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Enterprises have space to spread out


The situation in the market isn’t favourable for investing in industrial and warehouse property. In 2015 no new projects in St Petersburg and the region of Leningradskaya oblast’ are expected. 

The industrial and warehouse property market of St Petersburg and Leningradskaya oblast’ against the current economic background may replicate the scenario of the previous 2008-2009 crisis, with this sector having recovered after it for the longest period of time, if compared to other sectors.

«Not until 2012-2013, when the first big deals on renting space or purchasing land in industrial parks after the crisis, did the situation on the new projects market normalize», -  Maxim Ignatovich, Surveyor International Group  - Head of the sales and Acquisitions  department,  affirms.

Peak demand emerged in late 2013 and early 2014, with the market is biggest deals on renting warehouse space and construction of distribution centres on the Moscow highroad for some big retail chains. According to Maxim Ingnatovich, it was the intensity of the chains, not industrial enterprises, that mostly contributed to the growth. Unfortunately, activity in the second  half of 2014 the economic and political situation in the country changed, which drew a long-aspirated revival of the market to a close. In this context, investing in industrial and warehouse property is risk-bearing, which is reflected in developers’ strategic profile. In 2015 no putting into service or new big project execution are planned.

Customized warehousing

In 2015 the market is still short of warehouse space of both A+ and B+ class, the vice-president of commercial estate in the Property Development and Research Agency comments. This shortage is especially obvious in the sector of manufacturing and land lots for similar use. Maris|Part of the CBRE Affiliate Networkris company concluded that in the first quarter of 2015 the volume of high-quality warehouse property in St Petersburg and its suburbs showed an increase of 58 thousand m2. Two A-class warehouse complexes, PNK CAD and «B Logistics», and a B-class «Terra - Terminal» were executed. Besides, in the first quarter trade and distribution complex «ATM» constructed in built-to-suit format was executed as part of «A Plus Development»’s industrial park.

234 thousand m2 of high-quality warehouse space is announced to be executed in St Petersburg before the end of 2015. However, according to the head of the research department of JLL company in St Petersburg, only about 70% of the announced volume is expected to appear. Most of a future executed space is built-to-suit projects, particularly, warehouse facilities in «A Plus Shushary» industrial park.

At the same time, Mikhail Tyunin the head of warehouse industrial property and land of Knight Frank St. Petersburg says that economic decline notwithstanding, the current activity in the market is quite intense, as rates have become more comfortable for tenants. However, A class is filled while C class is emptying. «Companies that profited from the situation have considerably improved housing conditions without losing money», - Mikhail Tyunin says. But as soon as the supply will fail to meet the demand, rates will immediately soar up, faster than they gave way. There are almost no new projects in the market and, according to Maris|CBRE analysts, by mid-2015 free speculative warehouse space would have been merged.However, Vadim Tarasov, Itella’s manager of the northern region, says that  optimization of logistics processes in various companies takes place. Besides, current clients of logistics operators are far from upscaling, dollar drop notwithstanding. And space coercion may result in the rise of vacancy rates.

Currently around 100 thousand m2 of built-to-suit warehouse facilities is under construction. According to Ekaterina Lapina, their clients are mostly mass grocery retailers. «Magnit» created a precedent by erecting it’s own logistics complex in the region. «Lenta» also has its own terminal, and Auchan and Х5 Retail Group are constructing their own warehouse facilities, as well.

Free parking

There are more than 15 industrial parks in St Petersburg and Leningradskaya oblast’, and the majority are greenfield. However, they are developed irregularly. «There are five or six parks which have been steadily developing and have been filled with residents for several years, - Maxim Sobolev, Head of Commercial Property of «UIT Sankt-Petersburg», - while others are on the stage of land conversion, drafting and primary construction».

«The market of the land provided with access to utilities is in stagnation now, - Alexander Parshukov, Head of Investment of CJSC «VTB - Development», says, - the crisis affected industrial enterprises’ plans on short-run development». But, according to Maxim Sobolev, while at the beginning of the year the number of requests was in decline, in March the situation started improving. Prices for unprepared land went down, while those for the land with access to utilities, remained almost at the same level. In any case, installation in industrial parks is still the least risky option for advancing business, with a hung rouble implicitly contributing to localization of foreign companies’ manufacturing, - Alexander Parshukov believes. But it seems unreasonable to launch a new project with the present satisfactory level of supply, slow filling of industrial parks and lack of demand. And we won’t see any new parks for 1,5 or two years.

Maria Mokeicheva - maria.mokeycheva@dp.ru

"Delovoi Peterburg", 04/28/2015

Short address for the article: http://www.dp.ru/103x5l/