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Investment in Infrastructure and Real Estate Industry

1 peso = 8 cents

The global economy is going through difficult times, which will affect the trade mundi and domestic demand for all products.

This program considers an important development in the field of construction, with investment of the 2.5 trillion pesos equivalent of 200 billion US dollars projected in the period between 2007 and 2012, or 422 billion pesos annually until 2012.

Relevant infrastructure like airports, roads, railways, ports, power plants and producing oil and gas, petrochemical, and communication networks are considered in the program. The investments are aimed at enhancing the global competitiveness of Mexico, and consequently opportunities to build new housing markets.

Mexico currently has 26 major ports, and the goal is to invest, both sources of public and private investment, about 71 billion pesos, with the purpose of restoring and expanding existing 22 ports in the Pacific and the Gulf, including Manzanillo, Lázaro Cárdenas, Punta Colonet, Veracruz and Tuxpan, and the creation of five new ports, which would increase the annual potential of 4.0 TEU ocean freight TEUs in 2006 to 7.2 in 2012.

Highway system for the program includes the restoration of the main trade routes of transportation, connecting major cities and ports, as well as building new roads, improvements and development reaching a total of 12.3 thousand kilometers of roads sue investment by 297 billion pesos.

The rail system will receive investments of 49 billion pesos to increase its size from 26.7 to 28.1 thousand kilometers, highlighting the proposed train station in the metropolitan area of Mexico City. As for air transportation, the government plans to improve existing 31 airports and build three new, making a total of 59 billion pesos.

Country's logistics network

Such investments in transport infrastructure are planned to improve the logistics network in the country. Improvements in transport infrastructure investments immediately promote the industrial sector, which in turn requires more manufacturing plants and distribution depots, thus benefiting industrial real estate market.

Additionally, the increased operational efficiencies attracts private investment, resulting in job creation and higher incomes, finally strengthening the residential and commercial property sectors.

Additionally to transportation projects, the National Infrastructure Program planned investments of 283 billion pesos to increase the use of Internet and mobile phones among Mexicans.

Another 380 billion pesos will be invested in power generation and environmental issues related, and finally 379 billion pesos will be used in gas refining and petrochemicals.

Investment in treatment and treatment of waste water indicate opportunities for the residential property sector.

154 billion pesos are predicted for such projects, while 30% of all investments in water treatment concentrated in the Valley of Mexico. Not coincidentally, this is the area of the country with greater private investment in the residential sector. Investments in oil and gas investments topped the list of over 800 billion pesos. Obviously, time and resource allocation will depend on the current discussions around the issue of energy in Mexico. However, such investments are expected to cause a boom in states around the Gulf of Mexico.

The global economy is going through difficult times, which will affect world trade and domestic demand for all products. During such periods infrastructure investments are welcome, not only by the capital injected into the economy but because they make the country more competitive in the long term.