On the heels of San Francisco-based AMB Corp.'s acquisition of its principal Mexican development partner in July, the firm's Denver-based rival ProLogis announced plans in late August to develop a three million-sf industrial park in Ciudad Juarez. But where the former calls its acquisition of Mexico City's G. Accion, SA de CV an effort to capitalize on Mexico's growing consumer economy, the latter is looking to take advantage of the country's role as a supplier to the US.

"Companies continue to establish light manufacturing and assembly operations in Ciudad Juarez for its strategic location and proximity to the Mexico-US border," says Silvano Solis Vazquez, ProLogis senior vice president and head of Mexico operations. "More and more production lines are moving south of the border in an effort to reduce costs and tap a highly skilled labour force, and thus are creating demand for modern, high-quality, light manufacturing, assembly and distribution space. Our new development in Ciudad Juarez is well positioned to serve our customers in the region."

The REIT has already begun Phase I of ProLogis Park Centro Industrial Juarez, involving construction of three buildings totaling 500,000 sf and completion of infrastructure for an additional six buildings. Located near Juarez International Airport, the site offers access to Mexico's Interstate 45 as well as US interstates 110 and 10.

Meanwhile, 10 US and Mexican border states participating in the 26th Annual Border Governors Conference in Los Angeles renewed their commitment to reduce border wait times and improve the secure movement of people, goods and services across the US-Mexico border. A joint declaration produced four recommendations designed to improve commercial connectivity, including: supporting efforts to obtain funding for additional border crossing inspectors; reducing border wait times substantially by the year 2013 and completing bi-national, state-to-state regional border master plans within three years; supporting border states' requests for a presidential permit for international crossings; and expanding the number of informational signs posted on the US side of the border to increase public awareness of weapons and ammunition laws.

Finally, Mexican President Felipe Calderon opened bidding for development of Punta Colonet, a multi-billion-dollar seaport 150 miles south of Tijuana intended to rival the ports of Los Angeles and Long Beach. The $4 billion first phase of what is expected to be the largest infrastructure project in the nation's history encompasses construction of a port with capacity to handle two million containers a year when it opens in 2014 and a new railroad to carry freight to the US border. Ultimately, the port would be able to handle 20 million containers annually, about two-thirds the current capacity of the two Southern California ports combined.

The massive development will be built on government land but with private funding. The government expects to award the 45-year concession in 2009. Among the anticipated bidders are Mexican billionaire Carlos Slim Helu, the world's second-richest man, whose infrastructurecompany Impulsora del Desarrollo Economico de America Latina (Ideal) has teamed with Mexican mining and railroad giant Grupo Mexico and Iselin, NJ-based terminal operator Ports America Group. State and local officials are planning for a city of about 200,000 to grow around the port. The current population is about 2,500.

In addition to the above, China's Geely Automobile moved ahead with plans for a 300,000-vehicle assembly plant farther inland in Leon, Mexico to supply both North and South America. Geely and a local partner will spend $130 million over three years to reach production of 50,000 units annually, followed by an additional $140 million over the next two years to reach 120,000 units. A third stage, after 2013, will take annual capacity to 300,000 units.

Instant Insights /

Mexico's Industrial Market Makes Strides Along US Border

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