Prospects of logistic real estate market development in Ukraine for today look not so optimistic as they seemed to be at the beginning of 2008. The total amount of realized construction works in January-November 2008 is estimated in 57611.8 mln.UAH makeing 87%, compared with the same period of the previous year. While during January to March, 2008 the growth of performed construction works was observed relatively with the same period of 2007.
(Source: SSC of Ukraine)
Despite the lack of high quality warehouses catalyzing development of this market sector the financial crisis has provoked the progress of negative processes at logistic estate market. The of decrease industrial production and leaving the market by some retailers have caused losses of the main warehouses’ leaseholders. As a result the vacantness level of many operating objects jumped to 10-15%. Therefore it’s possible to predict with high probability that rent rates for “A”-class warehouses in 2009 will decrease for 7-10%.
Many developers revised their portfolios and excluded logistic projects. As example, one of the biggest Ukrainian developer – XXI century which is one of the first who has claimed that due to the World and Ukrainian Crisis the company will concentrate on the main commercial and elite real estate projects and facilitate its portfolio from logistic projects. Other developers expose their projects for sale and at the same time continue to realize them. Also it’s important to note, that some owners intentionally make semblance of active building attempting to attract investors. Up to Knight Frank’s data in 2008 just in Kiev region the breaking-in of about 515.9 thousand sq.m. of A and B -class warehouses was declared but in fact just 230.4 thousand sq.m. was put into operation.
Taking into account the arguments above it’s possible to predict with high level of probability that in 2009 the growth of warehouses estate market will decrease significantly. But considering that logistics comparatively with residential estate is less influenced by crisis (it’s caused by unsaturation and lack on logistic estate market). Due to peculiarities of logistic real estate market there is an effect of delay crisis influence for 6-8 months, comparatively with residential estate the peak of slump will happen in February-March of 2009. And if for today the prices for warehouses are artificially kept up on high level approximately in March, 2009 the prices will just crash down.
In this case, it’s possible to say that national market of warehouses stays separately and it’s not affected by trends which are familiar to commercial or residential estate markets. That’s why it’s possible to speak about its fastest “recovering” comparatively with other sectors of real estate also conditioned by geographical position of Ukraine, lack of high quality warehouses and higher investment attraction of logistic real estate.