Guadalajara: Expanding to Meet the Needs of Industry

Amidst extreme delays in supply chains and soaring costs of container shipping impacting global industry, Jalisco’s private and public entities are focused on making investments that will turn it into the most important cargo hub in the country—and possibly in all of Latin America. These investments will benefit the area’s economy and manufacturing in Mexico by increasing industrial real estate offerings in the area to meet the consistent and growing demand for warehousing facilities to accelerate and simplify the storage and transformation of goods coming into the region by land, sea, and air.

Despite sustained growth in availability of class A buildings in industrial parks of Guadalajara, Jalisco’s state capital, this growth has been just enough to meet demand for warehousing and manufacturing sites, resulting in average vacancy rates around 3% of total built facilities. To ensure that already established companies can expand in the region and new foreign companies manufacturing in Mexico can expand their operations to Guadalajara, industrial real estate developers reported construction activity of nearly 2.8 million sq. ft. at the end of 2021 in Guadalajara.

In addition to this reported industrial construction activity, the operators of the Manzanillo port (Mexico’s main port to Asia and 3 hours away from Guadalajara) announced an investment of USD 230 million to expand its cargo-handling capacity from 1.4 to 1.7 million of TEUs (20-foot containers) per year. This aims to alleviate port congestion due to an increase of 30% in shipping volume between 2020 to 2021 of containers arriving to Manzanillo. Jalisco government officials also announced that by the end of 2022 there will be clearance to dispatch sea containers into a dry port in the Guadalajara Metro Area to increase the overall cargo handling capabilities of the region.

The arrival of e-commerce giants to Jalisco, including distribution centers of Amazon and Mercado Libre, are a clear sign for state and federal agencies to invest in connectivity projects to facilitate the flow of goods. These projects include finalizing the rail line between Guadalajara and Aguascalientes to reduce transport times to northern and central Mexico, and the construction at the Guadalajara Airport of a new runway that is expected to open by 2026 and increase its cargo capacity from 200,000 to 500,000 tons of cargo per year, representing a relief for the saturated airports in Mexico City.

In addition to these investments, and increases in federal funding for infrastructure, the Jalisco state government is also planning to invest an estimated USD 680 million in infrastructure for water distribution, highway improvements, education, among other projects.

These combined efforts are making the region more attractive for a variety of companies in electronics manufacturing in Mexico, the high-tech industry, as well as automakers. Given the area’s improved connectivity between the port of Manzanillo, the US, and Mexico’s Bajío region—one of the country’s leading industrial areas and hub for Mexico’s automotive industry.