Grupo Martins owns a land of 123,530 sqm in the Industrial District of the city of Uberlândia and, in 2017, it needed a real estate consulting firm to ensure that its preliminary masterplan for a logistics condo was suitable for the local demand as product formatting and scaling, and whether it would be necessary to phase and/or expand the construction and occupation. The study would also be used to negotiate with CODEMIG the timeframe to begin the implementation.
The Work Conducted
The work involved the following stages:
- Analysis of the economy and jobs in Uberlândia and full search of the logistics and industrial markets with their main indicators, both with respect to the type of use and occupants, as their physical and market characteristics;
- Evaluation of the land by the comparison method, critical analysis of the existing predesign and budget for implementation;
- Economic and financial analysis of the investment considering several scenarios, with emphasis to the design and costs sent by Grupo Martins, design and costs of market expert companies aiming at maximizing the GLA and optimizing construction costs and phasing with initial construction of the minimum area requested by CODEMIG.
We concluded that it was not the right time to develop a logistics project in Uberlândia, in view of the several challenges to overcome, being the most relevant: suppressed demand with low absorption due to the economic moment of consumption that was affecting industry/logistics/warehousing, the pressure of lease value downwards, high competition from developments being designed and large supply of land with attractive prices, a fact that could increase the current competition at any time.
We recommended the negotiation with CODEMIG of the timeframe for the decision making process for the development and construction of the warehouse, considering that we were in one of the worst times of demand and liquidity of logistics developments throughout Brazil and the trend was a medium and long term increase in the lease values that directly impacted the feasibility indicators. With the extension of the timeframe for the development, it would also be possible to try to find a company for Built to Suit (BTS) operations, which would eliminate the risk of absorption improving the results.