INDUSTRIAL LAND MARKET OF SAINT-PETERSBURG AND LENINGRAD REGION:  4TH QUARTER OF 2009

Review object

In this review the land plots of industrial category and land plots of settlement category with the permitted use for production and warehousing purpose have been considered. Moreover, land plots of agricultural category, just about to be reassigned to industrial category (i.e. the land use planning, where such land plots are located, has been completed in one way or another, or there are other regulation documents, defining the reassignment of such plots), have also been considered.

Information sources used

When preparing this review for industrial land plots we used our own PETERLAND database, materials from specialized printed matters («Kommercheskaya nedvizhimost'» («The Commercial Real Estate»), «BN» («The Property Bulletin»), «Delovoi Peterburg» («The Business Petersburg»), «Prigorod» («The Suburb») etc.), data by property and consulting companies, published in the mass media or on the Internet, as well as data from private sources. The total number of sources used – 117. The results of the study are shown on maps and diagrams.

Initial data

Offers for approximately 579 objects have been considered for the 4th quarter of 2009:

Land plots	–    439   (76%)
Industrial asset complexes	–    140   (24%)

The total area of land plots considered makes 6487 ha, while the area of industrial asset complexes makes 313 ha.

1. Territorial distribution

The territorial distribution of objects is shown on Map 1.

As usual, the major number of objects (over 90%) is located in the vicinity of Saint-Petersburg and its suburbs: up to A-120 motorway, 30-35 km away from the Ring Road.

On Map 1 above one can see that the land plots are grouped in several zones, each one characterized by relative price homogeneity, and are located along the main traffic routes and exits from Saint-Petersburg. The largest number – some 100 industrial land plots – is located between the Western segment of the Ring Road, Yanino and Murmansk Highway. Brief description and characteristics of several zones are given below in Section 4 of the present review.

Map 2 shows the territorial distribution of industrial asset complexes.

One can see that, unlike the land plots, the industrial asset complexes offered are distributed more or less evenly throughout Saint-Petersburg and Leningrad Region. We may only distinguish the area to the south from Obvodny Canal in Saint-Petersburg and Kolpino-Metallostroy zone, where many industrial enterprises of the city are actually located.

2. Land plots distribution by size (area)

The total area of land plots considered makes 6487 ha.
Diagram 1 below illustrates the distribution of the offered industrial land plots by size.

As you can see, most offers (62%) are for land plots under 5 ha each.

The relationship between the number of land plots and the total area they occupy is shown on Diagram 2.

As you can see, land plots under 5 ha making the largest number of offers (62% of the total number) occupy the smallest area – only 584 ha (9% of the total area of all land plots). The biggest area of 4736 ha (73% of the total area), are occupied by large land tracts over 25 ha in size, but the number of such land plots is relatively small – only 12% of the total number of offers.

It should be kept in mind that many large land plots in Leningrad Region with the area of 10 ha and over are the land plots of agricultural category, but are being marketed as land plots for industrial use, and are located within the newly developed industrial areas, or are already included into the existing industrial areas as per master plans of the municipal authorities of Leningrad Region.

As for the size of industrial asset complexes' land plots, the majority (64%) has the area under 2 ha, another 22% make the land plots of 2 to 5 ha, and only 2% of offers are over 10 ha.

3. Utility systems supply

When choosing an industrial land plot it is necessary to consider the availability of utility systems or the possibility to connect them. Our study showed that the share of land plots fully equipped with engineering communications is pretty small – only 4% of the total number of offers, whereas another 22% may also be considered ready-to-use (approvals and/or technical specifications have been obtained). And the majority (74%) of land plots is either poorly developed or simply virgin land.

The situation with industrial asset complexes is radically different: 73% of objects are fully equipped with utility systems, and 14% have connection points and/or technical specifications for the connection have been obtained.

4. Distribution by price

Prices for industrial land plots and object are presented equally in rubles (46%) and US dollars (44%). Only 10% of offers are given in euro. When making price profile of the market all prices were recalculated in US dollars at the exchange rate: RUR 30 for USD 1 and EUR 0.70 for 1 USD (average exchange rate for the 4th quarter of 2009).

As one can see from Map 1 the land plots are grouped in several zones, each one characterized by relative price homogeneity, and are located along the main traffic routes and exits from Saint-Petersburg. On Map 3 such zones are highlighted with different colors, for each zone the number of offers, the total area occupied and average price for land plots within the zone are given.

As compared to the results of market research in previous quarters (4th quarter of 2008 and 1-3rd quarters of 2009) new zones have appeared: zone in the eastern part of Saint-Petersburg and KAD-Novosaratovka zone.

As for the prices for industrial asset complexes, they depend not only on the location and availability of utility systems, but also the number and cost of facilities, buildings, constructions etc, comprising such complex. Thus it makes no sense to speak of any distribution by price.

5. Price behavior

Diagram 4 shows the quarterly behavior of average prices in zones, highlighted on Map 3 above.

From the diagram above, one can see that the average prices within the 2009 year last two quarters (i.e. since the beginning of crisis) have decreased for the average of 10-30% (excluding Fedorovskoe Zone, where the price was originally not high).

It should be stressed that since the outbreak of economical crisis, the number of executed transactions on the purchase of industrial land plots and industrial asset complexes has decreased rapidly – throughout the year 2009 the market was standing still in expectation. However the interest in industrial land and objects remains high.