Warehouse Space: Kazakhstan Needs 2x More

Demand for warehouse space in Kazakhstan is almost twice as high as supply, resulting in renting storage in Almaty costing more than in Moscow, Orda.kz reports.

Halyk Finance analysts draw attention to the warehouse issue in Kazakhstan.

Experts say the demand for logistics capacity in the country in October was between two and 2.8 million square meters. Meanwhile, the warehouse area is 1.4 million square meters, and only 41% (578 thousand) are high-quality and widely used class-A warehouses. 

Entrepreneurs have to overpay for storing their goods, which inevitably spills over into cost.

Nurlan Kanzhanov, chief analyst at Halyk Finance, notes that e-commerce is driving Kazakhstan's demand for warehouse space. Over the past ten years, e-commerce's share in total retail trade has increased more than 18 times, and marketplace turnover in 2023 exceeded 1.7 billion tenge. 

Supply cannot keep up with demand, however.

The distance between cities and the priority of express orders require the presence of inventory in each major city. This, in turn, increases the need for warehouse space. However, if there are not enough warehouses, this will lead to the "freezing" of additional inventory, Nurlan Kanzhanov points out.

There are almost no vacant warehouses in Kazakhstan (1.6% of the total area).

Regarding warehouse space per capita, the country is 11x behind China and 4.5x behind Russia. Kazakhstan is 10x behind the US and the EU as well.

Up to 99% of warehouses in Almaty and Astana are occupied with significant rent.

The growth of warehouse rental rates in Almaty (68% in 2022 and 44% in 2023) correlates with the increase in the share of e-commerce in these years (nine percent in 2022 and 0.2% in 2023). The growth of rental rates significantly exceeded the levels in Russia. For example, rental rates in Almaty are significantly higher than in Moscow, especially in the last months of 2023. This may be due to a shortage of warehouse space, Nurlan Kanzhanov says.

On average, renting one square meter of logistics facilities in the country has increased from 1,895 tenge in 2021 to 4,583 tenge in 2024. In Almaty, this figure reaches 5,500 thousand tenge - 2,000 tenge more than renting similar Moscow facilities.

At the same time, the area of ​​new warehouses being put into operation in Kazakhstan is only decreasing.

In 2024, it amounted to 121 thousand square meters. To meet the growing demand, the country needs at least two million square meters of warehouse space. The projects currently at the implementation stage may help partially resolve the problem, providing another 230 thousand square meters of logistics capacity.

In September, we reported that renting warehouse space in Almaty was more costly than in Dubai.

Original Author: Nikita Drobny