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News Release

​Moscow

Warehouse vacancy rate in Moscow grew up further reaching the levels of 2009

​JLL analysts expect it to improve by the end of the year


​​Moscow, 28 July 2015 – According to JLL estimates, the vacancy rate in warehouse complexes in the Moscow region rose to 11.2% by the end of Q2 compared to 10.4% seen in the end of March. The current vacancy rate is only marginally lower than the record level seen in 2009 of 11.6%. Nonetheless, such an increase in vacancy was mainly due to considerable volumes of available premises amongst new deliveries while the vacancy rate in existing objects remains close to the levels seen in Q1 at approximately 10%. 

The highest level of vacant space in Q1 was seen in the North of Moscow Region (~23%) which may be explained by the historically low level of warehouse supply on the North coupled with high availability in new warehouse supply which has entered the market over the past two years. Yet, in absolute terms, the levels of available space on the North and South of Moscow regions are similar and close to 360,000 sq m. JLL analysts expect that the level vacancy rate will improve to 9-9.5% by the end of 2015, taking into account the limited amount of supply in the second half of the year as well deferred demand for warehouse space.

According to JLL estimates, about 270,000 sq m of new warehouse space was delivered over Q2 representing around a 29% decrease compared to the same period of 2014. In sum, about 619,000 sq m of new warehouse space was delivered over the first half of 2015 in Moscow Region, which was marginally lower the volumes of new supply over the same period last year. By the end of Q2 2015, the total warehouse stock of Moscow region reached the level of 11.8m sq m.  

Among the key projects delivered to the market over the Q2 there were Kholmogory IP (Phase I, 92,000 sq m), new warehouse premises in PNK – Bekasovo (71,000 sq m) and PNK – Chekhov 3 (102,000 sq m). 

The total amount of expected completions of warehouse space for the rest of the year is estimated at 0.4m sq m which comprises less than a half of the space delivered over the same period last year. Among the largest upcoming warehouse projects there are new complexes in Sever 2 LP (25,000 sq m), Dmitrov LP (20,000 sq m) and Synkovo LP (28,000 sq m). 

Dynamics of New Warehouse Supply in Moscow RegionDynamics of New Warehouse Supply in Moscow Region_28072015.png

Source: JLL

The total amount of new supply for the entire 2015 year is estimated at 1m sq m representing a 34% YoY decrease. Due to the fall in rents coupled with the rising costs of construction as well as limited sources of finance, the majority of future supply is represented by BTS (built-to-suit) schemes. 

In terms of demand for new warehouse space, the volume of take-up in Q2 was 159,000 sq m showing a 16% YoY decrease compared to the levels seen over the same period last year. The volumes of take-up over the entire H1 2015 was marginally lower compared to the levels seen over the same period last year - 305,000 sq m vs 320,000 sq m. The average size of deals in H1 2015 was comparable with the size seen in H1 2014 and amounted to 11,400 sq m.

Petr Zaritskiy, Regional Director, Head of Warehouse and Industrial Department, JLL, Russia and CIS, commented: “Most of the tenants are actively engaged in renegotiating current lease terms yet still cautious in their decisions to buy or to lease new warehouse space. The main drivers of the actual demand for new warehouse space were retailers (especially food retailers), manufacturing companies and, surprisingly, logistics companies, which were among outsiders over the last crisis in 2009. Several considerable, even record transactions that were negotiated over the last quarter are expected to take place in the second half of the year.”

According to JLL forecasts, for the entire 2015 year, the amount of demand for warehouse space in Moscow region could reach 0.8-0.85m sq m which is 11% less the levels seen in the past year. The Russian warehouse market is influenced heavily by external factors which are still not favorable, considering the increased volatility on the oil market (Brent price has lost about 18% since its May peaks) as well as generally lackluster May economic data.     

Warehouse Take-up and New supply in Moscow RegionWarehouse Take-up and New supply in Moscow Region_28072015.png

Source: JLL


Over the course of Q2, the average level of rents for new deals in Class A stabilized at the level of RUB 4,300 sq m per year (triple net), while the level of prime rents was around RUB 5,000 sq m per year (triple net). At the same time, the average rental costs (including level of rents for renewals and renegotiations) saw also no change QoQ and stood at USD 105 per sq m per year in Q2.  The difference in rents depending on the location became more visible with the relatively expensive supply in popular locations (e.g. close to “Betonka” highway). 

Warehouse Market Balance in Moscow Region​
Warehouse Market Balance in Moscow Region_28072015.png

Source: JLL


About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $55.3 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 and 2015 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015, and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.

For further information, visit www.jll.ru​