Mixed-Use Projects Monopolize Growth

According to the Asociación Mexicana de Profesionales Inmobiliarios (AMPI) (Mexican Association of Real Estate Professionals), the investment and development of mixed-use projects continues to expand. It is estimated that, by the end of 2019, this sector will have a growth of five percent compared to last year.

Óscar Israel Reyes Dueñas, president of AMPI Guadalajara, reported that the development of business centers, apartments and commercial offerings in the same space continues to be a trend in investment and development in the main areas of the Guadalajara Metropolitan Zone (ZMG).

The government’s strong commitment to adopting a redensification policy in the city (bringing people closer to their work areas, schools, hospitals, stores, transportation routes and other services to give them a better quality of life) has boosted the generation of vertical housing in the ZMG.

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“Today, transit time is very important to the population. This has meant that clients are willing to invest a little more in their property as long as it generates less travel time,” he said.

Last year alone, 81 new vertical projects were developed in the state capital, adding to the existing 184.

Reyes indicated that the millennial market’s great acceptance of this type of space has given rise to those of more advanced generations (such as baby boomers) seeing vertical housing as an investment and business instrument, whose clients come to be the more current generations.

“Their purchasing power is higher, and they have a greater possibility to invest, but undoubtedly, in a few years, millennials will be profiled as the most important market.”

The president of the association stressed that, although currently there is a large supply of verticality in the real estate market, even greater than demand, the sector is aware that quality will be the decisive factor for investors, who are increasingly more selective in what they seek.

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“Now, people make purchases much more consciously. Before, they were more impulsive, but today, due to the good quality of the real estate products being developed in the market, their purchases are more reasoned.”

He pointed out that the added value of the units remains strong, especially in areas such as Providencia and Chapalita and even “farther south, such as La Calma, Arboledas and Paseos del Sol, where there are now prices that were previously unimaginable. For example, in areas like Andares, today they are 25 percent higher than five years ago.”

He shared that the areas in the ZMG registering the greatest real estate growth are to the south of the city, “by López Mateos, where important mixed-use projects such as Punto Sur and malls such as Galerías Sur are being developed. It is also growing toward Tesisitán, toward the north of the city and the entire Calzada area. A lot of investment is being made toward the center of Guadalajara, and we even expect that next year it will begin to be seen in Zapopan.”

Reyes said that neighborhoods such as Americana, La Moderna and Lafayette are becoming an important niche for the development of spaces, since the proximity of services, transportation and work areas is attracting the attention of the millennial market.

“They have the office, the bike path and the light rail nearby. They really like being able to develop in mixed spaces, and it makes their lives easier.”

However, the president of AMPI said that one of the challenges the real estate market has had to face throughout this year is the issue of speculation and uncertainty about government policies, which has lowered investment by the public initiative, causing a lack of liquidity in the market.

“We’re hardly going to reach the same levels of growth we had last year. I very much doubt that this slowdown we have is going to reverse this year. We hope that in 2020 there will be a rebound.”

He pointed out that this year’s growth rate in the housing sector was 10 percent (due to the strong investment in housing developments recorded last year); however, commercialization has remained slow.

He explained that the issue of the slowdown has affected the entire real estate sector nationwide; however, he stressed that Jalisco is one of the states with the highest real estate investment in the country, so it is hoped that this situation will gradually be remedied.

He said that the ZMG is a pole of attraction due to the openness to redensification and verticalization that exists, so it becomes a factor of interest to the investor who wishes to develop a project in a city that is growing rapidly and has adapted positively to this new form of housing.

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