2016 WAreHouse MArket report - Knight...
Transcript of 2016 WAreHouse MArket report - Knight...
HigHligHts � 709 thousand sq m of quality warehouse space were built in 2016, which was comparable to the 2015 level.
� About 17% of the total stock of new facilities or 118 thousand sq m were built for own use; 40% or 288 thousand sq m – for speculative purposes (for the open market) and 303 thousand sq m (43%) were constructed directly for existing clients (built-to-suit). As a comparison: the share of built-to-suit premises did not exceed 18% in 2015, and 10% in 2014.
� the vacancy rate remained practically unchanged at 9.3% (more than 1.2 million sq m) at the end of the year.
� the volume of transactions reached 1.1 million sq m, 11% down from the previous year's figure and became the third result in the whole history of the market. However, the new take-up transactions amounted to 80% or 883.6 thousand sq m (excluding the move to other premises, changes of existing commercial terms and the renewal of current lease agreements).
� the main tenants of quality warehouses were retail operators and distributors as well as in the year-earlier period. in total, their share exceeded 60%.
� the asking rental rates for Class A premises were in the range of 3,000–4,300 rub./sq m/year.
WAreHouse MArket reportMoscow
2016
reseArCH
Warehouse Market report. MoscoW
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key indicators. Dynamics*
"Several stable trends shall be mentioned summing up the outgoing year. Firstly, the volume of completed transactions is at a sufficiently high level, it is almost equal to the indicator of the previous year. On the other hand, the take-up of the existing vacant stock is very slow and the average marketing time is from 8 to 12 months. In general, we can state that the market has reached its historically bottom values of rental rates, and the demand/supply ratio is in equilibrium. The unstable economic situation, the low level of rental rates and the high vacancy rate were constraining factors for many developers to implement new speculative projects, so most of the new construction was built-to-suit.
As for demand, a large share of transactions has been evidenced, they were previously deferred by large players waiting for the "bottom of the market" and more attractive commercial terms. As a result, 42% of the total volume were transactions with an area of more than 25 thousand sq m.
We expect a reduction in demand in 2017, as key players of the online market, retail and distribution have already acquired or leased the required premises. The average transaction size also declined in addition to reducing demand. Warehouse premises are being taken up even if slowly despite long marketing terms. Therefore, the further fall of rental rates is hardly worth counting in 2017. On the other hand, the existing vacant stock does not demonstrate the existence of serious prerequisites for the growth of rates."
Maxim ZagoruikoDirector, Industrial, Warehouses and Land, Knight Frank, Russia and CIS
Class А Class B
total quality supply volume, thousand sq m 12,666
including, thousand sq m 10,715 1,951
New delivery in 2016, thousand sq m 709
lease and purchase transactions volume in 2016, thousand sq m
1,099
Vacancy rate, % 9.3
Asking rental rates**, rub./sq m/year 3,000–4,300 2,000–3,300
operational expenses, rub./sq m/year 1,000–1,200 700–900
* Compared to the end of Q4 2015** triple net – excluding VAt, operating expenses and utility bills
source: knight Frank research, 2017
Vacant space and asking rental rates for Class A warehouse premises in terms of location
* triple net – excluding VAt, operating expenses and utility billssource: knight Frank research, 2017
3,000–4,300 3,000–
3,700
2,900–3,500
3,000– 4,000
3,000–4,200
3,000–4,300
3,000–4,300
3,500–4,400
3,000–4,350
Asking rentalrates*,rub./sq m/year
Vacancy rate0–3%3–7%7–10%> 10%
NORTH
NORTH-WEST
NORTH-EAST
EAST
WEST
SOUTH-WEST SOUTH-EAST
SOUTH
MKAD
Moscow
3
ReseaRch2016
Distribution of new 2016 delivery by type
lease and purchase transactions volume by size
43%
40%
17%
Built-to-suit
Speculative
Owner-operated
42%
37%
21%
< 10,000 sq m10,000–25,000 sq m> 25,000 sq m
source: knight Frank research, 2017
source: knight Frank research, 2017source: knight Frank research, 2017
source: knight Frank research, 2017
New delivery volume, transactions volume and vacancy rate dynamics
Average asking rental rates dynamics for warehouse premises in Moscow region denominated in ruB
Average asking rental rates dynamics for warehouse premises in Moscow region denominated in usD
source: knight Frank research, 2017
lease and purchase transactions in Moscow region in terms of company profile, 2016
source: knight Frank research, 2017
12%
3%2%
40%
23%
16%
RetailDistributionTransport and logisticsManufacturingOnline-retailOther
0
2
4
6
8
10
12
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2010 2011 2012 2013 2014 2015 2016New delivery volumeTransactions volumeVacancy rate
%thousand sq m
2010 2011 2012 2013 2014 2015 2016
rub./sq m/year
3,550
3,900
4,4004,700
4,5004,300
4,000
3,0003,250
3,6003,900
3,6003,300
3,000
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Class А Class B
120 125132 130
100
117
132140 140
100
70 65
100 105
129
124
80
97
110115 120
90
60 5540
60
80
100
120
140
160
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
$/sq m/year
Class А Class B
Warehouse Market report. MoscoW
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Leningradskoe hwy
Pyatnickoe hwy
Yaro
slavs
koe
hwy
M-8 "K
holm
ogor
y"
Schelkovskoe hwy
Dm
itrov
skoe
hw
y
А-107
А-107
А-107
MKAD
P-113
A-104
SOLNECHNOGORSK
ZELENOGRAD(MOSCOW)
MOSCOW
YACHROMA
DMITROV
IKSHA
LOBNYA
DOLGOPRUDNIYSHODNYA
KHIMKI
MYTISCHI
PUSHKINO
KRASNOARMEISK
IVANTEEVKA
SCHYOLKOVO
FRYAZINO
KRASNOHORSK
DEDOVSK
KOROLEV
₽
₽
М-11
key iNDiCAtors
tHe VoluMe oF QuAlity supply
tHe iNCreAse oF supply
tHe VoluMe oF VACANt spACe
tHe VoluMe oF trANsACtioNs
AskiNg reNtAl rAtes (triple net – excluding VAt, operating expenses and utilities)
3,223 thousand sq m
324.3 thousand sq m
more than 370 thousand sq m
224.7 thousand sq m
3,700 rub./sq m/year
North
the northern direction of the region has always been one of the most popular for warehouse development, since leningradskoye and Dmitrovskoye highways, located here, provide the connection of the Moscow region with the port of st. petersburg, receiving goods from a number of european and Asian countries.
the supply volume of quality warehouses here was 3,223 thousand sq m or 25% of the total stock of the Moscow region.
the total increase in the new supply reached 324.3 thousand sq m in 2016, which was 45% of the total amount. Notice also that, 45% of new warehouses were directly constructed for built-to-suit purposes.
the volume of transactions in the north of the Moscow region was about 224.7 thousand sq m over the past year. Almost half of them were executed by distribution companies.
rental rates at the north of the region were one of the highest among all directions: the average rental rate was 3,700 rub./sq m/year (triple net).
key transactions
Company Segment Object Class Area, sq m
О'key retail logopark sever-2 A 59,645
Armtek Distribution Nikolskoe А 28,560
pek transport and logistics evropark А 16,000
Megapolis Distribution logopark pushkino А 13,762
source: knight Frank research, 2017
source: knight Frank research, 2017
lease and purchase transactions in Moscow region in terms of company profile
WAREHOUSE COMPLEXESSpeculative
Owner-operated
Object class
Existing
Under construction
8%
44%
27%
21%Distribution
Retail
Transport and logistics
Manufacturing
8%
44%
27%
21%Distribution
Retail
Transport and logistics
Manufacturing
tHe sHAre oF Built-to-suit WAreHouse CoMplexes
45%
5
ReseaRch2016
₽
₽
₽
SCHERBINKA
PODOLSK
CHEKHOV
KLIMOVSK
ODINTSOVO
LYTKARINO
ZHUKOVSKY
LYUBERTSY
DOMODEDOVO
TROITSK
DZERZHINSKY
MOSCOW
Kaluz
hsko
e hig
hwayKievskoe hwy
MKAD
MKAD
Novoryazanskoye hwy
Kashirskoe hwy
War
saw
skoe
hw
ySi
mfe
ropo
lskoe
hw
y
Yegoryevskoye hwy
M-2
"Cr
imea
"
M-4 "D
on"
А-107
А-107
source: knight Frank research, 2017
7%4%
3%
62%16%
8%
Retail
Transport and logistics
Distribution
Online-retail
Manufacturing
Other
7%4%
3%
62%16%
8%
Retail
Transport and logistics
Distribution
Online-retail
Manufacturing
Other
key iNDiCAtors
South
the southern direction has always been popular, as it enjoys good transport accessibility. in addition, one of the country's largest airports is located here, as well as a large selection of land plots for the construction of warehouses. simferopolskoye and kashirskoye highways, located in this direction, are of strategic importance, ensuring the connection of the majority of russian regions with the market of the capital.
the supply volume of quality warehouses here was 4,428 thousand sq m or 35% of the total stock of the Moscow region.
241.5 thousand sq m were delivered in the south of the Moscow region over the past year, 55% of them were built-to-suit.
the volume of transactions in the southern direction became the highest against other directions of the region and was equal to 438.9 thousand sq m.
the business dimension of residents is a noticeable difference from the northern direction: the main factor in the selection of facilities by retail operators is good transport accessibility, and the southern direction is one of the best by this criterion, unlike distributors, which prefer locations on the route from ports of st. petersburg to Moscow.
key transactions
Company Segment Object Class Area, sq m
slg transport and logistics Adidas Chekhov А 59,789
HoFF retail Northern Domodedovo А 47,000
Castorama retail pNk Chekhov-3 A 42,452
terem retail pNk park-Valishchevo А 23,400
source: knight Frank research, 2017
tHe VoluMe oF QuAlity supply
tHe iNCreAse oF supply
tHe VoluMe oF VACANt spACe
tHe VoluMe oF trANsACtioNs
AskiNg reNtAl rAtes (triple net – excluding VAt, operating expenses and utilities)
4,428 thousand sq m
241.5 thousand sq m
more than 260 thousand sq m
438.9 thousand sq m
3,500 rub./sq m/year
tHe sHAre oF Built-to-suit WAreHouse CoMplexes
55%
lease and purchase transactions in Moscow region in terms of company profile
WAREHOUSE COMPLEXESSpeculative
Owner-operated
Object class
Existing
Under construction
Warehouse Market report. MoscoW
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₽
₽
27 km
DEDOVSK
ISTRA
KRASNOHORSK
ODINTSOVO
MOSCOW
APRELEVKA
NAROFOMINSK
TROITSK
SCHERBINKA
VNUKOVO
KHIMKI
Minskoe hwy M-1 "Belarus"
M-3
"Ukra
ine"
M-2
"Cr
imea
"
Novorizhskoe hwy
Volokolamskoe hwy
MKA
D
MKAD
Kievskoe hwy
Kaluz
hsko
e hwy
Mozhaiskoye hwy
М-9 "Baltija"
key iNDiCAtors
WeSt
the quality warehouse stock of the western direction of the Moscow region is represented by the smallest number of facilities: their total area is 2,032 thousand sq m. one of the reasons for this is the popularity of this direction among developers of suburban housing and, as a consequence, the high cost of land plots. kievskoye highway is most in demand among all highways of this direction for the construction of warehouse facilities.
the new supply increase of 2016 was minimal among the directions of the region and was only 12.6 thousand sq m or 2% of the total delivery.
Nevertheless, the western direction enjoys steady demand despite low supply. so, 149.7 thousand sq m of warehouse space or 14% of the total demand were located here during 2016.
the portrait of residents of the western direction is historically distinguished by the presence of a relatively large proportion of manufacturing companies. so, the share of such transactions ran at 35% of the total stock. Distribution companies stood first on the list as in the case with the northern direction.
it should be noted that the vacancy rate in the western direction was the lowest among all directions of the Moscow region and equalled to 7.4% given the limited supply and relatively high demand.
7%2%
43%
35%
13%
Distribution
Manufacturing
Transport and logistics
Retail
Other
7%2%
43%
35%
13%
Distribution
Manufacturing
Transport and logistics
Retail
Other
key transactions
Company Segment Object Class Area, sq m
BMW Manufacturing pNk park-Bekasovo А 34,344
luDiNg Distribution logopark krekshkino A 30,414
Greenfields Distribution Akvion Vnukovo А 12,698
Alutech Manufacturing kievskoe 22 А 12,262
panalpina transport and logistics logopark krekshkino А 10,570
source: knight Frank research, 2017
tHe VoluMe oF QuAlity supply
tHe iNCreAse oF supply
tHe VoluMe oF VACANt spACe
tHe VoluMe oF trANsACtioNs
AskiNg reNtAl rAtes (triple net – excluding VAt, operating expenses and utilities)
2,032 thousand sq m
12.6 thousand sq m
more than 150 thousand sq m
149.7 thousand sq m
3,700 rub./sq m/year
tHe sHAre oF Built-to-suit WAreHouse CoMplexes
0%
lease and purchase transactions in Moscow region in terms of company profile
source: knight Frank research, 2017
WAREHOUSE COMPLEXESSpeculative
Owner-operated
Object class
Existing
Under construction
7
ReseaRch2016
₽
₽
MKAT
А-10
7А-
107
MKAD
Novoryazanskoye hwy
Yegoryevskoye hwy
Nosovihinskoe hwy
Gorkovskoye hwy
Schelkovskoe hwy
M-5 "Ural"
M-7 "Volga"
MOSCOW
BALASHIHA
KOROLEVSCHYOLKOVO
NOGINSK
ELEKTROSTAL
ZHELEZNODOROZHNIY
LYUBERTSY
ZHUKOVSKIY
BRONNITSY
RAMENSKOE
source: knight Frank research, 2017
10%
43%
30%
17%
Retail
Transport and logistics
Manufacturing
Distribution
10%
43%
30%
17%
Retail
Transport and logistics
Manufacturing
Distribution
key iNDiCAtors
eaSt
Company Segment Object Class Area, sq m
Delovye linii transport and logistics infrastroy Bykovo А 33,743
x5 retail group retail logopark Sofino А 22,868
ontex Manufacturing Viarona Noginsk А 20,000
Belligen Distribution springs park A 19,556
llC "geba" retail trilogy park tomilino А 14,000
source: knight Frank research, 2017
the stock of quality warehouse properties in the eastern direction of the Moscow region was 2,982 thousand sq m. Here, the cost of land is relatively low unlike other directions, and the main constraining factor for the development of warehouse real estate is poor transport accessibility.
As a result, the landlords of the properties in the eastern direction significantly reduced rental rates in order to attract residents. they were 3,300–3,500 rub./sq m/year on average.
And, such a strategy was effective as 2016 showed: the total volume of transactions here was 238.1 thousand sq m or 22% of the total volume in the region. And the main residents were the companies engaged in retail industry as well as logistics operators.
tHe VoluMe oF QuAlity supply
tHe iNCreAse oF supply
tHe VoluMe oF VACANt spACe
tHe VoluMe oF trANsACtioNs
AskiNg reNtAl rAtes (triple net – excluding VAt, operating expenses and utilities)
2,982 thousand sq m
130.4 thousand sq m
more than 200 thousand sq m
238.1 thousand sq m
3,300 rub./sq m/year
tHe sHAre oF Built-to-suit WAreHouse CoMplexes
17%
lease and purchase transactions in Moscow region in terms of company profile
key transactions
WAREHOUSE COMPLEXESSpeculative
Owner-operated
Object class
Existing
Under construction
Warehouse Market report. MoscoW
8
ReseaRch2016
ReSeARChOlga YaskoDirector, russia & Cis [email protected]
InduStRIAlMaxim ZagoruikoDirector, russia & [email protected]
+7 (495) 981 0000
© Knight Frank llP 2017 – this overview is published for general information only. Although high standards have been used in the preparation of the information, analysis, view and projections presented in this report, no legal responsibility can be accepted by knight Frank research or knight Frank for any loss or damage resultant from the contents of this document. As a general report, this material does not necessarily represent the view of knight Frank in relation to particular properties or projects.
reproduction of this report in whole or in part is allowed with proper reference to knight Frank.
Warehouse complex Borisovka, Moscow region, simferopol'skoe hwy, 10 km from MkAD