There is a lack of houses and there are plenty of vacancies in the cities of the sheds

Between Serra da Mantiqueira and the Fernão Dias road corridor, Extrema would be just another small town in the south of Minas Gerais, well served with stories and tourist attractions. It would be, if it weren’t for the abundance of industries and logistics sheds spread out on both sides of the highway that connects São Paulo to Belo Horizonte.

These four industrial hubs guarantee the municipality about 25% of the movement of Brazilian e-commerce and generate an imbalance on other fronts: there are a lot of job vacancies and a lack of properties for those who arrive to work. For those who live there, the cost of living is also higher.

About 100 kilometers away, Cajamar, in the metropolitan region of São Paulo, is experiencing a similar situation. With 142 companies in the logistics sector operating in its surroundings, the city is lacking housing, reducing the chances of reversing the role of dormitory city, as municipalities whose population only returns to sleep are called.

The municipal government of Cajamar estimates that four out of ten purchases made online in Brazil are dispatched from distribution centers installed in the municipality.

Also in common, the two have fiscal policies to make the facility more attractive. In Cajamar, the legislation allows a reduction in the IPTU (Imposto Predial e Territorial Urbano), but companies need to comply with two counterparts: guarantee 50% of contracts between city residents and invest 2% to 5% of the cost of the work in municipal infrastructure.

In Extrema, the most aggressive policy is the state policy. The Minas Gerais government has a special tax regime for e-commerce that provides a reduction in ICMS (Tax on the Circulation of Goods and Services), which can reach effective rates of 1% on sales.

Fernando Passalio, Secretary of Economic Development of Minas Gerais, says that the municipality has done its homework. “It invested in industrial districts and, since 2019, it has a more robust attraction of industries and distribution centers”, he says.

He calculates that the logistics condominiums employ around 20,000 people in the region and says that the growth of Extrema is spreading to other municipalities, also drawing manpower from the surroundings. The municipality also grants benefits, such as exemption from ISS (service tax) on the work and discount on permits, which are studied on a case-by-case basis.

According to the agency Invest Minas, 27 logistics projects and distribution centers are installed in Extremas, seven of which are still being implemented. The government’s projection is that they generate 2,400 direct jobs.

Mônica Vieira, from the Secretariat of Economic Development, says that she is approached daily by companies interested in discussing benefits for installation in the city.

The largest project under construction is the BWP Business Park logistics complex, which, when ready, will have approximately 170,000 square meters of gross leasable area installed on a plot of 691,000 square meters. The first part, covering 72 thousand square meters, was delivered at the end of last year and is leased to Via (formerly Via Varejo). The total investment is R$ 350 million.

Vieira, from Economic Development, says he considers the condominium the consolidation of the expansion of the municipality’s logistics network, which now wants to look in another direction. “We have strengthened the top, now it’s time to make medium and small industries and companies grow, so that they too are part of that growth.”

On another front, the municipality says it is studying projects for the construction of 10,000 properties. The lack of housing inflates rents. Maria Regina Luz, 44, “born and raised” in Extrema says this is the city’s only fault. “Anyone who wants work can come, which is available, but it is difficult to find [imóvel] two-bedroom for less than R$1,600 per month”.

Dionísia Gomes, 28, left the northern region of Minas a little over nine years ago and went to Extrema in search of work. There, she was a Bauducco employee until 2020 and considered living in the city, but ended up settling in the neighboring municipality, Itapeva, where rents were cheaper.

For José Cícero, 36, who works in commerce, the flow of new workers makes rent negotiations difficult. “One leaves, ten people come.”

The rent of a 53 square meter apartment in the central region is in the range of R$ 1,400. Kitnets in regions close to industrial districts are already rented for R$ 1,500.

Pedro Vieira da Silva Neto, 34, leaves Bragança Paulista (SP) every day and goes to Extrema to sell protective covers for car seats. “Here it sells fast because people have money,” he says. In an afternoon of work, he sold six protectors, which he negotiates for prices between R$100 and R$200, depending on how much the buyer is willing to haggle.

According to the IBGE, the average monthly salary in the municipality was 2.4 minimum wages in 2019. In 2022, the minimum wage in the municipality is R$1,600, but businessman Valdemir Grespan, 52, says that for less than R$2,000 he is unable to hire a salesman for the building materials store he manages on the banks of Fernão Dias.

From January 2020 to January 2022, Extrema opened 8,066 new jobs. The stock of job vacancies is 57.1 thousand positions. Simone Couto, from the HR consultancy Minas Perfil, says that Extrema is currently experiencing two urgencies: more training of manpower and higher wages. “People change jobs for R$50 more and that’s bad for companies too,” she says.

The concern with professional qualification is also shared with Cajamar, who started to build a training center aimed at serving the logistics sector. The idea, according to Mayor Danilo Joan, is to create customized programs for companies. Since January 2020, Cajamar has opened 7,381 formal vacancies.

The arrival of so many warehouse condominiums also led to an important legislative change for the city, which started to charge ISS for the stock kept in the city. Called the stock law, the rule doubled the Cajamar government’s collection of ISS – from about R$ 60 million to R$ 120 million annually..

The city accumulates about 2 million square meters in warehouses and another 25 million free. However, Joan says the priority for these unexplored areas is another. “We need to create a new city. There is a lack of housing in the city today, and what is available sells fast.”

José Augusto Viana, from the São Paulo Regional Council of Realtors, says that current economic conditions have made developers postpone projects. The combination of the Selic (basic interest rate) and high inflation, plus fluctuations in the prices of construction materials, made the risks of the works too high.

“If it launches today, it sells everything in a weekend, but there is a lot of doubt as to the ability of this buyer to approve bank financing in two or three years”, he says. The effect of this hesitation appears on the secondary market, where only those used to be traded are left.

For rent, two-bedroom apartments measuring between 50 and 55 square meters, in the central region, can be found for around R$ 1,400.

In Caucaia, in the metropolitan region of Fortaleza (CE), the expansion of the logistics network from the sheds is a bet to be able to retain residents. According to the city hall, only 10% of its population works in the municipality.

“With the growth of these sectors, thousands of new jobs will be generated, which will make it possible for the Caucaiense not to be forced to move to the capital”, says the municipal government.

Since last year, management has offered tax incentives to companies under the commitment that at least 80% of contracts will be among residents of the municipality. Companies also have to assume the training of these workers.

Currently, the municipal government says it is in the final stages of negotiations with a group from the logistics sector for the construction of a 150,000 square meter condominium and with a forecast of opening 6,000 formal vacancies (the balance of positions with a formal contract held in the city since January 2020 is 4,569 jobs, according to Caged).

The location of the state of Ceará is seen as a competitive advantage to transform the region into a connector for the Northeast region, says Julio Cavalcante, Secretary of Economic Development of Ceará.

“Brazil is very extensive and there is no reason to concentrate all the distribution centers in the Southeast. The GDP of the Northeast states is second only to Argentina and Chile in South America”, he says. The Port of Pecém is located in the metropolitan region of Fortaleza, which in 2021 reached 22 million tons of cargo handled, a record in 20 years of activity.

Shed market has reached peak growth

The advance of the logistics sector in the municipalities – and in the country as a whole – did not start with the pandemic, but was enhanced by it. The period of social distancing has accelerated the growth of ecommerce, including millions of new consumers in this type of purchase.

In 2019, consultancy Ebit|Nielsen estimated that 10.7 million shoppers had made their first online purchases. The following year, there were 13.1 million new consumers, and in 2021, 12.9 million, reaching a total of 87.7 million online shoppers.

It was this mass of consumers that gave traction to the warehouse market, both for the installation of distribution centers for retailers and for guaranteeing stocks. The maintenance of ready-made inputs and products was resumed by several sectors after the pandemic as a way to avoid delays in deliveries and fluctuations in raw material prices.

In 2021, the sector broke records for deliveries, with 2.2 million new square meters, the best result since 2013, according to real estate consultancy SiiLA. Now, companies that monitor the sector see a moment of consolidation and some concern about oversupply coming.

André Romano, from the JLL consultancy, says that municipalities such as Cajamar and Jundiaí are still the most important centers for the sector, as they serve the concentration of consumers in the state of São Paulo.

“What brought decentralization of logistics is the phenomenon of ecommerce and tax issues”, he says. After Extrema, Romano sees opportunities for growth in the metropolitan regions of Recife and Fortaleza.

For Abiner Oliveira, coordinator of the Real State committee at Abralog (Brazilian Association of Logistics) and director of the consulting firm Colliers, the surroundings of Vitória (ES) and Itajaí (SC) also have absorption potential for logistics in the coming years. “The pandemic brought obvious bottlenecks, generating industrial decentralization movements.”

Data from the Biswanger consultancy point to 2 million square meters currently under construction, which should increase the vacancy rate in 2022 and 2023. In 2021, the percentage of vacant sheds was 11.5% and could be between 16.7% and 18.6%, according to the consultancy’s projections.

Average rental prices have shown little variation, despite the still low vacancy which, in the assessment of Biswanger director Nilton Molina Neto, indicates that the market is anticipating the new deliveries scheduled for the next 18 months.