Warehouse market Q1 2021

Stock

In Q1 2021, 9 warehouse and industrial properties totaling about 86.4 ths. m2 were put into operation that was 2.9 times as much as spaces commissioned in Q1 2020. The only one warehouse with a total area of 1,500 m2 was a speculative one. The others were built-to-suit projects.

About 326 ths. m2 of warehouse facilities are to be put in operation by the end of 2021. 80% of the properties are related to speculative supply.

The volume of speculative construction will almost double the final 2020 figure as long as the commissioning deadlines are met.

Demand

The volume of transactions in the warehouse segment amounted to more than 58 ths. m2, that was 7% lower than the record for Q1 2020. The entire above-mentioned amount of industrial and warehouse space was leased out.

In Q1 2021 the principal demand, as in previous years, was formed by retail and distribution sector (78%). In contrast to 2020, in Q1 2021 non-food retailers dominated in terms of demand in the market.

Occupancy

Virtually lack of new speculative supply and a consistently high level of demand led to maintaining the vacancies in high-quality warehouse complexes of class A and B in St Petersburg at the extremely low level.

As of the end of March, 1.2% (−0.1 p.p. in relation to the final indictor of 2020), was vacant in class A warehouse buildings. That was the minimum value for the last 5 years. In class B warehouse complexes, 3.9% was vacant (−0.8 p.p. to December 2020).

In total, following the results of Q1 2021 at about 72,000 m2 was vacant (that is 2.0% of total stock).

Rental rates

Q1 2021 was characterized by relative stability of asking rental rates on the market. The average rental rates in Class A and B warehouses increased by +0.4% over the three months.

The average level of rental rates amounted to 450-580 Rubles per m2/month, inclusive of VAT and operating expenses. Utility charges are paid on the basis of actual consumption.