As a result of the pandemic and the economic crisis it generated, many investors have wondered whether it is appropriate to invest, even in times of crisis. This is most natural, since many businesses that had remained stable had to close due to the pandemic.
During times of uncertainty, the world economy had a setback, however, over the months it was recovering thanks to the strategies implemented by the governments of each country.
As we always mentioned, investing in Blue World City is one of the best options you can choose, especially the purchase of land, which has greater opportunities for growth and is insurance for difficult times, in addition to not depreciating over time. .
In this article we will talk about why it is convenient to invest despite the pandemic and why industrial land is a good option.
How has the pandemic affected the real estate sector?
At the beginning of 2020, all economic sectors suffered a great financial impact from the COVID-19 pandemic, the most affected being those related to recreational activities, tourism and retail trade, according to data from the Ministry of Finance and Credit Public.
Against this background, real estate was no exception. However, despite the falls registered, the industrial real estate market had a significant rebound, driven by the accelerated growth of e-commerce in Mexico.
According to experts on the subject, the pandemic accelerated the adoption of electronic commerce in the country by up to 2 years due to social isolation, which led to more frequent use of digital channels to make purchases.
Many companies in the real estate sector already had an Internet presence with websites and social networks, however, during the months when the pandemic had the greatest impact, they had to completely migrate to the digital system, including the sales process.
If you want to know more about buying and selling land on the internet in simple steps, we invite you to read the article that we have prepared.
During the first months of the pandemic, online sales increased between 15% and 60% in traditional categories, and 300% in pantry and grocery supplier businesses.
This situation has put small and medium-sized companies facing a new challenge: modifying their logistics strategies to expand their service capacity without affecting operations; which has increased the demand for warehouses for storage and distribution.
Due to the change in consumption habits due to the pandemic, these logistics and distribution operations have become essential for customer service that seeks speed and quality, especially in the segments that have registered the highest demand, such as:
- Pantry vendors
- Grocery stores
- Personal hygiene
- Pet food
- Food services
An important point for real estate investments is that -according to IDEI- the properties acquired during the pandemic will maintain a 17% capital gain, as opposed to the 3% that they would have in the absence of the health contingency due to COVID-19.
Today, storage has become a key element that requires agility, flexibility, and, especially, large and well-located warehouses in any part of the Mexican Republic, which allow satisfying the demands of the new digital consumer.
For this, companies focus on spaces that meet the necessary characteristics and infrastructure, to improve their operations by making their processes and distribution of goods more efficient, such as:
- Strategic location
- Communication routes
- Level of urbanization
- Size and capacity
This growing demand for spaces to store and distribute merchandise opens up an area of opportunity in real estate investment, with a business that generates constant income and increases equity capital: the rental of industrial warehouses.
Industrial land: the basis for venturing into the leasing of warehouses
Industrial lands are, by definition, lots of a wide extension with ideal characteristics to build warehouses and logistics operations centers for small and large businesses.
These lands have the established type of industrial land use, in which buildings such as an industrial park, industrial warehouse or factory are housed, with the purpose of use for the industry or secondary sector.
The demand for this type of property has increased significantly not only due to the growth of e-commerce; It is also due to the lack of space and infrastructure for logistics in Mexico that companies were already facing, even before the pandemic.
However, nowadays, the lack of land in some cities in Mexico has slowed down the construction of industrial developments, turning other regions of the country into excellent opportunities to invest in this type of space, as is the case in Yucatán and Quintana. Roo.
At present, acquiring industrial land in these regions is very convenient, since warehouse rental costs will increase, due to the lack of land in other areas and the demand from companies that want to expand their storage capacity.
In addition to the Return on Investment generated by the rental of warehouses, this business offers other advantages to protect and continue to increase capital, such as:
- High returns, once the investment is recovered.
- Possibility of investing the returns in another industrial area.
- Increase in the value of the land.
- Maintain possession of the property.
Factors to consider before buying an industrial land
If you are looking to invest in land for your industry or in any case to rent it for industrial purposes, you should consider these 4 points before doing so, since many companies are dedicated to the sale of industrial land, but not all have the best benefits or amenities.
A land located in the area of greatest concentration of its branch, will have more possibilities of obtaining profitability in the medium or long term. For this, it is necessary to determine in advance if your company is part of a specific chain, for example: automotive, food, cosmetics, among others.
It is common to observe that factories meet by category in certain areas, which facilitates the transportation and management of raw materials.
For example, in the city of Mérida it is the western area that concentrates the greatest industrial activity.
The type of industry is a determining factor as these can be classified into:
- Small and medium industry.
- Large non-polluting industry.
- Large polluting industry.
And each of them requires specific characteristics that adapt to their activities and how they intervene with the community.
2. Land use, zoning and environmental regulations
In the legal matter, the land must comply with all the established norms, as well as with the procedures that require government approval.
In order to develop an industrial project, it is necessary that the type of land use is established for this type of activity. It is also important that it is a flat land, that has urbanizations or dates established by the government.
This must be confirmed, since the existence of a factory or industry near a residential area does not mean that it is unnecessary to carry out the process of change of land use, or that it is possible to do so.
3. Market value of the land
It is essential to carry out a market study that provides certainty that the purchase price is adequate, as well as a projection of the value that said property will have in the future.
There are companies – such as BMF Inversions – that carry out the processes for a complete market research, which guarantees the capital gain and guarantees the value of the property to investors. When it comes to a private seller, these studies can be carried out through a real estate exchange such as Easy Broker ID.
Sometimes there is not enough budget or liquidity to make a purchase of such magnitude, however, in Mexico there are facilities to obtain financing that allow the development of new industries that generate jobs and contribute to the country’s economy.
Among the most common financing options are:
- Credits in banking institutions.
- Real estate crowdfunding.
- Financing through real estate companies.
- Agreements between developers.
- Institutional brokerage firms.
- Investors and private funds.
Where to buy an industrial land?
Due to their industrial development, Mexico City and Monterrey are the cities that lead this real estate market, with an inventory of industrial spaces of 8.9 million m² and more than 10 million m², respectively. In other areas you can find lots of 5,000 m².
However, the same demand for properties for sale by companies has significantly reduced the opportunities in this market due to the lack of land and high construction costs.
For this reason, the states of the Mexican southeast, such as Yucatán, have become attractive options for those who seek to diversify their businesses and obtain constant income, especially because the price per square meter in the southeast is lower than the rest of the country.
Today, Yucatán offers unique opportunities to invest in land with prices much lower than in the rest of the republic. For example, in 2018 the cost per square meter in that entity was 50% lower than in Mexico City.
However, in addition to the cost, it is also essential to evaluate the characteristics of industrial land that offer the real estate market in Yucatan.
The lands most valued by the logistics industry are those that are in a strategic location, within an urbanized area, controlled access, and with quick exits that favor mobility for cargo and efficient distribution route planning.
Undoubtedly, there are many opportunities to acquire excellent land in Yucatán and Quintana Roo, not only industrial or residential, but also commercial.
Get to know Advance Industrial Park Yucatán
Advance Industrial Park Yucatán is a real estate development of urbanized industrial land located in Mérida, within the new most important industrial and corporate zone in the state.
It has a guardhouse, direct entrance through the western peripheral, quick exits to the Mérida international airport and roads that facilitate access to the exit to Progresso – Yucatan’s main port – and key shopping malls in the peninsula.
It is located to the west of the city of Mérida, an area that stands out for its high industrial and commercial development
Some benefits of the land for sale in Advance Industrial Park Yucatán:
- Lots from 1,122 m².
- Financing of up to 18 months without interest.
- Lower investment cost by extension of land.
- Excellent location.
- Private property with urbanization.
- High profitability investment in the short and medium term.
Investing in industrial land is safe in a pandemic
Although some conservative investors prefer to wait for the bad times to pass to carry out their investments, large investors take advantage of opportunities like this to obtain good land at great prices and with great returns.
Now that you know the benefits of investing in industrial land, the next step is to find the ideal property for your project.
With BMF Inversions we have more than 25 years of real estate successes, we also have trained personnel to provide you with all the advice you need to invest safely and obtain the best results, since we are experts in lots for industrial development.
We comply with all health measures in our offices so that you can schedule a private appointment with one of our advisors or, if you prefer —or you are outside of Merida— you can schedule a virtual appointment.
Invest and diversify your income through real estate income, with lots that you can rent to take advantage of the growing demand in the logistics industry.