How to choose between Greenfield vs. Brownfield warehouses in Latin America

Expanding logistics capacity in Latin America is never a one-size-fits-all decision. Geography, regulation, talent availability, demand patterns and infrastructure vary dramatically not only between countries, but even between cities within the same market. As companies look to strengthen their distribution networks, one question inevitably appears: should the next facility be a Greenfield project built from scratch, or a Brownfield project that adapts an existing site?

The answer is not simply about cost or construction timelines. It depends on how fast a company needs to scale, how predictable its demand is, how mature the local logistics ecosystem is, and how complex the regulatory environment may be. In some markets, building a new site offers strategic control and long-term efficiency. In others, leveraging a high-quality existing facility is the fastest and most resilient way to grow.

Before comparing the two paths, it’s important to understand what each actually means in the context of Latin American logistics.

Understanding Greenfield vs Brownfield Options

What Each Option Is

Greenfield

• Building a new facility from scratch on undeveloped land.
• Full control over layout, flow, utilities, and long-term expansion.

Brownfield

• Adapting an existing facility (warehouse, plant, logistics park space, or acquired operation).
• Using existing structures and infrastructure while customizing the interior as needed.

Typical Forms in Latin America

Greenfield

• Purpose-built distribution centers designed around expected volume, automation and long-term network strategy.

Brownfield

• Type C warehouses for basic storage.
• Light-assembly or semi-production buildings.
• Class A industrial facilities with reinforced floors and advanced dock infrastructure.
• Modern logistics parks where tenants lease a defined area and customize inside.

Commercial and Operational Characteristics

Greenfield

• Higher upfront capital.
• Longer permitting and construction timelines.
• Requires more planning and internal capability to manage development.

Brownfield

• Usually leased under 10–15 year contracts.
• Faster to start operating.
• Requires negotiation on improvements, flexibility and renewal options.

Strategic Advantages

Greenfield

• Optimal location selection with no inherited constraints.
• Designed for long-term efficiency, service levels, and resilience.
• Easier to integrate into broader manufacturing or distribution strategy.

Brownfield

• Lower upfront cost and quicker speed-to-market.
• Access to existing infrastructure, utilities and zoning.
• Ability to leverage established 3PL networks instead of building capabilities internally.

Typical Constraints

Greenfield

• Slower deployment due to construction and permitting.
• Higher exposure to regulatory risk and environmental requirements.
• More sensitive to forecast accuracy, since it depends on long-term volume.

Brownfield

• Limited by what exists in the market.
• Layout and flow must adapt to the building rather than the other way around.
• Expansion may be constrained unless located in a scalable logistics park.

Alternative or Hybrid Paths

Greenfield-Adjacent

• Acquiring a company (M&A) primarily to obtain land, infrastructure or workforce.
• Forming a joint venture to blend local expertise with global standards.

Brownfield-Adjacent

• Build-to-outsource: designing the facility internally, then handing operations to a 3PL.
• Leasing in logistics parks to enable modular or phased expansion.

How to decide between Greenfield vs. Brownfield in LATAM?

Inti typically recommends structuring the decision around 8 considerations:

1. Strategic reason for the move
   • Growth, service improvement, cost reduction, risk mitigation or regulatory pressure.
   • The nature of the objective will change the tolerance for risk and payback time.
2. Time horizon
   • Serious logistics decisions need a 3, 5 and 10 year view.
   • The best location for years 1 to 3 may differ from the best location for years 5 to 10.
   • Large companies often optimize for a medium or long horizon, while smaller companies may value flexibility over theoretical optimality.
3. Demand and center of gravity
   • Where demand is today and where it is likely to grow.
   • How organic growth or strategic pushes in certain regions will shift the demand center over time.
4. Infrastructure and resilience
   • Real access (not only theoretical proximity) to ports, airports, highways and border crossings.
   • Industry specific constraints, for example cold chain for flowers or tight time windows for fresh foods.
   • Need for multiple alternative routes and storage buffer to withstand disruptions like road closures or port congestion.
5. Fiscal and regulatory environment
   • Local tax regimes on production, inventory and cross border flows.
   • Special regimes for exports, free trade zones or bonded warehouses.
   • Environmental, labor and union regulations.
   • Sustainability of any tax advantage over time, given the fiscal health of the region or municipality.
6. Talent and culture
   • Availability of experienced logistics professionals and operational staff.
   • Local work culture and its alignment with 24/7 operations, automation and continuous improvement.
7. Maturity of logistics outsourcing options
   • Presence of serious 3PLs with track record in the right industry and service level.
   • Availability of modern logistics parks that support scalable, multi tenant Brownfield solutions.
8. Financing and banking relationships
   • Banks with inventories of land or assets can sometimes favor specific Greenfield or Brownfield options.
   • Specialized industrial or project finance can be more flexible around build to suit or complex redevelopments.
9. Regional nuances across Latin America
10. Latin America is not a single logistics market. Decisions that make sense in one country can be completely wrong in another.
11. Below are some opportunities and considerations to consider in each country:

Region	Key Characteristics	Strategic Implications	Risks	Preferred Approach
Mexico & Colombia	• Large megacities with low negotiation leverage. • Strong secondary cities with better influence and support.	• Start in secondary cities before entering major metros. • Place facilities just outside big cities.	• Overbuilding too early. • High fixed costs without proven demand.	• Brownfield or small sites first; expand to Greenfield later.
Chile	• Activity concentrated in Santiago. • Good road networks enable national coverage from one DC.	• One well-located DC can serve most of the country.	• Land in Santiago is scarce and expensive. • Greenfield limited by zoning pressure.	• Brownfield inside logistics parks is typically optimal.
Smaller / Less Mature Markets	• Limited 3PL capability. • Small skilled labor pool.	• Evaluate partners and talent first.	• Risk of not being able to run a modern DC effectively.	• Build in-house only with reliable talent; expand where partners exist.

What are the key steps to analyze a New Distribution Center?

From Inti’s experience across the region, there are 7 key steps to evaluate alternatives:

1. Define the business reason and time horizon
   • Clarify why you are expanding (growth, service, cost, risk).
   • Set the planning horizon (3, 5, 10 years).
   • Map how demand and product mix are expected to evolve.
2. Translate strategy into network needs
   • Decide what service levels you need and for which regions.
   • Define the role of the new node (inbound hub, main DC, regional DC, last mile).
   • Only then ask what kind of asset (Greenfield/Brownfield) fits that role.
3. Map local options and constraints
   • Identify available land, logistics parks, and 3PLs.
   • Assess permits, build times, and local infrastructure.
   • In many markets, Brownfield and logistics parks will be the fastest and most flexible options.
4. Size capacity to realistic growth
   • Build for the next stage of growth, not for a distant “ideal state.”
   • Prefer staged expansions, modular designs and flexible leases over big, irreversible bets.
5. Model scenarios, including taxes and regulation
   • Run scenarios with different tax rates, incentives and regulatory changes.
   • Check how sensitive your decision is to changes in fiscal policy, labor law or environmental rules.
6. Decide who operates the facility
   • Evaluate whether you should run operations yourself, outsource to a 3PL or use a hybrid model.
   • Consider “design in-house, operate with a specialist” to keep strategic control and outsource execution.
7. Choose Greenfield, Brownfield or hybrid based on all of the above
   • Select the option that best fits the strategy, local context, risk profile and financials.
   • Treat Greenfield/Brownfield as the outcome of the process, not the starting point.

What tools can you use for evaluating greenfield vs. brownfield options?

From a technical standpoint, Inti uses a mix of custom modeling and specialized tools:

For pure Greenfield location problems, custom gravitational models are often effective:

• They quantify “attraction” between supply points and demand points, using distances, volumes and costs.
• They identify candidate areas where a facility minimizes total logistics cost or travel effort.
• They are relatively straightforward to implement in tools like R, Python, Stata or even Excel for smaller networks.

On top of custom models, specialized tools such as network optimization suites can provide:

• Integrated analysis of transportation, warehousing and inventory.
• Robust scenario comparison: current network vs Greenfield vs Brownfield vs hybrid designs.
• Time based simulations to see how the network behaves at 3, 5 and 10 years under different demand and cost assumptions.

Critically, these tools also help model inventory strategies:

• Which products belong in which node.
• What service levels and safety stocks are needed by region.
• How the new facility fits into inbound flows, central DC roles and last mile structures.

How can Inti help?

At Inti, we see distribution center strategy in Latin America as a multi-dimensional problem that cannot be solved with a simple Greenfield versus Brownfield checkbox. The right answer combines robust quantitative modeling, qualitative understanding of each country and city, and a clear view of how logistics supports the overall business strategy.

Contact us to see how we can help you analyze whether it makes sense to open a new distribution center and if so, what is the best model for your network.