The "Nearshoring" is the phenomenon that has generated that Yucatan has a package of more than 310 private investment projects in the textile, aeronautical, automotive, agro-industrial, tourism, real estate, services, logistics and aerospace sectors.

Together they add an economic spill for the state of more than 138 billion pesos and includes the participation of world-renowned companies such as Airbus, Walmart, Leoni, Accenture, Amazon and the first Mercado Libre distribution center in the Mexican southeast which meant an investment of 1600 million dollar and has a storage capacity of two million products. This has been the firm's strongest investment in Mexico.

Other huge arrivals were the three plants of "Woodgenix" Chinese kitchen manufacturer that sells to World Disney Resource and Home Depot; and the arrival of the Japanese company "Uchiyama Manufactering Corporation”.

To all this are added for the near future 260 investment projects of companies from the US, China, Japan, South Korea, Germany, Spain, England and France, companies, which in many cases, continue to operate in the Asian region, but at the same time, are re-locating or expanding their manufacture in Mexico to sell in the U.S. market. There are transnationals in the automotive sector that had all their manufacturing in China, Malaysia, India and Vietnam and are now being established in Mexican territory.

Mexico has become more attractive to install manufacturing from Asia due to the geographical proximity to the United States, the cost of labor, the trade war between Washington and Beijing, and the advantages of the North American Free Trade Agreement (T-MEC) that came into force in 2020.

Other huge arrivals were the three plants of "Woodgenix" Chinese kitchen manufacturer that sells to World Disney Resource and Home Depot; and the arrival of the Japanese company "Uchiyama Manufactering Corporation”.

To all this are added for the near future 260 investment projects of companies from the US, China, Japan, South Korea, Germany, Spain, England and France, companies, which in many cases, continue to operate in the Asian region, but at the same time, are re-locating or expanding their manufacture in Mexico to sell in the U.S. market. There are transnationals in the automotive sector that had all their manufacturing in China, Malaysia, India and Vietnam and are now being established in Mexican territory.

Mexico has become more attractive to install manufacturing from Asia due to the geographical proximity to the United States, the cost of labor, the trade war between Washington and Beijing, and the advantages of the North American Free Trade Agreement (T-MEC) that came into force in 2020.

When former President Donald Trump imposed tariffs of up to 25% on imports from China in 2018, many companies looked for a way to replace "Made in China" with "Made in Mexico."

According to a study carried out by the Inter-American Development Bank (IDB), the relocation of companies could mean for the nations of Latin America and the Caribbean about 78 billion dollars in terms of exports. In addition, Mexico could be the most benefited, with 35,300 million per year in goods exports alone.

What is intended with "nearshoring" is that Yucatan becomes the new border with the United States to export products to the East Coast, in this regard, it is worth mentioning that today Yucatan is already the third place in entities in Mexico that have made the best use of "nearshoring" with the improvement of their logistics, according to data from the consulting firm Credit Suisse.

All this has been generated in large part due to the "Mayan Train", as it is also a freight train that will be connected to the Transistmic train project and this in turn will allow to connect the Pacific with the Atlantic, becoming a logistical axis as important as the Panama Canal. It is intended that the raw materials can arrive through Salina Cruz, be transformed and reach Yucatan and then taken out through Puerto Progreso, one of the main reasons being the growth derived from imports, since there is a great migration from Southeast Asia and China of many inputs for manufacturing and export to the United States.

Despite the fact that more than 70% of industrial activities by nearshoring are concentrated in the north of the country, according to data from the consulting firm CBRE, the southern region of Mexico could attract greater foreign investment in logistics and as a distribution center. According to figures from the Bank of Mexico (Banxico), during the last 12 months from June 2022, the production and investment of foreign companies in the south of the country increased by 1.5 percentage points and in 2023 it grew between 0.9 and 1.2 percent.

From the southern region Yucatan stands out, due to its geographical position, infrastructure and the great advantages it offers than other areas of the country for large industries of the world to relocate, among them we can mention the most important that are the issue of security, because is a challenge that companies face due to the power that criminal organizations have in certain areas of the country (according to the Executive Office of the National Public Security System (SESNSP), Yucatan has the lowest rate of crimes); as well as for the large water resources that the state has unlike other areas of the country, taking in consideration that water shortage is one of the big risks and limitations for nearshoring to end up expanding in Mexico. Without water, there is no industry.

It will most likely be that non-wet industries will arrive throughout the north where there is no water, that do not consume much of this resource, and the wet industry in southeastern Mexico.

It is worth mentioning that although the industrial parks that offer the greatest logistical advantages and that have a solid base of suppliers and local talent are those located closer to the United States, from the construction of the Transismic Corridor, this advantage is gained in the southeast.

In that sense, the growth opportunities for southern Mexico are concentrated in logistics, storage and meeting point for the supply or production chain, but the great challenge for national entrepreneurs is to embed themselves within this process.

The international promotion of the territory, as well as federal investments in infrastructure, achieved that in Yucatan Foreign Direct Investment (FDI) reached a flow of 535.9 million dollars in 2022, a record figure in local history, with data from the Ministry of Economy (SE), so the state is undoubtedly living an unprecedented moment in the arrival of international companies that locates it as an important investment pole. For this reason, Yucatan government is working on projects such as the expansion of Mérida International Airport to increase its capacity from 2 to 4.7 million visitors, the expansion of the Port of Progreso (port that handles the greatest variety of cargo in the National Port System and the one with the largest flow of containers in the southeast), the construction of the elevated viaduct in that port and the construction of the two combined cycle plants Mérida IV and Valladolid, the expansion of the natural gas network and the Cuxtal II project that will double the capacity of the Mayakan2 system, 3 Wind farms and two plots. Efforts are also made to the federal government so that the tax incentives that are applied in the controlled strategic enclosures of the Transistmic corridor are also applied in the technological pole of the welfare of Yucatan.

All this, makes Yucatan the ideal state to investand it certainly makes us think that it will become the new border with the East Coast of the United States, with which the Mexican southeast will be more competitive and it will be possible to increase the share of regional imports to the neighboring country.

The British consulting firm Deloitte, in 2021, qualified Yucatan as the state with the best conditions to invest and in 2022 the Mexican Institute for Combativity (IMCO) placed Mérida among the top 10 most competitive cities in the country.

Yucatan is growing faster than the rest of Mexico, while the country does it at 5.9 percent, the state of Yucatan is doing it at 8.1 percent annually.

Foreign investment and industry have been growing significantly and Yucatan occupies the first place in growth in the capture of FDI.

How does all this impact the real estate sector?

Extensibly, in first place, because of the number of Industrial parks that need to be built and consequently all the residential development that will have to be generated to meet the need for housing.

The Ministry of Finance and Public Credit (SHCP) pointed out that the demand for industrial spaces increased by 42% in 2022 compared to that observed in 2021. Additionally, he said that at the end of the first half of 2022, 4.7 million square meters (m2) of construction were being developed due to nearshoring, double what was done in 2021. The authorities in the country and the developers of industrial parks continue to work to expand and improve the alternatives, which will undoubtedly continue to attract investment; however, in the face of the increase in demand, the real estate industry will have to invest substantially in the construction of industrial buildings, especially in areas and markets that are of commercial interest such as Yucatan. This will allow us to take advantage of the enormous momentum that nearshoring is giving to this and other sectors of the economy.

The Mexican Association of Private Industrial Parks (AMPIP) confirms that there is more interest from foreign companies that want to come to Mexico, especially Asian and there is little space available to rent in the industrial parks. According to Pablo Monsivais, an analyst at Barclays bank, industrial space is being rented when they are just building, a phenomenon that had not been seen before.

We are seeing how the re-location is progressing. In the last year alone, about 70 plants in the automotive sector moved their manufacturing operations to Mexico. While some of those plants are already working, others are about to go into operation. In the course of 2024, several significant trends are anticipated in our country, such as, for example, the opening of 47 new industrial parks projected by the Mexican Association of Private Industrial Parks (AMPIP). Likewise, the AMPIP expects that between 2024 and 2025 around 453 new companies will arrive in Mexico, of which 77 would be Chinese. This translates into a potential demand of up to 2.5 million square meters. This has been because of the Mexican model of industrial parks, which comply with high standards and good international practices to provide certainty to companies and investors. Finally, it is important to note that the phenomenon of nearshoring has attracted more than 800 foreign companies to Mexico since 2018 and only the AMPIP projects the arrival of 453 new companies to Mexican industrial parks between 2024 and 2025 with a notable interest on the part of Chinese companies; a trend that aligns with the estimates of economic growth and labor productivity and that consolidate the importance of nearshoring as an engine of development in Mexico.

It is undoubtedly the best time to invest in industrial real estate models in the Mexican southeast.