4 Sep 2018 15:07

Leroy Merlin to launch distribution center costing 10 bln rubles in Russia in Q1 2020

MOSCOW. Sept 4 (Interfax) - DIY retailer Leroy Merlin and developer PNK Group are about to start building a distribution center in the Dmitrov district just to the north of Moscow covering around 140,000 square meters, JLL, which brokered the sale of the site and the build-to-suit project, said in a press release.

"Construction will begin soon with launch expected in Q1 2020. Planned investment in the project is 10 billion rubles," the consultant said.

The distribution enter will be Leroy Merlin's main logistics hub in Russia, said Yevgeny Bumagin, JLL Head of Industrial and Warehousing Department. It will have convenient access to the main highways, including M-11 and M-10, Dmitrov Highway, the Central Rring Road and others. "The northern Moscow region is one the most sought-after areas, accounting for 15%-20% of the region's demand for warehousing each year," he said.

Leroy Merlin is the Russian DIY retail market leader. The Leroy Merlin network in Russia currently consists of 75 hypermarkets in 35 regions. Turnover in Russia was 266 billion rubles last year. Leroy Merlin itself estimates it has a 12.8% share of the Russian DIY market. Leroy Merlin expanded its retail area in Russia 21% in 2017, opening 16 hypermarkets.

Finland's Kesko agreed to sell its last Russia-based asset, its chain of K-Rauta DIY hypermarkets, to Leroy Merlin for 12 billion rubles or 169 million euros in February this year. Kesko is selling 12 of 14 K-Rauta properties: eight in St. Petersburg, three in Moscow and one in Kaluga.