Fitch Special Report: Positive Outlook for Mexico's Industrial Commercial Real E

'Falling interest rates over the past few years, along with liquidity provided by foreign and institutional investors, have made the financing of new developments possible,' said Greg Kabance, Managing Director of Fitch's Latin America Structured Finance Group.

The near-term outlook for the CRE industrial market in Mexico is positive. With its close proximity to the United States and relatively educated labor force, Mexico is a viable option for many North American manufacturers that seek new locales for their investments. The industrial market is nearing its mature stage; new construction is almost always rapidly absorbed while general vacancy, and lease rates have remained stable over the past five years. At the same time, the Mexican government strives to attract top international corporations and aims to replace some of the industrial business that has left for Asia and Eastern Europe.

Nevertheless, Fitch believes there are still some hurdles to clear before true CMBS technologies are to be employed in the Mexican CRE market, such as the short-term nature of leases, possible liquidity shortages, tighter underwriting standards and fluctuating risk appetites, and the inclusion of non cash flowing properties in CRE Portfolios.

This report is the second in a series examining the commercial real estate market in Mexico. Fitch Ratings' previous report, 'An Overview of the Mexico City Commercial Real Estate Market,' focused on office properties located in and around Mexico City.

The full report, 'An Overview of the Mexican Industrial CRE Market,' is available on the Fitch Ratings web site, .

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