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Industry key-highlights
Investment activity in commercial real estate in Belarus is the most common mechanism for saving and generating income for both private local investors (including small and medium businesses) and foreign ones.
Actively development of the commercial real estate market has begun since 2008 (the commissioning of the first office and retail properties in Minsk). Over the next 10 years, the average annual growth rate of commercial real estate has amounted to 23% and as of today, the stock of constructed commercial real estate (logistics and warehouses, retail, office) only in Minsk and Minsk region within a radius of 30 km has exceeded 3 mn sq. m.
High rate of ROI in Belarus in relation to the region of Central and Eastern Europe has led to increasing competition, consolidation of the industry, the emergence of unique projects. If at the beginning of development of the industry, “dominance of supply” was observed, at the current stage of development, “demand dictate” is observed, when non-demanded facilities in the market, it affects the payback rates of projects and their occupancy by tenants.
Foreign investors actively participates in the implementation of projects in the industry, as well as the improvement of the construction/development business by local companies to ensure the diversification of their business.
Investments in the industry
Over the past 5 years, the volume of investments in fixed assets has amounted to more than USD 2 bn, while the main focus is the construction of housing (State Housing Program). In 2017, investments in fixed assets amounted to USD 112 mn (+ 6.7%), but significantly lower than during the years of the active implementation of the housing program.Over the past 4 years, foreign direct investment on a net basis has exceeded more than USD 200 mn.
At the beginning stage of market development, the main investors were the state (housing program), local and regional investors implementing projects according to the “share-construction” principle (in the office and logistics real estate segment, more than 50 projects were implemented according to this scheme); local and foreign players in retail (development of own retail networks, development of modern large formats of retail real estate: Korona, HIPPO, Euroopt). At the stage of active growth and slow consolidation, the market is increasingly becoming organized and transparent, when one investor implements a project.
UNITER’s competences in the industry
Practical experience in preparation and support of unique financial and investment transactions in hotel business, logistics, commercial real estate (office, retail, residential) entertainment and sport segments; also contacts with investors, developers, operators (international hotel chains) allow UNITER Investment company to provide professional assistance to clients who have decided to work in these segments in Belarus.
The company takes part in the support of integrated development projects and the implementation of large-scale development projects: financial and engineering due diligence of ongoing construction for more than USD 150 mn (a multifunctional complex within the borders of Nezavisimosti Avenue, Y.Kupala St. in Minsk); the development of the land plot near Minsk for the construction of an international-level golf course and cottage real estate development (Minsk Golf Club).
The company actively provides services to foreign investors and national companies in conducting research on the commercial real estate market in Belarus. For instance, the company has prepared market research for the largest Russian developer company (PIK Group of Companies); a comprehensive analysis of investment opportunities in commercial real estate to attract foreign investment for Sovereign Investment Fund in the Gulf countries; investment and financial advisory services for the purchase and restructuring of large distressed commercial real estate assets for a foreign investor.
UNITER provides advising services to Sokol Investment Company (a local company established by Qatar Armed Forces Investment Portfolio) for the development of multifunctional complex at Pobediteley Avenue in Minsk with total investment cost about USD 200 mn. The complex comprises 5stars hotel (managed by international hotel operator Mariott), sports infrastructure, shopping area, cinemas, wellness center, restaurants, parking, etc.).
Disclaimer
These industry outlooks were prepared for informational purpose only and does not constitute an offer or solicitation of a strategic transaction. Points of view, forecasts and evaluations presented in these outlooks reflect our opinion as of the publication date and may be changed without notice. Although the information contained herein has been obtained from sources we believe to be reliable and although we ensured their accuracy as of the publication date, we cannot guarantee, expressly or impliedly, practicality of these outlooks regarding future events or current or future value evaluation. Any investment decision based on these outlooks should be made only at the discretion of the investor and UNITER or its employees or any third party shall not be responsible in any form and in no circumstances for any action of any party taken on the basis of these outlooks. Nor UNITER, nor any of its employees, nor any third party shall be responsible for losses that result from such actions.Визуализация рынков и отраслей
Investment Policy Strategy for Schneider Electric. Development of the company's investment policy strategy in various sectors, including residential and commercial real estate. Analysis of investment projects implemented in the residential real estate industry, as well as promising investment projects.
Project “MINSK WORLD”. The largest investment project of integrated development of the territory (former airport Minsk-1), through the creation of a business center, public and residential buildings. The land area is more than 300 ha. The building volume of the residential area exceeds 2 million sq.m. The total cost of the investment project is more than USD 3 bn.
Business plan of construction a trade and logistics complex in Minsk region(Azerbaijani investor, Kaspianstroyinvest).
Feasibility study of creation a training complex for freestyle sports in Minsk (Ministry of Sport and Tourism).
Feasibility study of development a new type of business activity (commercial medical services) for an existing Belarusian private company.
Project independent review of business plan corresponded to medical center as part of the Project “Construction of a multifunctional complex within the borders of ”Filimonova str. - Nezavisimosti Ave. – Makaenka str.".
Financial advising of Sokol Investment Company (a local company is established by Qatar Armed Forces Investment Portfolio) for the implementation of the project “construction a multifunctional complex on Pobediteley Avenue in Minsk”. The complex includes a 5-stars hotel managed by Mariott, sports infrastructure (managed by an international operator), a shopping area, cinemas, a wellness center, restaurants, parking, etc.) and current financial advising after implementation the project.
Monitoring of the hotel real estate market, recreational and other related services for the management company of the Marriott hotel in Minsk.
Debt restructuring of a large commercial property in Minsk (over USD100 mn).
Attracting foreign investment in the development of a large commercial real estate project.
