Although there are signs of recovery for Mexico City’s office rentals, the market is far from healed.
A report from online real estate marketplace Solili pointed out that rentals seem to be on the road to recovery for Mexico’s capital. Neverthelees, the average price of rentals remains 5% below pre-pandemic levels.
Renting office space is still cheaper in the country’s other cities, such as Monterrey, Puebla and Tijuana, according to Solili.
In January 2020, months before the pandemic struck, corporate tenants paid an average of US$22.3 in monthly rentals for a square meter of office space in Mexico City.
The Covid-19 pandemic dealt a devastating blow to property markets across Mexico, but the capital suffered the hardest blow. At the end of 2021, nearly 25% of office space was unoccupied in the city.
“There were 1.76 million vacant square meters of office space in the final quarter of 2021, which is almost 24% of the 7.48 million square meters (available in the city),” reported Mexico News Daily, citing data from property developer JLL.
Some realtors are delaying new constructions because they are seeing an oversupply of commercial properties in the city. Solili says commercial real estate is less likely to recover fully in the near future.
Currency devaluations and the growing popularity of remote worke could also be responsible for the fall in office rentals.
If the economy rebounds significantly, then the office rentals may move back up to pre-pandemic levels over the next two years, said Sergio Mireles, Solili’s director.
While Mexico City lags behind, the demand for office space is on the rise in Querétaro, Quintana Roo and Hidalgo.