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Belarus

Market characteristics

The Industrial and Logistics sector in Belarus concentrates mainly in the region of Minsk, were the vast majority of modern industrial space is located. The Belarus I&L market has remained largely resilient due to the stable market and economic conditions. The country has also not been affected by any restrictive measures as a response to the COVID-19 pandemic.

Supply, demand & vacancy

At the end of H1 2020, the total stock of modern industrial space in Belarus reached 683,300 m2, of which 81% (553,300 m2) was located in the Minsk region. During the first half of 2020, ca. 31,100 m2 of new warehouse space was delivered to the market.

The vacancy rate on the Belarus I&L market is stable and low (4%), and has recorded a limited amount of newly-built space over the last two years. Business activity supports short time demand for warehouse space.

In the leasing structure, in terms of sectors represented, activity was led by 3PL (34%) and retail (23%) tenants. These are quite typical proportions for the Belarus market and is also visible in Minsk region, where those sectors are also dominant and account for 32% (3PL) and 20% (retail).

Rental rates & lease conditions

In H1 2020, prime rental rates remain unchanged in Belarus and range between EUR 3.7-7.0/m2/month.

The average lease length in Belarus is 3-5 years (logistics/warehousing) and 5-7 years (production/ manufacturing). Across the market in general, and with such low vacancy rates, developers are not under pressure to offer incentives to tenants.

Outlook

Despite the uncertainty caused by the pandemic, the main investors/developers do not intend to postpone development projects in Belarus. It is expected that by the end of 2020 the I&L market will grow by an additional 71,000 m2, the majority of which will be located in and around Minsk. Due to this fact, the development pipeline for the coming months is not substantial, it can be estimated that the level of demand and vacancy are likely to remain stable.

Top 5 lease agreements

Company nameRegionPark NameSize (m2)SectorLease Type
ZhelentorgMinsk-8,0003PL/CourierNew lease
WildberriesMinsk-3,000E-CommerceRenegotiation
Alivarya (Carlsberg group)Minsk-2,950Production New lease
Japan Tobacco InternationalMinsk-1,100DistributionNew lease