Kiev hotel market overview (Part 2)

So, regarding such figures, market has to show significant growth for new hotel development. Some sources reporting that total desired investment volume in hotel market exceed USD 600 mln. But we don’t see the dynamic.

Why it is happen? Main reason is much longer payback period comparing with office, multi-family and retail development. And more risky as well. Taking into that Live has not official zoning, any land plot could be built by any building. And investors put the money into more profitable project as I stated above. Look on this: PB for office building – is 3-7 years instead of hotel PB with 7-8 years.

One of the way is small hotels with 40-60 rooms. This one of the best way to invest in hotel market in Kiev. And local authorities sighed off an bill supporting the increasing of the small and middle-sized hotels. They predict a up to 70 new objects until 2010 with 4-6 years PB period.

As Build & Live Development reporting for such European city as Kiev is, it should provides 3-4 five-star hotels, 14-17 four-star hotels and 45-50 three-star ones. If the all developed projects will come on the merlet such figure could be reached.

Some forecasts for near future:

2007

Hyatt Regency Saint Sofia (but some troubles now)
280-room 5-star on B. Zhitomirska
192-room on Antonovicha
99-room on Sagaydachnogo

2008

270-room Hilton on T. Shevchenko
330-room on Luteranska