In January-July 2014 the total area of new office facilities commissioned in Minsk exceeded the figures of the market growth in the year 2013 in total.

According to Colliers International, in January-July 2014 10 new office buildings with the total leasable floor area of 111 thousand meters approximately were commissioned in Minsk (including an office building in Borovlyany). At the same time, in 2013 12 new office buildings with the total leasable floor area of 92 thousand m2 were commissioned.

Such a high rate of growth of office real estate market may be explained by the fact that the commissioning of certain office buildings, the construction of which was launched in 2014, was postponed to 2014. Moreover, it is possible to suppose that the growth of the market was caused by the fact that many investors carried out payments for construction in due time.

The biggest new facility that was offered on the real estate market is the business center with the total floor area at 25 thousand m2 of the complex "Victoria Olymp".  Some other office facilities have been commissioned recently, among them a business-center in Borovlyany (the total floor area is 9,360 m2) and a business-center "Titul" (26,733 m2).

As it was announced earlier, it is expected nearly 36 office real estate facilities with the total rentable floor area at 360 thousand m2 will be commissioned in 2014. Most of them are buildings with the total floor area exceeding 9-10 thousand m2.

According to Colliers International, it is possible to expect that the total floor area of office buildings will be 210 thousand m2 according to the results of 2014.

BUSINESS NEWS has learned from the Director of Brokerage Department of Colliers International Belarus Andrey Aleshkin that such a forecast has been given according to the evaluation of projects on commissioning of facilities in 2014, as well as taking into account quite high possibility of rescheduling of commissioning.

"As of today the total leasable area of commissioned office buildings totals 111 thousand m2. It is necessary to build and commission 100 thousand m2 of offices to reach the target figure for the year 20144, namely 210 thousand m2, and it is possible enough. Therefore, Colliers International has not lower figures of its first forecast," Andrey Aleshkin noted.

According to experts of the Group of Companies "Tvoya Stolitsa", the total floor area of new office facilities in Minsk will exceed 200 thousand m2 in 2014. According to the Deputy Head of "Tvoya Stolitsa. Real Estate for Business" Olga Semenchuk, the total floor area of offices commissioned in H1 2014 exceeded 74 thousand m2 (up  13%), and it is expected that the total floor area of offices to be commissioned in H2 2014 will exceed 130 thousand m2.

According to experts, the total floor area of offices offered on the office real estate market in Minsk totals 640 thousand m2 approximately. The share of facilities commissioned under schemes of participatory construction is quite considerably.  

According to "Tvoya Stolitsa", in July 2014 offices in 26 business-centers, of which 15 are B Class business centers and 11 are C Class business centers, were offered for purchase through the participation in participatory constructio. Priced for offices varied from USD 1,400/m2 to 2.900/m2 VAT inclusive. The average price for offices was USD 2,040/m2 VAT inclusive.

As for the structure of demand for offices for lease and for purchase, the share of facilities with the total floor area up to 100 m2 it the maximum.

At the same time the demand for offices with the total floor area exceeding 1,000 m2 is increasing, Andrey Aleshkin states.  

According to Olga Senchuk, in Q2 2014 the vacancy rate of offices in business-centers in Minsk was 9%. By the end of the year 2014 the vacancy rate will increase slightly due to the commissioning of new business-centers, the expert notes.

According to Colliers International, the vacancy rate in A Class business-centers (in line with the classification used by the company, there is one A Class business-center only) is approximately 15%.

"The offer of A Class offices has declined; nevertheless, there are still vacant facilities. The vacancy rate in B Class business-centers is higher.  For instance, as of B1 Class offices, the vacancy rate exceeds 30%, and even reaches 60% in several buildings. As of B2 Class offices, the vacancy rate is considerably lower, but taking into account that the question is of the voluminous segment of speculative office real state, it is possible to find vacant offices as well," Andrey Aleshkin noted.

"Currently, prices on the market of modern office real estate are quite steady. Modest fluctuations in price are registered when new buildings are offered on the market or when buildings under construction are commissioned. At the same time, depending on the commissioning of new facilities, the number of buildings construction is reduced. So, in 2013 13 facilities were offered on the market of participatory construction, but within 8 months of the current year this year, only 1 facility was offered,"experts of "Tvoya Stolitsa note.

According to the Director of Brokerage Department of Colliers International Belarus Andrey Aleshkin, the excess of offer over the demand is one of short-term trends on the market, in particular as regards offices for rent with quite high prices. At the same time, the rotation of lessees is still registered and it is expected that the rotation will increase in autumn when business activity increases usually.

Rent prices for office real estate have not been changed over last two month. The data of Colliers International Belarus, as of today rent rates for class A offices vary from EUR 29/m2 to EUR 37/m2 (net of VAT), for class B offices – from EUR 17/m2 to EUR 29/m2, for class B2 offices – from EUR 8/m2 to EUR 18/m2.

 "Developers begin to assess the situation taking into account real trends. That means the share of steep prices declines. The question is of cases when owners set rent prices exceeding the current maximum prices within a class of real estate. For instance,  the question is of cases when prices for B1 Class offices are at EUR 35-37/m2, while it is almost impossible to lease out A Class offices at such prices," Andrey Aleshkin explained.

Olga Senchuk, it her turn, considers that it is possible to expect a stabilization of rent prices for modern offices by the end of the year 2014. According to the expert, it is expected that the current level of activity of tenants will be kept and that competition between lessors will increase on the market. At the same time, taking into account the total floo