Владислав Сурков

Construction has started on the outer edge of the MKAD, 700 m along Altufevskoye Shosse of the One & Only class A office and logistics complex. It is being built on a 15.6-ha site. The developer and investor for the project is NT-Development and brokerage services are being provided by Swiss Realty Group. According to Swiss Realty Group representatives the complex’s location offers an indisputable advantage. “We are convinced that the project will be highly attractive for tenants. There is easy transport access from the MKAD and any highway from Moscow region as well from Altufevskoye Shosse. Its location is unique for warehouse complexes in Moscow which will make it of interest to a very wide range of companies,” says Ilya Shershnev, development director at Swiss Realty Group.

The almost 85,000-sqm office and warehouse complex will comprise two buildings: a 70,400-sqm office and warehouse building of which 64,000 sqm will comprise warehouses and 6,400 sqm offices; and, a 13,800-sqm class B office building. According to market experts the share of office areas in the One & Only is too great. “For warehouse complexes outside the MKAD office areas should only constitute 5-7% of the total area,” says Ruslan Suvorov, head of warehouse and industrial real estate at Praedium. – The complex’s 20% share of office areas is too great. Moreover the complex is situated outside the MKAD and while it is close to the metro the developer will have problems renting out the office areas. There will be only a few logistics operators ready to rent warehouse areas outside the city limits and move their offices there. However, a lot of does depend on the transport access.”

The One & Only will be also have a car and lorry park and guest parking. The complex will be built in phase. “Each phase of the project includes the construction of office and warehouse areas in proportion to the total construction area,” comments Swiss Realty Group. It is planned that part of the areas will be leased by one of the construction investor’s companies whose name has not been disclosed.

The completion of construction is planned for the fourth quarter of 2007. However according to NT-Development, “A client who has concluded a contract will be offered the option of the deadline for the second and third phase being substantially reduced,” “The construction of the second and third phases can be speeded up if a rental agreement is concluded before the start of construction of the corresponding phase. If however it is concluded after construction has begun then it will be completed according to the original deadline,” adds Swiss Realty Group.

According to information provided by Swiss Realty Group the areas will be rented out for terms starting at three years with rental rates of $130/sqm per year for warehouses and $215-300/sqm per year for office areas. The operational charges will be range from $20-25/sqm? per year for the warehouse areas.

Market experts regard the rental rates as somewhat overstated and comment on the unusually short rental terms. According to Mr. Suvorov today rental terms are normally at least five years. “From the point of view of the complex’s tenants the rental terms will provide for temporary location which is a plus. For the owner however it represents a minus since it will have to quickly think about finding new tenants for the complex which in turn reduces its investment attractiveness,” comments Mr. Suvorov.

The total investment in the project is over $70 million which experts also regard as somewhat high. “This makes the construction cost for the developer $885/sqm which is a big number for a class A complex, says Mr. Suvorov. The planned pay back period is 5 years.