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JLL MX Office Report Mexico City 2q 2022
JLL MX Office Report Mexico City 2q 2022
JLL MX Office Report Mexico City 2q 2022
Research
Central
West
South
North
CDMX
Office Market Overview Mexico City-Class "A" | 2Q 2022 3
1,800,000
1,600,000
1,400,000
1,200,000
Square Meters
1,000,000
800,000
600,000
400,000
200,000
0
Santa Fe Polanco Insurgentes Reforma Norte Lomas Perisur Bosques Interlomas Lomas Altas
Sur
Completed Buildings
Supply Distribution
in completed buildings as of june 2022
15%
Total available stock:
1,759,049 22%
12%
Santa Fe
Fitted out space represents 45% of the Norte
total stock available Polanco
8% Insurgentes Sur
Reforma
Lomas
7%
24% Perisur
6% Interlomas
1% 2% 3% Bosques
Lomas Altas
4 Office Market Overview Mexico City - Class “A” | Q2 2022
350,000
300,000
150,000
100,000
50,000
0
Reforma Polanco Lomas Santa Fe Bosques Lomas Altas Interlomas Norte Perisur Insurgentes
Sur
Q2 2021 Q2 2022
300,000
302,281
57,012
250,000
Square Meters
73,768
200,000
208,213
150,000 168,524
134,286 87,356 99,345
100,000 82,817
50,000
17,578
46,062 28,320 38,385
22,776 37,907 14,241
4,451 7,823
0
Santa Fe Norte Polanco Insurgentes Reforma Lomas Perisur Interlomas Bosques Lomas Altas
Sur
1%
Total Demand
yearly comparison
Square Meters
700,000
600,000
495,231
500,000
425,926
Square Meters
392,315
400,000
408,200
331,054
293,203
300,000
278,939 247,216
250,021 238,607 231,683
200,000
113,954 153,654
100,000
0
Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022
* Includes all activity registered during the period Source: JLL Research
6 Office Market Overview Mexico City-Class "A" | 2Q 2022
Net Absorption*
From January to June
30,000
The market reached at the end of 26,275
-20,000
-
25,895
-30,000
-40,000
Lomas Altas Polanco Insurgentes Lomas Interlomas Norte Bosques Reforma Perisur Santa Fe
Sur
* Net demand: Supply as of Q4 2021 + new supply delivered during the period Q2 2022 – Supply as of Q2 2022
Source: JLL Research
Lomas
1%
2% Bosques
9%
5% Perisur
8% 8% Interlomas
300,000
256,464
250,000
211,210
200,000
Square Meters
178,030 173,113
150,000
141,788 133,435 133,013
119,515 132,887
118,052
100,000
105,786
71,162
50,000
29,748
0
Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019 Q2 2020 Q2 2021 Q2 2022
*Renegotiations, subleases, investments and relocations from Class A to Class A Buildings are excluded
New Supply
as of June 2022
33%
Projected Delivery Date and RSM
Insurgentes
of Buildings Currently Under Construction
Number of Reforma
Year Total sqm Avaliable sqm.
Buildings
Polanco
2022 11 235,411 216,393
2023 14 420,220 394,576 Santa Fe
2024 1 30,000 30,000
1% Bosques
Total 26 685,631 640,969
18%
Lomas
6%
13%
Pipeline*
as of June 2022
The city´s
1,800
vacancy rate
remained stable 1,600
23.6% 23.5%
during the first 20.1%
half of the year 1,400
1,200
23.5% 15.0% 14.0%
15.0%
1,000
13.0% 13.0%
12.0% 12.0%
800 11.0% 11.0% 11.0%
9.0%
600
6.0%
7.0% 5.0%
400
200
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022*
51.5%
50%
40%
35.6%
30% 29.0%
Mexico City
Vacancy
Rate: 23.5% 20% 19.5% 18.1% 18.7% 17.2% 18.1%
15.1%
13.1%
10%
0%
Reforma Polanco Lomas Santa Fe Bosques Lomas Altas Interlomas Norte Perisur Insurgentes Sur
$30
$20
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022*
Asking prices do not include OPEX / CAM charges Source: JLL Research
Office Market Overview Mexico City-Class "A" | 2Q 2022 11
Rental Ranges
(*) Asking Rents
Property Clock
Asking Rent
Submercado (USD / sqm / Month) Short Term Trend
Reforma USD $26.00 - $34.00
Rental Rents
Polanco USD $24.00 - $28.00 Growth Falling
Slowing
Lomas de Chapultepec USD $26.00 - $35.00
Landlord Favorable
Neutral market
Tenant Favorable
Conclusions
Office Market Overview as of June 2022
At the end of the first half of 2022, and despite the still present impact of the pandemic, that led to record high
vacancy rates, the market continues its gradual recovery, with a stable vacancy rate.
Due to oversupply and low demand for office As a result of the implementation of hybrid
space, in addition to the current economic crisis working and the establishment of “home
and the COVID 19 impact, the office market is office”, the vacancy of office space is
tenant favorable and will remain so for at least 2 expected to continue but in a moderate way
more years. compared to the previous two years.
Vacancy rate is at its highest rate, reaching Fitted out space represents 45% of the total
23.5%, due the oversupply combined with a high offering approximately 6% is subleased.
number of tenants vacating premises, however it
remained stable for the last three quarters.
There is a large pipeline of 685,631 square meters in 26 buildings expected to be delivered over the next three
years. This will represent an increase in the current stock of approximately 9%.
Total leasing activity during this quarter showed a 61% rise, when compared to the same period last year.
The market reached at the end of the first half of the year a positive net absorption: 9,999 sq. m. Although
the oversupply and moderate vacancy of office space persist, the market continues with a gradual recovery
The city’s average asking rent remained stable at USD $23.55 /sq.m/mth, compared to the previous quarter.
However, the trend for moderate decreases in rental rates, driven by oversupply and expected pipeline supply, will
continue.
Office Market Overview Mexico City - Class “A” | Q1 2022 13
Appendix I
Class A vs. B | Differences
Concept Class “A” Class “B”
Parking Rule rentable square meters 1 per each 45+ rentable square meters
Ceiling Height 3.5+ meters =< 3.5 meters
Age <20 years 20-40+ years
High Speed : high and low rise divisions for buildings Regular Speed : elevators when available, some with
Elevators with 10+ floors, with smart card access; service/freight elevators
freight elevators
Emergency = > 2 stairs < 2 stairs
Staircase Pressurized emergency and service staircase Non- pressurized
Appendix II
Submarkets Description
Reforma
-Reforma is one of the most prominent office corridors in the country
- Mexico´s most iconic landmarks, museums and embassies are located in this
corridor, as well as first class hotels such as: St. Regis, Four Seasons and the
Sheraton Maria Isabel
- Excellent amenities and transportation including fine restaurants, banks, subway
stations, buses, taxis, bicycle rental
- Includes areas known as Zona Rosa, Cuauhtemoc and Juarez which are mixed
residential and business districts
-Tenants such as the BBVA Bancomer, Mapfre, Monterrey New York Life, Bank of
Tokyo, HSBC, Deloitte and many government agencies are located in this area
-The Mexico City Airport is located within a 20-30 minute drive
-The Reforma corridor is an ideal choice for tenants looking for a central and very
well interconnected location despite the occasional traffic jam or public
demonstration. It provides easy access from all cardinal points and convenient
amenities to their employees, clients or contacts.
14 Office Market Overview Mexico City - Class “A” | Q1 2022
Submarkets Description
Polanco
- Polanco is considered one of the best corridors in Mexico City due to their vast
majority of services such as: public transportation, restaurants and first class
hotels
- Polanco has been currently extended into former industrial areas known as
“New Polanco” which includes Irrigation, Anahuac and the Granada
neighborhoods
- Parking is limited and traffic jams occur due to the high density of companies
working in this corridor
- Tenants such as Nestle, Grupo Carso, Ernst & Young and many retail
companies are located in this area
-The Mexico City Airport is located within a 30-40 minute drive
- Various residential and office developments are under construction since this
area is more flexible in terms in regard of land use
Lomas de Chapultepec
Lomas Altas
Submarkets Description
Santa Fe
- Santa Fe is the largest sub market of Mexico City and offers large floor
plates in modern Class “A” office buildings
- Provides excellent amenities and services including restaurants, first class
hotels and the Santa Fe Mall, one of the largest in Latin America, but some
areas of Santa Fe do not have access within reasonable walking distance
- Difficult and limited access has been resolved with new access from south
of the city known as Supervía Poniente, but traffic jams occur due to the
high density of companies working in this corridor
- Lack of public transportation, no Subway (Metro) serves the area, a train
serving from Toluca is being constructed and will have a stop in Santa Fe
- Tenants such as Grupo Bimbo, CitiBanamex, GE, Ford and Santander are
some important companies located in this area
- Mexico City Airport is located within a 35-45 minute drive
Submarkets Description
Interlomas
- Interlomas is located west of Mexico City and inside the State of Mexico,
which represents lower property taxes in this area
- Because of its location, it presents difficult access from all cardinal points of
Mexico City and lacks of public transportation that serves central areas
- There is an abundance of amenities and supporting services in the
immediate area. These include: strip centers, car agencies, restaurants of all
types, grocery stores, big box retailers, entertainment centers, and the Paseo
Interlomas Shopping Center
- Surrounded by burgeoning high-end residential areas
- Tenants such as Procter & Gamble, Henkel, General Mills and Philips are
located in this area
- Mexico City Airport is located within a 50-60 minute drive
Office Market Overview Mexico City - Class “A” | Q1 2022 17
Submarkets Description
Insurgentes
Perisur
- Perisur is located on or near the Periférico Sur one of Mexico’s most
important highways
- Very accessible to Mexico City’s high quality southern residential areas
- Several first class business hotels, cultural and commercial amenities
surround the area
- Tenants such as Astra Zeneca, Johnson & Johnson, Adidas, TV Azteca,
Kuehne + Nagel, Government Agencies and many retail companies are
located in this area
- Not easily accessible from the more central business areas of Mexico City.,
e.g. Polanco, Reforma, Lomas, etc.
- Mexico City Airport is located within a 45-60 minute drive
Norte
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management. A Fortune 500 company with largest and most diverse in real estate with $60.5
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acquisition, occupation and investment. considered one of the main capital market
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1992
7 Tijuana
Started operations
Offices in Mexico
1650+
Professionals in Mexico
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About JLL
We are a financial and professional services firm that LaSalle Investment Management, our investment management
specializes in real estate and investment management. A business, is one of the world’s largest and most diverse in real estate
Fortune 500 company with annual income of US$18 with $60.5 billion of assets under management.
billion, JLL provides comprehensive real estate services In 2019, JLL acquired HFF, a company that is considered one of the
to clients looking to improve value through real estate main capital market consultants in the industry. HFF has a deep
acquisition, occupation and investment. With over understanding of US and global markets.
93,000 professionals, JLL renders services to its clients
through 300 offices located in 80 countries around the The JLL and HFF merge will allow our clients to benefit from a global
world. team of over 3,700 professionals specialized in capital markets in
We are leaders in the property and integrated facilities 47 countries providing new insight and larger market coverage as
management industry with a global portfolio of well as stronger business flows.
approximately 4.6 billion of square feet worldwide and
US$ 179 billion in sales, acquisitions and financial
transactions.
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