Warehouses are moving to the Concrete Circle Road

Press Release

Warehouses are moving to the Concrete Circle Road

Knight Frank announces the beginning of the leasing campaign of Terminal Lvovsky, the first Class A warehouse complex, with a total area of 40,000 sq m. The complex will be located on the Concrete Ring at the cross-point of Simferopolsky and Starovarshavskoje highways, 28 kms from the Moscow Circle Road. The developer of the project is KS Development. Knight Frank holds exclusive rights for representation of this facility in the market.

Advantages of the Small Concrete Ring areas (line A - 107) for the development of logistical and industrial complexes were repeatedly discussed both in business community and in administrative authorities. It is obvious for many people concerned, owing to the overloaded road traffic on the Moscow Circle Road in the zone within 15 kms from Moscow and relocation of the industrial enterprises to the suburbs, sooner or later the "Concrete road" will become the most probable logistical line of the Moscow region. It is a normal process of relocating industrial facilities to the areas which as per their aggregate characteristics have more advantages, than areas of the mega city. It has always been observed that many developers show interest towards the Small Concrete Ring Road, in particular NLK.

It was decided to construct the Terminal Lvovsky exactly in this location owing to the several reasons. Firstly, roads of the Southern direction are mainly the roads used for transportation of goods to the Central and Southern regions of the country. Secondly, those were exactly the Southern locations, from which the project was launched for rebuilding and extension of "A" highway to 8 lines, which purpose was to redirect the transit traffic flows along the bypass route around Moscow. The project is to be completed by 2010. Thirdly, the marketing research for development of logistical streams, which was performed by the client, showed that this site has the greatest number of advantages, first of all, owing to the identified trend of increased cargo flow from the regions.

Construction of the Terminal Lvovsky will be performed in 3 stages. The first stage of the complex (5,000 sq m) is constructed and surrendered for lease under assistance of Knight Frank acting as mediator for this transaction. The tenant was Schenker – a logistical company that manages Metro Cash & Carry chain of hypermarkets. Within the nearest future it is expected to complete the construction of the 2-nd module of 18,500 sq m and to commission it in October this year. This project has already attracted the attention of major operators in the market, and with one of them the letter of intents was signed for the proposed lease of a part of the module, and the negotiations are under way for possible expansion of the leased area. Schenker is also looking at the possibility to increase its presence in this part of the terminal. And finally, the 3-rd stage of construction of 16,000 sq m total space will be completed in the first quarter of 2006.

The Terminal Lvovsky meets all requirements of Class A warehouse complex. The development spot occupies less than 50 % of this site total area. Construction works are being performed with application of reinforced -concrete technique, in contrast to the most frequently used one – metalware, that brings the constriction costs to minimum but is inferior by technical specifications. The effective ceiling height is 12 meters; the flush floors, with anti-dust coating can withstand a stress-load of 6 tons per sq m. The area of 4,000 sq m are allocated for office premises. The current lease rent for warehouse premises is at USD 130 per sq m.

Contact person:

Andrei Patrushev, PR-Director, Knight Frank.
Tel.: +7 095 981 0000 (office)
+7 095 799 5437 (mobile)
e-mail: andrey.patrushev@ru.knightfrank.com

Background information: Knight Frank is an international consulting company that was established in London in 1896. Today Knight Frank in association with its strategic partner Grubb&Ellis employs about 11,000 professionals and maintains more than 200 offices in 32 countries world-wide. In Russia Knight Frank has been operating since 1996. The company delivers all types of services in the market of the high quality real estate. Exactly owing to the possibility of using progressive in-house knowledge and the western technologies adapted to the Russian market, the company reliably holds the leading positions in the market of consultancy services in the Russian property market.