Menka Company has analyzed the retail market of Minsk and Regions of Belarus

In 2015, the experts of Menka Analytical Center conducted a research of the retail market of Minsk and Regions of Belarus. First of all, this research resulted in the classification of shopping centers and retail chains classification. The supply and demand, commercial terms, footfall and visitors’ profiles of shopping centers of Minsk and the Regional Centers of Belarus were analyzed as well.
In 2015, 7 shopping centers with a total GBA of 172.4 thousand sq m (GLA – 90.6 thousand sq m) were completed. As for 1 January 2016, the total GBA of shopping centers (with a minimum GLA of 5000 sq m) of Minsk amounted to 1129.7 thousand sq m, the total GLA came to 558.1 thousand sq m. The total stock of retail space in shopping centers with a minimum GLA of 5000 sq m in Minsk increased in 2015 by 90.6 thousand sq m, which is around 29% of the planned amount of the projected completions in Minsk for 2015. Shopping centers provision of Minsk is equal to 284.8 sq m per 1000 inhabitants.

Taking into consideration new shopping centers rescheduled for opening in 2016, as well as high completion degree of, first and foremost, such facilities as Dana Mall, GreenCity and Galleria Minsk, the growth of leasable area offered in shopping centers (GLA from 5000 sq.m) in 2016 is to be about 370 thousand sq.m.

In 2015 average annual vacancy rate in the shopping centers of Minsk was 3.1% with 0.4% growth as compared to 2014 (2.7%). Menka company experts suggest that by the end of 2016 the share of vacant area in the operating shopping centers (GLA from 5000 sq.m) without shopping centers to be opened in 2016 will be no more than 3.4%. Vacancy growth will be first of all based on further rotation of tenants experiencing financial difficulties due to consumer’s demand decrease. Besides that, vacancy will grow because of minor loss of tenants to the shopping centers to be opened in 2016.
In the opinion of the Menka company experts, new shopping centers, even if consider their format and location, will open with 40 to 70% occupancy. It is very important that these shopping centers support their format by high-quality international brands, first of all by the brands new for Minsk market. However, there is certain caution the international retailers demonstrate when it comes to entering the Belarusian market. It is based mainly on the following reasons:
• Many international brands prefer to enter the Belarusian market through Russia, and in Russia international retailers are less active now due to economic and political reasons;
• Economic decline in the country: decrease of consumer purchasing power, depreciation of the national currency to US dollar, etc.;
• Small number of companies in the Belarusian market are interested in purchasing expensive international brand franchises, while most of the international brands interested in the Belarusian market prefer to enter it by selling their franchises;
• When entering a new market outside the European Union, international retail networks take certain risks due to specific features of tax code of the country, its customs duties and other factors. In the context of the world economic crisis international retailers improve their general development strategy and open new facilities in more predictable and economically stable regions.
In 2015 lease rates in Minsk shopping centers dropped by 20-35% average, and by the end of 2015 the range of the lease rate in a shopping gallery of shopping centers was $25 to $65 per month. Taking into account economic situation in the country in the first place, as well as increasing competition on retail real estate market, analysts of Menka company believe that in 2016 lease rates will drop by another 10-15% average.
According to the results of a survey of customer traffic in Minsk shopping centers (GLA from 5000 sq. m) performed by the Menka company analytics center in 2015, foot traffic of shopping centers was 0.8-25.2 thousand people per day on weekdays and 0.8-27.9 thousand people per day on weekends.
Read more in the analytical report Analytical Review of Minsk Retail Market – 2015
In Belarusian regional cities the area of operating shopping centers (GLA from 5000 sq. m) as of 1 January 2016 was GBA — 367.3 thousand sq. m and GLA — 240.8 thousand sq. m. In 2015 4 shopping centers were opened: GBA — 103.7 thousand sq. m and GLA — 66.1 thousand sq. m.
At the end of 2015, there were 17 shopping centers with a minimum GLA of 5000 sq m (including completed in 2015 projects) in the regional centers of Belarus. They include: 3 medium shopping centers (GLA 20000-39000 sq m), 3 small comparison-based (GLA 5000-19000 sq m) shopping centers, 11 small convenience-based shopping centers (GLA 5000-19000 sq m). All of the shopping centers refer to traditional format. There are no specialized shopping centers in the regions of Belarus. Shopping centers provision of the regional centers of Belarus is equal to 120.9 sq m per 1000 inhabitants.
Shopping centers opened in 2015 formed rather high-quality offer on the retail real estate market and, by doing so, partially covered the demand of the international and national retail chains for retail areas corresponding to their shop format. In their turn, they showed small, but positive growth of their presence in regional cities.

Occupancy of new shopping centers (GLA from 5000 sq.m) in regional cities as of the moment of opening was maximum 60% for most of them. As a rule, on the opening date the list of tenants contains only an anchor tenant which is a large hypermarket food retailer, a shop of household appliances and electronics, homeware shop, children’s clothes shop, children entertainment center and small shops in checkout area.

In 2015 average daily footfall of the shopping centers (GLA from 5000 sq.m) was 7.7-10.2 thousand people per day on weekdays and 8.6-12.1 thousand people per day on weekends.

Read more in the analytical report Analytical Review of Regional Retail Market – 2015

You can find more analytical reports on the retail real estate of Belarus on the page “Analytics”.

MENKA is a company providing a full package of specialized services on the retail trade and retail property markets. We make our contribution to the development of trade in Belarus by putting into operation the effective shopping centers, introduction of the modern real property formats and development of retail trade based on the culture and traditions of the Belarusian trade