closed parking lots and factories are converted into warehouses to speed up deliveries to São Paulo

race of online retail and the consumer goods industry to quickly deliver its products to consumers has caused fierce competition for storage spaces in the city São Paulo, the main market in the country. For this reason, spaces such as inactive parking lots or abandoned factories, for example, have been turned into warehouses specifically for e-commerce.

The highest demand for vacant spaces goes from the heart of the capital São Paulo to areas 30 km from the center. In these regions, there is a shortage of land for the construction of logistics condominiums and suitable properties to be converted into warehouses. “last mile” (last mile), in the jargon of the logistics market. These warehouses serve as a support point for the final shipment of goods, the most expensive part of deliveries.

The lack of land for setting up new logistics projects has led to real estate market until boiling. Reflections appear at the top rental of shedsin the fall of the year free spot and also in the adaptation of empty properties to become warehouses.

Today, it is not unusual to find logistics warehouses in areas where until recently there was industry. An example of this transformation was the purchase of the train factory from Alstomin Lapa, a district in the western part of the city, along Good storage. The departure of the French company to Taubaté (SP) left a free plot of 80,000 square meters, with 65,000 square meters of sheds.

“We are renovating these warehouses, which will create a logistics park in the heart of Lapa,” he says Thiago Cordeiro, CEO of Goodstorage. The company will start operations in February and already has a pre-leased part.

The company, which started in 2013 as a furniture store, has today positioned itself as an urban logistics company, including storage for individuals (selfeststorage) and for companies. It has seven urban logistics parks with a total area of ​​150 thousand square meters and investments of 150 million dollars. Four are already in operation, with 90% occupancy. All apartments are located within Marginals and are strategically located to accommodate fast deliveries.

With attention to this new lifeblood, urban storage, Sign Outwhich started two years ago as a kind of “airbnb” for parking spaces, is another one that has changed its position.

Faced with the low profitability of renting parking spaces, the company’s focus shifted to creating a warehouse infrastructure to supply traditional retail, from e-commerce and gives industry. Small urban warehouses were opened, with 200 to 1 thousand square meters, distributed in the districts of big cities.

“We aimed at a small ant and hit an elephant,” he says. Michele D’Ippolito, Managing Partner. With this move, the company managed to win important customers, such as Ambev, Mercado Livre, Americanas and other giants, interested in leasing warehouse hubs.

The entrepreneur explains that the new trend in logistics to speed up deliveries is the “granularization” of warehouses within large centers. As a result, more diverse spaces began to be used: from deactivated shops to warehouses and part of unused parking lots. “We are very eclectic and our model is very hybrid,” he says. By using such diverse storage spaces, he points out that it is not about improvisation.

On Rua 25 de Março, an important popular shopping center in the center of the capital, for example, the company occupies part of the parking lot. The leased space has been converted into a container warehouse, and it is also used for transshipment and removal of goods.

In Vila Olímpija, south of the city, the company has a warehouse of 400 square meters, divided into small logistics hubs. They are rented by online retailers such as Amaro, Riachuelo and companies such as Infracommerce, focused on the implementation of e-commerce for industries. In fact, consumer goods industries such as Philip Morris and Canon, located in the Vila Olímpia unit, are the company’s main city center customers.

“For us, the pandemic was magical,” says the entrepreneur who experienced a jump in business during the height of covid-19. “In 2021, we increased revenues by 1600%.” The business was so successful that a special warehouse department was created, the so-called Unmoor yourself. This year too, the company continues at a fast pace, but does not reveal how much it is growing.

To cater to the fast delivery market, a property management partner for consultancy Binswanger Brazil, Nilton Molina Netsays that real estate development companies have been looking not only for large plots of land in the São Paulo Metropolitan Region to build logistics condominiums, but also for smaller “lots”, with 5,000 to 10,000 square meters, to set up specific logistics operations within the city of São Paulo Sao Paulo.

The trend confirms Simone Santos, president of SDS Propertiesreal estate company specializing in sheds and coordinator Real Estate Committee of the Brazilian Logistics Association (Abralog). In your company, there are daily requirements for at least 1000 square meters of storage within the city of São Paulo. “However, there is not enough adequate infrastructure to meet this demand.” The main stakeholders are e-shops, but there are also producers of beverages, cigarettes, and pharmaceutical products.

Marina Cury, CEO of Newmark in Brazilconsulting company in the real estate sector, says that there is a great demand for logistics spaces, especially those that are up to 15 kilometers from the center of São Paulo. Those who are looking are logistics developers and companies that want to rent warehouses. “It’s almost a perfect marriage,” he says, if there was no proposal.

Due to the limited supply of sheds, the vacant place is pressed. In the second quarter of this year, for example, free spaces in warehouses in logistics condominiums located within a radius of up to 30 kilometers from the center of São Paulo he was from 8.7%while in the rest of the state of São Paulo, the average vacancy rate was almost twice as high (17.2%), according to research conducted by Binswanger.

The historic minimum of vacant spaces in the warehouses closest to the capital, 5.5%, was recorded in the third quarter of 2021. Due to the deliveries of new logistics condominiums, there was relief. “But 8.7% is a very low workplace,” says Molina Neto. ON balance market occurs when shed idleness fluctuates between 13% and 15%.

The lack of rental sheds is even more critical in facilities that are closer to the center, up to 20 kilometers from Praça da Sé, the ground zero of the capital city of São Paulo. Between April and June, logistics warehouse vacancy in those areas was 1.7%, according to Newmark. This is less than half of the non-work registered in the first quarter (4.08%).

By all indications, the tightening should continue. in accounts Mariana Hanania, head of research from Newmark, the delivery of 94,000 m² of new warehouses in the capital is expected by the end of this year. In 2023, there will be another 78,700 square meters. “The tenant will only be able to take all this new space,” he warns. So, the perspective is that the stock of warehouses in the capital, currently of 600 thousand square meters, remains insufficient.

Another thermometer of heating is behavior lease from warehouses to logistics condominiums up to 30 kilometers from the center. The asking value has increased every quarter since the beginning of 2021. It reached R$27 per square meter in the second quarter of this year, with up 28% in the last 12 months, points to Binswanger. It was a much more pronounced improvement than that recorded for the average of other areas of the state of São Paulo, which increased by 11% in the same period.

The high demand for warehouse spaces in the city of São Paulo that guarantee delivery within a few hours is also starting to change the profile of some regions. Simone, from Abralog, notes that in regions where zoning is more restrictive for residential use, ie. Predominantly industrial zone (ZPI), there are properties that are used for logistical use. Even residential construction is allowed in these zones, but usually for low-income families. Because of this, the dispute between large entrepreneurs for land is much smaller, and the pressure on costs is lower, which ultimately enables the realization of logistics warehouses in those parts of the city.

But this was not the logic that prevailed in the past. According to consultants, the fate of a large piece of land or an empty industrial warehouse in the capital São Paulo was to become a residential, office or shopping center building. Logistics was not on the radar to take advantage of these areas, as most companies did not have e-commerce. Another obstacle is that the use for logistics did not close the account, it was not profitable, Molina Neto points out.

Today, however, after all the acceleration of digital sales caused by the pandemic, logistics have become relevant for real estate entrepreneurs and the account is starting to close. The reflection of this trend has already appeared in profitability. In the last 12 months, real estate funds with securities related to logistics projects paid an average annual dividend of 8.64%, while corporate weak funds had a lower profitability of 7.88% in the same period.

plan of Good storage, according to Cordeiro, will have 500,000 square meters of logistics warehouses in the city of São Paulo in five years. Another 250 million dollars will be invested for this. “Despite the high interest rate, which is not suitable for real estate investments, we will continue to invest a lot, because there is a lack of infrastructure.”

D’Ippolito, says the goal Unmoor yourself is to have 700 units in six years. Today, there are 28 units that make up a total of about 20,000 square meters of storage space. They are spread over more than 20 cities, with over 300,000 inhabitants, spread across the country. São Paulo occupies the largest part of the total area, between 3000 and 4000 square meters.

The next frontier to explore for storage is “presalt,” jokes the businessman. These are underground areas of big cities that are inactive and need a lot of technology to explore. “This is the next step that we see as a square meter with great potential for repurposing for logistics.”

Demanded, Americanas S/A reported, via a statement, that it “has more than 200 hubs strategically located to increase focus on ever faster delivery to the customer. In addition, 1,800 stores also function as a hub”.

Through his advisory body, Loggi reported that “its facilities in urban centers are part of our strategy to connect Brazil, ensuring that all people have access to fast and efficient delivery. In this sense, the company has already occupied several spaces, temporarily or permanently”.