Experts have been stating for several quarters that the warehouse logistics market is the most stable segment of commercial real estate. There is good demand, high rates and low vacancy.
However, if in the period 2021-2022 this stability was supported by good volumes of new space commissioned and growing supply, then there is nothing particularly encouraging for 2023 as a whole and for the first quarter of the current one. And the growing deficit cannot continue indefinitely without negative consequences for the market, notes partner, executive director of NAI Belarus Andrey Aleshkin.
“As you know, where it’s thin, it breaks. Still, I wouldn’t like to make gloomy forecasts: there are both ongoing projects and announced projects, and, I hope, they will be implemented faster than any collapse in the market.”
What happened in the warehouse logistics market at the beginning of 2024 in the next “Review of warehouse real estate in the first quarter of 2024” NAI Belarus company .
GENERAL REVIEW
– The infrastructure of commercial warehouse logistics as of the first quarter of 2024 did not change by the end of 2023 and is represented by 69 operating facilities (Logistics centers and complexes). Of these, 18 are state-owned, 51 are private.
– In the first quarter of 2024, demand and rental rates remained stably high, and vacancy and supply in the market remained stably low.
– Vacant supply on the market was formed only for rotational reasons, but cases of rotation have become a rare occurrence. There was no talk about vacancy as such.
– The situation in the driver industries is as follows. Reduction of warehouse inventories: as of March 1, 2024, warehouse inventories to the average monthly production volume in the Republic of Belarus amounted to 69.8% (a year earlier 78.2%) (including in Minsk – 100.3%). In monetary terms, finished product inventories amounted to 9.078 billion rubles and grew by only 0.3% over the year. The transport industry has normalized: transport freight turnover amounted to 101.6% compared to the same period in 2023 (for comparison, at the beginning of 2023, only 66.4% compared to the level of the comparable period in 2022). There was an increase in foreign trade in goods by 2.1%.
OFFER
The supply on the modern warehouse real estate market did not change during the period under review. Which is an extremely negative point against the backdrop of high demand and a total shortage of supply.
Dynamics of supply of space in modern warehouses (logistics complexes), thousand sq. m
We can only expect that in the coming months the supply will increase at least slightly, since the construction of both a dry warehouse and a specialized refrigerated warehouse is expected to be completed in the Prilesye TLC complex. Also in the recent period, a well-known developer in the warehouse segment, the Belpromstroy company, announced a new project in the area of the Lipki airport, which is structurally reminiscent of the project she recently implemented in Tsnyanka. However, even in the best scenario, commissioning will not take place before the end of 2025.
Renderings of the new project of the Belpromstroy company
Thus, in terms of supply in the warehouse logistics sector, everything is hopeless in the near future.
DEMAND
Demand in the warehouse segment has remained stable and sustainable for several years. The first months of 2024 continued the trend towards continued demand.
The priority is the demand for modern warehouses with multi-level rack storage, temperature control, convenient access and unloading areas. But not only. There is a demand for special warehouses, such as refrigerated warehouses. And for regular dry ones for floor storage. In the past few months, there have been requests from organizations with large document flows for warehouses suitable for storing archives.
Demand also varies in terms of area. There are potential consumers who are ready to take large warehouses entirely, and there are also requests for compact units.
RATES
In such a situation, when stable, stable demand persists for a long period, and the supply market has actually frozen and is not developing, in principle, one cannot expect that rates will be low.
High-quality Class A warehouses have already reached rates of 26-28 rubles per 1 sq. m. m. without VAT. This is in the once familiar euro denomination of 7.5-7.8. Quality representatives of class “B” are not far behind. There, the rental price reached 20-22 rubles per 1 sq. m. m: the rates are not low at all.
Ranges of rental rates for high-quality modern warehouses in Minsk and its suburbs, rubles per 1 sq. m per month excluding VAT and operating costs
VACANCY
A very low level of vacancy in the warehouse market formed by the end of 2023 and continued to be at the same low level in the first months of 2024. There were no prerequisites for an increase in vacancy, even minimally, since no new properties were introduced, and tenants in existing ones were in no hurry to vacate the premises.
Vacancy in the warehouse market
At the beginning of 2023, the market was characterized by the formation of rotating permanent vacancy, when some owners terminated contractual relations with one tenant in favor of a potential future one. In the current period, such a phenomenon was virtually absent.
Conclusions, forecasts, trends
Over the past 4 years, the warehouse market has been the most stable in terms of demand, rates, and some other indicators among all non-residential real estate segments. There is a very high probability that the basis of this stability in the segment will be accumulated for at least the next 3-4 years.
Trends in brief:
- Demand will remain high and will absorb new or vacated space;
- Demand will continue to expand geography, the “transportation factor” in terms of distance from the Moscow Ring Road will have a lesser influence on the rental decision;
- Rental rates will remain consistently high. The trend is towards further growth;
- The commissioning of new space in the coming months will be insignificant;
- The likelihood of new projects being announced is low.
NAI Belarus is the Belarusian representative office of the network of consulting companies NAI Global, one of the top 6 global brands in the real estate market, one of the world's largest brokers, which is represented in 43 countries, in 325 offices with 5,800 employees.
NAI Global offices are leaders in their local markets and work closely together to provide clients with exceptional solutions to their commercial real estate needs.
The regional division of NAI Global has been represented in Belarus since 2020. In addition to brokerage, NAI Belarus actively provides services in valuation, consulting, comprehensive management of real estate and construction projects. NAI Belarus manages more than 100,000 sq.m. commercial real estate.
