Q1 results: supply is not growing in the warehouse market
Offer
In Q1 2022 the market of quality industrial and warehouse real estate in St. Petersburg was replenished with the only warehouse facility built for the company’s own needs in the special economic zone of St. Petersburg (GBA = 4,982.5 sqm).
About 400 ths. m2 of warehouse facilities are to be put in operation by the end of 2022. 65% of the properties are related to speculative supply. The total volume of the new speculative offer will exceed the final figure of 2021 by 2.9 times, subject to compliance with the stated terms of commissioning.
Warehouse projects, planned to be comissioned in 2022
|
Object |
|
Area, sqm |
|
Shushary-3 PNK Park |
|
57,000 |
|
Invest-Bugry warehouse complex |
|
26,000 |
|
Trodex Logistic |
|
23,000 |
|
Ahlers, stage 3 |
|
23,000 |
|
Novosel’e |
|
17,000 |
Source: Maris
Given the current situation, it is possible to postpone the commissioning of a number of facilities.
Demand
In Q1 2022 demand in the industrial and warehouse real estate market was 41% lower than in Q4 2021.
The gross volume of transactions for the first three months of this year amounted to at least 150,000 sqm. The leading positions in the gross volume of demand in Q1 were occupied by transport and logistics companies (82%).The volume of warehouse space sold to logistics companies on lease terms increased fourfold in Q1.
Companies in the real sector of the economy, which leased three times more storage capacity than a year earlier, were actively increasing the volume of acquisitions. The trade sector, which was the driver of demand last year, occupied only 5% of the area of gross absorption in Q1 (64% according to the results 2021).
Vacancy
The absence of new speculative supply with a stable rate of demand, supported the situation of acute shortage on the market in Q1. The volume of vacant space remains at a minimum rate for the fifth year in a row, and according to the end of March 2022, the average vacancy rate was 0.6% (-0.2 p.p. to December 2021 indicator).
According to Q1 results the vacant rate in the class A warehouse complexes increased by +0.3 p.p. (compared to December 2021) and was 0.4%. In class В vacant rate on contrary decreased by –1.5 p.p. (compared to December 2021). Average vacancy is 1.3%.
In total 24,000 sqm are vacant on the market of high-quality warehouses for the end March 2021.
Rental rates
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% in annual terms. In Q1, in the context of a reduction in the volume of vacant space and the absence of an increase in new speculative supply, the pressure on the price indicators of the warehouse real estate market continued. Average range of rental rates: 550 – 800 RUB / sqm per month, including VAT and operating expenses. Utility costs are paid according to actual consumption.
Development forecast
Provided that the development activity and demand remain, 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 may increase slightly in 2022. The requested rental rates in this scenario will remain stable throughout the year.