The logistics condominium market in Brazil has undergone significant changes in recent years, especially since the beginning of the pandemic with the growth of e-commerce, including the decentralization of operations and the increase in new available stocks.
According to data from the Market Analytics platform of SiiLA (Latin American Real Estate Information System), the Northeast surpassed the South in stock of warehouses, which until 2021 was the second largest market for logistics condominiums in Brazil, with the delivery of 333 thousand square meters of new warehouses at the end of 2022, totaling 2,4 million assets in the region.
This decentralization trend is recent and has been driven by the increase in land and rent costs, mainly within the 30-kilometer radius of São Paulo and other strategic regions. Proximity to the consumer center is crucial to reduce both shipping costs and delivery times and, therefore, e-commerce companies seek to position themselves within this radius from their main customers.
On the other hand, this behavior does not necessarily translate into a trend. Buildings indicates that the demand for new areas, especially more distant from the city center of São Paulo, already shows some signs of cooling down and a movement of returns and leftover logistics warehouses is starting to emerge.
In fact, the logistics market in São Paulo, the main one in the country, remains heated. Currently, the State has more than 10,9 million square meters of warehouses, and in 2022 alone, 1,3 million square meters were delivered. In the last quarter of 2022, the vacancy rate, or vacant spaces in the São Paulo market, stood at 13,6%, showing a reduction of 0,2 percentage points compared to the previous quarter.
Observing the Southeast region in general, in 2022 new 2,1 million square meters were delivered, now totaling 17,9 million square meters, and this is still the region for which most of the new areas are destined. According to the CFO of warehouse rental company Log, André Vitória, there are around 170 million square meters of leasable area in logistics warehouses, 80% of which are located on the SP-RJ axis. The municipality of Cajamar, for example, which is close to the capital of São Paulo, received 387 thousand square meters of new stock in 2022, consolidating the region as one of the main ones for the logistics sector.
In February 2023, new 235 m² of developments were registered in the state of São Paulo, with almost 80% of them located in the city of Barueri, another municipality close to the capital of São Paulo. The state is, together with Minas Gerais, the one with the highest average rental price per area (R$ 24/m²), followed by Bahia (with R$ 23/m²).
In February 2023, Pernambuco was the state outside of SP with the highest net absorption, that is, with the greatest difference between the number of leased areas and areas returned, with around 5 thousand square meters, in addition to a rate of vacancy of only 0,5%. Real estate developers are betting on new projects for logistics operations in the Northeast, confirming the increased demand for area in the region.
Before the start of the pandemic in 2020, Brazil had 672 logistics condominiums. According to data from Buildings, at the end of March 2023, there were 737 condominiums in the country, which makes up a total inventory of more than 31 million m².
Figure 1: Quarterly evolution of the delivery of new inventory to the market in Brazil (thousand m²)
Source: Buildings
As shown in the figure above, in the last year alone, more than 3 million square meters of warehouses were delivered in Brazil. Of these, another 2,7 million square meters correspond to high-end warehouses, totaling an increase of 21% compared to that registered in 2021; and a new record was reached for new areas delivered in the country for the logistics condominium market. Nevertheless, the increase in available inventories did not cause an increase in vacancy, which remained in balance with the level observed in 2021.
Despite the evolution in the number of installations, there is an expectation of a reduction in the pace of supply of new stocks. Buildings forecasts that inventory delivered in 2023 will be around 30% lower than the previous year, due to increased capital and construction costs, in addition to high interest rates.
Thus, despite various uncertainties, experts point to a trend of stability in the sector this year, mainly related to the amount of new stocks.
References:
- Barueri boosts the market for logistics warehouses – 19/03/2023 – Panel SA – Folha
- Brazil sets record for new logistics warehouses in 2022 – 24/03/2023 – ClubeFii News
- With e-commerce growth, logistics warehouse sector sets records in 2022 – 11/08/2022 – CNN Brasil
- How will the logistics sector perform in the post-pandemic? – 07/02/2023 – Buildings
- Decentralization of logistics gains strength in the country and the Northeast surpasses the South in stock of warehouses – 21/03/2023 – InfoMoney
- Understand the growth in the search for high-end logistics warehouses – 06/02/2023 – Exame
- Expansion of the logistics warehouse market slows down 05/04/2023 – Buildings
- Logistical condominiums market has record year for new stock and absorptions | 4Q2022 - 06/02/2023 - JLL
- Logistics condominium market: where will we go in 2023? – 19/12/2022 – Buildings
- Warehouse market shows demand inversion – 27/03/2023 – Market | Pipeline | Value (globo.com)
- Logistics market remains resilient, with more balanced demand – 29/03/2023 – Buildings
- Is the logistics market slowing down? – 01/02/2023 – Buildings
