IBM Renews 1.1 MSF Industrial Lease with Prologis in Mexico
Prologis Inc. has broken its own record in Mexico with the renewal of a nearly 1.5 million-square-foot lease with IBM de Mexico, S. De R.L. at the Guadalajara Technology Campus in Guadalajara, Jalisco. The deal marks the industrial real estate company’s largest single lease in Latin America thus far.
The IBM name has a long history at the campus. It was in 1975 when IBM erected a typewriter manufacturing plant on the site of what has since become a multi-structure industrial complex. IBM Mexico renewed its commitment to Guadalajara Tech, which Prologis has owned since 2007, under a long-term lease agreement. Specific terms of the renewal have not been disclosed; however, IBM Mexico’s decision to stay put in its digs was likely influenced by the property’s location in a technology hub.
The proof is in the numbers. The Secretaría de Promoción Económica, the economic development arm of the Government of Jalisco, cites risk and industry research provider Business Monitor International’s forecast that Mexico’s IT and software industry will climb to $10 billion by 2013, with Guadalajara leading the charge. “Guadalajara’s specific strengths rely on the maturity of its high-tech cluster with business incubators and accelerators,” the agency notes. “In the ‘90s it was one of the first regions, with semiconductor and computer manufacturing operations giving Jalisco its prestige as Mexico’s Silicon Valley.”
Further buoying the logistics sector in Mexico is the manufacturing industry. According to a recent study by Prudential Real Estate Investors, “Mexico’s prime location and competitive pricing have strengthened its position in production and distribution of goods bound for the U.S. in wake of the financial crisis. Recent foreign direct investment figures confirm investors’ confidence in Mexico’s manufacturing sector.”
Prologis, whose portfolio in Mexico encompasses roughly 29 million square feet of logistics and distribution space, has been active in the market beyond lease transactions. The timing appears to be right for lucrative dispositions. At the end of 2011, the real estate company contributed a $293 million industrial portfolio in Guadalajara, Mexico City and Monterrey, to its Mexican co-investment venture, Prologis Mexico Fondo Logistico, resulting in proceeds totaling $266 million. And during the first quarter of 2012, Prologis sold $360 million in third-party land and building assets located in the U.S. and Mexico.