Industrialists have a need for cheap and prepared land / E. Kuzmina / Vedomosti

A Plus Development intends to add three more parks to the three that it already has – in Pushkin, Kolpino and Shushary. The development project was presented at the investment council under the governor of St. Petersburg at the end of last year. A Plus Development parks in Pushkin and Kolpino are already full, and out of 72 hectares in Shushary, only 10 hectares are free and contracts for them are planned to be concluded this year, a company representative said. In order to develop further, new sites are needed, the company intends to build three more industrial parks in the north, south and east of the city and is selecting sites, he adds. According to him, sites from 50 hectares are of interest, and in total, about 750,000 sq. m of class A industrial and warehouse space could appear on the three sites.

A Plus Development expects to receive the sites for a specific purpose as part of assigning the strategic status to its project, a company representative reported. According to him, part of the areas in the parks will be allocated for the placement of small and medium-sized businesses on preferential terms. Members of the investment council supported assigning the strategic status to the A Plus Development project, according to a message from the St. Petersburg administration.

According to the developer, the total investment in the project will be 30-35 billion rubles, of which 12 billion rubles have already been invested in three operating parks. The development is planned to be carried out between 2016 and 2020. A Plus Development is going to use both its own (about 30%) and borrowed funds, says a company representative.

The projects will be in demand, notes Mikhail Tyunin, Head of Industrial and Warehouse Real Estate at Knight Frank St Petersburg. Although the supply of land for industrial projects in St. Petersburg is very large, there are few parks. In addition to A Plus Development, such a product is currently offered by VTB Capital Asset Management (Maryino) and YIT (Greenstate), he says, adding that the north of the city is not yet covered by such an offer. Some industrial parks have been announced but have not been launched, because their implementation requires serious investments, primarily in infrastructure; these are expensive projects, says Tyunin.

Industrialists need cheap and prepared land, confirms Alexey Bragin, CEO of 5Mikron Engineering. “We are looking at a territory for a new production facility in 2018, and the best option is a site in an industrial park,” he says. But for now, the problem for manufacturers, according to him, is the high prices offered by developers. Existing industrial parks are not loaded, and for industrialists it is more economically profitable to buy an old site, demolish all the buildings and set up production in its place, Bragin reasons. According to him, the most convenient format of industrial parks is ready-made blocks from 5,000 sq. m with connected infrastructure, and the availability of public transport is considered a big plus. When building new sites, there is a risk that there will be problems with generating capacities due to the crisis in Lenenergo , so the attractiveness of the parks will increase, he predicts.

The import substitution policy and the devaluation of the ruble have provoked the development of small Russian companies, and they will be the ones to shape the demand for industrial real estate in the near future, says Boris Moshensky, CEO of Maris in association with CBRE. According to him, there is mainly demand for industrial real estate up to 5,000 sq. m and small land plots. Companies are looking for premises to rent for no more than 350 rubles per 1 sq. m per month, and for purchase – from 30,000 to 40,000 rubles per 1 sq. m, says Moshensky.

A Plus Development to Invest Up to RUB 23 Billion in Industrial Parks