Brazilian logistics market: what to expect in 2022?
2021 was another memorable year for the logistics warehouse sector in Brazil. In general, the excellent performance of 2020 was repeated in 2021, consolidating a cycle of about 4 years of good results for the sector.
In this article you will see a complete analysis by our experts on the performance of the Brazilian logistics market in recent years and the outlook for 2022.
The influence of e-commerce on occupancy rates
The rapid growth in occupancy rates of available logistics warehouses, mostly related to the increase in online shopping in the most serious period of the pandemic, persisted in 2021 and should remain accelerated for the year 2022.
It was also possible to notice that the logistics market changed its format, decentralizing its operations to the main consumer markets. São Paulo and Rio de Janeiro maintain their leadership in logistics warehouse inventories, but the growth of new class A logistics condominiums in Minas Gerais is evident, especially Extrema, in the south of the state and Contagem, closer to the capital.
Extrema has been the preferred region for companies with large import volumes and online sales operations, which mostly serve the state of São Paulo: ''transport costs end up being minimized with tax advantages for operations installed in extreme region. Contagem, on the other hand, has the benefit of proximity to the consumer market in Belo Horizonte and also the industrial park between the city and Betim”, explains Eric Ammirati, Industrial Leasing Manager at Cushman & Wakefiled.
The South region has, in its three states, accelerated growth, and the Northeast presented positive results in Bahia, Ceará and Pernambuco. The North region also received attention, with emphasis on the state of Amazonas, which reduced vacancy by 50%.
The largest historical series of delivery of warehouses was still the year 2013, especially between 2010 and 2016, a period in which the entire real estate market grew vigorously. But the excellent performance of 2021, with 1.83 million m², should be maintained in 2022.
Change in occupant profile
The change in the profile of occupants in the last 5 years highlights the e-commerce and online retail companies (marketplaces and omnichannels), which have transformed the logistics market and accelerated the hiring of warehouses in recent years, reaching a total of 60% of lease transactions carried out between 2020 and 2021, with approximately 1.3 million m².
Raquel Miralles, Transactions Director at Cushman & Wakefield, comments on the change in the profile of occupants: ''in previous years, we had other highlights such as the Logistics Operators and Wholesale sector, which historically have always had a relevant participation in the hiring of warehouses in condominiums '', it says.
In this new environment, international players are arriving fast, renting warehouses and offices in the main addresses of São Paulo.
What to expect from the Brazilian logistics market in 2022?
For 2022, the trend for the Brazilian logistics market is to maintain the growth of online retail segments, pushing the hiring of warehouses, not only in the São Paulo-Rio de Janeiro axis, but also distributing the logistics network to cities with greater purchasing power. The main focus of these companies is delivery in the shortest time and at the lowest cost, which is demanding that the relationship with sellers (professional sellers of marketplaces) be improved, keeping their stocks already in the possession of these platforms to speed up delivery, which in certain cases is already done in less than two hours.
Luis Fernando Deak, Market Research Manager at Cushman & Wakefield, predicts another year of high inventory numbers: ''the number of new inventories should be high throughout the country, mainly in the Southeast region, where there are about 80 % of the total stock in Brazil. As a result of these inventories, we should see an increase again in the state’s asking price throughout the year,” says Luis.
This increase will primarily reflect the increase in construction material and labor costs, due to readjustments that projects with vacant or newly available areas in the market must suffer from rates and inflation, a phenomenon that should be observed throughout the country.
To meet the needs of new consumers, logistics operations have been redesigned and require developers and developers to offer other models of logistics warehouses, either through the 'infill' development, retrofit or redevelopment of old industrial plants, but which have an excellent location within of urban centers, with addresses that allow the reduction of delivery time and improve the experience of the final customer.
The solutions are already being tested, even in smaller volumes, and should start operating in 2022 or 2023. They promise to improve the shopping experience and be the strategic point of last mile, crossdocking and urban logistics operations.
The Brazilian logistics market continues to be attractive to large investment groups, keeping the cap rate stable at 7.8%. 2022 should be a year of major acquisitions and launches of new projects, with emphasis on the built-to-suit model, the preferred format at the end of 2021.
