Guadalajara may benefit from this situation. Sergio Mireles, general director of Datoz analysis platform, suggests that Mexican companies could take advantage of the lower labor costs and talent pool in Guadalajara, similar to what is happening in the manufacturing sector. However, it remains to be seen if the local companies can handle an increased workload, which could impact the demand for corporate spaces.
The Covid-19 pandemic has significantly impacted the Guadalajara office market, and most corridors in the state are currently vacant, except for the Providencia corridor, which has a vacancy rate of 16.4%. The Guadalajara office market has been sensitive due to the pandemic. Nevertheless, new occupations have compensated for the vacancies, increasing by almost 90%, from 18,243 to 34,644 square meters at the end of the second semester of 2022, according to Jaime Ito, associate director of Newmark’s Bajío-Occidente.
The construction of new office buildings in Guadalajara was halted in the second half of 2022. Over 66,000 square meters of work remain in force within the Puerta de Hierro, Plaza del Sol, and Vallarta corridors, which will be incorporated into the market over the next two years. Some projects that were planned have changed their use to housing. There was also a decrease in exit prices within the Providencia and Plaza del Sol corridors, of -3.2% and -1.4%, respectively. However, prices in the rest of the logistics corridors increased from 0.8% to 2.1%.
Despite the changes in the market, Ito believes that the Guadalajara office real estate market will continue to recover. He points out that Jalisco handles approximately $29,000 million in sales from exports, ranking it fifth in foreign trade nationally.