The market for logistics condominiums in Brazil seems to be timidly beginning its pace of growth recovery. The economic recession, which caused a significant increase in the number of vacant areas and brought down rental prices, is now beginning to show signs of reversal.
In practice, for companies that use warehouses, this means that prices are, little by little, becoming more expensive, and that free areas are no longer so abundant.
The average price, which reached R$23 per m²/month in 2014 and dropped to R$15 per m²/month in 2017, has already risen again to R$19 per m²/month in early 2019. vacancy rate (which represents the percentage of vacant areas), which was 19% at the beginning of 2014 and rose to 26% in 2017, has already dropped again to 21% at the beginning of 2019.
According to the real estate research company Buildings, Brazil has 21 million m² of areas in logistics condominiums, two thirds of which are classified as Class A.
Most of the built area is located in the Southeast region (78%), followed by the South (12%), Northeast (7%), North (2%) and Midwest (1%). Average vacancy is currently quite different by region. In the North, for example, there are few options built, but among those that exist, most of them are empty and available, with a vacancy rate of 45% in this region. The South region, on the other hand, has a vacancy rate of only 12%.
Source: ILOS analyzes with data from Buildings.
The logistics condominium market is totally related to economic growth, which increases the demand for products and, in turn, increases the demand for storage spaces.
Lease prices and the availability of areas will depend on the economy and also on the increase in the supply of new spaces, led by private investments in the construction of new areas. These constructions, which slowed down during the period of economic crisis and reached their minimum level in 2018, showed, at the beginning of 2019, a slight increase.
If Brazil manages to take off in its economic recovery, probably the prices of rents in logistics condominiums will rise, since they are still quite behind the growth of the IGP-M.
References:
https://buildings.com.br/site/revista_buildings/ed45/B45_BX/index-h5.html?page=1#page=74
https://www2.colliers.com/pt-BR/Pesquisa/MARKETOVERVIEW1T2019LOG
Source: Buildings Magazine 2nd. Quarter 2019
Maria Fernanda Hijjar
https://ilos.com.brExecutive Partner of ILOS, holds a master's degree and a degree in Production Engineering from the Federal University of Rio de Janeiro (UFRJ). With more than 10 years of experience in the field of Logistics and Supply Chain, working on several projects, management and participation in research associated with the subject. She has more than 20 articles in newspapers, magazines, periodicals and congress annals, being co-author of several titles in the COPPEAD Collection by Atlas publishing house and in the Panorama Logístico Collection ILOS and CEL / COPPEAD.
