Tashkent, Uzbekistan (UzDaily.com) —  Uzbekistan and Kazakhstan have outpaced Dubai and Manchester in terms of warehouse real estate costs, according to IBC Global.

A severe shortage of warehouse space in Central Asia has led to high rental rates, which now exceed those in major port cities, IBC Global said.

According to Stanislav Akhmedzyanov, Managing Partner at IBC Global, the average annual rent in Tashkent and Almaty exceeds US$150 per square meter. This is about 15% higher than in Dubai and Manchester and 60% more expensive than in the Moscow region.

Kyrgyzstan is also keeping pace, with a rental rate of US$114 per square meter per year, comparable to Munich or Bristol, and significantly higher than rates in major port locations in the EU and Eastern Europe.

The shortage of warehouse space is driving high rental rates and creating attractive conditions for investors. The payback period for warehouse complexes in Central Asia is half as long as in Europe, with an average return on investment of 17-20% per annum, allowing for a return on investment within five to six years.

This situation has also led to a trend toward long-term contracts, often up to ten years, providing investors with the opportunity to recoup their investments before the contract expires. The Built-to-Suit (BTS) model, where developers build warehouses for specific clients, is also gaining popularity. Given the current shortage, nearly 93% of potential tenants are willing to commit to long-term obligations.

However, despite the promising outlook, the region faces a paradox: it is on the brink of a warehousing boom but currently lacks the necessary infrastructure. All market participants are working swiftly to address this issue.