The State Property Committee spoke about the positive experience of involving real estate objects in economic circulation in the Orsha district
Thorough Inventory
– Ekaterina Svyatoslavovna, two years ago, a detailed monitoring of unused real estate was carried out in Orsha and the region. More was identified than local authorities knew about...
– Initially, in the Orsha district, the comprehensive development program until 2020 provided for the involvement in economic circulation of about 112 state-owned objects. In the autumn of 2018, a monitoring was carried out, during which an additional 150 objects were identified, which became vacant in 2018 and were subject to inclusion in the relevant calendar schedules for 2019. In addition to state-owned objects, privately owned real estate was also surveyed. In this regard, the total number of unused property significantly increased, including due to property belonging to organizations undergoing liquidation or bankruptcy. From October 1, 2018, to July 1, 2021, out of 693 unused and inefficiently used objects, 581 were involved in economic circulation or demolished – 83.8 percent. This includes 63 out of 66 objects of republican ownership (95.5 percent), 248 out of 285 objects of communal ownership (87 percent), and 270 out of 342 objects of private ownership (78.9 percent). As we can see, about half of the unused or inefficiently used real estate is privately owned. The mechanisms for its involvement in economic circulation (sale) or demolition are similar to those applied to state property, taking into account the norms of civil legislation.
Information on unused state property is updated on an ongoing basis. To attract investors, it is posted on the websites of the State Property Committee, the Orsha District Executive Committee, and the Vitebsk Regional Executive Committee. Taking into account the experience of the Orsha district, at the initiative of the State Property Committee, an additional inventory of real estate objects was carried out in other regions as well. The result was the identification of a significant number of unused objects of private ownership.
– In Orsha, among other things, regulatory and legal innovations in the sphere of disposal of state property objects were also implemented.
– Decree No. 506 "On the Development of the Orsha District of the Vitebsk Region" grants the Orsha District Executive Committee the right to independently dispose of unused and inefficiently used objects of republican ownership located in the region, which are included in the list of such objects annually approved by the State Property Committee. Previously, the right to dispose of them was granted only to the Vitebsk Regional Executive Committee. Decree No. 506 also allows the sale of real estate owned by the state and by business entities with a state share of more than 50 percent in their authorized capital, even if such objects lack technical passports and documents certifying the state registration of ownership rights. In 2019, a decision was made to alienate nine such objects, in 2020 – six, and in 2021 – 16. The alienation of property is carried out upon the availability of a statement of technical characteristics of the object and state registration of the land plot.
The Orsha District Executive Committee has adopted relevant decisions concerning all state-owned property objects included in the list of unused and inefficiently used real estate objects. The number of such objects is relatively small. Therefore, it is too early to talk about efficiency. However, the additional powers granted to local authorities by Decree No. 506 have significantly increased the speed of decision-making. Similar provisions are included in Decree No. 177 "On Measures to Develop the South-Eastern Region of the Mogilev Region." The results of real estate management in these regions were considered at the meetings of the interdepartmental working group, established in February last year by the Prime Minister's order, to develop proposals for improving the system of support for the development of territories with a population of over 80,000 people. It has been recognized that it is advisable to extend the provisions stipulated in Decree No. 506 and Decree No. 177 to such regions. As part of the work to improve the procedure for managing state property, carried out by the State Property Committee, draft decrees are being prepared, according to which the above-mentioned provisions will apply to the entire territory of Belarus.
Investors have a choice
– The real estate management sphere is extensive and multifaceted, requiring specific competencies. How well are local officials coping with this task?
– Local authorities, taking into account economic feasibility, are authorized to create specialized enterprises for the management of unused state property. Their employees fully possess the regulatory framework, understand the trends and rules of the real estate market functioning, and its economic principles. In Orsha, the communal unitary consulting enterprise "Orsha Regional Center for Entrepreneurship and Real Estate Support" was established, which provides economic and organizational support to small business entities in the region, is engaged in leasing property, and monitors the efficiency of its use for its intended purpose. In August 2019, the center was assigned additional functions for the maintenance and involvement in economic circulation of unused real estate in the Orsha region. Over two years, 73 objects of communal property were transferred to the enterprise's balance sheet. Today, more than half of these buildings are already involved in economic circulation. For the remaining real estate, the center seeks buyers, tenants, investors, and also carries out measures to increase the attractiveness of such objects: it puts them in order, repairs them, and formalizes missing documents. Naturally, at the initial stage, such work only brings costs. Therefore, to maintain the balance of income and expenses of the center, in 2019, liquid real estate objects were additionally transferred to its balance sheet for lease.
– In past years, one often had to hear complaints from businesses about a shortage of industrial sites in the regions. To what extent will the ongoing measures for inventory and improved management of state real estate contribute to meeting entrepreneurs' demand for industrial sites?
– To attract potential investors, a list of 133 vacant industrial sites has been formed, posted, and is kept up-to-date on the websites of the Vitebsk Regional Property Committee and the Vitebsk Regional Executive Committee for provision to investors for the creation of new enterprises and production facilities. Additionally, there are 89 objects that can be offered for gratuitous transfer for the implementation of investment projects, as well as 17 unused objects included in the State List of Historical and Cultural Heritage of the Republic of Belarus, which can be put up for auction sale at a basic rate or gratuitously transferred to the investor's ownership for the implementation of an investment project.
Speaking about the country as a whole, today more than 1500 state-owned properties are offered for sale or lease, information about which is posted in the Unified Database of Unused State Property on the website au.nca.by. The State Property Committee's website also contains information about unused properties owned by OJSCs with state participation, a list of unfinished construction exceeding norms, subject to involvement in economic circulation through alienation mechanisms, for the implementation of investment projects in accordance with the approved regional measures of regional executive committees and the Minsk City Executive Committee.
Objectively, investors have a choice today. And the legislation offers a wide range of tools for working with state property: sale, gratuitous transfer, lease, and other transactions. The fate of each object is considered individually: searching for a new owner or tenant, use for own purposes by owner organizations, demolition. Decisions are made taking into account previously taken measures and with an emphasis on the set tasks – bringing order to the land, attracting additional funds to the budget, or creating jobs. Anyone can acquire real estate under the most diverse conditions. Another issue is that each investor must understand that any project also entails certain responsibilities. However, a wide range of opportunities has been created in the country for the manifestation of private initiative.
«Respublika».