The International Council of Shopping Centers (ICSC) reports that the booming retail and mall industries in Mexico have been good for real estate and are helping attract new investors. This year the total amount invested in new stores,distribution centers,technology and equipment is expected to hit $4 billion,which is an increase of more than $400 million over what retailers spent in 2012.
“Mexico is en vogue,” stated Vincente Yánez Solloa,executive president of Mexico’s main retail trade group,Asociación Nacional de Tiendas Departamentales y Autoservices (ANTAD). “It is one of the economies with big growth possibility in light of the problems still faced by European countries and even the United States.”
Recent announcements include Walmart’s promise to open at least 250 stores in Mexico throughout 2013,and the Liverpool department store chain’s $510 million pledge to open four stores and three new shopping centers by the end of this year. In addition,Mexican grocery store Comercial Mexicana will spend up to $290 million to open 12 new supermarkets and two restaurants,while major fashion retailer Shasa will open ten new stores in 2013,thanks to double-digit growth in sales last year throughout Mexico.
This year,Mexico’s GDP is projected to grow by at least 3.5 percent,with little inflation to speak of. In addition,the nation’s unemployment rate is hovering steady at around 5.4 percent,which is lower than the U.S.,which logged a 7.6 percent unemployment rate this May.
“The Mexican real estate industry is also benefiting from the continued growth of FIBRAs (Mexico’s version of REITs) and publicly listed structured equity securities called CKDs,whose main source of capital is the burgeoning pension funds,” writes the ICSC. “This year and next,13 shopping centers will be opening in Mexico. At least 50 other projects could break ground this year or in 2014.”
The newest trend in retail space in Mexico is to plan developments that feature a blend of restaurants,movie theaters,entertainment venues and more. Mall developer Grupo Acosta Verde will reportedly open at least five new shopping malls in 2013,following index-linked sales growth,a nine percent rise in the number of visitors and an improved overall occupancy rate in 2012.
“There is still more to be developed in Mexico,particularly in small and medium-sized cities that are growing and need the services offered by shopping centers,” shared Edgar Rodriguez,who is director of operations for Grupo Frisa,which holds a 43-mall portfolio in Mexico real estate.