Tijuana’s Industrial Space Booms Amid Economic Growth

Tijuana is experiencing an unprecedented boom in its industrial sector. Over the past few years, the city has attracted substantial Foreign Direct Investment (FDI), fostering economic growth and increasing activity in the manufacturing, logistics, and e-commerce sectors.

One of the primary factors contributing to the expansion of industrial space in Tijuana is its strategic geographical location. Situated just south of the U.S. border, Tijuana offers unparalleled access to the U.S. market. This proximity provides a significant logistical advantage, allowing for seamless cross-border trade and making it an attractive destination for manufacturers aiming to optimize their supply chains. Additionally, the implementation of the United States-Mexico-Canada Agreement (USMCA) has further boosted cross-border trade, enhancing Tijuana’s appeal as a prime location for industrial development.

Several sectors have seen remarkable growth in Tijuana’s industrial space, driven by the establishment of manufacturing facilities by companies in the automotive, electronics, medical devices, and aerospace industries. The automotive industry, for instance, has witnessed a surge in activity, with major manufacturers setting up production facilities to cater to the North American market. Similarly, the electronics sector has thrived, fueled by consumer electronics and telecommunications equipment demand. This development has significantly increased the demand for industrial space in Tijuana.

Tijuana’s Industrial Real Estate Surge is Driven by Business Demand

Moreover, the rise of e-commerce has created a high demand for warehousing and logistics facilities. Companies are investing heavily in Tijuana to build state-of-the-art distribution centers that can handle the increasing volume of goods moving through the region. This trend is expected to continue as online shopping becomes more prevalent, requiring more sophisticated and extensive logistics networks.

The rapid growth of industrial parks and facilities is a testament to Tijuana’s industrial resurgence. The increasing demand for industrial real estate is driving new developments and expansions. Modern industrial parks equipped with state-of-the-art facilities are being constructed to accommodate businesses’ growing needs. Notable projects include multi-tenant facilities designed to cater to the diverse needs of small and medium-sized enterprises (SMEs) and large corporations.

Real estate developers, logistics companies, and manufacturing enterprises stand to gain from the favorable business environment and growing market potential, which are projected to expand this year. Baja California, which contributed 5% of Mexico’s total FDI in the first quarter of 2024, amounting to US$1 billion, exemplifies this burgeoning opportunity, and Tijuana was one of its top recipients.

Tijuana’s Thriving Real Estate Market: Growth, Occupancy, and Future Prospects

Furthermore, Tijuana’s real estate market has demonstrated considerable activity and growth in 2024. According to JLL’s most recent real estate report, the city encompasses a substantial market size, totaling 93,885,078 square feet (8,722,209 square meters).

The market’s health can be gauged by its remarkably low vacancy rate, which stands at 3.04%. This low rate shows the strong demand for real estate in Tijuana, with a significant portion of available space currently occupied. Even though rental rates are on the rise as businesses compete for available space, some buildings are still available, and partners like TECMA can help companies identify available sites to start their operations.

In terms of development, there is ongoing construction amounting to 391,911 square feet (272,068 square meters). This construction activity points to a growing market and a positive outlook for future real estate availability and investment opportunities in Tijuana. Key areas such as the Otay Mesa Industrial Zone and the El Florido Industrial Park are seeing heightened activity.

Looking ahead, the outlook for Tijuana’s industrial real estate market remains positive. The city’s thriving sectors and ongoing real estate developments make it an attractive destination for businesses and investors looking to capitalize on the North American market. As Tijuana continues to evolve, it solidifies its position as a critical player in the global industrial landscape.