Real Estate and Environmental Challenges in Mexico

The conversation centres around the rapid growth of Mexico’s industrial real estate sector, particularly in the context of “nearshoring” and the relocation of production facilities closer to the USA to avoid tariffs imposed on Asian goods. Grau highlights Mexico’s growing role in the global supply chain: industrial parks, where many foreign companies manufacture goods for export, are expanding. However, this growth is complicated by the need to balance real estate development with environmental concerns such as zoning regulations, water scarcity, and security issues.

Rodríguezunderscores that sustainability is no longer optional but a central part of any successful business model. She stresses the importance of conducting thorough due diligence when planning real estate projects. This includes verifying the alignment between urban development zoning and environmental regulations, which often do not match and can cause legal complications. She also emphasises the need for careful site selection, taking into account not just legal factors but also environmental ones, as well as proximity to indigenous communities.

Both speakers agree that due diligence should involve a comprehensive review of the environmental impact, ensuring that projects comply with the environmental laws at federal, state, and local levels.

Water supply is a particular challenge in many areas, as some regions face scarcity. Developers need to be mindful of the amount of water required for their projects and, when necessary, look for locations with adequate resources. Additionally, electricity supply can be an issue, with state-owned utility CFE struggling to meet the growing demand in some industrial areas. Security is also a concern for companies, particularly those looking to establish facilities in regions with heightened risks.

Mexico’s environmental regulations play a significant role in shaping real estate development. Environmental impact assessments (EIAs), which provide a comprehensive review of a project’s potential effects on the environment, are a must. These assessments are required to propose mitigation and compensation measures where necessary. It is also important to integrate green building practices, such as energy-efficient designs and renewable energy solutions, into real estate projects. These practices are not only environmentally beneficial but also financially prudent, as they reduce long-term operational costs.

Both speakers provide examples of successful projects in Mexico that have managed to balance economic development with environmental conservation. These projects often involve close collaboration between private developers, local communities, and government authorities. Grau cites institutional clients who have adhered to both Mexican and US environmental standards, ensuring compliance with stringent regulations while fostering sustainable growth.

The discussion also touches on the political context in Mexico, with the election of Claudia Sheinbaum as the country’s new president, signalling a potential shift toward more environmentally focused policies. As Sheinbaum has a background in environmental science, the speakers suggest that future real estate development in Mexico will likely place even greater emphasis on sustainability and environmental protection.