Debunking the Value-Add Myth; Auto vs. IT Hardware: Mexico Industrial Real Estate, Technology, Economics, Public Policy & Strategy

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Debunking the Value-Add Myth; Auto vs. IT Hardware: Mexico Industrial Real Estate, Technology, Economics, Public Policy & Strategy

intensity, leads on productivity, labor quality & Mario Simplicio

capital efficiency. We see it as a fast scaling sector with solid potential ahead Research Associate

Mario.Simplicio@morganstanley.com +55 11 3048-6211

We lift our 2027 GDP forecast to 1.9% (from 1.7%), driven by IT hardware/AI Julia Lobato Barbosa

export and investment boom and see OW Vesta & FPrologis as best positioned Economist

Julia.Lobato.Barbosa@morganstanley.com +55 11 3048-6016

We argue that Mexico has the potential to scale its IT hardware/AI–related Morgan Stanley México, Casa de Bolsa, S.A. de C.V.+

Ernesto Gonzalez

ecosystem under what today is a largely USMCA-compliant framework, setting

Equity Analyst

the stage for the next leg of growth for industrial real estate. In a recent note Ernesto.Gonzalez@morganstanley.com +52 55 5282-6726

(see The Finish Line Is Not the Race: Mexico's Role in the US Data Center Build-Out Morgan Stanley & Co. LLC

Relay), we made the case that Mexico is increasingly a beneficiary of the US data Jenny Li

center build-out wave, with an emerging USMCA-compliant tech ecosystem (IT Research Associate

Jenny.Li1@morganstanley.com +1 212 761-2228

hardware/AI–related). That tech ecosystem not only has the potential to translate

into a tangible industrial footprint but is on track to become the country's largest

export vertical — potentially surpassing the auto sector, which has anchored

Morgan Stanley does and seeks to do business with

Mexican exports for decades. We argue this dynamic could be setting the stage for companies covered in Morgan Stanley Research. As a result,

Mexico's next industrial real estate leg of growth.