Why does Kazakhstan need warehouse classification?

Head of research and analytics in IBC Real Estate

Logistical infrastructure is one of the top priorities for the vast majority of countries in the world. This is necessary for their economic development. If a country wants to expand its trade, it will need enough high-quality warehouses and transport routes.

As the economy grows, a country attracts more foreign businesses and makes people eager to consume more goods. As a result, businesses need an effective system for the storage, processing and distribution of goods.

When international brands come to a country, they serve as a booster for the entire market as they need world-class warehouses. At an early stage, such companies prefer not to directly rent warehouses but seek support from big logistic operators. This is virtually always the best decision given that there are a lot of nuances in each new market. However, as a result of this cooperation, logistic companies together with their international customers become a force that drives demand for modern warehouses that meet international standards of quality and safety.

Kazakhstani retailers gradually adopt international standards and already have begun developing their own logistical systems. On the other hand, the demand for up-to-date high-quality warehouses is constantly growing. As a result, the market needs an effective method for evaluating such property.

In our company, we believe that this will happen in the warehouse market in Kazakhstan in five years.

Currently, we see high demand for warehouses and low supply (less than one million square meters) at the same time. About 60% of the current high-quality warehouses work in two ways: responsible storage service and direct rent. The reason for this is that logistical operators own these warehouses.

The market supply is relatively small, although there is stable demand for such property and many tenants are ready to expand their businesses. The shortage of storage property is the key obstacle for them.

As the economy grows, we expect the warehouse development and direct rent market to evolve. Commercial relations in this sphere must be institutionalized. Everything is going to be more complicated than it is now, including requirements for facilities, tenants’ expectations and contract conditions.

IBC Real Estate is seeking to standardize the process of evaluating the quality of warehouse real estate in Kazakhstan. With this purpose in mind, we have developed a CIS warehouse classification based on available warehouses, client requirements, as well as social, economic, geographic and legal features of the region. Thanks to this classification, we can assess warehouses by several parameters starting from requirements to engineer systems to characteristics of land parcels.

We believe that this tool is able to facilitate the Kazakhstani market in developing highly effective warehouses for all market players. At the same time, a professional approach and support from international consultants will guarantee the sustainability of this business in the long run.

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