Based on the results of the second quarter of 2024, experts from the consulting company COLLIERS report the continuation of positive trends in the office real estate segment. Tenants' interest in new properties is growing, vacancy continues to decline, and transactions are becoming larger.
Stock
Adaptation of the office real estate market to the realities of 2022-2023 has formed new standards of rental relations, which are increasingly consistent with developed markets: reformatting of premises at the request of the tenant, finishing by developers, assistance in the provision of furniture, flexibility of commercial conditions. And the market reacts positively to such changes: rates are stabilizing, vacancy is decreasing, transactions are becoming larger. The continuation of this trend can be expected in subsequent months with the achievement of an equilibrium state.
New offer
There is no new supply of office space in commercial real estate in Minsk in the second quarter of 2024. At the end of the period, the stock of office premises is 1,071 thousand sq. m. m.
The commissioning of new office space in the second half of 2024 may amount to more than 60 thousand square meters. m in the Prizma multifunctional complex, the multifunctional complex on Pobediteley Ave., 63B, the Golden Pearl multifunctional complex and the Levada business center. Prizma may become the first business center in the country built according to the international environmental standards LEED.
Demand
There is a growing interest among tenants in new properties located in good locations with access to various modes of transport and infrastructure, a high level of technological equipment and innovative design. In those properties that provide comfortable conditions for employees or increase the efficiency of business processes, tenants are willing to consider higher rental rates. These trends can be viewed with caution as prerequisites for introducing qualitatively new office projects to the market 
Rates
The parameters of rental rates remain the same, but their average value increased by 3% over the quarter and amounts to 10.2 euros/sq. m/month for class B1 and 7.2 euros/sq. m/month for class B2. The reduction in the range of B1 class rates indicates their gradual equalization. Developers increase the rate of the previous two years when prolonging contracts.
For ease of understanding, rental rates are given in euros per 1 sq. m. m/month excluding VAT, operating costs and utility bills for retail space 50-250 sq.m. m.
Vacancy
Vacancy in the second quarter continues to decline, reaching 14%, which is 3 p.p. less than the previous quarter. It decreases noticeably in class B1, where it becomes lower by 5 percentage points. and is 17%. In class B2, vacancy decreases by only 1 percentage point. and reaches 11%, which is close to the equilibrium level.
Sales and purchase transactions
In the second quarter, the number of transactions increases noticeably: the area in transactions is 10 times larger, the cost is 20 times larger. The largest transaction in the amount of 1.6 million US dollars was concluded for three premises with a total area of 1.1 thousand square meters. m, located on Logoisky Trakt, 15/4 (two premises) and st. M. Bogdanovicha, 122, which were purchased by RRB Bank from the developer Aresa-Service.
An interesting deal was concluded for two buildings on the street. Rakovskaya, 18 and 18/1 (built in 1889 and 1917) with a total area of 1.4 thousand square meters. m. The company "ProfLegal-Service" purchases them from the liquidated state enterprise "Trading House "Legprom" for 0.9 million US dollars. A year earlier, the same company, as a result of an auction, became the owner of the building opposite that previously belonged to the Triple company (Rakovskaya St., 19a).
* Transactions registered from 03/16/2024 to 06/15/2024, with an area of 500 sq. m. Prices include VAT
Trend and Forecast
During the second quarter, vacancy is restored to the level of early 2022, and the average rate increases by 3%. Large rental transactions of IT companies and retailers have a positive effect on reducing vacancy and are a marker of the revival of the market as a whole. Until the end of 2024, we can expect further recovery growth in rates and stabilization of vacancy at 10-12%.
