www.starpm.by

SHOPPING AND ENTERTAINMENT CENTRE IN VITEBSK

BUSINESS PLAN

www.starpm.by

Poland

Russia

Ukraine

www.starpm.by STAR PM: AN AMBITION ACTOR ON THE DEVELOPMENT MARKET OF BELARUS

THE COMPANY PROFILE

THE TEAM

Star PM FLLC is incorporated as a Foreign Limited Liability Company in the Republic of Belarus and is headquartered in Minsk, Belarus. Star PM have branches in all the Regional cities in Belarus. They are Vitebsk, Mogilev, Gomel, Brest and Grodno. Smaller branches are located in other cities where Star PM has ongoing developments. Verbant Investments Limited is a Cyprus owned company which was set up for this specific development project. Verbant Investments Limited closed a contract with Star PM to develop, finance and market the project from concept to reality.

There are currently twenty four employees located at the head office of Star PM. They are split into three categories, administrative, engineering and surveying. Each member of the Star PM team is highly valued; everyone is expected to have opinions, as it is a team that will make this company and project excel. It is the mission of the company to employ people who are committed to a high standard of excellence, who thrive on a team atmosphere, and who have outstanding customer service skills. This idealism is represented by the current staff, and will continue to be the guideline by which new team members are hired. The obvious management gap we have is the fact that we have not filled the position of head of retail development. The reason being

that the development of a shopping center is a new reality in the country and to find someone local experienced is impossible. To fill this gap we are relying on the consultation from Sigitas Dougoras Frics and his team who was the head of retail development for the Acropolis group in Lithuania. Sigitas who was the head of development of over 100 retail projects in the Baltic States is a major asset for our project and saves us large amount of monies due to their vast experience. Sigitas and his team are involved in all the stages of development starting from concept and finishing with preparing the management for operating the shopping center once it is completed. We have special units on the ground in Vitebsk where the project is located. The unit is responsible to monitor on ground works as well small local administrative errand. The unit receives as is accountable directly to the head office in Minsk.

www.starpm.by

THE MARKET AND ITS POTENTIAL

With the majority of the educated and skilled workforce working long hours a need has arisen for hypermarkets and shops to be open longer hours. Another niche in the market is entertainment that currently is still old fashioned as well as spread out over the country. The construction of modern shopping centers in Belarus will fill this niche and upgrade the level of shopping and entertainment in the country. In Vitebsk itself there are currently no shopping centers at all. The local population does their shopping in small shops or outdoor markets. Outdoor markets are becoming less and less popular in the country due to the fact that in the winter it is very cold and in the summer it is too hot for one to do their shopping.

LOCATION

The city of Vitebsk is the administrative center of Vitebsk Region of the Republic of Belarus. The administration of the city is divided into three districts: Pervomaisky, Zheleznodorozhny and Oktyabrsky. The total area of the city is 96 sq. km. The population is 366,200 people.

PROJECT ACTIVITY FORECAST

POPULATION

In early 2010, the population of Vitebsk amounted to 358,100 people. 176,000 of them are economically active. Unemployment rate is 1.3% of the economically active population. Average nominal wage in 2009 was about $365 per month; average income per month for 1 person is about $250. The salary was 57% of all cash incomes.

www.starpm.by

THE SITE OF DEVELOPMENT

The construction site of the shopping mall is located in Zheleznodorozhny District of Vitebsk in the place of the former workshops of the Comintern factory. Zheleznodorozhny is the largest district by area in the city, with an area size of 45 square km. There are 60,400 people who live in this district and it is located in the right-bank part of the city. A large portion of the city’s industry is concentrated in this district: there are 25 industrial enterprises, 34 repair and construction organizations, municipal services, 20 transport and communication companies, train and bus stations.

Within 500 meters from the site, there are bus and train stations; close to the site is located the main bridge that links the Zheleznodorozhny District with the city center; in the close proximity of the site there are a number of administrative and socio-cultural facilities which are significant to the district and the city (College of Communication, City Hospital No.2, Children’s Creativity Center etc.), which form migratory population flows.

COMPETITION AND DEVELOPMENT ADVANTAGES

After analyzing the market we can establish that the local retail real estate market of Vitebsk favors the building of a new shopping center. We haven’t found any existing retail facilities that could compete with the future shopping center. However, in near-term outlook, appearance of new facilities of is possible. Branded stores of clothes/footwear, republican/regional networks of children’s goods, cosmetics/perfume products, household goods etc. are underrepresented in the city. All this opens up great opportunities for the formation of a unique local market pool for tenants in the mall. Thus, taking into account location factors of our facility and development features of competitors’ projects; the most optimal way is to see the development of the facility in the concept of a retail park, which involves covering the area by many large operators with a wide range of product groups. This concept will form the image of the shopping center as a place “where you can find everything and for a good price”. This category of operators will build and attract the consumer flow which, in its turn, will

COMPETITIVE ADVANTAGES OF THE FACILITY

www.starpm.by

As the competitive advantages of the object can be noted the following: Location of the shopping center on one of the leading arterial roads

of the city; Significant floor space; High transport accessibility; High visual accessibility; A conceptual approach to the internal filling of the shopping center,

according to international standards which already have been well proven on practice;

A balanced pool of trade operators; Availability of leisure component; Availability of convenient vertical communications; Availability of various offers of food; Possibility of easy transformation of the inner space of trading levels; Creation of a universal complex with focusing on the most integral

perception; The creation of a radically different environment, which will become

a place for comfortable shopping for the residents and visitors, a place of meetings and recreation.

widen the gallery and apply higher rent prices for tenants of the gallery in comparison to other shopping centers in Vitebsk. The area for leisure and entertainment should focus on family leisure, because it corresponds more closely to the concept of the trading zone in contrast to competitors’ projects that are more focused at business class customers.

The share of leased premises the main commodity groups in the SEC

www.starpm.by

The land, with the former workshops, of the Comintern factory was bought. The demolitions of the buildings were completed. Geological works on the sites have been completed. Plans and permissions have been received. Pre contracts have been closed with many operators who would like to be part of the 1st historical shopping center in Vitebsk. Currently we are looking for a general contractor who will be responsible for the construction of the site. Parallel to this we have had talks with Astron and other companies who deal with metal construction beams and have received quotes for this stage.

THE BUSINESS STRATEGY THE POTENTIAL OF THE OBJECT AND PLANNING DECISIONS

On this plot of land it is planned to create a retail and entertainment center with a lease area of approximately 27,000 square meters located over three floors.

Parameters of the shopping center

The total area of center, in sq. m. 35,160

The total area of 1st floor, in sq. m 12,380

The total area of 2nd floor, in sq. m. 12,220

The total area of 3rd floor, in sq. m. 8,760 + 1,800

Number of trade levels 3 Target group of customers Average Quantity of anchor tenants 7 (food, household appliances

and electronics, furniture, sports, children, an entertainment complex.)

Number of stores 100 Number of catering facilities 6

APPENDEX: SHOPPING AND ENTERTAINMENT CENTRE IN VITEBSK

PLANS AND SKETCHES

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

www.starpm.by

220004, Minsk, Belarus

40 Nemiga str., office 204

Tel/fax +375 17 306 20 90

GSM +375 29 671 80 19

E-mail: moshe@starpm.by

www.starpm.by

YOUR WINDOW INTO THE REAL ESTATE OF BELARUS!