The political stabilization and economic growth in Russia in the last two years have stimulated the growth of the freight-transportation market.
The demand for modern warehousing services is growing faster than the construction rates of such warehouses. In Moscow Oblast, the market for warehousing services is stable and is characterized by steady demand, supply and prices. The main trends seen on the market include scrapping of outdated, small-capacity and poor-quality warehouses, construction of large-capacity warehouses with relevant auxiliary infrastructures and services and development of such infrastructures outside the Moscow Ring Road.
Warehouses currently operated in Moscow and its suburbs can be divided into four categories:
1. European-class warehouses. There are not many such warehouses, and most have been built over the last five years; a smaller number of warehouses were created by reconstructing former factories.
2. Traditional warehouses, i.e., those built during the Soviet era.
3. Warehouses made by minimal remodeling of what used to be bomb shelters, garages, factory shops, etc.
4. Unfinished facilities requiring substantial investment (unfinished industrial and construction facilities).
In other words, only the first two categories represent ready-to-use warehouses, while the latter two categories are "raw material."
The total available warehousing area in Moscow and Moscow Oblast is estimated to equal approximately 2 million square meters. Over the last few years, the figure has been steadily growing at a rate of approximately 200,000-300,000 sq. meters a year. At present, the growth of warehousing space in Moscow and its surroundings is accounted for mainly by the construction of new warehouses or fundamental reconstruction of what used to be industrial shops. As a rule, newly built warehouses have a large capacity and auxiliary facilities such as parking lots, repair shops, services, etc.
Examples of modern warehouses are the Joint International Chain of Customs Warehouses, LIT-Terminal, Timber Terminal, Terminal-M, Terminal Reviko, FM Logistics and a number of others. Of interest is the density of warehouses broken down by direction from Moscow's center as of 2001 (see Fig. 1).
The largest number of warehouses is located along the northwest-southeast axis where industrial facilities have been traditionally located. In building new, modern warehouses, preference is given to the northwestern and western semi-axes to accommodate the incoming freight flow.
Speaking of warehouses in Moscow and the oblast in general, it should be noted that more than 50 percent of these facilities do not have loading-unloading ramps and parking lots, and not many warehouses have access to railway lines, which is particularly bad in view of the increasing volume of railroad-contained transportation.
The cost of renting warehouse space depends primarily on the warehouse's quality, location and available infrastructure. Recently, all warehouses, regardless of category, have increased in price following increases in utility rates and overall inflation in the country. The rates of modern-class warehouses and related services are expected to increase by 13-15 percent by the end of the year.
A sharp increase in imports during 1990s stimulated demand for warehouses with customs regime, and such warehouses were set up at the rate of 200,000 sq. meters a year. By 1996, there were 273 warehouses with customs regime in Moscow and its oblast, with a total of approximately 650,000 sq. meters of floor space.
The 1998 crisis did not have any serious impact on this segment of the market, which surprisingly even continued to grow because construction projects that had been started earlier still had to be finished. As of early 2000, the number of warehouses with customs regimes in Moscow and Moscow Oblast reached 475, to a total floor space of 840,000 sq. meters, constituting less than 50 percent of the total warehouse space in Moscow and the oblast.
Fig. 2 shows a breakdown of warehouses by category and capacity as of 2001. As the graphic makes clear, most warehouses have floor spaces in excess of 1,000 sq. meters, and those with floor spaces between 1,000 sq. meters and 5,000 sq. meters are the most common.
The recent trend on the market is the appearance of modern-class corporate warehouses built and owned by major traders. It is absolutely clear that owning warehouses is beneficial for any trader in the longer run. The only problem is finding investment to finance it.
(The author is CEO of Commercial Information-Analytical Center)