Warehouses Growing

In 2021, developers are to build the maximum capacity of logistics complexes.

The Moscow and Moscow Area warehousing market expects the maximum capacity of new premises to be commissioned since 2014. According to analysts' forecasts, by the end of 2021, the newly built warehouse capacity will grow by 55 % and will amount to 1.3 million sqm, but almost all of these facilities have already been rented or purchased by companies. At the same time, intracity logistics is still experiencing a shortage of supply.

In 2020, capacity of the newly commissioned A and B class warehouse premises in Moscow Area declined by 14 % and amounted to 837,000 sqm, according to Knight Frank's analysts. However, experts predict that this year will see the maximum capacity of new warehouses commissioned since 2014. That year, the market saw a record of 1.7 million sqm, in 2021, it will be slightly less — 1.25–1.3 million sqm, Knight Frank expects.

The growth in new construction will be driven by further demand from retail and online commerce.

Expansion to the regions and implementation of projects under contracts concluded in 2020 will also have their effect, says Victor Afanasenko, regional director of the warehouse and industrial real estate department at Colliers. But such a capacity of new warehouses will not affect the vacancy rate, analysts are sure.

Konstantin Fomichenko, head of warehouses, industrial and land department at Knight Frank, says that even in the situation of new speculative projects entering the market, by the end of 2021 the vacancy rate in the warehouse segment of Moscow and Moscow Area will remain at the level of the previous year — 2.3–2.5 %. JLL has different forecasts — the company expects a decrease in the share of vacancy rate in the market down to 1.7–2.0 %.

The low current capacity of vacant warehouse spaces has resulted in an increase in the share of new facilities built to suit a specific tenant or owner, says Evgeniy Bumagin, head of the warehouse and industrial premises department at JLL. According to his calculations, the share of transactions in this format has grown up to 51 %. At the same time, at the end of the last year, about 87 % of new warehouses were already leased or purchased by the time they were commissioned, and 74 % of the projects announced for 2021 have already been contracted, Mr. Bumagin researched. The main risk in the construction of speculative warehouses is the growing cost of construction, Egor Dorofeev, partner at Cushman & Wakefield is sure.

Despite such construction rate in the segment, the intracity logistics market is still in decline.

Mr. Afanasenko believes that the demand for intracity logistics warehouses significantly exceeds supply. The total capacity of quality warehouses within the Moscow Ring Road is now about 589,000 sqm, i. e., 9 % of the total supply in the segment, said Andrei Lukashev, Managing Partner of ILM. Therefore, the main trend for several years will be the construction of new warehouses within the city limits and the gradual disappearing of industrial facilities built in the Soviet era, says Vasiliy Grigoriev, deputy director at the market research department of CBRE.