RDIF to invest in development of new logistics facilities

Property Funds World, 24.10.2014

The Russian Direct Investment Fund (RDIF) is to invest in the development of Class A logistics space in Russia as part of a joint venture.

The joint venture will provide the necessary funds, strategic expertise and management resources for the development of logistics facilities to satisfy the growing need of companies to improve the efficiency of their supply chains.

RDIF together with co-investors intends to focus initially on the Moscow region market, which is the major transportation hub serving the Moscow region and the rest of the country, and will expand into other regions at later stages.

The development of logistics centres will enable Russian manufacturing and retail companies to reduce logistics costs, which will benefit the end consumer and strengthen Russian companies' competitive advantage. Russia is among the countries with one of the highest levels of logistics costs: its logistics expenditure as a percentage of GDP is 19 per cent, compared with 11.6 per cent globally. Russia also significantly lags behind the majority of developed and many developing countries in terms of supply of quality logistics space. Due to underfunding in this sector, RDIF and its partners see significant potential for value creation in both the mid and long term.

Kirill Dmitriev, CEO of RDIF, says: “The Russian logistics market continues to remain undersupplied in terms of high quality logistics facilities compared to other major global cities, with Moscow at 0.8 sqm/capita or approximately half of leading global cities. The demand for logistics facilities is driven by the needs of evolving traditional retail businesses, fast growing ecommerce and the need for efficiency in global supply chain. The trend of significant demand for premium logistics facilities over medium and long term as seen in Russia and global markets makes this investment an attractive long-term opportunity.”