Offer drops to keep prices in control

To avoid the average rent prices reduction due to excess supply, the logistics condominium market decided to reduce by 800 thousand square metres (m²) the delivery of new stock of warehouses for classes A+, A and B. According to surveys by SiiLA, an American real estate intelligence multinational that offers solutions for the sector, deliveries planned for this year totalled three million sq metres. A new estimate now shows that spawning should be 2.2 million sq metres. Even so, this area, equivalent to about 270 football fields, is almost double what was delivered last year (1.15 million sq metres).

Giancarlo Nicastro, CEO of SiiLA Brasil, says that the segment is going through a good moment, boosted by increased rental values and demand, mainly for warehouses and well-located condominiums.

SiiLA Brasil points out e-commerce as the main responsible for the positive performance of the sector. Companies such as Mercado Livre, Magazine Luiza and Amazon, for example, are among those that absorbed the most until September. Another factor that has impacted the segment is the migration of some industrial sectors (pharmaceutical, automotive, beverages and food, among them) from less sophisticated warehouses to high-end ones (A+ and A).

Although there is no precise data on the investments made by the leading players in this market, Nicastro calculates that the average cost to build a logistics condominium today is R$ 2,500 per sq metres, including the plot of land. It means that the 2.2 million sq metres that will be delivered this year should absorb at least R$ 5.5 billion in investments and generate another R$500 million in rents, considering that the average rental price in the country is at R$19.30 per sq metres.

Nicastro believes that despite the country's economic situation, players in this market have not failed to notice that Brazil has a significant logistical deficit compared to markets such as the American and Chinese. Hence there is room to continue to grow. Today, the national stock of logistics warehouses is around 21 million sq metres, an area occupied by Amazon alone in the United States, according to the SiiLA executive.