The risen rental price of warehouse buildings remains realistic

Which warehouse spaces are currently in highest demand, and how do you anticipate the demand trend to develop in the next six months? The question is answered by industry expert Fred Linnukütt, Head of the Warehouse and Production Spaces Department at Uus Maa Commercial Real Estate.

The demand for warehouse spaces in the current market remains somewhat cautious among clients – they are observing and waiting, but still making incremental decisions to avoid missing out on significant opportunities. The most sought-after are smaller warehouses in the range of 100 to 200 m2, with an additional office space of around 50 m2. These kinds of warehouses are being sought with rental prices up to 8.5 €/m2. Beyond that size range, the market is relatively quiet.

There are no inquiries at all for larger logistics spaces (1000+ m2). Businesses are staying in their current spaces because the rent is more affordable than in new locations, where the square meter price starts at 6.8 euros. This information comes from our mapping activities. Clients are not keen on making decisions at the moment, primarily due to two reasons: 1. uncertainty about the future; 2. significantly higher rental prices in new buildings.

Generally, when businesses move, they tend to opt for larger rental spaces. Considering the rent prices for new logistics buildings, it’s easier to stick to the old location. If the volume of goods has increased, companies tend to contract logistics services from firms that offer palletized solutions, as these arrangements can be terminated on short notice and costs are based on the number of pallets.

The rental price of a new building is linked to construction costs. The market is in an interesting situation where rental prices have seen a steep increase due to this factor, which clients are not yet prepared to accept. Unfortunately, time cannot be reversed, and this reality seems to be here to stay.

Source: ÄRIPÄEV / Siim Sultson.


Certified Real Estate Agent, level 5 | Head of Industrial Properties



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