Updated at 14:52,24-02-2021

Minsk for rent: Lukashenka's administration earns millions from real estate

Euroradio

Minsk for rent: Lukashenka's administration earns millions from real estate
The administration headed by Viktar Sheiman, Lukashenka's longtime friend​, owns hundreds of buildings.
"We are the largest operator in the market of non-residential real estate in the Republic of Belarus," the website of the Main Economic Directorate of the Presidential Administration (MEDPA) says. And this is not the case when the Belarusian authorities attribute their achievements to themselves. A noticeable part of the office real estate in all districts of Minsk belongs to MEDPA.

It operates real estate not only in the capital city of Minsk but throughout the country. However, it is the buildings in Minsk that are of most interest, since the majority of the Belarusian businesses and therefore money is concentrated in the capital.

Dozens of facilities


The map shows the buildings that MEDPA owns and that have vacant space for rent. They are in every district of Minsk, and the facilities can be chosen to suit any taste.

In fact, even in Minsk, MEDPA has more buildings: we marked the ones that are currently available for rent. There are other buildings, already occupied.

The rent price is quite democratic: for example, a square meter in the building on Karl Marx Street costs about 24 rubles per month. A block of several offices with a total area of 52 meters costs about 1,250 rubles.

To compare: you would have to pay twice as much for the same office in the renovated building on Vera Khoruzhaya Street (where Viktar Babaryka's headquarters were located). However, the interior quality there is better than in most of the buildings rented by MEDPA. There is another nuance we'll describe later.



Many of the buildings of MEDPA are used by government agencies or organizations. For example, on Marks, 15 there is an office of the Department of Humanitarian Cooperation, and on Marks, 16 - a branch of Belarusbank and the Federation of the Modern Pentathlon. Both buildings, by the way, are of historical and cultural value - as well as a number of other buildings, which belong to MEDPA.

Many private organizations also rent space from MEDPA. But this is not surprising: there are not many office buildings in Minsk that are not associated with this organisation.

Million-dollar turnovers


At the beginning of January the head of MEDPA Viktar Sheiman reported about the growth of revenues of the sponsored structure up to 2.6 billion rubles. This is about a billion dollars at the current exchange rate. However, he did not mention the amount of net profit. As well as statistics on the different areas of activity.

MEDPA owns about four hundred buildings around the country. Its total area and the percentage occupied by government agencies is only known to the agency itself. But you can imagine the amount of revenue even considering one example.

The XXI Century Business Center is located on Independence Avenue, near the Barysauski Trakt metro station. The building was built in 1997 and was the first business center in the country and one of the first buildings with large-scale use of glass on the facade.

On average a square metre here costs about 20 rubles, and today only a little more than 500 meters are free. If they are also occupied, it adds 10 thousand rubles per month. The total area of the business center is 17.8 thousand meters.



Of course, a significant part of it is not rented space, but even if only half of it is rented, the monthly revenue is tens of thousands of dollars. And that's just one building.

Given the number of buildings, we can assume that the total monthly rental revenue is at least a six zero figure. At the same time, the costs are minimal: the vast majority of the buildings were simply handed over to MEDPA. They were inherited by the BSSR and became republican property. The buildings are maintained by a different organisation.

But not everyone pays for space in the MEDPA buildings: the organizations subordinated to the president or the government and some other organizations listed in Lukashenka's edict are exempt from it.

...and related services


If you think renting space in MEDPA buildings is cheap and therefore most profitable, that's not quite true. At one time MEDPA was indeed criticized by Lukashenka for too low prices and obvious dumping. But today, the system is more cunning.

Each tenant of buildings belonging to the agency has to conclude another contract - with RUE "BelEZ". This organization is also part of the Lukashenka's Administration. It deals with the maintenance of the buildings: hires janitors, maintains the premises in a decent condition.


Example of care from BelEZ


True, many occupants complain: even broken window frames are repaired by them, there is no soap or hot water in the toilets. And in general, many of the premises need renovation.

Today, BelEZ manages 864 buildings all over Belarus. Their total area is almost 1.7 million (!) square meters.

The services provided by BelEZ are not free: in some buildings in the city center, the payment per square meter goes up to 11 rubles per month. Of course, there are other prices, too: for some buildings, it is even less than a ruble. But the turnover, on the whole, is not insignificant, and, judging by all appearances, highly profitable.

It turns out that thanks to these two structures alone the Executive Directorate has a huge financial turnover. Inclusion in the sanctions list will not prevent the organization from making a profit from lending buildings out inside Belarus. The situation around the "Belarus" spa complex in Druskininkai (it also belongs to MEDPA and has its accounts blocked after the introduction of the "third package" of sanctions) is unlikely to repeat here.