Six advantages of Build to Suit custom projects
It is estimated that in Mexico, the demand for industrial real estate during May 2021 reached 354,000 square meters,1 and in the coming months, an increase of between 10% and 15% is expected. In this context, the so-called Build to Suit (BTS), a construction model designed to lease industrial buildings and distribution centers adapted to the needs of each sector, is emerging as an excellent growth alternative.
Build to Suit in Mexico
As the main feature, these developments have an exclusive design, which comes from the technical specifications of each client among which we find factors such as location, the surface of the construction area, concrete resistance of the facilities, free height of the building, installation of fire-fighting systems and the capacity of transformers or tanks, in cases where industrial activity so requires it.
This adaptation to particular needs, both at an architectural and operational level, is just one of the competitive advantages of the Build to Suit model in relation to the conventional facilities offer. Furthermore, these developments ease activity centralization in the case of distribution centers.
The stability brought by this construction model to companies must also be considered. As these projects require a significant capital investment, longer leasing contracts are also required, with an estimated duration of between 10 and 20 years, seeking to amortize this investment. However, it is not the client who finances the project, but the developer.
Build to Suit: custom industrial spaces
Aimed at industrial construction projects, the Build to Suit arose from the massification of e-commerce1 in the United States and Europe, promoting long-term industrial real estate fixed income.
In this modality, the seller of the land, the final owner client, the leasing company, the person in charge of the building, and the site can all intervene. On the other hand, there are companies capable of entirely undertaking construction projects.
The benefits of custom projects are multiple, and we can highlight those listed below.
- Adequate spaces and architecture. These are areas suitable for the operation and growth plans of the industry and include an industrial architecture that is designed to meet the required distribution and design needs. In addition, delivery times that work for both parties are agreed.
- Profitable facilities. From the point of view of cost and effectiveness, custom projects are more efficient than other alternatives concerning the investment that must be made.
- Financial availability. When the developer undertakes the financial burden in the execution of a construction project, companies do not have to immobilize their capital, but can rather use it to grow the business.
- Construction trends. During the execution of the project and throughout its useful life, it seeks to include the latest generation of construction trends and energy-saving and sustainable materials.
- Real estate opportunities. Through real estate anticipation practices (that is, the negotiation of properties located in growth areas), it is possible to choose among locations in the market of interest and access additional services offered by the developer.
- No technical team is required. The need for an internal structure for the execution of a construction project is eliminated, contributing to the reduction of the initial investment by the client.
Thanks to the various technical and financial solutions provided by a Build to Suit contract, companies can benefit from the security and comfort offered by this type of facility, which is also delivered ready-to-run.
At Advance Real Estate, our specialty is acquiring, operating, and leasing industrial projects in Mexico. All our facilities include benefits such as the highest standards in security, innovation, and flexibility of spaces equipped with Class A infrastructure and services based on our clients’ objectives. For example, Huawei, Axionlog, and Irving are some companies with which we have carried out this type of project.
Since 2007, we have powered the growth of various companies in the country’s main cities through the acquisition and operation of more than one million square meters of industrial space.
Information source:
- www.microbyte.cl/nego/…/202106nego2.pdf
- advance-realestate.com
- www.revistalogistec.com/scm/…/2502-modelo-build-to-suit-las-ventajas-de-construir-a-la-medida-de-los-requerimientos-de-tu-operacion
- atisa.com/blog/11-factores-influyentes-en-edificios-industriales-build-to-suit
- lavozdequeretaro.com/noticias-nacionales/adquiere-advance-real-estate-668410-pies-cuadrados-en-ciudad-juarez
- t21.com.mx/logistica/…/demanda-inmobiliaria-industrial-crecera-entre-10-15-2t21
