Summing up the year…

Summing up the year…

Unprecedented demand represented the deciding factor driving the warehouse market’s growth in 2012. A substantial increase in construction volumes was seen throughout the year.

According to data from Cushman & Wakefield, in 2012, 720,000 sq.m of warehouse facilities commenced operations in Moscow region, a two-fold increase from the 2011 result. Among the largest projects commencing operations this year: PNK Vnukovo (more than 158,000 sq.m), Infrastroy-Bykovo (more than 130,000 sq.m), and MLP-Podolsk (more than 80,000 sq.m). According to developers’ statements, in 2013 plans call for the construction of approximately 1m sq.m of high-quality warehouse facilities. The majority of these have already been reserved by tenants and buyers.

Requested rental rates remained consistently high – $130-135 per sq.m a year in class A excluding VAT, service payments and operating costs.

Demand for warehouse facilities in Moscow region mainly emanated from retailers (40% of the overall deal volume in 2012) and manufacturing companies (24% of the overall deal volume). A new, rapidly-growing demand segment is internet-retail; companies in this segment provided approximately 10% of total realized demand.

Because of the lack of warehouse facilities ready for occupancy on the market, the main deal volume comprises initial built-to-let and build-to-suit agreements, a segment that formed through high demand for storage space purchases in 2011-2012.

According to Yegor Dorofeev, partner and head of warehouse and industrial real estate division at Cushman & Wakefield, such activity on the part of developers and tenants hasn’t been seen on the Moscow region market since 2008.