Construction & Real Estate

Traditionally a barometer of a Mexico’s economic health, the construction sector saw investment slow in 2017 as a result of a dip in public spending on infrastructure works and uncertainty among private investors over the possible outcome of the renegotiation of the North America Free Trade Agreement. This could further push up the already rising costs of materials brought by the February 2018 hike in interest rates to a nine-year high of 7.5%. Although the sector will continue to gain steam in 2018, such growth will be tepid, given that the factors impeding expansion remain. The real estate sector of Mexico saw record occupancy in 2017. Competitiveness as a manufacturing hub and job growth is fuelling a hike in demand for residential properties and retail space. The expanding population is also driving continued growth in housing demand, as the housing shortage remains above 25%. These factors are all solid indicators of a market that is far from saturated, demonstrating substantial opportunities for investment and growth. This chapter contains an interview with Luis Gutiérrez Guajardo, President, Prologis Latin America.