Queretaro offers much to entice manufacturers—including very competitive industrial real estate options. Manufacturers considering expanding into Queretaro, increasingly known as an industrial center for aerospace, automotive, and plastics manufacturing, will find plenty of site options available. Selecting the right one will depend upon advanced planning, an understanding of local availability and best practices for leasing real estate in Mexico, and support from the right partners.
Industrial real estate rates in Queretaro
Queretaro has become a hub for manufacturing. It’s home to more than 100 Tier 1 and 200 Tier 2 automotive manufacturers, as well as two aerospace OEMs and their suppliers. There are 45 million people available within a 215-mile radius, providing manufacturers an ample pool of skilled and semi-skilled labor. And, the Queretaro capital city has a reputation as one of the safest cities in Mexico and a truly international destination.
Industrial real estate development has kept up supporting this growth, ensuring there remains ample industrial real estate available in this market. State-of-the-art facilities may range from 500 to 10,000 square meters. While there are many players in the local real estate market, approximately 10 institutional companies dominate the business and lease about 90% of the available space. Working with one of these institutional real estate brokers can provide some security in your transaction.
National industrial real estate rates range from $5.38 to $3.48 USD per square meter, and costs in the city of Queretaro fall within the average at $4.00 to $4.10 USD/m2. Moving just beyond the metro region may provide manufacturers cost savings. For example, rates in nearby Guanajuato can range anywhere from $3.60 to $4.30 USD/m2, depending on the exact location.
Further afield, about three hours north in the automotive manufacturing industrial cluster that is San Luis Potosi, manufacturers are more likely to find less supply, driving prices up closer to an average of $4.50 USD/m2. In Aguascalientes, supply is also limited due to a growing manufacturing presence, but manufacturers can still find competitive industrial real estate rates closer to $3.60 to $4.00 USD/m2.
7 tips for selecting industrial real estate in Queretaro
While rates will certainly play a role in broad decisions of where to lease, there are a range of other factors to consider to narrow down the potential sites. From infrastructure availability to safety considerations, it’s important to ensure that facilities match their advertised promises. Below we suggest seven questions to ask potential future landlords as you search for real estate in Queretaro.
1. Is the facility part of an industrial park?
Facilities within an industrial park will be more likely to have the infrastructure needed to support intensive manufacturing demands. However, it’s important to do your due diligence here. Ask industrial park lessors what is included in maintenance and other fees. Get an understanding upfront what other tenants may be paying in terms of relevant utilities, including electric, gas, and water.
2. Is the facility’s land use aligned with your operations?
While an industrial park developer may hold a general permit for industrial land use, there can be specific restrictions listed on these permits. Certain operations may need special permits or land use authorizations. Before you sign an industrial lease, identify any relevant restrictions, and ensure it will be possible to secure all necessary permits.
3. Does the facility allow for future expansions?
Talk to lessors about the site’s flexibility to determine whether future expansion will be possible. Is there land or ample build-to-suit space available nearby? Or will you be looking for a new site within the next five to ten years?
4. Is there ample apparent power?
Do the industrial park and landlord own sufficient KVAS? Will the lessee have access to the KVAs needed? If the answer is yes, lessees should be sure to get the promised availability of KVAs in writing.
5. Are fire protection systems in place?
Ensuring the building houses adequate fire protection systems is particularly important for manufacturers. Go further and ask about the availability of fire extinguishers, hoses, sprinklers, etc., to ensure safety needs are accounted for.
6. Does the landlord have other properties?
Working with a commercial real estate company can minimize the risks you might run into during your lease. Ask any potential landlord if they manage facilities in other locations or industrial parks. If the answer is yes, how do these facilities compare to each other? This might provide a peek into how well-maintained facilities are over time.
7. Does the facility best meet all your needs?
By beginning your search with a clear goal in mind, you can better ensure long-term success. Create a checklist that outlines your facility needs and preferences. While you may not get everything on your list, you can weigh the cost-effectiveness of trade-offs to narrow down your search for industrial real estate in Queretaro.
6 traps to avoid in signing your industrial lease
As with any business deal, it’s important to perform your due diligence prior to signing your lease. For manufacturers new to searching for industrial real estate in Mexico, be sure to avoid the following six potential pitfalls:
- Doing business with non-institutional landlords. Working with an institutional landlord can provide some security that you’ll get what you pay for. Be sure to check references, other properties, and other relevant information to ensures that your landlord will uphold their end of your bargain.
- Jumping all-in with a new developer. New developers can promise permits and utilities, but neither party has any evidence that they will be able to comply.
- Setting up a facility outside an industrial park. While this may seem like a more flexible option, chances are high that this will delay your operational permits and licenses—and increase the cost of securing this important documentation.
- Having only one real estate broker show you facilities. Working with two or more brokers ensures you’re getting the complete picture of the local real estate.
- Accepting verbal agreements. If you want to ensure you get services in a timely manner, be sure to get these promises in writing.
- Making a location decision based on data alone. Everything looks better on paper. However, U.S.-based companies find that one of the chief benefits of manufacturing in Mexico is that it allows for easy visits. Make a point of visiting any potential locations, seeing that the facilities available match the promise.
To ensure you get the best real estate deal in Queretaro for your manufacturing needs, it may help to work with a knowledgeable partner. Tetakawi has provided shelter services and helped connect manufacturers with Class A industrial real estate in Mexico for over 34 years.
If you’re ready to simplify your search for the perfect site, contact us today.
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