2021 results: warehouses break records of absorption volume
Offer
In 2021 the market of high-quality industrial and warehouse real estate in St. Petersburg was replenished with 25 complexes with the total area of 250 ths sqm, which is 33% lower than in 2020. The increase in supply by 64% was mainly provided by industrial and warehouse complexes built according to the built-to-suit scheme and for the companies own needs. This ratio of speculative and non-speculative supply has remained unchanged since 2019.
In 2021, the main event was the introduction of a large speculative project – Armada Park North, with an area of more than 50 ths sqm. By the time of commissioning, the complex was filled with tenants by 90%. In Q4 all the areas of the warehouse complex were fully leased.
In 2022, it is expected to put into operation about 368 ths sqm of warehouse real estate. 63% of warehouse complexes planned for commissioning are speculative. Subject to compliance with the stated terms of commissioning, the total volume of the new speculative offer will exceed the final figure of 2021 by 2.6 times.
Demand
For the second year in a row, the warehouse real estate market is breaking records in terms of absorption volume. The gross volume of transactions in 2021 amounted to at least 830,000 sqm (+51% relative to the same indicator in 2020).
Q3 2021 has become an absolutely unprecedented leader in the volume of quarterly absorption of high-quality industrial and warehouse real estate in the entire history of monitoring the St. Petersburg market: almost 330 ths sqm were sold, leased and sold according to the built-to-suit scheme.
The main tenants of high-quality warehouses in 2021 were companies in the retail and distribution segment (64%). The volume of warehouse space sold in 2021 to companies in the retail and distribution segment increased by 98% compared to the results of the previous year. If in 2020, the growth driver was non-food trade enterprises, then in 2021, the main volume of demand was provided by e-commerce operators.
Vacancy
A slight increase in new speculative supply and a high level of demand support the acute shortage of high-quality space in the industrial real estate market of St. Petersburg.
According to Maris analysts, the volume of vacant space on the market has remained at a minimum level for the fourth year in a row, and as of the end of 2021, the average vacancy rate was 0.8% (-1.5 p.p compared to December 2020). 0.1% is vacant in Class A buildings (-1.2 p.p. in relation to the final indicator of 2020), 2.8% is vacant in Class B warehouse complexes (-1.9 p.p. in relation to December 2020).
In total, by the end of 2021, about 32 ths sqm are available on the market of high-quality industrial and warehouse real estate.
Rental Rates
Q3 2021 was characterized by an unprecedented increase in the requested rental rates in the industrial and warehouse real estate market of St. Petersburg. In 3 months, the average level of requested rental rates increased by 14.7%. By the end of 2021, the annual rate increase was 17.6%, relative to price indicators at the end of 2020.
The average range of rental rates is 470 – 700 rubles / sqm per month, including VAT and operational expenses. Utility costs are paid according to actual consumption.
Development forecast
Subject to continued development activity and demand, as well as the absence of a new wave of restrictive measures, the average vacancy rate in the market of high-quality industrial and warehouse premises in 2022 will continue to hold at record lows.
In the conditions of maintaining an acute shortage of high-quality warehouse facilities on the market in the short term, the pressure on price indicators will continue, which will lead to a further increase in the requested rental rates.