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According to experts, a shortage of water, gas and electricity in some Mexican states has caused limited investments in the country’s real-estate sector. Rafael Berumen, director of Colliers Mexico City, said that the scarcity of basic services in some areas of the country has caused retail, housing and industrial real-estate developers to reassess where to invest.

One example is Monterrey, the capital and largest city of the northeastern Mexican state of Nuevo León, which has been experiencing a water shortage and where companies are concerned about the impact on projects already built and those yet to be built.

“It’s a negative, of course. But it also raises awareness, so companies can look more into rigorous practices oriented toward sustainability,” Berumen said. “You can bet on channeling greater investments in buildings that contribute to saving water and energy, for example.”

Berumen said he is hoping that the issue of water scarcity in Nuevo León is temporary, but emphasized that water supply should be the responsibility of the government, which has not done an efficient job in terms of water management.

Pedro Morales, a partner at the law firm GLZ Abogados, said that several Mexican cities are having problems attracting new investments due to energy shortages. These cities include Querétaro, Tijuana and Monterrey.

“There is a shortage of electricity because the private sector has not been allowed to create new projects due to the uncertainty surrounding the Electricity Industry Law (LIE),” Morales said, referring to Mexican President Andrés Manuel López Obrador’s (AMLO) controversial energy law that prioritizes inefficient, expensive and dirty state-run power production over private green alternatives.

“These circumstances bring negative consequences for private investment,” Morales said. “Not having cheap and safe energy is definitely not an incentive for the industrial sector, and more so in the case of global companies, which have policies geared toward sustainability. The lack of water, security and all these aspects that stunt the growth of companies is a shame.”

For her part, Alexis Torres, head of sustainability at Colliers Mexico, said that these problems can be solved by sound public policies and investment in local infrastructure.

In the case of companies, Torres said she believes that it is possible to carry out construction practices that help save water, gas and energy in buildings.

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