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Market analysis of industrial warehouse premises.

Forms Relevance.

Management decisions in the real estate sector should be based on objective data about the current situation and development prospects of various market segments. Currently, in Russia there is practically no system for monitoring the industrial real estate market. In this regard, the study of the main indicators affecting the cost of objects is an important direction, allowing us to determine the degree of sensitivity of the value of objects to various indicators. Research methods. The article presents a comparison of classifications of industrial and warehouse buildings and premises, as well as the results of an analysis of the sales and rental market for the type of real estate under study using the example of the city of Voronezh. The main pricing factors and development trends of this segment have been identified. regional market

real estate. Result. Systematization of these indicators will allow us to determine criteria investment development

real estate market.

Introduction Industrial and warehouse real estate is a special area investment activities . Unlike commercial retail and office real estate, the main source of income from which is traditionally the rental of premises, as well as the possibility of resale of objects at the end of the investment phase, industrial and warehouse real estate is often considered not only as a source of rental income, but also as a component of investment in development of the service sector or production of products in a particular industry. In this regard, industrial and warehouse real estate is represented by a variety of objects, without classification of which it is impossible to carry out any economic measurements

Currently, the need to systematize real estate of various types is one of the difficult tasks facing participants in the real estate market: property owners, analysts, realtors, appraisers. On the one hand, the fact that the value of each object depends on its assignment to a particular market segment, as well as on the totality of its properties and characteristics, is obvious. In this regard, attempts are being made to develop and apply various systems for classifying real estate objects. On the other hand, often sellers, buyers and experts use different concepts, meaning by them objects of the same class. This introduces great confusion not only into the process of searching for common interests of sellers and buyers of real estate, but also does not allow the formation of a single, orderly system information support real estate market. Unlike commercial real estate, the systematization of the types of which has been actively carried out over the past ten years, the topic of classification of production warehouse real estate remains highly relevant today.

Purpose of the study. Existing real estate classifications often duplicate each other or expand comparative characteristics and factors by which an object will be assigned to a particular class. To date, several attempts have been made in Russia to develop a classification of real estate objects in various segments of the real estate market. Options for a unified classification of warehouse real estate are offered to the market by consulting companies. Among the available classifications of warehouses, the following should be noted:

Classification developed by the international consulting company Knight Frank,
Classification developed by the Swiss consulting company

The comparison parameters for industrial and warehouse real estate according to these consulting companies are presented in Table 1.

Table 1

Classification of industrial and warehouse real estate of Knight Frank and Swiss companies

Classification of the production and warehousefacilitiesof the Knight Frank and Swiss companies

Class		Knight Frank
	Buildings designed for use for storage purposes. Location, equipment, finishing, proximity to the road network, redevelopment for any type of cargo, high speed of cargo operations and storage reliability must comply with modern principles of warehouse logistics.	Modern one-story warehouse building made of lightweight metal structures and sandwich panels, preferably rectangular shape without columns or with column spacing of at least 12 meters and with a distance between spans of at least 24 meters.
	Not provided	A modern one-story warehouse building made of lightweight metal structures and sandwich panels, preferably rectangular in shape without columns or with a column spacing of at least 9 meters and with a distance between spans of at least 24 meters.
	20-30 year old reconstructed buildings or premises. They have characteristics similar to class “A” premises, but differ in their location: industrial zone, city limits.	Not provided
	Premises created in the 90s, but lacking some parameters that are typical for class “A”.	A one-story warehouse building, preferably rectangular in shape, newly built or renovated.
	Premises built in the 70-80s, former research institute buildings. Such buildings, as a rule, require some modification and investment of funds.	A one- or two-story warehouse building, preferably rectangular in shape, newly built or reconstructed.
	Areas that were not used as warehouses. These include car parks, car depots and similar production facilities	Capital production premises or insulated hangar.
	The buildings were built in the 1930s-1960s - former premises of food wholesale warehouses and vegetable stores.	Not provided
	Not intended for use for storage purposes and premises. Such structures with economic point view it is profitable to demolish. This is due to the high costs of restoring and bringing the premises to modern parameters.	Basements or civil defense facilities, unheated industrial premises or hangars

It is worth noting that non-specialized industrial buildings(classes C and D) can be rented. Specialized buildings are mostly characterized by purchase and sale transactions.

The classifications given are quite clear and specific. , however, in order for market participants (buyers and sellers of real estate, realtors, developers, analysts, and appraisers) to easily use them, it is necessary to combine numerous characteristics. This will help determine the class of the property being assessed for the selection of comparison properties for sale and rental from the relevant real estate sector.

Having analyzed and systematized the parameters for comparing industrial and warehouse real estate of Knight Frank and Swiss companies, it is worth proposing to consider the characteristics of buildings and premises in relation to belonging to a certain class based on:

analysis of information about the real estate market;
composition of pricing factors and information about the values of pricing factors for each type of object.

Materials and research methods. As comparison parameters, many public sources (real estate agency websites - Sota, Transfer, Citadel, etc., Internet portals for posting ads - Avito, Kamelot, etc.) use a simplified classification, so the information on these resources was used to compile a new list types of objects. For the period under review, we took the second quarter of 2017. As a result, a proposal for the purchase and sale of 171 and the rental of 101 industrial and warehouse real estate in the city of Voronezh was analyzed.

Our proposed classification of industrial and warehouse real estate is presented in Table 2 and includes explanations from the classifications of Knight Frank and Swiss.

table 2

Classification of commercial real estate

Table 2

Classification of the objects of commercial facilities

Object type	Object characteristics
Production and warehouse premises	Premises created in the 90s, but lacking some parameters that are typical for class “A”. (B+) Car parks, car depots and similar production facilities. (C) Basements or civil defense facilities, unheated industrial premises or hangars (D)
Industrial and warehouse buildings	20-30 year old reconstructed buildings or premises. (A-) Modern one-story warehouse building made of light metal structures and sandwich panels, (A+) Premises built in the 70-80s, former research institute buildings. (B) The buildings were built in the 1930s-1960s - former premises of food wholesale warehouses and vegetable stores. (C-) Basements or civil defense facilities, unheated industrial premises or hangars(D)
	Car parks, car depots and similar production premises (C)
Warehouses (including logistics complexes)
Industrial and warehouse complexes	Buildings designed for use for storage purposes. corresponding to modern principles of warehouse logistics. (A+) Modern warehouse buildings made of lightweight metal structures and sandwich panels, preferably rectangular in shape without columns or with column spacing of at least 12 meters and with a distance between spans of at least 24 meters. (A+)

Since 2016, there has been a downward trend in the new supply of commercial real estate in the warehouse segment, which continues in 2017. The value of supply prices and rental rates decreases, the number of vacant space, developers are forced to cut costs and optimize space.

Owners commercial properties real estate often wonder what factors influence its value? Solving this problem is also important for the owner of the property, so as not to deliberately reduce the value when selling or leasing. This is no less important for the buyer, so as not to overpay for improvements that are unnecessary, from his point of view.

Let's consider the factors that influence the increase or decrease in the value of commercial real estate when selling and leasing it.

There are 2 groups of factors in relation to objects that generate income: general (external) and local.

The first group of factors reflecting the socio-economic and political situation in the country and region, the geophysical environment of the object, as well as the legal admissibility, physical feasibility and economic feasibility of developing a construction option. These factors are not directly related to a specific property, but they affect the state of the real estate market segment, and, consequently, the value of the property being assessed.

Local factors take into account the characteristics of the property and its immediate surroundings. These factors are directly related to the analyzed object and similar objects on the real estate market.

Pricing factors have their own specifics depending on the class of the production and warehouse facility. In the segment of class A and B warehouses, the range of rental rates is quite narrow. This is due to the fact that the characteristics of the building itself do not vary very much. The main pricing factors for such objects are location and transport accessibility

In the segment of class C and D warehouses there are many more factors that influence the price. However, during the crisis, according to the observations of experts, the most significant factor here became transport accessibility. The issue of quality temporarily faded into the background.

As a result of the analysis, the above pricing factors were grouped depending on belonging to a certain class of warehouse premises and are presented in Table 3.

Table 3

Pricing factors of production of real estate objects

Pricing factors of production and warehouse facilities

Industrial real estate	Warehouse real estate

Floor/number of floors (basement, basement, first or higher floor)
Wall material
Year of construction
Location
Location of the object in the building (ground, underground floor, separate building);
Composition, technical condition of the building and engineering systems(presence of heating; availability of adjustable humidity and temperature conditions)
Condition of the premises
Communications (ventilation, fire alarm, telephone)
Composition of access roads (availability of roads and railways)
Additional inseparable improvements (presence of loading ramps and docks; presence of a freight elevator)
Room height
Characteristics of the land plot and surrounding area (availability of a sufficient number of parking spaces for trucks and cars)

On this moment in the regions of Russia, in particular in Voronezh region There is a significant downward trend in the commissioning of warehouse space. Although there are several industrial parks in operation, general structure offers are still dominated by low quality properties. The demand for high-quality warehouses is mainly observed from companies in the agro-industrial complex and retail chains.

Limited access to borrowed funds, their high price, as well as a large volume of vacant space, became the reasons for the slowdown in construction activity in the industrial and warehouse real estate market. At the moment, the most popular format for warehouse construction is the built-to-suit scheme, according to which more than 60% of the volume of commissioned facilities has been sold in Russia since 2015.

Built-to-suit(abbreviated BTS) literally means "build to kit". However, it would be more accurate to call it “custom construction.” BTS is a technique in which buildings are erected (or modernized) to meet the needs and requirements of a specific company. Production and warehouse facilities commissioned in 2016 are presented in Table 4.

Table 4

Logistics centers commissioned in Voronezh in 2016*

The logistic centers put in operation in Voronezh in 2016*

An object	Address	Area, sq.m	opening date	Class
ABC-Electro
Logocenter A-Logistic	Voronezh region
Logocenter Samson-Opt	Voronezh region With. Babyakovo, Novousmansky district

*Offer on the Voronezh industrial and warehouse real estate market

The Voronezh region belongs to the industrial-agrarian regions. The traditional production orientation of the Voronezh region is Agriculture, mechanical engineering.

The industry is dominated by mechanical engineering, electric power, the chemical industry and the processing of agricultural raw materials. They account for 4/5 of the total volume of industrial output.

The Voronezh industrial and warehouse real estate market is represented by warehouses, workshops and hangars, as well as production buildings located in residential areas and industrial zones of the city, positioned in the segment of high-quality real estate (classes A and B).

Knight Frank analysts note that in 2016 there was a shortage of liquid supply - modern high-quality facilities with a good location, convenient access roads, modern engineering equipment etc.

The study revealed that within the city of Voronezh, almost all offers on the market for the sale of industrial and warehouse real estate are concentrated in three districts - 29% each account for the Kominternovsky and Levoberezhny districts, and 25% for the Sovetsky district. The presented ratio is reflected in Figure 1. Due to the specifics of this real estate segment greatest number proposals are concentrated in the industrial zones of the city away from the center.

Rice. 1. Structure of the offer for the sale of industrial and warehouse real estate by districts of the city of Voronezh

Fig. 1. Offer structure of the sale of objects of industrial and warehousefacilities by districts of the city of Voronezh

The structure of sales offers in the selected segments of industrial and warehouse real estate is presented in Figure 2.

Rice. 2. Structure of offers for the sale of industrial and warehouse real estate

Fig. 2.Offer structure of the sale of objects of industrial and warehouse facilities

The study shows that the supply for the purchase of premises and buildings is in percentage terms almost equal to 40% and 38%, respectively, and the share of warehouse complexes accounts for 22%. The interval of the study is the second quarter of 2017.

In September 2017, the average offer price for the sale of industrial and warehouse premises was 15,141 rubles/sq.m. m. average price sales offers 1 sq. m of this type of real estate ranged from 8,000 rubles. up to 95,150 rub. depending on pricing factors.

The average offer price for the sale of an industrial and warehouse building was RUB 13,516.24/sq. m. Average selling price of 1 sq. m. m of this type of real estate ranged from 2,900 rubles. up to 54,000 rub. depending on pricing factors.

The average offer price for the sale of the production and warehouse complex was RUB 9,806/sq. m. Average selling price of 1 sq. m. m of this type of real estate ranged from 7,228 rubles. up to RUB 29,729 depending on pricing factors.

The ranges of supply prices and the ratio of areas of the studied types of industrial and warehouse real estate objects are presented in Table 5.

Table 5

Offer price intervals and ratios of areas of industrial and warehouse real estate objects

Table 5

Intervals of the offer prices and ratio of the areas of objects of industrial and warehouse facilities

Offer price for the sale of industrial and warehouse premises for 1 m 2, rub.

Maximum
Minimum
Total area of the offer for sale of industrial and warehouse premises, sq.m.

Maximum
Minimum
Offer price for the sale of an industrial and warehouse building per 1 m2, rub.

Maximum
Minimum
Total area of the industrial and warehouse building offered for sale, sq.m.

Maximum
Minimum
Offer price for sale of industrial and warehouse complex per 1 m2, rub.

Maximum
Minimum
Total area of the offer for sale of the production and warehouse complex, sq.m.

Maximum
Minimum

A special feature of the industrial and warehouse real estate rental market are rental agreements, which are concluded for a short period (1-3 years). The wide range of rental rates is caused by strong market differentiation and depends on the volume of warehouse space offered for rent and its quality.

Nowadays in the real estate market there is a practice of charging rent for the entire total area of the proposed building or premises. Most of the premises offered for rent up to 100 sq.m. are the main areas, which do not include auxiliary areas (corridors, bathrooms, etc.). Similar objects with an area of more than 100 sq.m. already include auxiliary ones, i.e. in fact, common areas are offered.

It is assumed that offers of objects on the real estate market, both sales and rentals, include VAT (18%). In addition, as practice shows, rental rates do not include the amount of utility bills, i.e. they are paid by the tenant separately. It should also be noted that a typical indicator is the rental price of 1 sq.m of space in a time interval equal to a month.

In the industrial and warehouse real estate rental market proposals are also concentrated in three districts - Kominternovsky (43%), Sovetsky (23%) and Levoberezhny (20%). The presented ratio is reflected in Figure 3. Due to the specifics of this real estate segment, the largest number of proposals are concentrated in the industrial zones of the city at a distance from the center.

Rice. 3. Structure of rental supply of industrial and warehouse real estate by districts of the city of Voronezh

Fig. 3.Offer structure of the rent of objects of the industrial and warehouse facilities by districts of the city of Voronezh

The structure of sales offers in the selected segments of industrial and warehouse real estate is presented in Figure 4.

Rice. 4. Structure of rental offers for industrial and warehouse real estate

Fig. 4.Offer structure of the rent of objects of the industrial and warehouse facilities

The study revealed that the most offered for rent were mostly industrial and warehouse premises (83%), the least offered were buildings and complexes (11% and 6%).

The interval of the study is the second quarter of 2017.

In September 2017, the average price for renting industrial and warehouse premises was 154 rubles/sq.m. m. Average rental offer price of 1 sq. m. m of this type of real estate ranged from 80 rubles. up to 348 rub. depending on pricing factors.

The average rental price for an industrial and warehouse building was RUB 13,516.24/sq. m. Average rental offer price of 1 sq. m. m of this type of real estate ranged from 268 rubles. up to 1205 rub. depending on pricing factors.

The average rental price for the industrial and warehouse complex was RUB 5,448/sq. m. Average rental offer price of 1 sq. m. m of this type of real estate ranged from 92 rubles. up to 500 rub. depending on pricing factors.

The intervals of rental rates and the ratio of areas of the studied types of industrial and warehouse real estate are presented in Table 6.

Table 6

Intervals of rental rates and ratios of areas of industrial and warehouse real estate

Table 6

Intervals of rental raes and ratio of the areast of objects of the industrial and warehouse facilities

Rental rate for 1 m 2 of production and warehouse premises, rub.

Maximum
Minimum
Total area of the rental offer for industrial and warehouse space, sq.m.

Maximum
Minimum
Rent rate for 1 m 2 of industrial and warehouse building, rub.

Maximum
Minimum
Total area of the industrial and warehouse building rental offer, sq.m.

Maximum
Minimum
Rent rate for 1 m 2 of industrial and warehouse complex, rub.

Maximum
Minimum
Total area of the industrial and warehouse complex rental offer, sq.m.

Maximum
Minimum

Industrial and warehouse real estate for 2016 - early 2017 did not show activity either in the direction of global decline or in the direction of growth. Activity in the market was carried out mainly due to existing industrial enterprises, which are developing on their territory and do not enter the open market; however, as experts note, there is interest in industrial and warehouse real estate, but most of the properties do not meet the quality requirements of potential investors.

Research results. The result of the study is our proposed updated classification of industrial and warehouse real estate based on monitoring the sales and rental market in the city of Voronezh, comparing the classifications of Knight Frank and Swiss companies. As the main elements of comparison, we proposed to consider the characteristics of buildings and premises relative to belonging to a certain class.

All pricing factors influencing the increase or decrease in the value of commercial real estate during its sale and rental were considered.

The list of these factors solves a serious practical problem, since it is important for property owners not to deliberately reduce the value of real estate when selling or leasing. This is no less important for the buyer, so as not to overpay for improvements that are unnecessary, from his point of view.

In the process of analyzing the supply structure, a reduction in the number of market segments characterized by limited functionality was noted, and an expansion of segments consisting of objects that provide a wide range of high-quality technological capabilities.

Monitoring the market for the purchase, sale and rental of industrial and warehouse real estate behindIIquarter of 2017 showed that the main supply is concentrated in three districts of the city of Voronezh - Kominternovsky, Sovetsky and Levoberezhny (20%).

The study revealed that the offer for the purchase of premises and buildings is almost equal in percentage to 40% and 38%, the share of warehouse complexes accounted for 22%. The offer for renting industrial and warehouse premises turned out to be the largest - 83%, less was offered for renting buildings and complexes (11% and 6%).

Conclusion. The conducted research should act as a systematic basis for creating a unified classification of industrial and warehouse real estate, unified system basic concepts in the relevant market segment, as well as pricing factors of the types of objects under consideration in the industrial real estate market.

general characteristics regional industrial and warehouse real estate market

The past 2013 was an extremely favorable period for the warehouse real estate market and is characterized by high performance supply and demand - despite the high volumes of commissioning, the level of vacant space remained low (1-2%). In 2013, there was a high level of absorption volume - about 1.3 million square meters. m.

Experts note the revision of the classification of industrial and warehouse real estate in Moscow as one of the most significant market events. According to the measurable clarifications proposed by the Knight Frank company, objects of class “A+” differ from objects of class “A” by a greater distance between spans, an ultra-flat floor with anti-dust coating, a greater permissible load on the floors and a heating system that provides at least +14 at external air temperature up to - 35C (excluding low-temperature storage conditions).

Experts call PNK-Chekhov of the PNK Group company a striking example of such an object (class “A+”). In addition to compliance with the characteristics listed above, experts note large turning and parking areas, logical organization of access roads, quality of coverage, etc. The area of the construction site does not exceed 45%, and each building can operate as an independent facility, since it has a convenient location, separate entrance and autonomous communications and power supply systems.

Offer on the industrial and warehouse real estate market in Moscow and the Moscow region

The volume of space commissioned on the industrial and warehouse real estate market of the Moscow region in 2013, according to various estimates, amounted to about 800 thousand square meters. m, and the total volume of quality supply is about 9 million sq. m. m. According to experts, these commissioning volumes are a record for the last 4 years, while almost all new facilities belong to class “A”. One of the main reasons for the growing share of high-end objects in new construction is increased demand from companies for which a high-tech warehouse is a way to increase the turnover of goods.

The largest volumes of commissioned industrial and warehouse space in 2013 were noted in the southern and southeastern directions. These directions, together with the southwestern one, are traditionally in high demand, and, as a result, the largest volumes of supply are concentrated there. This direction of supply and demand is due to freight flows passing through the M-4 highway and Simferopol highway.

Figure 1. Geographical structure of the commissioning of industrial and warehouse space (according to the Praedium company)

A significant share in the volume of commissioned industrial and warehouse space in 2013 was occupied by large market players. For example, the PNK Group company continued the development of the PNK-Chekhov project (the first stage of PNK-Chekhov 2 was commissioned) and PNK-Vnukovo (building No. 9 was commissioned).

In the PNK-Chekhov 2 logistics park, buildings 2 and 3 with a total area of about 127 thousand square meters were commissioned in the second half of the year. m. This project has become the largest new high-quality project introduced on the Moscow market. The logistics park is located in the city of Chekhov, 49 km along the Simferopol highway from the Moscow Ring Road, near the PNK-Chekhov project of the same name. According to the developer's plans, the implementation of the warehouse project will be completed in 2014, then the total area of the complex will reach 286 thousand square meters. m.

Second place in terms of commissioning scale went to the project introduced in the first half of 2013. It became the Logopark North logistics park, with an area of 110 thousand square meters. m. The developer of the project was the company “Karavella”. This warehouse facility is located 7 km from the Moscow Ring Road along the Leningradskoye Highway in the Solnechnogorsk district. Logopark has a convenient location and is very attractive to both the largest Russian and foreign companies. Among the resident companies it is worth noting: IKEA, Global Logistic Projects, Eldorado, etc.

The development company PNK Group not only made its mark in Chekhov, but also brought to the market the next warehouses in the PNK-Vnukovo project. In 2013, the company commissioned three buildings (3, 8 and 9) with a total area of 101 thousand m2.

In the second half of 2013, the development company Raven Russia increased its activity in the market, continuing to introduce queues in current warehouse projects. Thus, the third stage of the Klimovsk logistics park (55 thousand sq. m) and the second stage of the Noginsk logistics park (37.1 thousand sq. m) entered the market.

Figure 2. The most significant production and warehouse facilities commissioned in 2013 (according to the Praedium company)

In the geographical structure of input there is a tendency to develop territories more distant from the Moscow Ring Road. Traditionally, complexes located 20-30 km from the Moscow Ring Road are in high demand, while now the supply of high-quality facilities located at a distance of up to 50 km from the Moscow Ring Road is actively being formed, which are also in demand, which is confirmed active use“build-to-suit” schemes when implementing these projects.

The market for the sale of land and property complexes for industrial and warehouse purposes, both in the zone up to 30 km and in the zone up to 50 km, is represented mainly by low-class objects, suitable mainly for redevelopment.

Among the complexes commissioned directly within the city of Moscow, experts single out only one facility - the Magistralny terminal, which is a self-storage warehouse. The internal space is organized according to the design principle, which allows us to offer the tenant an area from 1 to 50 sq. m. m in one plane. Prices start from 950 rubles. per sq. m per month and depend on the size of the selected box and rental period. The advantageous location between two important highways: Khoroshevskoye and Zvenigorodskoye highways, as well as a high level of service, ensured stable demand for self storage services immediately after the start of sales of space in the new terminal.

Demand on the industrial and warehouse real estate market in Moscow and the Moscow region

The industrial and warehouse real estate market in Moscow and the Moscow region maintains an extremely high level of demand - even the record commissioning of new space had virtually no impact on average level vacant space, which, according to various estimates, amounted to 1-2%. This circumstance is explained by the following factors:

Developers, trying to minimize the risks associated with the market exposure of the property, are increasingly implementing projects using the “built-to-suit” scheme, as a result of which a significant share of the space never reaches the open market (according to various sources - from 35% to 60% in 2013).
The construction of warehouses for a specific client is a service aimed at large buyers (or tenants), which, coupled with a low level of vacancy, creates unsatisfied demand from small buyers (or tenants).
In the process of construction of objects oriented to the open market, preliminary agreements rental/sale, which also reduces the actual volume of space supplied to the open market by the time of commissioning.
Postponement of commissioning dates for a number of facilities.

Buyers and tenants of warehouses choose a “build-to-suit” scheme of interaction with a developer not only because of limited supply, but also often due to highly specialized requirements for the acquired space. Compliance with these requirements in the early stages of project implementation allows for savings on operation and possible adaptation of a typical warehouse to the specific requirements of a particular client.

Experts estimate the level of demand (total volume of purchase, sale and rental transactions) in 2013 at 1.3 million sq. m. m, which is slightly higher than in 2013. The peak of demand occurred in the 2nd-3rd quarters of 2013.

The most active tenants and buyers of industrial and warehouse real estate in 2013 were large trading companies, distributors and manufacturing enterprises.

Figure 3. Distribution of transactions in the industrial and warehouse real estate market by business profile of tenants and buyers (according to the Knight Frank company)

According to the Jones Lang LaSalle company, in 2013 the the average size transactions - on average for 2013 it amounted to about 18 thousand sq. m. m (13 thousand sq. m in 2012 and 11 thousand sq. m in 2011). Experts call the largest deal of the year the lease of 72 thousand square meters by IKEA. m in "Logopark North".

Table 1. The largest transactions in the industrial and warehouse real estate market of the Moscow region (according to the Jones Lang LaSalle company)

Commercial conditions on the industrial and warehouse real estate market in Moscow and the Moscow region

From the point of view of commercial conditions, the industrial and warehouse real estate market can be characterized as stable - there were no significant changes in rates during 2013; the current high level of rates is explained primarily by a shortage of quality supply.

During 2013, the level of rental rates for high-quality industrial and warehouse complexes in the Moscow region was on average in the range of 115-140 USD/sq. m/year (triple net).

The range and average supply prices of industrial warehouse complexes, depending on the conventional location zone, were (including objects for redevelopment):

Within the city of Moscow: 16,130 - 158,333 rubles/sq. m, average value 58,915 rub./sq. m.
In the area up to 20-30 km from the Moscow Ring Road (Podolsk, Odintsovo, Zelenograd, etc.): 3,349 - 61,508 rubles/sq.m. m., average value 36,862 rub./sq. m.
In the area 30-50 km from the Moscow Ring Road (Elektrostal, Chekhov, Solnechnogorsk, Dmitrov, etc.): 1,916 - 52,174 rubles/sq. m., average value 21,725 rub./sq. m.

Figure 4. Range and average values of the unit cost of supply of industrial and warehouse real estate depending on the area of the facility’s location, rub./sq.m.

The unit cost of space in the segment of high-quality warehouse real estate in the Moscow region is on average in the range of 900-1,400 USD/sq. m., capitalization rate is about 11%.

Pricing factors in the industrial and warehouse real estate market

Since the cost of objects located within the city is significantly higher than the cost of objects located in the region, it is advisable to build the dependence of the unit cost on pricing factors for one of these groups of objects. Next, to build dependencies, objects located in the area were selected due to the larger number of proposals and, as a result, a more visual construction of these dependencies.

Among the pricing factors of industrial and warehouse real estate, the most significant quantitative factors, from the point of view of influencing the unit cost of the object, can be identified:

First of all, we can highlight a factor related to location and transport accessibility, namely - distance to MKAD. This factor provides greatest influence on the price of objects located outside the city, since objects within the city are significantly influenced by many other factors related to location (for example, distance to the metro, distance to major streets, etc.). In addition, a significant factor is distance to main transport routes.

Among the properties offered for sale in 2013, the range of values for the factor “Distance to the Moscow Ring Road” was 3.6-59 km, the average was 33 km.

The range of values for the factor “Distance to main transport routes” was 0.2-9 km, the average value was 1.8 km.

Figure 5. Influence of the factor “Distance to the Moscow Ring Road” on the unit cost of the object

Figure 6. Influence of the factor “Distance to main transport routes” on the unit cost of the object

Total area of improvements- according to a survey of agents specializing in the sale of industrial and warehouse real estate in the Moscow region, when selling objects of a larger area, sellers are ready to accept a certain reduction in payment, which is analogous to a “wholesale discount”, i.e. objects of larger area, as a rule, cost less per square meter. The range of values for the factor “total area of improvements” was 110-75,000 sq. m. m., average value - 8,939 sq. m.

Figure 7. Influence of the factor “Total area of improvements” on the unit cost of the object

The total area of the land plot. Industrial and warehouse facilities with a larger land plot have greater demand in the market. Since, on the excess land plot, it is possible to organize parking for vehicles, place an open warehouse for various products, there is the possibility of maneuvering heavy vehicles. The range of values for the “Total area of the site” factor was 1,300-83,200 sq. m. m., average value - 22,764 sq. m.

Figure 8. Influence of the factor “Total area of land” on the unit cost of the object

The most significant quality factors include:

Condition/level of interior decoration of production and warehouse premises- good condition of the building or spent in it major renovation will save the potential owner from attracting additional investments into the property. Offer prices for industrial and warehouse buildings or built-in premises that are in good condition with a simple level of finishing are higher than offer prices for properties in satisfactory condition.

Table 1. Values of the factor “Condition/level of interior finishing”

Availability and condition utility networks also plays a significant role in determining the cost of a production and warehouse facility. This factor determines the amount of capital investment required for the normal functioning of the facility, while, from the point of view of implementing the production and warehouse function, the availability of electricity and heat supply is paramount.

Table 2. Values of the factor “Presence and condition of utility networks”

Availability of access roads and their convenience- the most popular areas are those with several convenient access roads. The convenience of access roads is assessed using a point system, depending on the class and level of vehicle traffic on the street from which vehicles enter the territory, as well as the possibility of temporary parking on it.

Table 3. Values of the factor “Equipped with access roads and their convenience”

Depending on the type of production, other pricing factors may be taken into account (presence of a railway line, ceiling height, availability of cranes, etc.).

Main trends and forecasts in the industrial and warehouse real estate market in Moscow and the Moscow region

In 2013, the classification of industrial and warehouse real estate was revised - information regarding class “A+” objects was clarified.
The market continues to experience a high level of demand against the backdrop of a shortage of quality supply; the vacancy rate in 2013 was 1-2%.
The main commissioning of new facilities occurs in popular directions: south, southeast, southwest. Moreover, almost all objects belong to class “A”.
The volume of transactions in the industrial and warehouse real estate segment amounted to about 1.3 million sq. m. m.
A relatively new trend is the implementation of projects located at a distance of 30-50 km from the Moscow Ring Road.
The implementation of projects according to the “built-to-suit” scheme is becoming increasingly popular - according to various estimates in 2013, from 35% to 60% of the space was sold in this way.
Taking into account the delay in the commissioning date of a number of projects, the volume of commissioning in 2014 may remain the same as in 2013. At the same time, the vacancy rate is expected to remain at 2-4%.
An increase in rental rates and the cost of selling objects is not expected - the main limiting factor is the unfavorable macroeconomic forecast for 2014 (low GDP growth and other socio-economic indicators).
Among the largest projects announced for commissioning in 2014, market experts highlight: the South Gate industrial park and the Radumlya logistics park, with a total area of 200 and 155 thousand square meters. m. respectively.

Conclusions: Close to record volumes of space commissioning on the industrial and warehouse real estate market in Moscow and the Moscow region did not have a significant impact on demand, which continues to be at a high level. In the absence of serious fluctuations in commercial conditions against the backdrop of high levels of demand, we can conclude that the market has stabilized. The main factors that restrain the market from further active development, are macroeconomic - the instability of the general economic situation increases the risks of developers, forcing the latter to increasingly work according to the “build-to-suit” scheme.

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The classification accepted on the market allows not only to structure the offer according to basic quantitative criteria, but also to provide an understanding of the qualitative state of the market.
Traditionally, class A and B warehouses are the basis of the market - these are, as a rule, new organized large complexes with an appropriate range of services, a wide product line (in terms of functionality, type and area of premises), differing in scale and a professional management company.
Class C warehouses are predominantly old, often repurposed from industrial premises, have a small area, and are not equipped with forklifts and other infrastructure. The average area of a typical class C warehouse is 1500 sq.m.

	class B	class C
General indicators
Number of warehouses, pcs.	32	31
Total area, sq.m.	248942	59500
Average area, sq.m.	7700	1500
Current offer (rental)
Total area, sq.m.	121123.7	37552
Average area, sq.m.	3785	2120
Share of vacant space, %	0.487	0.631

In the supply structure of the local market, the number of warehouse complexes of class B and C is comparable, while the area of vacant premises is not equal: 76.3% of available space for rent belongs to class B. The share of vacant space in class B complexes is 48.7%, C – 63, 1%.
The largest number of warehouse complexes that are presented on the market as a current offer (47.6%) have a total area of 1,000 sq.m. We are talking about small Class C hangars, which represent the low segment of the market.

Among the warehouses under consideration, the minimum area is 100 sq.m. This is a small room intended for production or storage purposes, class C. Maximum size of the sites under consideration, these are class B objects - PSK "Chekhovsky" and "Sergeevo" - 67 thousand sq.m.

At the time of the study, 158.7 thousand sq.m. are offered for rent. premises, which is 51.4% of the total volume of class B and C production and warehouse premises located on the local market.
The largest number of warehouse complexes (33 out of 63) on the local market are located in the area of 50-60 km from the Moscow Ring Road; accordingly, it is at this distance from Moscow that the bulk of vacant space is located - 122.8 thousand sq.m.

Warehouse projects require large land areas, and there are fewer and fewer of them left, which is the reason why developers are moving further and further from the Moscow Ring Road. In addition, due to the shortage of industrial land in the 30-kilometer zone, prices are rising, which significantly increases the costs of the project, as well as the final rent. The general trend the development of industrial land in an increasingly remote area and the high trafficability of the route make it possible to move to more distant areas without significant damage to business. Moreover, it is precisely this remoteness (more than 30 km from the Moscow Ring Road) that is being actively developed by large class A complexes, which indicates the high potential of the local market and the relatively low sensitivity of demand and price to the distance from the capital.

The structure of the offer according to the qualitative and quantitative indicators of the generated lot (for rent or sale)

In 19 out of 63 warehouse complexes you can also rent office space. Areas available for rent start from 20 sq.m.

Location	Office area for rent, sq.m.	Cost of renting office blocks, rub.
Chekhov, st. March 8	16 sq.m.	2400 rub. block/month
RTI PLANT / Chekhov, st. Chekhova, 20b	from 20 sq.m.	400 rub. sq.m./year
Chekhov, st. Assembly	25 sq.m.	3000 rub. block/month
Chekhrovsky district, Barantsevo village	from 20 sq.m.	400 rub. sq.m./year
Chekhrovsky district, Lyubuchany village	50 sq.m.	400 rub. sq.m./year
Chekhrovsky district, Novoselki village	2 office blocks: 1750 2580 m2	400 rub. sq.m./year
Chekhov, st. Kolkhoznaya	500 sq.m.	200 rub. sq.m./year
Chekhov district, Novoselye village	100	250 rub. sq.m./year
Chekhov, st. Printers	from 20 sq.m.	400 rub. sq.m./year
Chekhov, Simferopolskoe highway, 1	150 sq.m.	400 rub. sq.m./year
Chekhovsky district, village. Talalikhino	blocks of 40 sq.m.	210 sq.m./year
Chekhovsky district, Chekhov	300 sq.m.	250 rub. sq.m./year
Chekhov district, Lyutoretskoye village	3-storey building - 500 sq.m.	7000 rub. in year.
PSK Chekhovsky / Chekhov, st. Komsomolskaya	from 100 sq.m.	600 rub./sq.m.
Chekhov city, 8th March st.	200 sq.m.	300 sq.m./year
Chekhov, st. Mira	100 sq.m.	300 sq.m./year
Chekhov district, Chepelevo village, Central st., 27	500 sq.m.	500 sq.m./year
Chekhov, Mira st.	from 150 sq.m.	350 sq.m./year
Chekhovsky district, urban settlement Stolbovaya	500 sq.m.	400 rub. sq.m./year

Pricing policy of competitors by class, quality characteristics

The rental rate for warehouse space depends on several factors:

location of the warehouse complex (remoteness, highway)
proximity to transport routes
rented areas (when renting large areas, the tenant is provided with a discount)
rental period

Rental rates on the local market for high-quality warehouse space are quite high. Today, the generally accepted practice is to calculate net rental rates (triple net), without taxes, utility bills, which are paid separately by the tenant. In all warehouse complexes under consideration, operating expenses are already included in the rental price. Utility costs are paid by the tenant separately “according to meters”.

	class B	class C
Min. rental rate per 1 sq.m., rub./year	1800	300
Max. rental rate per 1 sq.m., rub./year	4600	4476
Average rental rate per 1 sq.m., rub./year	2700	2110

Cost of 1 sq. m in a class B property will cost the tenant an average of 2,700 rubles. in year. In class C, rates are lower and vary between 1500-2200 per year per 1 sq.m. The larger the area rented by one client, the lower the price of 1 sq.m. “Wholesale discount” can range from 10 to 30%.

In most of the warehouse complexes under consideration, tenants need to pay a security deposit (security deposit, security deposit) equal to one month's rent. The security deposit is a kind of refundable amount that cannot be used as payment for the last month and is in no way related to the rental deposit. This is a contribution that provides compensation for damage to property discovered at the end of the annual contract.

Main players

Name	Location/address	Class	Warehouse area, sq.m.	Market share (by total area), %	List of services
RTI PLANT	Chekhov, st. Chekhova, 20b	WITH	10000	0.032	Fire alarms, hydrants; Telephony, Internet; 24/7 security
-	Chekhov district, Novoselki village	IN	41425	0.134	There is a railway line on the site. It is possible to rent offices. It is possible to rent a land plot.
Sergeevo http://www.psksergeevo.ru/arenda/	Chekhovsky district Sergeevo	IN	67685	0.219	Office rental possible parking for passenger cars, access and parking for trucks and Eurofur.
PSK Chekhovskiy http://psk-chehovskiy.ru/	Chekhov, st. Komsomolskaya	IN	67000	0.217	Production, industrial, office premises; Office rental possible Possibility of renting land parking and parking services for cars and trucks

In total, 4 players account for a 60% share of the space market.

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FEDERAL EDUCATION AGENCY

State educational institution "KEMEROVSK STATE UNIVERSITY"

FACULTY OF ECONOMICS

Market analysis of industrial and warehouse premises

Completed:

students of group E-041

Volodina Love,

Volodin Roman

Checked:

Doctor of Science, Prof. Starikova L.N.

Kemerovo

Cost of production and warehouse premises in Kemerovo, January - October 2008.

In this report we will reflect the current situation with the cost of 1 square meter area of production and warehouse premises in the city of Kemerovo.

The main concentration points of production and warehouse premises are the Zavodsky district (Kuznetsky Ave., Shaturskaya St.), Central district, Kirovsky district. There are also single offers on the market in the Predzavodsky district, on Raduga and FPK. The range of areas offered is from 15 sq. m. up to 71444 sq.m..

The sample included 195 objects, but 63 objects were excluded from comparison because there is no information about their functional purpose.

Table 1.

The table shows that the maximum cost of 1 sq.m. at production and administrative complexes, because they have greater functionality and include: production premises, storage facilities, administrative premises, and all communications.

The sample included 193 objects, but 9 objects were excluded from comparison because there is no information about their area or price.

Maximum cost per 1 sq.m. characterized by a warehouse with a total area of 300 sq.m. in the factory area. This is a production facility total cost 75,000 thousand rubles, offered by the agency Zhiltsov, Dmitriev and partners (07/11/2008).

Minimum cost per 1 sq.m. characterized by a warehouse with a total area of 5000 sq.m. in the factory area. This is a warehouse with a total cost of 5,500 thousand rubles, exhibited by the agency Zhiltsov, Dmitriev and Partners (07/11/2008).

Table 2.

The diagram shows that the market has the largest supply of warehouse space up to 500 sq.m.

We also compared the cost of 1 square meter of industrial and warehouse space depending on the area where they are located.

Table 3.

The table data shows that 55.7% of all production and warehouse premises are located in the Zavodskoy district. This is due to the fact that the Zavodsky district is a promising area for the development of business activity. This is facilitated by both the proximity to the administrative and business centers and the convenience of transport interchanges with a high concentration of population and traffic flows.

The diagram shows that the average cost per square meter of industrial and warehouse premises ranges from 64.6 thousand rubles to Central region up to 17.1 thousand rubles in Rudnichny.

Dilapidated premises without special equipment with the need to restore life support systems are gradually becoming a thing of the past. The owners of such premises try to sell the property at the maximum price. To do this, they are trying to improve the legal status and quality characteristics of objects:

1. Legal registration land relations. The cost of the property increases significantly if the land plot is used by the owner of the building as a property. This can be explained by the fact that the procedure for registering land ownership is very long (7-8 months) and expensive, so the number of people wishing to purchase an object with registered ownership land plot is growing every day.

2. Improvement of the area adjacent to the building. A fenced area with convenient access roads is valued.

3. Repair of the building and restoration of communications. Carrying out or restoring communications is a very costly process. In this regard, potential buyers are practically not interested in objects without life support systems.

The sample included 127 objects, but 68 objects were excluded from comparison because There is no information about the date of their putting up for sale.

Table 4.

		September
Quantity, pcs.

	Zavodsky district
Quantity, pcs.
Average price, thousand rubles/1 sq.m.

List of information sources

1. www.sibestate.ru

2. www.realt-service.ru

3. Magazine “Everything about real estate” (No. 4,5,6)

4. Newspaper "Real Estate Bulletin"

Application

Warehouse classification

* by functional purpose:

supply, production, distribution warehouses;

* by type of stored products: warehouses of raw materials, materials, components, work in progress, finished products, containers and packaging, residues and waste, tools;

* by type of ownership: enterprises’ own warehouses, commercial warehouses ( common use), rented warehouses;

* by functional purpose: sorting and distribution warehouses, distribution warehouses, seasonal or long-term storage, transit and transhipment (cargo terminals), production supplies (production), trade;

* by product specialization: specialized, non-specialized, special, universal, mixed;

* according to technical equipment: partially mechanized, mechanized, automated, automatic;

* by the presence of external access roads: with berths, with rail access roads, with roads;

* by type of warehouse buildings:

* according to technical device (design); open warehouses (sites), semi-closed warehouses (areas under a canopy), closed warehouses;

* by number of storeys: multi-storey, single-storey

(with a height of up to 6 m, high-rise (over 6 m), high-rise rack (more than 10 m), with a height difference).

Analysis of warehouse construction for 2016

According to preliminary results, since the beginning of last year, the volume of warehouse premises put into operation amounted to 510 thousand m 2. Compared to 2015 (800 thousand m2), this figure in 2016 is 36.2% lower, which in absolute terms is 290 thousand m2. According to S.A.Ricci, this is the most low level commissioning of new warehouse space over the past 5 years, starting in 2012.

Offer. In 2016, the most rational and widespread strategy was the introduction of large warehouse complexes for a specific client (built-to-suit). Examples of such objects are: a warehouse complex in Reutov - 17 thousand m2, SC "South Gate" (Leroy) - 90 thousand m2 and "PNK - Northern Sheremetyevo" (Mercedes-Benz) - 50 thousand m2.

The volume of new warehouse space commissioned in 2016 was distributed among three directions: south, east and north. According to preliminary results, the most active direction for commissioning was the southern direction - 165 thousand m 2 were built here. In the north, the increase in supply in 2016 amounted to 152 thousand m2. In the eastern direction, the volume of new supply amounted to 75 thousand m 2. It should be noted that most of the warehouse complexes commissioned in the southern and northern directions are warehouses of the built-to-suit format (90 and 50 thousand m2, respectively).

Currently, active construction of transport interchanges is underway on the federal highway “M-7 Volga Highway”. It is expected that the highway will be completed by the end of 2017. Upon completion of all work, the M-7 Volga highway within the city of Balashikha will have five lanes in each direction, three of which are intended for transit flows. Thus, improving transport accessibility will make logistics facilities located in the eastern direction more convenient and attractive. Currently, there are two large warehouse complexes located in this direction: Atlant Park and Raven Noginsk. Now the total volume of rented space in Atlant Park is 360 thousand m2, and another 60 thousand m2 is under construction. Commissioning is planned for May 2017. There is also a project for the construction of about 300 thousand m2 of warehouse space in Atlant Park. In the Raven Noginsk warehouse complex, the rentable area is 334 thousand m2.

Examples of large warehouse complexes commissioned in 2016

An object	Highway, km from MKAD	Area, m2	Class	Developer	Quarter
"South Gate" (Leroy Merlin) BTS	Kashirskoe, 30	90 000	A	Radius Group	III
"Northern Sheremetyevo" (Mercedes-Benz) BTS	Rogachevskoe, 25	50 000	A	PNK Group	III
"PNK - Northern Sheremetyevo" (building 6)	Rogachevskoe, 25	47 000	A	PNK Group	III
"Valischevo" (building 4)	Simferopolskoe, 32	34 000	A	PNK Group	III
IP "Sever-1" (6th and 7th stage)	Dmitrovskoe, 27	31 000	A	"Logopark Development"	III
SC "Britovo"	Novoryazanskoe, 30	20 000	A	SST	II
Warehouse complex (BTS)	Gorkovskoe	17 000	B	Step	I

According to S.A. Ricci

In 2016, a landmark deal was completed for the warehouse real estate market: one of the largest developers, Radius Group, signed an agreement with Auchan Retail Russia on the construction of a warehouse and logistics complex with an area of over 138 thousand m2 in the Domodedovo district of the Moscow region. The new distribution center will be the largest building of its type in Europe built for a single company. Investments in the project will amount to about 6 billion rubles.

According to preliminary results in 2016, the share of class A warehouses in the total volume of new supply was 96%, and class B – 4%, which in absolute terms amounts to 419 thousand m2 and 17 thousand m2, respectively. In conditions of high vacancy, developers are trying to bring to the market only high-quality and most competitive space.

Examples of significant transactions completed in 2016

Client	Direction	km from MKAD	An object	Class	Transaction area, thousand m2	Transaction type
OK	Leningradskoe	27	Logopark Sever-2	A	59,6	Rent
Hoff	Kashirskoye	12	Northern Domodedovo	A	50,0	Rent
Faberlic	Kashirskoye	12	Northern Domodedovo, PLC	A	46,0	Rent
Castorama	Simferopolskoe	50	PNK-Chekhov 3	A	42,4	Rent
BMW	Kyiv	50	PNK-Bekasovo	A	34,3	Rent

According to S.A. Ricci

Demand. Since the beginning of the year, the volume of absorption of warehouse space has amounted to 1.1 million m2, which is 15% less than in 2015 (1.3 million m2) and in absolute terms amounts to 200 thousand m2.

The southern part of the Moscow region continues to be the most attractive for tenants. The southern direction accounted for 47% of the total volume of completed transactions, which in absolute terms amounts to 466 thousand m 2. In the southeastern direction, the absorption volume was 20% (195 thousand m2), and in the southwestern direction - 10% (101 thousand m2). In the north of the Moscow region, the volume of transactions is 15% (143 thousand m2). Western and eastern directions are in the least demand - only 1% of the total volume for each.

Vacancy. The market average vacancy rate at the end of 2016 was 8.2%, which is equivalent to 921 thousand m2 of free space. This indicator has decreased by 0.8 points since the beginning of the year, which is explained by a significant excess (more than 2 times) of demand over supply.

Rates. Weighted average rates rentals in the Moscow region have remained stable since the beginning of the year. In ruble terms, the rental rate level has remained unchanged for 7 quarters in a row, which indicates that the price bottom has been reached.

The weighted average rental rates for class A warehouse premises are 3,900 rubles/m2 per year (triple net). For class B premises, the rate is 3,600 rubles/m2 per year.

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Market analysis of industrial warehouse premises.