During 2011, investments made by new companies as well as those made by established ones in expansion have kept the industrial real estate market stable.
In cities such as Saltillo and in states such as Nuevo Leon, Queretaro, Guanajuato and San Luis Potosi, those investments have become routine.
The strategic location, human talent and economic stability, as well as logistics and access to markets are key points and arguments that are taken into account by foreign companies when they decide where they will move their operations and invest.
“Mexico is a country that is very attractive to all companies wishing to export to North America, thanks to its excellent connectivity with the United States and Canada. Not all countries have access to the Atlantic and Pacific Oceans, enabling access to European and Asian markets”, stated Andrés Franco Abascal, Assistant Secretary of Foreign Investment and International Commerce in Nuevo Leon, who also pointed out that after the Federal District, Nuevo Leon is one of the most attractive states for investors.
Last year, Nuevo Leon attracted 6 billion dollars and during 2011 the same amount is expected to be invested.
“Those who set up business in Nuevo Leon seek exportation of most of their production. In fact, 90% of them send their products to the United States and Central America”, expressed Abascal.
Nuevo Leon stands out among other states since it has obtained investments in industrial real estate by 37 companies, eight of which are new and 20 of them are companies that have reached their goals and are now expanding their installations.
During the same period of time, Queretaro concentrated on a total of 10 companies, four of which were new, one was an expansion and one was a re-location.
In San Luis Potosi, 15 companies invested for the first time in that state and 8 more expanded their installations.
Guanajuato obtained a total of 15 companies, 11 of which are new companies that visualized the competitive advantages of the location and set up business for the first time here and four expanded their operations.

A strong Nuevo Leon
During the first semester of the year, expansion projects were more frequent in Nuevo Leon.

This is Haldex’s case, which increased its presence in the Prologis Apodaca Park 3 within 143,469 square feet of space.
Keune & Nagel expanded its industrial bay by constructing 109,000 square feet in the AMB Agua Fria Industrial Park.
MABE also underwent two expansions in the CPA ADN Park in Cienega de Flores. One of them was 200,000 square feet of expansion while the other consisted of 105,496 square feet.
However, we must point out that new companies have also made investments. This is the case of Ernest Industries from the United States, which is found in the “La Silla Apodaca” Industrial Park within a 25,000 square foot plant and Solapack, a packaging specialist, which set up operations outside of industrial parks on an area measuring 75,500 square feet.
The German company Siemens is also investing 40 million dollars in an expansion in the City of Santa Catarina.
Sergio Chávez, Analyst of CB Richard Ellis, estimated that at least 5.5 million square feet will be occupied.

Foreign Presence in Nuevo Leon
Today there are more than 2,600 foreign companies operating in the metropolitan area of Monterrey.
“There are whole countries that do not have this many companies and we, as a State, have achieved it. This demonstrates that Nuevo Leon is attractive to the entire world”, stated Abascal who also pointed out that the automotive, aerospace, appliance, specialized medical service, metal-mechanical and software development sectors are those that are most interested in the State.
From January to July of 2011, the Government agency has announced 19 projects for investment in the automotive, electrical, home appliance, metal-mechanical, plastic and chemical sectors, among others.
It is contemplated that the companies will invest more than 800 million dollars and they will create more than 2,300 jobs.
The director pointed out that the countries with most interest in Nuevo Leon are the United States (50%), followed by Germany, Japan, England, and France.
“Previously, the United States represented 80% of investments, but the origin of investors has diversified, which is healthier for the State since it no longer depends on just one country”, stated the Director.
It should be mentioned that other companies have Nuevo Leon in their sights for the future. “We have 55 potential investment projects, of which 36% are in advanced stages”, added Abascal, who stressed that if those projects are carried out in the next few years, 2,500 million dollars will be invested and 15 thousand jobs will be generated.

A Law that Benefits Investments in NL
Nuevo León stands out because it has a Law to Promote Investment which provides investors with support.
Incentives include training personnel in the State and in the countries of origin, a reduction in Income Tax is offered for two or three years and economic support is offered for building the infrastructure, access to the plant, etc. , the latter of which is 5% of the value of the project.
“For this latter benefit, it is important to evaluate the number of persons who will be contracted, the amount they will be paid, the ecology of the project, among many other aspects. And the higher the score achieved by the investment, the greater the percentage of support to be given”, pointed out Abascal, who emphasized that the incentives offered by different governments in Mexico do not represent the most important point for attracting investments to a specific State.
In fact, the incentive factor is found in 17th place when the decision is made to set up business in a region, since factors such as logistics, location, talent, import and export routes, among others, have the most impact.


Queretaro Continues on the Rise
In Queretaro, companies such as AB Steel, Brovedan, Erreka and Harman Becker are present in the state for the first time.
The two first companies are found in the Queretaro Industrial Park in industrial bays that are 419,792 and 333,681 square feet, respectively.
While the last two companies are located in the Queretaro Industrial Park in spaces measuring 31,135 and 187,000 square feet, respectively.
Others announced their investments for 2011, such as Eurocopter which will invest 500 million dollars in the construction of a manufacturing plant. The company of German and French origin will directly employ 100 persons in their plant.
The Japanese automotive company, Neaton, will invest 104 million pesos in its new plant located in the Marques Industrial Park.

Investments in Puebla
During 2011, Puebla has not lagged behind in attracting investments since the Thyssenkkrupp Automotive System company from Germany expanded its installations in the Finsa Industrial Park within an area of 150,696 square feet.
The automotive company invested approximately 26 million dollars for its new plant which will create around 1,200 direct jobs.

Guanajuato’s Attraction
During 2011, the Guanajuato Interior Port has been the extremely attractive for investors since all out of all of the industrial contracts signed and announced, 11 will be located there.
This includes Martinrea, a Canadian company, a 1st tier company in the automotive industry, which will invest approximately 36 million dollars in 2011 for the construction of its 162,500 square foot plant.
Hiroshima Aluminium will also invest 25 million dollars to set up its plant in the Guanajuato Interior Port within a 150,700 square foot industrial bay. This Japanese company belongs to the automotive sector and it will generate approximately 100 direct jobs.
Kautex Textron, from the U.S., will also invest approximately 14 million dollars for the first time in the Guanajuato Interior Port to build a 96,000 square foot plant which will generate 95 new jobs.
“The Guanajuato Interior Port is a place that has an infrastructure with logistics, air communication, highways and railroads in the same place. In addition, it has an interior customs office, a strategic fiscal compound and a business park. This entire infrastructure becomes attractive when, in addition, it offers industrial and logistics companies the option to install their operations in the same industrial park”, stated Jorge Arturo Acevedo Alarid, General Director of Interpuerto.

San Luis Potosi
In San Luis Potosi, the industrial real estate market has presented a clear recuperation compared to previous years.
“I am sure that the recuperation of the market with respect to previous years will continue. San Luis Potosi, in addition to having an excellent infrastructure with logistical advantages for businesses, is also near cities that attract large companies such as Queretaro and Guanajuato”, stated Maricela Valencia, Marketing Manager of El Bajío Region of Citius Capital.
The first new company to invest is L’Oréal, a French manufacturer of cosmetics and beauty products that will invest more than 50 million dollars to construct its new manufacturing plant in the Logistik Industrial Park.
With this the company will be able to product approximately 200 million units of dye per year.
This will be the second plant in Mexico in the State of San Luis Potosi, thanks to its closeness to the United States, the main destination of its exports.
Another interesting investment is that being made by the Magna automotive company, which will spend approximately 100 million dollars in 2011 to construct its new plant where it will generate approximately 700 new jobs.
It will be located in a 323,000 square foot industrial bay within the Logistik Industrial Park.
General Products from the United States invested approximately 24 million dollars to install a new 69,000 square foot plant in the Logistik Park.
The automotive and aeronautic company will use its new industrial bay to manufacture chassis for VW, Mercedes Benz, Ford, Scania and Volvo vehicles.

TABLE
Real Estate Contracts signed by location (square feet)
Guanajuato 14,570,768
Nuevo Leon 2,482,758
San Luis Potosí 1,815,996
Saltillo 1,498,410
Querétaro 2,919,960
Guadalajara 698,601
Puebla 150,696

Note: Guanajuato had the greatest number of square feet thanks to the areas that will be used by Volkswagen and Pirelli Pneumatics which is 6,458,346 and 4,305,564 square feet, respectively.

OUTSTANDING
“If a company wishes to enter the North American market with 450 million consumers, which also includes Mexico, Nuevo Leon is the best location”, stated Andres Franco Abascal, Assistant Secretary of Foreign Investment and International Commerce in Nuevo León.