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Moscow

New warehouse completions in Moscow Region increased by 39% in Q2 2012

The volume of new warehouse completions in Moscow Region in H1 2012 reached approximately 168,405 sq m


Moscow, July 23 2012 – The volume of new warehouse completions in Moscow Region in H1 2012 reached approximately 168,405 sq m, that is comparable with H1 2011 level (165,766 sq m). The majority of this total area was completed and set into operation in Q2, resulting in 125,000 sq m vs. 89,736 sq m in H1 2011 (39% growth). There were two key completions this half: MLP-Podolsk (80,000 sq m) and Vnukovo-Logistic (55,000 sq m).

Daria Bugaeva, Head of Capital Markets and Industrial Research, Jones Lang LaSalle, Russia and CIS, commented: ‘Indicators from the first quarters of the year are traditionally low. However, there are already several built-to-suit projects under construction, contributing to an expected year-end total of 780,000-800,000 sq m of space delivered. Compared to 2011 figures, this is more than a two-fold increase. At the same time developers deliver new projects to the market, that are expected to be completed and set into operation in the next year. We have observed for the last few months an active marketing of PNK-Chekhov II and LP Nikolskoe’.

Take-up volume in H1 2012 fell by 31% compared to H1 2011 amounting to 527,535 sq m. Total demand for 2012 is expected to reach 1m sq m (22% less than in 2011). Such a decline can be associated with the supply deficit: the majority of new premises is already preleased or sold out. Companies can either prelease and enter into new warehouse space in a 10-12 months period or choose built-to-suit schemes.
See Diagram “Market balance in Moscow Region”
 
Some tenants are also cautious of relatively high rents reaching USD135-140/sq m/year. According to Jones Lang LaSalle’s forecasts, rents will stabilize at this level until the end of the year.
 
Breaking down demand by sectors, we saw that retail companies and distributors acted as key tenants in H1 2012. It is also worth mentioning the growing share of e-commerce retailers that participated in such deals as KupiVIP, Wildberries, etc in Q2 2012.
Under current conditions vacancy rate remains relatively low at 1.82% as at the end of H1 2012. We expect that by year-end (2012) vacancy rate will increase and reach 2-3% due to accelerated level of completions.
See Diagram “Dynamics in rents and vacancy rates in Moscow Region warehouses”

 

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 195 million square meters worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $47.2 billion of assets under management.

In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg, Kiev and Almaty. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg.
For further information, please visit www.joneslanglasalle.ru