Sunday 17 January 2021

What Threats Are Facing Industrial Parks?

Although in general industrial parks have "healthy occupancies", they also face challenges

The movements of foreign companies impact the economy in Costa Rica in many ways. One is the pressure they put on the buildings that they leave when they move to larger premises, close their operations or decide to leave spaces, such as industrial parks, to look for other environments.

Forum II located in Lindora, Santa Ana, has a vacancy rate of 9.9%. Its predecessor, Forum I, a short distance away, is  14.6%. A healthy percentage of vacancy is 10%. These developments are affected by the dense traffic of the area in which they are located.

At this time, the free zone (zona franca) type developments are considered stable and attractive investments.

- Advertisement -

For the older industrial parks, the challenge is to enter the trend of attracting smaller companies and attracting others that do not require specialized facilities.

Róger Carvajal, market analyst of the industrial and logistics division of Colliers, explained that the growth of office centers in the free zone regime is ordered and pre-positioned. In this way, the creation of speculative spaces in the market is avoided, which facilitates their absorption.

“The new free zones do have specialized infrastructures made according to the requirements of the companies,” said Carvajal.

In the new parks, risk is controlled by diversification. Grettel Fallas, real estate portfolio manager of Prival Bank, explained that in her real estate fund they included a multi-tenant space (for several tenants) of six industrial warehouses and an additional warehouse in the Zona Franca El Coyol, located in Alajuela, west of the San Jose airport.

- Advertisement -

Other real estate funds in the country use similar criteria. For example, given the low occupancy of the property of BCR Sociedad Administradora de Fondos de inversión (SAFI) in Global Park (by the departure of a tenant), Rosnnie Diaz, manager of the entity, explained that this is the normal cycle of the industry.

“The industrial real estate market is in an expansion stage, so it presents very positive indicators of profitability, availability and growth for the investment fund industry,” Diaz said.

According to data from NFK Central America, a total of 13 real estate investment funds have industrial-type buildings and office centers, whose leasable area is assigned (in whole or in part) to the free zone regime.

Inversión Inmobiliario Multifondos recently announced the purcahse of land in Cartago for the development of the Zona Franca La Lima. IMF also owns other properties such as properties as Zona Franca Metropolitana, Forum 1, Los Balcones, in Plaza Roble, and Centro de Negocios Trilogía Oeste, among others.


Although the level of vacancy of buildings in industrial parks is 8%, some parks are facing threats, since companies could leave them because of the traffic congestion in the area where they are located and the travel time of employees.

The main challenge for industrial parks is to keep vacancy below 10%. At this time, the sector average is 8%.

- Advertisement -

For Colliers, other threats faced by industrial parks in the country to have their facilities unoccupied are that companies have several sites for the separation of their processes and competition for human resources.

Regarding the way in which construction of this type grows in the country, explained to that “…  the new free trade zones have specialized infrastructures made according to the requirements of the companies”.

Although there are generally healthy levels of vacancy, in zonas francas such as Lindora, buildings in free trade zones report high levels of availability, which is attributed to the complicated situation of road congestion.

Carvajal pointed out that “… high vacancies are argued in two ways: in the case of pioneering developments, these are because of the construction conditions of the properties, which lost efficiency due to their age. For the new free zones with high percentages of unemployment, the situation is explained by the existence of newly constructed multi-tenant spaces that are in the process of absorption”.

The availability rate of buildings is affected by several factors, including:

  • The expansion of spaces without presetting.
  • The creation of “satellites” of operations of the companies, that is, they have several sites or separate processes.
  • Location of the property and traffic congestion in the area where they are located.
  • Competence for human resources.
  • Traffic congestion and transfer time of employees.

High vacancies can be attributed two points: in the case of pioneer developments (such as Forum 1in Lindora), it is the construction conditions of the buildings, which lost efficiency due to their age. For the new free zones with high percentages of vacancies, the situation is explained by the existence of newly built multi-tenant spaces that are in the process of being absorbed.

Another source of risk is the option to operate outside the industrial parks, as in the project of Ciudad Tecnológica de San José, since it generates new and greater opportunities for the installation of value-added services and, with it, new employment opportunities. That is to say, the cluster effect that strengthens the productive sectors would be generated, as happens in places like Silicon Valley, in the United States, for example.


- Advertisement -

We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

Bogota, A Magnet For Foreign Investment

During 2019, Invest in Bogota, Colombia’s capital investment promotion agency, supported 48...

Costa Rica Announces Record of 16,718 New Jobs through FDI in 2019

Costa Rica's Investment Promotion Agency (CINDE), in its 2019 performance results...


Yes, you can survive Covid, but I wouldn’t wish it on my best enemy

RICO'S DIGEST - It's been almost a year since the first case was reported last March, we've been battling covid-19 in Costa Rica. And...

WHO rules out covid-19 herd immunity in 2021

(VOA) The World Health Organization (WHO) is warning that mass vaccinations against the novel coronavirus will not produce herd immunity this year. WHO chief scientist...

Pfizer will reduce the deliveries of its covid-19 vaccines to adjust production process

QCOSTARICA - The American drugmaker, Pfizer, said in a statement on Friday that reduced deliveries were a temporary issue, affected by changes to its...

Ticos lose respect for the new coronavirus, lower their guard

QCOSTARICA - Costa Ricans (Ticos) went from not knowing a single suspected or confirmed case of covid-19 in April to learning of four or...

Private sector offers 1,200 pharmacies to expedite vaccination against Covid-19

QCOSTARICA - To streamline the process, the 1,200 private pharmacies in the Costa Rica have proposed to join the vaccination campaign against Covid-19. This and...

Let's Keep This Going!

To be updated with all the latest news and information about Costa Rica and Latin America.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.