Record year for Moscow industrial growth on the cards, says CBRE

In 2012, lease and purchase agreements were signed for a total of 912,000 sqm, with the volume of leases signed exceeding the volume of annual construction by more than 30 pct. About 40 pct of the space under construction has already been sold or leased based on contracts signed last year. About 20 pct of the new stock in 2012 was based on the build-to-suit format. Over 45 pct of the warehouse space take-up in the Moscow region was accounted for by the retail sector. The volume of new delivery in Q4 2012 fell 9 pct y-o-y to 163,000 sqm. However, in 2012, 697,000 sqm of class ‘A’ warehouse space was delivered, equivalent to 96 pct of the new construction in both 2010 and 2011. Vacancy is at the minimal level of around 1 pct – at the end of 2009 it was app. 16.9 pct. Annual prime rents in Q2 2012 reached USD 140 per sqm (excluding VAT and operating costs) and held this level during remainder of the year. Despite the fact that Moscow is already in top ten most expensive logistics markets in the world, some upward pressure on rents is expected in 2013 driven by the strong take-up and the limited number of prime assets under construction. More than 1.5 mln sqm of class ‘A’ warehouse space has been announced for 2013, more than double the total new supply for 2012. CBRE also predicts that demand will grow, with around 1 mln sqm of logistic space forecast to be leased or bought in 2013.