• 8/17/2017

Ownership or lease?

This question is asked by managers of developing enterprises who are searching suitable premises for their production facilities or warehouse.

Maxim Vyacheslavovich Sobolev, Director for Commercial Real Estate at YIT Saint Petersburg JSC, shares his opinion on this issue with us. First of all, he believes, there are few modern, high-quality rental premises, and those existing at the St. Petersburg market often do not meet the specific requirements of the businesses. One can search for an already constructed building for years, whereas the found building or building is often a compromise, which is far from ideal to a certain extent. Most of the premises offered for rent are located in old buildings of the Soviet era or even in the pre-revolutionary period of construction. Obsolete worn-out structures and communication lines can cause an unscheduled business interruption. Termination of lease, even under the terms of a contract, will not compensate for one’s losses from interruption of business operations for the simple reason that no lessor will agree to such compensation under the lease agreement.

Besides, dynamic housing and commercial development in St. Petersburg should also be taken into account. Those territories on which residential complexes can be arranged in accordance with urban planning documentation will sooner or later be built up with housing estate, and industrial enterprises will be removed or substantially limited in their activities.

Construction of own building for the needs of production or a warehouse in an industrial park can become an alternative to a long search for a suitable lease option.

Business is developing stage-wise, and at a certain level of development, it becomes obvious that the next necessary step for further growth and improving the efficiency of the business is its arrangement in own premises, adapted to specific operational needs.

Own building is an asset using which one can attract financing. It should be also borne in mind that with the growth of the economy, the market value of assets will also grow.

It is possible to build a new building in 15–18 months, after which one can arrange its own business in it.

However, the above timeframe is only realistic if you chose a site with all necessary utility networks with free capacities, and if the construction is carried out by a contractor who can bear the liability for the assumed obligations.

The Greenstate Industrial Park has a complete set of necessary urban planning documentation that allows you to build both food and non-food businesses.