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News Release


New anti-record on the Moscow warehouse market – vacancy rate reaches 13.6%

​​Moscow, 19 October, 2016 – According to JLL estimates, 257,000 sq m of new warehouse space was delivered in the Moscow Region in Q3 2016, which was three times more than in the same period of 2015. This brought the total new supply in the first nine months to 0.6m sq m (-14% YoY).

Among the largest warehouse premises delivered in Q3 were new completions in South Gate industrial park (BTS for Leroy Merlin with the total area of 100,000 sq m), in Logopark Sever – 2 (85,000 sq m); new building in Synkovo logistic park (23,000 sq m).

Completions of warehouse space for the rest of the year are expected at 120,000 sq m. This will bring the total level of deliveries this year to more than 700,000 sq m, down 12% YoY.

Viacheslav Kholopov, Regional Director, Head of Warehouse and Industrial Department, JLL, Russia & CIS, says: “Uncertain economic situation, high vacancies, low net absorption coincide with significant amount of deals on the market. This forces developers to be more selective in regards to speculative construction in the largest Russian market, the Moscow Region. Developers try to reduce costs and modify offered products, looking for the new niches of business development. The readiness of the key players to work on BTS construction on the land plots not in their ownership, offer small buildings and sale of the big premises by blocks, testing market appetite for industrial premises indicate illustrate their attempts to adjust to new realities.”

The volume of take-up in Q3 decreased to 225,000 sq m. Overall, in the first nine months, the take-up declined to 616,000 sq m (-40% YoY). 

The main demand drivers for warehouse space were retailers and distributors – accounting for over half of transactions, accounting for 36% and 22% of the take-up volume respectively in 9M 2016.

​New Warehouse Supply and Demand in Moscow Region
New Warehouse Supply and Demand in Moscow Region_20102016.png

Source: JLL

The vacancy rate on the warehouse market has updated its high, reaching 13.6% at the end of Q3. In absolute terms the volume of vacant space reached 1.7m sq m out of the total available space of 12.7m sq m. According to JLL experts, the main reason of further vacancy growth is on the secondary market.

Over the course of Q3, the average level of asking rents for Class A space decreased slightly, to RUB3,500-4,000 sq m per year (triple net). Actual rental levels vary quite significantly depending on a particular object and its location. 

“Taking into account approximately 400,000 sq m transactions under negotiation to be closed by the end of the year, the 2016 take-up volume will likely equal 1-1.1m sq m. If this scenario materializes, the recent trend will be reversed, and the vacancy rate will decline to 12% by the end of 2016.” –Viacheslav Kholopov commented.

Warehouse Market Balance in Moscow Region
Warehouse Market Balance in Moscow Region_20102016.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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $59.1 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, 2006-2016 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, 2016, St. Petersburg; Consultant of the Year at the RCSC Awards in 2015.