Shovel-ready and BTS projects: keys for new investment opportunities11/04/2023
Regarding projects that aim to take advantage of nearshoring to Mexico and attract new foreign investors, it’s important to adapt buildings to meet each client’s specific needs for their activities. In this phase, Build-to-Suit projects can make a difference. However, in Mexico’s industrial market, access to energy and services is a crucial consideration for starting operations.
There is a term for this: “shovel-ready land”. In shovel-ready industrial land, clients can begin construction immediately because services and energy sources are provided by the developer. Frontier Industrial works with this model by having planning and engineering in an advanced phase so that construction can begin quickly, reducing costs and instilling confidence in our clients.
As a member of the Mexican Association of Industrial Parks (AMPIP), Frontier Industrial is committed to reducing the challenges of industrial activities in Mexico by offering the best conditions for each client to develop their activities. As developers, we provide shovel-ready land with guaranteed access to electric energy in all our industrial parks. Additionally, we offer the opportunity to develop industrial buildings tailored to the needs of our clients.
Design and building considerations for Build-to-Suit projects
Build-to-Suit projects are generally more expensive than renting an industrial building because of the customizations required for the client’s needs, such as space and service access.
For these projects, it is essential to consider the following:
- Project scale.
- Building specifications (last mile buildings, class A buildings, class B buildings).
- Tenant credit rating.
- Lease term.
- Local regulations and permits.
- Market conditions.
A Build-to-Suit project’s space and operational efficiency can offset the costs in the long run. Additionally, programs are available to accelerate the construction of logistics buildings and reduce payback time.
Ease of expansion
Developers can improve their ROI by using a streamlined approach that aligns with tenant expansion goals, which can reduce future design and construction challenges. This approach includes:
- Searching for developed buildings that meet specifications.
- Working with investment funds to obtain necessary financing.
- Planning costs according to the budget.
- Providing technical support before, during, and after construction with design and engineering advice.
- Conducting in-house construction or working with reliable construction companies.
Build-to-Suit projects are important for applying environmental, social, and governance standards (ESG). These projects can meet current company requirements while considering ecological balance and the future needs of nearby communities. This is aligned with the Mexican Association of Industrial Parks’ goal of having a portfolio with 100% intelligent and sustainable industrial parks by 2030.
Experienced Build-to-Suit developers focus not only on the developed buildings but also on areas where companies can improve their activities, reducing risk factors from the start of the project.
Enterprises can contact developers for tenant improvements and adapt developed buildings to reduce fees . Developers can also include their costs in the monthly payment.
Frontier’s Build-to-Suit advantages
As an industrial warehouse developer, Frontier Industrial offers Build-to-Suit projects for various goals, ensuring our clients’ needs are met. Our most significant advantages include the following:
- 1. Experience in projects in Mexico’s fastest-growing sectors, such as automotive, manufacturing, medical devices, logistics, and electronic commerce.
- 2. Support of a technical team specialized in developing industrial warehouses to meet each company’s specific requirements.
- 3. Availability of spaces in markets where land is scarce, such as Tijuana and the northern Mexico City area near the CTT corridor.
- Land reserve.
- 5. Ability to customize existing Class A buildings to meet the specific needs of our clients, including tenant improvements.
The energy availability in Mexico is a challenge for starting activities in any industry. Frontier Industrial offers you the opportunity to develop your project in the main industrial areas of the country, by acquiring shovel-ready land or with our Build-to-Suit projects. Contact us, talk with our advisers, and get profits by nearshoring to Mexico.
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