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Industrial Parks Today



The majority of industrial park in Russia is now at the very start of their development.

In the recent decade, industrial parks started emerging to provide industrial area and infrastructure management services.

In Russia, industrial park sector is young; it gained momentum due to investors coming to the country and investing in manufacturing.

We researched on over 10 industrial park of the Central Russia (Yaroslavl Region, Ivanovo Region, Vladimir Region and Nizhny Novgorod Region). The research was aimed at finding a large industrial estate to accommodate machine-building or metal-processing plant. We found out that Brownfield industrial parks are nowadays usually represented by a beautiful website in the Internet and a wrecked Soviet-period industrial park having no high-level, well-organized ready-for-use manufacturing facilities.

Most of such facilities cannot be used for production purposes without capital and long-term repairs of production areas and offices. Generally, the future facility would require repairs of the roof, walls, windows and floors, extending and replacing transport gates; in addition, surrounding areas require attention as well, as efficient transportation logistics should be arranged. Besides, power connection is also an issue, as power lines are often in quite a poor state and need replacement.

Analysis of industrial park offers of industrial facilities in the Central Russia (Yaroslavl Region, Ivanovo Region, Vladimir Region and Nizhny Novgorod Region) showed that it is hardly possible to find ready-for-use industrial premises of over 2000 sqm with wide spans, no less than 18 m, ceiling height of over 12 m, crane equipment, high-quality utilities and big offices, that would allow layout planning and would be in acceptable condition.

It should be noted that managing companies tend to use the industry park arrangement approach, where they agree to start capital repairs at the potential resident’s expense against future payments, which means that attractiveness of park facilities and the concept of “industrial park” as a ready-for-use site for new production is quite questionable.

Another noteworthy fact is that common lack of well-organized and transparent management company having a clear and appropriate development strategy for a resident and a set of important high-quality services results in putting off existing business development plans for an indefinite term. In Russia, industrial park organization approach and management company transparency directly influence investment potential of a facility.

Greenfield type of industrial park organization, i.e. construction on an undeveloped land with no completed facilities, has become widely spread in Russia. The main advantage of this approach is that an industrial facility is constructed on a turnkey basis and according to the requirements of your technology.

However, on the other hand, it’s not always possible to estimate the cost of the construction without conducting the full set of engineering investigations, design and construction works; in addition, it requires connection to a grid, which incurs high expenses, and a substantial amount of time before the launch of production for design and construction work.

In the light of the above, using Greenfield industrial park facilities appears to be much more expensive and slow business development approach.

Industrial parks of Russia Active Brownfield Industrial Parks Active Greenfield Industrial Parks OKA Industrial Park
Available, but old and requiring capital repair. Not available, requires design and construction, indefinite total cost. Ready-for-use building, S of over 40000 m?, span width of 12-18 m, ceiling height of 12-14 m, crane equipment for 10 tons.
Energy sources Old capacities require additional investment in grid connection. Requires connection to the grid, high tariff rates. Available, in facility, ready for connection.
Management Company services Undefined, usually security and cleaning services only. Subject to changes upon commissioning. General development strategy. Services are transparent and clear.
Rental price 120-350 rubles, incl. VAT. Purchase of an encumbered land 200 rubles, incl. VAT.