JLL have reported record breaking demand in the Russian warehouse space market in 2015. In Q3, the volume of take-up was 712,300 m² - almost three times higher than levels seen over the same period last year.
Decreasing rental costs have no doubt influenced this growth in demand and, whilst regional variation was noted, the vacancy rate decreased from the 11.2% seen in Q2 to the levels seen at the beginning of the year and stood at 9.9%. JLL experts expected it to remain at the levels close to 10% for the remainder of the year.
Petr Zaritskiy, regional director, head of warehouse and industrial department, JLL, Russia and CIS, commented: “The level of activity remained high over Q3 translating into several large transactions for new warehouse space such as the purchase of 120,000 m² by adidas Group in PNK – Chekhov 2, the lease of 66,000 m² by X5 Retail Group in Sofyino LP and the lease of 45,000 m² by retail chain Globus in Industrial Park Kholmogory. Retailers took almost a 75% share of all deals over Q3 (or 55% for the nine months) followed by distributors and logistic companies.”
The volatile ruble, the decrease in oil prices and the rise of inflation rates weakened consumer demand in the first half of 2015 - all factors which would impact the Russian warehouse market. As such JLL reported that despite deferred demand it was unlikely these high levels of activity on the market would extend far into 2016.
Further influencing these predictions was the decline in new warehouse space delivery in Q3 in the Moscow Region - 65% less than in the same period in 2014, at 91,000 m². The total amount of new warehouse space over the first nine months was close to 700,000 m² which was 20% lower than the total amount delivered over the same period in 2014.
Some of the largest delivered new warehouse projects were Logopark Sever – 2 (24,650 m²) and Leninskie Gorky LP (20,000 m²). Among the largest upcoming warehouse projects there are new complexes in PNK; Severnoye Sheremetyevo II (52,700 m²), Dmitrov LP (20,000 m²) and Synkovo LP (28,000 m²).
Petr Zaritskiy, commented: “We will likely see a further significant decline in the amount of deliveries in warehouse space going forward, as the majority of developers are switching to built-to-suit schemes due to the fall in rents coupled with the rising costs of construction. There are currently only about 0.4m m² of warehouse space under construction which can enter the market in coming year.”
Source: JLL
