Renegotiation expansion

Moscow and Saint-Petersburg warehousing property markets introduced a new term to cargo-handling and freight sectors – renegotiation. Experts evaluate this speculative tendency to be negative artificially driving down prices. Logisticians warned, renegotiation can influence any sphere of business life.

Warehousing complexes tenants have significantly reduced the demand for terminal services due to their own cargo turnover slump. It led to occupancy of class “A” and “B” warehouses decrease by 50-70% average. Thus, Saint-Petersburg warehousing property market turns to be tenant’s market for the nearest years ahead. Participants of “Transport and logistics 2009” conference that took place in Saint-Petersburg these days came to such an opinion. State of recession will remain unchanged at this market for 2-3 years, Alexandr Novikov, Deputy General Director of Interterminal company is sure.

It was him who addressing the information to the conference participants reported on occurrence of a new type of fake tenants. As per Novikov, Moscow warehousing market brought “renegotiation” term to Saint-Petersburg. The term means multiple-stage negotiating with a new landlord to gain concession from the existing one. The number of situations of “potential tenants” holding negotiations with a tenant without signing a contract significantly increased. Such a service appeared at the market of agencies occupied in tenants selection, which is even worse. That is a very negative tendency; and we are looking for the ways to get away with it, pointed out Interterminal’s representative.

The recession year brought to light other types of tenants. Some mid-level managers, Alexandr Novikov called them “firebrands”, tender logistics companies not to sign a contract but to demonstrate their activities to the senior managers. 

Another category of tenants, nominally named “naive” expect to lease a high-class warehousing complex “at a price of container area”. Such people are unable to adequately evaluate the market, considers the author of this classification of tenants.  

Besides, Novikov singles out “hesitant” tenants who put a stay on a contract reviewing and refuse to negotiate at the very final stage of the contract signing. This category of business people encroach upon most part of logisticians’ time.  

Unfortunately, the number of “active” tenants who have a clear and adequate understanding of their requirements to a warehouse decreases, states Novikov.

Speaking about warehouses owned by Interterminal, the top-manager pointed out, class “A” warehouses occupancy amounts to 75% to the date which more an exception at this market. Class “B” terminal of Parnas industrial area is 80-85% occupied, in Kubinskaya str. the occupancy amounts to 50%. Container open area isoccupied. 20%

Sofia Vinarova