Business news from Ukraine

STRENGTHENING OF E-COMMERCE UNDER QUARANTINE CONDITIONS TO STIMULATE DEMAND FOR WAREHOUSE SPACE

2 April , 2020  

The strengthening of e-commerce under quarantine conditions will stimulate the demand for warehouse space within the city in 2020, according to a study by CBRE Ukraine (Kyiv), an international consulting company. “As in the past ten years, e-commerce will again become a catalyst for demand and will lead to shifts and changes in the warehouse real estate market in the next cycle. E-commerce will stimulate demand for the format of so-called warehouses within the city (incity warehouses, urban warehouses). In 2020, transactions may be signed for the acquisition of former industrial facilities in the city for conversion into storage facilities,” CBRE said.
At the same time, the worsening of the economic situation could facilitate the acquisition by the market players of land plots for the development of built-to-suit projects at reduced prices. However, the launch of new projects may be suspended due to the limited work of government agencies and delays in processing permits.
“A large number of representatives of industrial real estate took a wait-and-see position, which most likely means a reduction in rental activity and vacancy in 2020. However, the likelihood of negative absorption in the industrial market is minimal. Warehouse services are currently in a great demand, more than ever before, which will allow most of logistics and warehouse services operators to stay ‘afloat’ throughout the crisis period,” CBRE predicts.
According to the consulting company, pharmaceutical distribution, food retail and its logistics are experiencing a peak in sales under quarantine conditions in the amount of 40-50% higher than in the New Year season.