Universidad Internacional de La Rioja

Facultad de Empresa y Comunicación

Master Business Administration

(MBA)

INVESTMENT OPPORTUNITY

G E N E R A L E N V I R O N M E N TA L A N A LY S I S

Student: Fernando Sánchez Salcedo

Subject: Análisis de Situación
Date: November 19th, 2021
• Investment opportunity
• Objective:
• To belong to an association as investor
• Project:
• Integral construction of:
• 25-level building
• Apartments & Lofts
• Shopping center
• Offices
• Possible locations:
• Downtown in México city
• North zone in México city
• Environmental analysis.

P E S T E L
 World rank of economical freedom 65

• Above the regional and World average

Government Integrity 39.8 ↑

• Corruption has been an issue for long time in México

Property rights 53.4 ↓

• Property registration is problematic

Fiscal health 88.7 ↑

• Public debt is equivalent to 53.4 percent of Gross Domestic Product.

Monetary Freedom 72.1 ↑

• Construction permits are more difficult to get

Investment Freedom 75.0

• Foreign investment is very well received in México

Figure 1: Interactive Heat Map. By The Heritage Foundation, (2021). https://www.heritage.org/index/heatmap

1.3 trillion USD México´s economy
• It makes it the second largest economy in Latin America.

Jobs at Construction
• Sector at the economy using the most of the un-qualified workforce.

High expectations of recovery on construction sector

• After 17% decline in 2020 (pandemic), 12% grow is expected in 2021.

Construction Industry Value 82.56 Billions USD.

Most of the investment on Construction Sector will come from foreign investors.

Annual Inflation rate

• from 3.3 on October 2020 to 6.2 on October 2021.

Consumer confidence indicator

• This indicator is growing compared with similar period last year.

Credit
• Banks and government offer credit to buy properties.
 Owning a property is still a goal for many people

Population Growth rate of 1.2 in 2021

México ranks above average in civic engagement

Mexicans are satisfied with their lives at 6.5 grade, being

6.0 the global average

Improvement on quality of life of Mexican citizens

Ranked at 11th on population globally

126 Millions total population

32.9 Million in Metropolitan area
 Latest Technology is available in México
• Construction sector gets the benefit.

Cost increase on using technology

• Controlled use of technology must be done
since it may increase the cost considerably.

Technology is included at the apartments,

shopping center and offices for security as it is a
hot topic in México.

Technology at Construction Materials

• New materials are used in Construction,
stronger, lighter and more durable.

Technology in all senses will be used to minimize the risk during natural disaster:
• Hydropneumatic stabilizers for earthquakes, sensors, alarms, signs, route of scape, CCTV, 24X7
surveillance.
Sewage treatment Plant, for irrigation purposes on all green areas.
Solar Panels, to generate the energy to be self-sufficient.
 Air Quality Weather and Climate Water Quality

México faces significant Lack of secure methods

Every year it is declared
environmental to clear water becomes
an environmental crisis
challenges and air an issue and the quality
due to high exposure to
quality is defined as of water is under the
particles.
poor. standards.

Regulatory entities:
Environmental impact Regulatory entities: CAM
WHO

Metropolitan
Environmental
Reports of The levels of population
Commission,
environmental impact in México still exceeds
Environmental
are needed for the standards defined
authorities in federal
Construction in México by the World Health
government, focused on
City. Organization.
improving the air
quality.

Project includes: sewage treatment plant, clean energy, energy savings. Due to the possibility to have
limited resources regarding water, it is recommended to use large cisterns for storing it.
 Review and comply with Federal, Estate and Municipal laws:

COFECE
• Federal Economic Competition Commission.

CMIC
• Mexican Chamber of the Construction Industry.

Ley de Desarrollo Urbano del Distrito Federal

• Lay the foundations of urban policy, controlled urban growth and the role of
sustainable development.

Ley para la reconstrucción, recuperación, y transformación . . .

• Law focused on promotion of sustainable construction.

Ley Federal de Metrología y Normalización

• NMX ( construction rules) and NOM (risk security of people, animals and plant from
being damaged.

Código de Edificación de Vivienda

• Adoption of global best practices.

Secretaria del Trabajo y Prevision Social

• Federal regulation of safety and health in the workplace.

All the permits and licenses will be processed. There is a high level of bureaucracy, so the usage of
local managers is recommended since they have the knowledge and experience already.
 PESTEL Summary (Balance between the 2 options)

Location: Downtown Location: North Zone

Negative Positive Negative Positive

P Government supports
investment on construction P Government supports
investment on construction

E Sector with growth

expectations on 2021 E Sector with growth
expectations on 2021

S High sense of property

ownership S High sense of property
ownership

T Trade agreements facilitates

use of technology T Trade agreements facilitates
use of technology

Environmental challenges in
downtown E E Manageable environmental
challenges at North Zone

Delays on permits, licenses Delays on permits, licenses

and comply with laws L and comply with laws L
 CONCLUSION

Even though some of the indicators seems not to be favorable, the construction sector in México is
growing and it is supported by government. It generates many direct and indirect jobs.

CEMEX, the Mexican company at the construction sector is ranked as the 6 th more important
company at the Mexican Stock Exchange, which is a positive sign on this sector.

According to federal entities generating statistics for housing in México, there is a deficit of 8.2
million of houses. Only 3.4% of the dwelling is less than 5 years old.

All the permits, licenses and comply with laws and regulations may be overcome with positive
results. To protect the investment, a protection factor is already included in the project.

I do recommend to become an investor. México is a very good market for

this type of projects, and these have demonstrated to be profitable.

I do recommend to select North Zone location and get the benefit of this opportunity.
 References
2021 Index of Economical Freedom. ( 2021). México
https://www.heritage.org/index/country/mexico
Centro de Estudios de las Finanzas Públicas (September 17th, 2021). Comentarios al Informe Estadístico sobre el
Comportamiento de la Inversión Extranjera Directa en México (enero-junio de 2021).
https://www.cefp.gob.mx/publicaciones/documento/2021/cefp0422021.pdf
Fondo Monetario Internacional. (October 2021). Informes de perspectivas de la economía mundial.
https://www.imf.org/es/Publications/WEO/Issues/2021/10/12/world-economic-outlook-october-2021
Gaceta Oficial de la Ciudad de México (April 19th, 2021). Reglamento de construcciones para el distrito federal
https://paot.org.mx/centro/reglamentos/df/pdf/2021/RGTO_CONSTRUCCIONES_19_04_2021.pdf
Gaceta Oficial del Distrito Federal (August 20th, 2021). Ley de desarrollo urbano del distrito federal https://
paot.org.mx/centro/leyes/df/pdf/2021/LEY_DESARROLLO_URBANO_20_08_2021.pdf
Instituto Nacional de Estadística y Geografía. (s.f.). Temas.
https://www.inegi.org.mx/datos/
International Trade Administration. (September 2nd, 2021). Mexico - Country Commercial Guide
https://www.trade.gov/country-commercial-guides/mexico-construction
lepatru007, ( April 8th, 2019). Análisis Pestel [Video] https://www.youtube.com/watch?v=vWPUkb4KjbA
Organisation for Economic Co-operation and Development (OECD), (s.f.). OECD Better Life Index. México.
https://www.oecdbetterlifeindex.org/countries/mexico/
OXFORD College of Marketing ( s.f.). What is a PESTEL analysis?
https://blog.oxfordcollegeofmarketing.com/2016/06/30/pestel-analysis/