Warehousing market in Russian regions shows growth

As many as 467,000 sq m were delivered to the quality warehouse property markets of Russia’s regions in 2019, which has turned out to be the best performance since the end of 2015.

According to the Research by Knight Frank the total volume of transactions amounted to 585,000 sq m in the regions of Russia in 2019, which is a historic record high for the regional quality warehouse markets.

More than 50% of all trading volume accounted for the logistics and online retail companies.

The average weighted rent rate for Class A warehouses grew by 2.8% to 3,600 rub./sq m/year triple net in 2019.

«2019 has become a game changer year for the regional warehouse property markets of Russia. The demand for warehouse premises increased by more than twice after it had sunk to its lowest 6-year point a year ago. The developers in their turn reacted to the new trends by raising the volume of newly delivered speculative warehouse properties, namely by 62%. In general, the vacancy rate amounted to zero in an array of regions. We forecast this trend to keep developing in 2020. Thus, we expect the demand for regional properties to go on growing. Meanwhile, the developer activity suggests that they will have something to offer to the businesses that plan on further expanding to the regions of Russia».

Konstantin Fomichenko Director, Industrial & Warehouses, Knight Frank

Research: https://extpic.kf.expert/lenta/analytics/prod/0/209/report.pdf