Summing up the work of the operators of the real estate market in the segment of professional warehouse premises in Kiev during the first quarter of 2019 are seeing a positive trend and a definite shortage of quality proposals. Specified segment of the real estate market of the capital actively to develop the supply and demand increased gradually.
Defining trends in the warehouse market.
In the first quarter of 2019, the market of professional warehouses were in positive territory, in particular, due to the growth of gross absorption to the level of 46250 sq. m, which is 27% more compared to the previous year.
According to the Director of the Department of industrial and logistics, CBRE Ukraine Natalia Sokirko - during the first quarter of 2019 in the segment was not put into operation any new object. But the completion 2019 projected market 83000 sq m of new premises. The average vacancy rate in the market at the end of the first quarter of this year amounted to about 3.6%. She noted that the previous year saw an increase in demand for warehouse property, which was due primarily to the resumption of business activity in this segment of the real estate market after the recession, which was celebrated in 2014 - 2016. The main share to total gross absorption in the market of professional warehouses amounted to leases of premises, at the time, as the operation in the sale of the warehouse property accounted for only 3%. It should be noted the interconnectedness of the market of warehouses in the capital and suburbs.
Who rents and buys warehouses in Kiev?
According to CBRE Ukraine, the largest number of warehouses lease of the enterprise of wholesale and retail trade, and they accounted for 59% of the total gross absorption in the warehouse market in 2018. Another part of the gross absorption was shared between the logistic companies - 19%, tenants of industries pharmaceuticals and medicine - 17%, tenants from other industries - 5%.
According to the head of valuation and consulting at NAI Ukraine Irina Trunova: "the Main demand will continue to shape the company's e-commerce and retailers. About warehouse location, it companies are showing great interest in the first place, to premises within the city. Such locations allow you to optimize the time for delivery of goods, both to the consumer and their own stores. Many large companies, for example, retailers prefer to build large storage facilities for their needs. This approach is known as Built-to-Suite. This format allows the tenant to the premises which fully meet the specific needs of his business, and also to guarantee in advance the developer having a long-term tenant, which ultimately minimizes the financial loss from vacant premises."
Where are rents in the capital?
Demand growth triggers a corresponding increase in rental prices of warehouses in the capital and the suburbs. According to analysts CBRE Ukraine, announced rental rates per month rent for 1 sq. m ranged from 125 to 162 UAH. which corresponds to the range of 4.6 to 5.9 US dollars for warehouse premises of class "A" and class "B" in the range of 75 - 110 UAH. which corresponds to the range of 2.7 to 4.0 USD. Effective rents for the best premises remained stable in national currency and up to 100 - 142 UAH./sq. m./month, at the same time, due to the strengthening of the hryvnia, increased slightly in U.S. dollars and at the end of the first quarter of this year was 3.7 - 5.2 USD/sq m/month.
What will happen to the segment of warehouse real estate in Kiev?
The overwhelming majority of experts predict a further development of the warehouse real estate market of Kyiv and Kyiv region, both in quantitative and qualitative terms.
"In the near future, the expected increase in demand due to the expansion of logistics companies, retailers and companies in e-commerce. It is expected about 100 000 sq. m. speculative proposals announced for market launch in 2019 – 2020. In particular, it is planned commissioning of the third stage of Unilogic Park (22,000 sq m) warehouse complex "Mirage 3" (9 000 sq m) and the second phase of Amtel logistics complex Properties (52 000 sq g) to the end of the current year", – says Natalya Sokirko.
Given the current state of the market - low vacancy rate and low activity of developers in this segment of the real estate market is to find a significant area of the warehouse is difficult.
"The volume of new supply is likely to be rapidly absorbed due to established market deficit of quality warehouse space. Thus, it is expected that asking and effective rents are denominated in local currency by year-end will grow as a result of lack of supply in the market, with the possibility of growth of effective rents for the best premises in the national currency at the value of about 5%. The tendency, when the landlords of warehouses, have certain competitive advantages, will seek to complete the transition in rental rates in dollar equivalent. Despite this, rents in us dollars are likely to remain under the risk of possible currency fluctuations," adds the expert.
Consequently, over time, the warehouse market will enter an active stage of development, of course, if the political and economic situation in the country will not change dramatically.
According to the materials of Capital estate
