Turnkey warehouse: myth or reality?

The tendency to build warehouses for the specific needs of the company in Russia has been developing for more than three years. However, so far even the very concept of build-to-suit has been questioned by experts, and the demand for warehouses of this type is doubtful. To be or not to be a turnkey warehouse in the Russian market?

Concept Talk

A foreign built-to-suit expression translated into Russian would form a lyrical, but too long phrase: "built to fit." However, this Russian equivalent is much better than the beaten “turnkey” combination, reflects the essence of an object specially built for the needs of the customer. A feature of the built-to-suit warehouse is that it is created from scratch or at the site with ready-made utilities and is initially designed according to the requirements of the future tenant. At the same time, projects that were adjusted during construction are not included in the built-to-suit category, since the changes introduced, such as increasing the mezzanine depth or creating an additional entrance group, are not significant. The built-to-suit format implies the participation of the customer in construction, starting from the warehouse project stage, and allows you to implement specific requirements. For example, requirements for equipment placement, space zoning, resource saving, safety, or special temperature conditions. As a result, the customer receives a unique product for comparable money and time, in which there is nothing that he would not need, and there is everything that he needs. Such "sharpening" of built-to-suit objects confuses those who have not yet fully understood the foreign concept. After all, if the warehouse is made for the needs of a particular company, does this mean that in the future it will not suit another enterprise? Oleg Mamaev, executive director of PNK Group, rejects this assumption: “A built-to-suit warehouse is not necessarily something that suits a particular customer and no one else. This is what the customer asked and the contractor built in accordance with all the requirements. ” There is always the possibility that at least one more company with similar requests will be found on the market. And when the lease term, which is usually set for 7 years with the built-to-suit format, comes to an end and the tenant does not want to renew the contract, a unique warehouse will not necessarily remain without a tenant.

More benefits for the same money.

When discussing the concept of built-to-suit, specialists in the warehouse real estate market will certainly ask builders of custom objects the question: why reinvent the wheel and create from scratch what can be effectively remade from an existing one? “Professional athletes do not buy ready-made bikes in the market, but assemble them according to their requirements,” Oleg Mamaev recalls. - So with built-to-suit warehouses. It cannot be said that they are fundamentally different from speculative objects, but they do not have elements unnecessary for the customer, and the areas are used as efficiently as possible. ”

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A concrete example of a warehouse built with a view to minimizing costs and increasing productivity can be the warehouse complex of the Russian shoe operator Centrobuv. In the PNK-Vnukovo logistics park, for the 7 months from the green field stage, it was built by the development company PNK Group. Since the key requirement of the customer for the object was high turnover, the project implemented an optimized cross-docking technology. This means that the warehouse has autonomous entry and exit with its own checkpoints, and at 36 thousand square meters. m of storage space accounts for 103 dock (one dock for every 300 meters). In addition, the facility is equipped with high-precision floors, which allow for narrow-aisle shelf storage technology. Due to this, the storage density increased by 20%. Other features include our own 7 auto repair shop for trucks and a lighting system that provides triple energy savings. An important characteristic is also the compliance of the warehouse with international safety standards FM Global (only non-combustible materials are used and an upgraded fire extinguishing system is implemented). “The Russian warehouse real estate market is experiencing an acute shortage of warehouse facilities with a large area and the ability to implement modern technologies, such as cross-docking,” said Andrei Nesterov, CEO of Tsentrobuv. - In addition, now the market is playing by the rules of the seller, and rental rates are quite high. Warehouses built-to-suit are more profitable than renting or acquiring an already constructed building. They can introduce innovative technologies without fear that in 2-3, for reasons beyond our control, we will have to look for a new warehouse. It is also possible to provide additional space for potential business expansion or to choose a good location that will make logistics more efficient. That is why we decided not to choose from standard options and order a built-to-suit warehouse. ”

Built or not built

Of course, not every company needs a warehouse created to order. The built-to-suit warehouse is an excellent solution for enterprises that pay great attention to logistics processes and are looking for any opportunities to increase efficiency, even the most, at first glance, insignificant ones. Often, such firms are represented by large operators that clearly represent their development trajectory. Indeed, during the construction of a built-to-suit warehouse, it should be understood that in the event of increased turnover or business reorientation, a unique warehouse may turn out to be unsuitable after the facility is commissioned. In addition, the developer seeks to minimize risks, and contracts for custom warehouses, as a rule, differ in terms of lease terms, conditions and sanctions. However, if the customer accepts these conditions, he will receive a warehouse corresponding to all his needs for approximately the same money and in comparable time. To date, the construction of the built-to-suit object takes a little more than six months, and not at all a year or two, as is commonly believed. The reduction of time became possible due to the fact that the built-to-suit warehouses became a separate category of projects with a slightly different level of technology. An important role is played by the confidence of the developer that the project is not being built “into the void”, but for a customer already awaiting it: there is no time spent on promoting the object, finding a tenant and reworking the already created object.

Despite the skepticism of some representatives of the warehouse real estate market, the built-to-suit phenomenon is becoming increasingly visible. Large vacant spaces are not enough, and, according to Knight Frank, of the declared 900 thousand square meters. m in 2012 year will be actually built 700 thousand square meters. m. The shortage forces large tenants to choose a turnkey warehouse format and sometimes even, as is the case with the Russian company Tvoe, to buy back a custom-built warehouse. Figures from last year show that out of five transactions for premises, more than 40 thousand square meters. Two were enclosed in built-to-suit objects, and analysts are convinced that the trend will continue to develop. So it is likely that very soon the “warehouse to order” format will become a reality even for those who so far consider it a marketing ploy of individual developers.