Mexico City’s (CDMX) financial and business corridor, the nerve center of the Mexican economy, is driving demand for office space in this part of the nation’s capital. This is the conclusion of CBRE Mexico’s First Quarter 2025 Office MarketViews report.
According to the consulting firm’s figures, between January and March of this year, Mexico City registered 70,000 square meters of net absorption, representing a 60% increase compared to Q1 2024 (44,000 square meters). Thus, gross demand or marketed space was 130,000 square meters, representing 3% annual growth, surpassing the 100,000 square meters registered in the same period last year, including renovations, expansions, subleases, and pre-leases at the beginning of this year.
Furthermore, the vacancy rate continues to decline. This indicator closed the first quarter of the year at 19.49%, a decrease of 2.54 percentage points compared to the first quarter of last year. This is the lowest figure recorded since the end of 2020, according to CBRE.
Furthermore, the so-called “Mexico City Business Center” (which includes the Reforma, Lomas Palmas, and Polanco sectors) closed the first quarter of the year with a vacancy or availability rate of 13.81%, a rate significantly lower than the overall indicator. This “business corridor” is essential to understanding the growth in demand for office space in Mexico City.
According to the CBRE report, gross absorption or marketed space registered in Mexico City (130,000 m2) was led by 60%, concentrated in three corridors: Polanco (36,000 m2), Santa Fe (24,000 m2), and Reforma (21,000 m2).
Of the Class A and A+ corporate space currently available for sale in Mexico City, 50% (717,000 m2) corresponds to refurbished, Plug&Play, and sublease spaces. This is 5% more than the amount registered in the first quarter of 2024 (721,000 m2). The other half of the offices that remain vacant are under construction.
The City’s Business Center represents 41% of the total corporate space inventory and accounted for 42% of net office demand in the first quarter of the year, with transactions averaging 1,200 square meters.
Its aforementioned vacancy rate of 13.82% represents a 4.26% decrease compared to Q1 2024, when it stood at 18.08%.
Of the available space, 48% is marketed as refurbished, Plug & Play, and subleases. The main industries driving demand were the energy sector (with 42%), corporate services (24%), and transportation and logistics (with 18%).
Regarding the construction indicator, it recorded 289,577 square meters, with nine active projects in total, distributed in the Insurgentes, Lomas Palmas, Polanco, and Reforma corridors. Likewise, 191,000 m2 of new supply is projected for 2025, of which 61% will be located in the Insurgentes corridor, followed by the Polanco area with 35%.
At the beginning of 2025, Mexico City’s inventory remained at 7.4 million square meters, an increase of 0.3% compared to the first quarter of 2024, with the addition of a single building.
Completion of 119,000 square meters currently under active construction in the Polanco, Insurgentes, and Reforma submarkets is expected by 2025, with delivery projected for the second and third quarters of the year.
Regarding the vacancy rate, its 19.49% for the January-March period is 2.54 percentage points lower compared to the same period in 2024, bringing the occupied space to 5.9 million square meters.
The report also indicates that 70% of corporate space in demand corresponds to Mexican companies, of which 55% are renewals, 27% are expansions, and 18% are new contracts. The remaining 30% of companies that signed a contract are foreign companies, most of them with new contracts.
Source: fundssociety
