In 2015 the number of transactions in warehouse market has reduced in 35%, vacancy rate has increased from 1-2% to 10%.

Experts and market leaders discussed efficient strategies of warehouse management at the conference Warehouse management, organized by Academy of Real Estate (ARE). The event was supported by the Russian Guild of Property Managers and Developers and PROEstate Events.

Accroding to Vyacheslav Holopov, Partner and Director for office and warehouse real estate of Knight Frank (Russia and CIS countries), in 2015 the number of transactions in warehouse market has reduced in 35%, vacancy rate has increased from 1-2% to 10%. The majority of warehouse transactions are executed in Moscow and Moscow region.

Warehouse market has recently become tenant focused. Ilia Pronichkin, Head of Tenant Relations department of LLC MLP, mentions that MLP company uses flexible strategy when working with tenants. “We don’t increase rent rates, offer payments delays, allow to switch from advance payment to postpayment. However any type of special lease conditions is offered only after thorough analysis of financial reporting.”

Real estate market experts discuss different ways to optimize expenses and increase income in times of crisis.

Olga Gavrilova, Deputy Director for work with clients of MD company, proposes to optimize regulatory and emergency maintaining costs.

Artem Pichugov, Head of Management Department of Radius Group, highlights that it is not possible to optimize some operational costs without additional investment, unless warehouse property is built with quality construction materials and equipped with energy efficient technologies. Operational costs are also adjusted by the number of tenants. The more the number of tenants is, the less operational costs are for each of them.

Aleksander Perfiliev, Commercial Director of Warehouse and Industrial real estate of Accent Property Management, is sure that applying to consulting companies is the fastest way to lease out warehouse property at high rate. “About 80-90% of lease agreements of more than 2000 sq.m. are supported by consulting companies.”

According to Sergey Kazinets, Partner of law firm “AVELAN”, one more way to optimize costs is challenging of cadastral value. Today it is possible to reduce cadastral value to 50-70%.