Foreign investors have been wary about buying Mexican commercial real estate ever since Donald Trump was elected president partly on a threat to shred the North American Free Trade Agreement if that pact with Mexico and Canada couldn’t be overhauled.
Now, just as three countries have settled on a new trade deal, another concern has surfaced that is keeping many investors on the sidelines in Mexico: the possible antibusiness policies of the country’s new leader, President Andrés Manuel López Obrador, a leftist nationalist.
Just before he took office late last year, Mr. López Obrador said he would cancel Mexico City’s $13.3 billion airport, which many in the business community said was vital to the country’s economic growth. Other steps he has taken, like the 2019 budget plan he announced in December, have assuaged some concerns.
But shock waves continue to reverberate from his cancellation of the country’s largest public works project, which was one third complete, as well as antibusiness statements Mr. López Obrador has made over the years. Commercial property sales volume, which fell sharply in 2018, is expected to stay low until there is more certainty about the new administration.