When a company decides to set up an industrial plant in Mexico, the financial conversation usually begins with a very specific figure:
How much does the land cost?
It's a valid question, but insufficient.
The land represents only one part of the investment needed to take an operation from paper to a fully functional facility.
The true cost of setting up an industrial plant includes infrastructure, construction, services, permits, special facilities, execution times and, in some cases, opportunity costs.
Therefore, a good real estate decision begins with understanding the total cost of the project, not only the land acquisition price.
The land is the beginning, not the complete project.
Two plots of land with the same price per square meter can have very different final costs.
Because?
Because physical and infrastructure conditions can change significantly.
Before comparing prices, it's advisable to check:
- land use;
- topography;
- access;
- water availability;
- drainage;
- energy;
- telecommunications;
- roads;
- urbanization;
- restrictions;
- possibility of expansion.
A piece of land may seem attractive until the investments needed to make it operational are identified.
1. The cost of the land
Naturally, acquisition is one of the first items.
But in addition to the purchase price, there may be associated costs such as:
- studies;
- deed registration;
- taxes;
- fee;
- technical studies;
- legal analysis;
- uprisings;
- regularization processes.
The figure that matters is not just the advertised price.
It is the cost of bringing the property to a condition suitable for development.
2. Urbanization and infrastructure
A plant needs infrastructure around and within the site.
Depending on the location, the following may be necessary:
- access;
- internal roads;
- courtyards;
- parking;
- drainage;
- stormwater systems;
- water;
- electrical infrastructure;
- telecommunications;
- outdoor lighting;
- security.
Every project is different.
That's why it's dangerous to use a generic cost per square meter without analyzing the specific conditions of the site.
3. Construction
Then comes the building.
This involves variables such as:
- surface;
- height;
- structure;
- clear;
- floors;
- deck;
- walls;
- offices;
- service areas;
- platforms;
- courtyards;
- fire protection systems.
A warehouse may have different requirements than a manufacturing plant.
An aerospace facility may require other standards.
A technology project can have completely different needs.
The cost of construction depends on what the building needs to do.
4. Special facilities
This is one of the games that is most easily underestimated.
Depending on the operation, the following may be required:
- HVAC;
- refrigeration;
- compressed air;
- gases;
- special electrical systems;
- substations;
- fire protection systems;
- automation;
- security;
- access control;
- telecommunications.
That's why it doesn't make sense to compare two projects solely based on the cost of the structure.
5. Permits and studies
An industrial project requires coordination.
Depending on the location and nature of the project, studies related to the following may be necessary:
- land use;
- impact;
- mobility;
- water;
- environment;
- civil defense;
- construction;
- feasibility of services.
Managing these stages also requires time and resources.
6. The cost that almost never appears in the first quote: time
Imagine a company that was planning to start production in January.
The project is delayed by six months.
During that period, the company may be:
- paying rent for temporary facilities;
- storing product in third parties;
- delaying contracts;
- postponing sales;
- paying staff without full productive capacity;
- losing business opportunities.
The cost of delaying an operation can be considerable.
Therefore, in industrial projects, the schedule is a financial variable.
7. CAPEX is not the same as total cost
CAPEX can be concentrated on the assets needed to launch the project.
But a more comprehensive assessment must also consider the impact of the operation.
For example:
Initial investment
adaptation costs
implementation time
operation
maintenance
possibility of expansion
=
economic cost of the solution.
This view allows for a much smarter comparison of alternatives.
What if the existing ship seems cheaper?
An existing building can reduce the initial investment.
But it's important to analyze how much it will cost to adapt it.
It may require:
- layout changes;
- extensions;
- platform modification;
- electrical installations;
- reinforcement;
- offices;
- special systems;
- safety adjustments.
The correct question is:
What will be the total cost to make this ship function exactly as I need it to?
Where does Built-to-Suit come in?
A BTS project allows the infrastructure to be designed based on the company's requirements.
MARFA BTS works under a comprehensive model that includes location, management, development and construction, seeking to align projects with operational, legal and financial needs.
This does not mean that BTS is automatically the lowest cost option.
This means it can allow for a better match between:
investment → infrastructure → operation → growth.
The cheapest land is not always the best investment
This is probably the most important conclusion.
Let's assume that land A costs less than land B.
But plot A needs:
- increased electricity investment;
- access works;
- hydraulic infrastructure;
- earthmoving;
- more development time.
While B has better conditions.
The initial price doesn't tell the whole story.
Therefore, the selection of an industrial site must be made considering the total cost of development and operation.
A simple methodology for evaluating an industrial investment
Before committing to an investment, we recommend dividing it into five blocks:
Block 1 — Land
How much does it cost to acquire and register it?
Block 2 — Infrastructure
What is needed to enable it?
Block 3 — Building
What physical requirements does the operation have?
Block 4 — Facilities
What special systems does it require?
Block 5 — Time
How long will it take to become operational?
This last variable must have a financial value.
The best investment is not always the one with the lowest CAPEX
An industrial plant is a tool for producing, storing, distributing, and generating revenue.
Therefore, a correct decision must seek a balance between:
- investment;
- speed;
- efficiency;
- risk;
- operation;
- growth.
The goal is not to spend less at any cost.
Is Invest where value is truly created.
Are you evaluating a new plant or distribution center?
MARFA BTS can accompany the process from the search and evaluation of the location to the delivery of the infrastructure.
Request a preliminary assessment of your industrial project and find out what variables should be considered before committing to the investment.