Raven Russia, a British investment company that is managing over 1mln sq m of warehouse class A space in Russia is pleased to announce the preliminary results as of 11 months of 2011 together with Knight Frank. Raven Russia has rented out over 200 000 sqm of class A warehouse space all over Russia in 11 months of this year.
Raven Russia has increased the volume of its leasing deals by 12% as compared to 2010: in merely 11 months over 200 000 sqm has been rented with the Moscow share of 145 000 sqm (long-term lease), Saint-Petersburg’s – 36 000 sqm, Rostov-on-Don’s – 28 000 sqm and Novosibirsk’s – 26 000 sqm.
Amongst the largest deals by Raven Russia in 2011 were the following: X5 Retail Group at Noginsk Logistics Park (75 600 sqm), Danone-Unimilk at the second phase of Klimovsk Logistics Park (11 360 sqm) and Azbuka Vkusa at Istra Logistics Park (15 000 sqm).
The construction of Phase III is due to commence in Q1 2012 at Klimovsk Logistics Park in the Moscow Region (43 000 sqm) while Phase II that has a total area of 55 000 sqm was put into operation in November. Therefore, Raven’s Russia total investment volume here came up to c. $40mln.
Over 90% of Phase II at Klimovsk Logistics Park was reserved while still at construction stage. A high demand for class A warehouses in the Moscow Region coupled with the deficit of available space in 2011 led to the growth of forward deals on the market.
In 2012 Raven Russia is to pursue an organic growth strategy. With about 100 000 sqm of class A warehouse space to be constructed next year, the total amount spent on land purchases and development will be about $80 mln.
The Moscow Region remains one of the key investment destinations in terms of warehouse development with around 75% share of the total transactions made on the Moscow market alone (c. 1 mln sqm).
As per Knight Frank European Market Indicators research (winter, 2011) Moscow Region warehouse rental rates still remain one of the highest in Europe (ranking 7th after Zurich, London, Geneva, Oslo, Stockholm and Helsinki) nearing the pre-crisis rates of $130 – 140/sqm per annum for a class A warehouse space (triple net).
The vacancy rate at the class A warehouses in Saint-Petersburg, Rostov-on-Don and Novosibirsk is also going down to the values of 4,5%, 0,5% and 16% respectively (Knight Frank data, as of Q4 2011). National retailers, car manufacturers, logistics operators and other manufacturing companies are behind this demand surge.
As to the regional markets, this is where the demand for the quality warehouses is just beginning to shape and for now the built-to-suit projects are taking precedence instead. Despite the time that it takes to realize the project and the associated expenditures this segment has a great potential.
Igor Bogorodov, Head of Moscow Branch at Raven Russia: In 2012 the deficit of warehouse space in the Moscow Region will limit the take up volumes (lease transactions) with the half of the demand to be accounted for by the warehouse space still under construction. On the other hand, the growth of rental rates will be capped by the tenants’ ability to pay with the expected level of circa $130-135/sqm per annum (triple net). A stable demand growth on the market in 2012 can be expected provided no negative macroeconomic trends are observed in Russia or on the global markets. We cannot rule out the development of built-to-suit projects in the regions as the demand for those is quite evident.
Viacheslav Kholopov, Director of Warehouse Real Estate Department at Knight Frank Russia and CIS: ‘The deficit of quality space on class A warehouse market will be quite palpable in the Moscow Region in 2012 which would in turn influence the rental rates as well as motivating tenants to sign preliminary leases‘.
Heiko Davids, Partner Knight Frank Russia and CIS: ‘The development of new warehouses in Russia is impeded by the lack of affordable financing due to an unstable situation on the international financial markets. This would prevent the developers from realizing the new large scale projects in Moscow and the regions.’
Raven Russia is a leader on the Russian warehouse market. The ordinary shares, preference shares and warrants of the Company are all admitted to trading on the Main Market of the London Stock Exchange. The company is focused on the acquisition and development of high quality class A warehouse complexes in the major cities across Russia, and their subsequent leasing to Russian and international tenants. The company holds its investments for the long term.
More than $1,5 bin has been invested over 5 years of the company’s successful activities on the Russian market. Raven Russia has a completed portfolio of 10 class A warehouses which is equivalent to circa 1 million square meters located in Moscow, St Petersburg, Rostov-on-Don and Novosibirsk. Raven Russia also holds 368 hectares of land across Russia and CIS available for future development as well as having the funding to complete the projects including build-to-suit.
The company's major tenants are Auchan, X5 Retail Group, Bacardi, DSV (Suzuki, Nissan+Renault), Nippon Express (Yamaha), NLC (Fin Post), Seacon Logistics (Amway), FM Logistics, Oriflame, Gradient, Gates, L'Occtaine, Roto Frank, Moron, Gorenje, Dixy Group, Pepsi, Alliance Healthcare, Major and Johnson Controls, etc.