When a company is searching for a warehouse to rent, it focuses on goods type and storage conditions first and foremost. Despite the majority of products must be stored with brick temperature conditions, there are some commodities without strict storage limitations. For example, it’s raw materials for manufacturing needs, petrol, oil, lubricants, building material, rubber and plastic products, etc.
If a company markets products with unstrict storage limitations, it’s inappropriate for it to rent a high-class warehouse. Moreover, renting and maintenance are the largest cost components.
D class warehouses are in great demand among Ukrainian entrepreneurs, as such premises are good to store commodities in unstrict conditions. Moreover, the rental rates for class D warehouses are the lowest.
Brokers use classifications by classes to assess technical specifications and equipment of storage facilities. The classification by Knight Frank consulting agency is the most popular. According to the classification, all warehouses on the commercial real estate market can be roughly divided into 6 types: А+, А, В+, В, C, D.
Class A+ premisses are storage facilities that are very much in keeping with the modern requirements of warehousing logistics. Then, class D warehouses are premises companies can use to store goods, but there are no special conditions here.
According to the classification by Knight Frank brokerage agency, class D warehouses are old buildings, which weren’t originally used as storage facilities. Generally, such premises are former vegetable bases, hangars, workshops, basements, etc.
You can’t regulate temperature conditions in class D warehouses. as they depend on season and weather. Thus, if a company plans to place goods with strict storage conditions (frozen food, for example) here, but wants to save money on renting, it should modernize an old building. But in most cases it’s inappropriate.
The classification by classes is relative, so brokers don’t impose clear requirements to class D warehouses. So, if a tenant has time to seek a convenient premise, he can find a warehouse in a good location and acceptable storage conditions.
Brokerage agencies don’t impose any requirements to the technical specifications of class D warehouses. Thus, you can find a convenient storage facility with high ceilings and great workload performance.
There are some optional requirements for class D warehouses. They are below:
It should be noted that there are no requirements for warehouse location in the classification by Knight Frank. However, you should consider this option while selecting a reliable warehouse. Storage facilities near main highways are preferable. You can significantly reduce transportation costs if your warehouse is located in the right place. Moreover, regional and urban transportation will be faster.
There is a little new proposition of high-class warehouses in the Ukrainian logistics real estate market. So, there is a demand to transform old buildings into warehouses. Thus, class D warehouses are the biggest categories. It’s estimated that there are more than 4.5 million type D warehouses square meters. To compare, the total space of A+, A, and B+ is about 1.8 million square meters.
The cost for class D warehouses is the lowest, compared to other types. However, such premises aren’t suitable to store goods in strict temperature conditions. So, large logistics providers and retailers consider renting or building high-class warehouses. Thus, it’s a great solution for small and mid-sized companies to lease class D warehouses, as they save money to maintain a premise.
Rental rates for class D warehouses are variable. They depend on a city. The cost to rent a warehouse in large settlements and industrial centers will be higher than in small townships.
Rental costs for warehouses depend on several options. So, the price for two storage facilities with the same space differs. It depends on:
Also, companies should understand how many square meters they need to store goods and keep stocks. Generally, lessors indicate the cost per square meter. Some of them also offer partially leasing options. So, the more storage space you need, the higher the total price.
To find a suitable warehouse, companies waste a lot of time. Generally, they call acquaintances, look for information on different websites, contact dishonest brokers, etc.
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