This week, the Monterrey Real Estate Business Summit takes place at the Quinta Real in San Pedro Garza Garcia. The event will bring together developers and real estate professionals from all over the country to take a glance at all the opportunities the Monterrey Metropolitan Area (ZMM) has to offer. To get a better idea about the market, here is an overview of where, what and who is developing there now.
The Monterrey Metropolitan Area (ZMM) is the third largest and most populated urban center in Mexico housing over 4.7 million people according to INEGI 2015 Intercensal Survey. ZMM has become a strategic state for the country’s industrial sector as it houses many manufacturing companies. Along with the industrial boom, more people have moved into the city in search of jobs and in return increasing the demand not only for housing, but also commercial real estate. Monterrey has definitely caught the eye of both national and international investors and developers.
In the last 35 years, Monterrey’s population has doubled and the urban sprawl has grown eight times its original size and absorbed surrounding municipalities. As the city becomes more densely populated, mobility and lack of basic infrastructure are beginning to impact the quality of life. More than 4 million cars circulate throughout ZMM, paralyzing areas such as San Pedro Garza Garcia and Valle. The federal and state governments are investing in MTS solutions to alleviate the flow of cars but the city demands more solutions and quick. Developers are changing their traditional projects to help citizens work, sleep, and play in the same area and reduce the use of cars through mixed-use projects.
Vertical Housing Slows Down
Nuevo Leon has been the leader in Mexico’s housing market above Jalisco and the State of Mexico for the last year when it comes to new housing. But in the beginning of the year there was a contraction in the residential market with sales falling 21.9 percent from 8,727 to 6,812 units sold when comparing to the same period Jan-Feb 2017, which could be attributed to various political and economic factors according to CONAVI.
As for vertical housing, the Housing Registry (RUV) has documented that only 27 percent of the total new homes in Mexico are vertical homes, a 4 percent growth since 2014. Since 2015, Monterrey has had a 23 percent increase in vertical homes.
The Monterrey Housing Cluster, which is formed by Nuevo Leon’s largest housing developers, believes the housing sector will grow 3.0 percent in 2018 due to the expected arrival of MX$800 billion in subsidies from the federal government. Nevertheless, Lamudi’s real estate portal data reveals that 55 percent of searches are for rental housing which could be in relation to the rising prices in the ZMM, especially in San Pedro Garza Garcia.
Mixed-use Continues to Boom
New commercial developments continue to boom throughout the ZMM. According to Colliers International’s 2S17 Report, there are currently 245 existing commercial real estate projects in the ZMM, 26 under construction and 11 still in the project planning stages. The submarkets with the most developments are Valle with 73, Garza Sada/Revolucion with 33, San Nicolas with 29 and Guadalupe with 28.
The most popular concept in the ZMM continues to be the development of strip centers with over 132 existing projects and six on their way. Nevertheless, mixed use projects are picking up quickly with only 30 existing projects, but with a pipeline of 20 projects.
An area that is currently trending for the development of large scale projects is downtown Monterrey. This area had been neglected for various yeas as San Pedro Garza Garcia and Valle took the spotlight. Developers such as Project 9 with Centro Cuauhtemoc are bringing the historic city center back to life with skyscrapers and large mixed-use projects to gain a large share of the market that was not being catered to.
Reaching for the Sky
Here are some of the upcoming projects that will change ZMM’s skyline in the next few years:
- Torre Insignia – Grupo Inmobiliario Monterrey
- Architect: HKS
- Constitucion 999 – Proyectos 9
- Architect: Grupo Sordo Madaleno
- Torre KOI – IDEI
- Architect: VFO
- T.OP Torres Obispado – Nest & Ancore Development Group