The growth in internet sales was just one of the many transformations brought about by the pandemic, and this expansion did not come alone. It also stimulated a series of other businesses that guarantee the ecommerce cycle, from purchases via cell phone or computer to delivery to the consumer.
Amidst this expanding chain, few markets have grown as much in the last two years as that of high-end logistics warehouses – and ecommerce was both the main attraction of this advance, as it is the confidence factor for those investing in these large and increasingly more technological spaces.
Among the ten largest occupants of logistics condominiums currently in Brazil, three have exclusively e-commerce operations, with around 1.1 million m² leased, almost double the 583 thousand m² occupied a year ago.
The vacancy rate, which indicates the percentage of square meters available for lease, continues to fall, despite the significant increase in new spaces. The number varies between 8.95% and 12.56%, depending on the consultancy (some include only properties considered to be of a high standard, others of all types).
From January to September, just over 1 million m² were delivered, according to SiiLA Brasil consultancy. The bulk of submissions, however, were scheduled for the last third of 2021.
If all forecasts come true, another 1.2 million m² will be available for lease until this year ends, surpassing by 12% the total leasable area registered at the end of 2020.
Last year had already been considered the best for the sector, when the net absorption, in São Paulo alone, reached almost 1.2 million m², twice the record of Newmark’s historical series, started in 2014.
Mariana Hananaia, director of research and market intelligence at the consultancy, says that projections indicate that a new record will be broken in 2021. In the third quarter, 568,000 m² were accumulated in new leases.
Most of them were in Cajamar, a municipality in Greater São Paulo that houses some of the main distribution centers for online commerce in Brazil –Amazon, Mercado Livre and B2W Digital (owner of Submarino, Shoptime and Americanas.com) are there.
​In addition to Cajamar, other cities in the metropolitan region such as Barueri, Jundiaà and Guarulhos are also within the range of logistics interest. The network, however, is beginning to expand, even though the stock, both new and already installed, is still highly concentrated in São Paulo.
The growth of online shopping has strengthened the operations of companies in other regions. Giancarlo Nicastro, CEO of SiiLA Brasil consultancy, says there is a lot of opportunity for expansion outside São Paulo. By the end of this year, deliveries are also planned in Ceará, Goiás, Minas Gerais, Rio de Janeiro, Paraná and Rio Grande do Sul.
In Rio, three projects are being completed, with sizes between 19,500 m² and 28.7 thousand m², which could further raise the vacancy rate, today between 18% and 19.8%, depending on the consultancy, positioning the municipality as a kind of ugly duckling in the midst of the logistics boom.
The main noise, according to Nicastro, comes from security, as many companies no longer provide insurance for cargo that circulates in the city. For André Romano, manager of JLL’s industrial and logistics division, the market primarily responds to demand: if there are consumers buying, companies will set up distribution centers.
“In fact, it is a market that goes sideways. It is not dynamic like São Paulo, nor stable like Ceará and Pernambuco are,” he says.
JLL projects that the new inventory will reach 2.5 million m² in 2022, surpassing the record of 2021. Almost 78% of these condominiums will still be in São Paulo. Then, 13.6%, in Minas Gerais, and 4.4%, in Bahia.
The president of SiiLA Brasil sees the increase in the total stock, which reaches 19 million m², as a point of attention for the market. The risk is that the supply will grow too much and too fast, bringing down prices, which after skating for years, had started to rise.
Mariana, from Newmark, says she believes the stock may scare, but will remain at the historical average in relation to new locations. She bets on a “fly to quality” movement, when companies opt for a higher standard lease.
“It will exchange 10,000 m² of bad quality for 10,000 m² of good quality,” he says.
Andre Romano, from JLL consultancy, also sees the possibility of a re-accommodation of contractors, according to the activity. Logistics operators (such as DHL and Fedex) can be further away from the capitals, where they will pay less for the m², keeping smaller hubs in large centers.
Ecommerce, on the other hand, needs to be close and with easy access to the main highways. In addition to the new digital consumers born out of the pandemic, the period of social distancing and health care stimulated other types of purchases, which also interfere in the distribution of distribution centers for those who are selling or delivering.
“Before, these purchases were big, they were TVs, refrigerators. Today, you can buy things for daily use and even supermarkets,” says Romano. For this purchase of offal, the consumer is much more in a hurry to receive than in the case of a household appliance.
In the state of São Paulo, the main absorptions in the third quarter came from the growth of digital. Mercado Livre closed 50.8 thousand m² with Prologis. Mobly, an online retailer of furniture and decoration items, leased 70,000 m² in the WT Especulative Logistics Center, which is part of an XP fund. Also with Prologis, Loggi contracted 46 thousand m². All in Cajamar.
Nicastro, from SiiLA, says that the logistics market in São Paulo is going through a different time compared to the rest of the country. “In São Paulo it is the ‘last mile’, the fight to see who delivers it sooner and cheaper, and this can only be done with efficiency and decentralization”.
The rough translation for the meaning of “last mile” is the last stop, that is, the final step before delivery to the customer. The operators’ ambition is to be able to stay 15 kilometers from the center of São Paulo, in an infrastructure that allows, in addition to the storage of goods, the maneuver of trucks and the entry and exit of these vehicles.
Marina Cury, president of Newmark, says that today there are six projects well underway between approvals and licensing and that they should meet this profile.
On the other hand, other regions of the country are only now starting to have distribution centers close by. Of the 16 condominiums scheduled for delivery this quarter, seven are in São Paulo.
“Having to wait inhibits consumption and it is already known that consumers are willing to pay up to 15% more if they receive the producer first,” says Nicastro, from SiiLA.
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