H1 results: vacancy in warehouses increase
Offer
In H1 2022 industrial &warehouse real estate market of St. Petersburg was increased by 4 complexes with total area of 69 ths. m2, which is 2 times lower than the indicator of H1 2021. If last year, the increase was provided mostly by industrial& warehouse complexes built according to the built-to-suit scheme, then this year - mostly by speculative objects.
Commissioning of 300 ths m2 of warehouse real estate is announced for H2 2022. The most of it (53%) is a speculative offer.
Subject to compliance with the stated terms of commissioning, the total volume of the new speculative offer will exceed the final figure by 1.7 times by 2021. Taking into account the market practice, it is possible to postpone the commissioning of a number of facilities announced for the current year.
Demand
In H1 2022, at least 234 ths m2 of high-quality warehouse space was sold on the market. In Q2 there was an uncharacteristic decrease in demand volume compared to the indicator of Q1 (-44%).
56% of the areas was realized on lease terms in the H1 of 2022. In absolute terms, the gross volume of lease transactions is comparable to the indicator of H1 2021. In H1 2022, one built-to-suit deal was signed on the market (43% of gross demand).
The leading position in gross volume of demand in H1 by transport and logistics companies (70%). Companies of real economic sector reduced the absorption volumes (-12% relative to the indicator of H1 2021).
Vacant
Growth of new speculative offer and area release in the secondary market, along with volume decrease in Q2, brought for the first time since 2015 to average growth average level vacant at the market.
At the end of June vacancy in class A buildings is 1.6% (+1.5 p.p. compared to the final indicator of 2021). In class B warehouse complexes 2.4% is free (– 0.4 p.p. compared to December 2021).
According to results of H1 2022 69 ths. m2 are free at the quality warehouse real estate market (about 1.8% from gross volume offer at the market).
Rental rates
The year 2021 was characterized by an unprecedented increase in the requested rental rates in the industrial and warehouse real estate market of St. Petersburg − +17.6% per year.
In H1 2022 increase in the volume of vacant space and in new speculative supply exerted little pressure on the price indicators of the warehouse real estate market: the level of the requested rental rates remains at the levels reached at the end of 2021.
The average range of rental rates for H1: 550 − 800 RUB per m2 per month, including VAT and operating fees. Utility costs are paid according to actual consumption.
Development forecast
Provided that the development activity and demand are maintained, and the relative stability of the economic situation in the country and in the region is achieved, in particular, the average vacancy rate in the market of high-quality industrial and warehouse premises at H2 2022 might increase a little: up to 4% - 5% of the gross supply volume.
In that a scenario, there will be a slight negative correction of the requested rental rates in the 2nd half of the year.
At the moment the largest development potential remains with companies involved in the field of import substitution.