Yuschenko Against Building Up Territory Around Olimpiiskyi Sport Complex

From Ukrainian News

President Viktor Yuschenko speaks against building up the territory around the national sport complex Olimpiiskyi.

This follows from a statement of the president’s press service, a copy of which was made available to Ukrainian News.

Yuschenko believes that Olimpiiskyi is a national sport facility that will serve Ukraine many years after UEFA Euro-2012.

The president noted that the state should consider the sport complex with all reasonable attitudes.

«If we place stakes that this arena has national prospects, and we should give it a second life, I am confident that we should do everything possible to clear the area around it,» the press service cited Yuschenko as saying.

The president insists on taking down the object built on the territory adjacent to the sport complex.

«The country and city residents should see the territory adjacent to the national sport complex without any constructions,» Yuschenko says.

In the president’s opinion, this question should be settled via dialogue between the investor and authorities.

As Ukrainian News earlier reported, UEFA demands demolition of the trade and entertainment center in front of the national sports complex Olimpiiskyi for holding the European football championship finals in 2012.

In February 2006, FIFA warned it would ban holding of official football matches at Olimpiiskyi sports complex in Kyiv, given that construction works of the center near the stadium continue.

The construction company Yudzhyn considers that all reports of authorities, FIFA and UEFA on necessity to terminate construction of Troitskyi Trade and Entertaining Center ("Olimpic plaza") in front of Olimpiiskyi National Sport Complex are political.

In August, the Kyiv city council decided to study options for paying compensation Yudzhin developer company for the trade and entertainment center.

US Investor Olimpus Capital Intends To Invest ,Too

US based Olimpus Capital announced its intention to invest in commercial real estate in Ukraine. The total investment would be about USD 100 mln.

The company is going to invest in development shopping and leisure centers in cities with a population exceeds 1 million people. Investment program counts for five years (until 2012). The first phase of the development efforts will search land plots for the shopping centers construction for K50 sqm each.

Olimpus Capital has been established in 1998. The main focus of investment portfolio is real estate and other high profitable industries. Now, an investment portfolio of the company aboutUSD 1,5 bln.

New Land Rent Rate Proposals For Kiev City

The Kiev Department for land resources has urged Kiev City council to approve standard land rent rate from 0.3% up to 10% valuation of the land.

The rent for land under residential buildings is proposed to be the lowest - 0.3%, while the highest rent rate will be for land utilizing by alcoholic beverage companies, metal companies, retailers sellers, open markets for non-food and automotive goods.

Financial institutions and gambling will pay 10% rent, too.

The rent is set at 3% for meat and diary manufacturing companies, as well as ice-cream, sugar, canned vegetables and fruit.

The rent is set at 5% for hotels, bars and cafes, 6% for restaurants and tourist agencies, 9% for mobile and Internet service providers , 8% for advertising companies, 1.5% for state medical and educational services.

The Department asked The City council to cancel its resolution of December 2000 setting land rent from 0.03% to 6% of standard valuation.

Petrovka Area Waits A New Shopping Centre

Within next 3 years nearby to Petrovka subway station may appear Petrovka shopping center with K187 sqm total area. The project drawings was approved at the last City planning council

Petrovka shopping centre will be built instead warehouses and book open-market, between Moscovskiy avenu and Verbov street. As described author of concept, Polish architect Anzhey Owczarek (he also designed Alta-Center), building will be 6 floors: 3the 3 floors of shopping area and 3 for underground parking. GLA is planned a K79 sqm. This is 2.5 bigger then Karavan shopping center has (K32 sqm respectively).

The first floor of the center located underground food supermarket, will be accessible directly from the subway. The two lower floors will serve parking for almost 2 000 cars.

There will be a new book market (K8 sqm), cinema multiplex for 15 rooms, restaurants, food courts, as well as bowling.

Construction works is scheduled to begin in spring 2008 and should be completed over two years.

Commercial Announcement

Land plot for sale

Location: Odessa city
Size: 13 ha
Zoning: Retail and social development
Title: Private property
Price: USD 110/1 sqm

write: kalinin.sergey@gmail.com

Dragon Capital About Ukrainian IPO Trends

Dragon Capital, Ukraine's top investment bank, expects initial public offerings from the country to more than double to $1.5 billion in 2007 and to reach $3 billion next year.

The Kiev-based investment bank, which accounts for about one-third of Ukraine's equity capital markets transactions, has completed seven IPOs this year, raising $500 million in total.

Last year, Ukrainian issuers raised a combined $482 million via initial public offerings.

"The pipeline is so full that we need more people to examine the deals," Brian Best, an investment banking director at Dragon Capital told Reuters after attending the Ukraine Capital Markets Forum in London.

"Investor appetite is still strong for Ukraine deals. The credit crisis doesn't have a huge impact, as investors look for high yields and fast growth," said Best.

Source: Reuters UK

One Line News - October 10

• Intermarket company (Lviv) is going to start operations for new K96 sqm shopping center at 2H 2008
• Kiev City Planning council did consider master plan for the last large territory (Osokorki) at the Left bank for 5 mln. sqm of residential construction
• Rizidor Hotel Group intends to open 4 brand new hotel until 2011 - one Radisson SAS and two Park Inn in Kiev and one hotel (brand is unknown yet) in Crimea
• Baltic Development is developing a new K 46 sqm logistic complex in Borispil, 13 km far from Kiev with USD 45 mln. total cost
• Kiev City Planning council has approved a additional area for Bolshevik shopping centre expanding more than K25 sqm
• XXI Century has announced its Net Asset Value - USD 1.498 bln, 1Q 2007 EBITDA - USD 27.27 mln.

Kiev Region - Current Land Prices, October 1

- Kiev-Svyatoshin district - $90.19/1 sqm;

- Obukhov district - $73.31/1 sqm;

- Borispil district - $57.30/1 sqm;

- Vyshgorod district - $54.73/1 sqm;

- Brovary district - $45.88/1 sqm;

- Vasilkiv district - $42.98/1 sqm;

- Makarov district - $22.51/1 sqm;

- Borodyanka district - $23.62/1 sqm.

- Fastov district - $10.97/1 sqm.

Valid for single-family construction, master planned communities.

Using source: SV Development

Some Info From Seven Hills About Development In Progress

Seven Hills (Kiev), a subsidiary of Scorpio Real Estate Group (Tel Aviv), a multinational group of developers, intends to invest more than USD 1 bln. in housing, offices and industrial property in Ukraine. Funds will be invested in the construction of residential complex Park Avenue in Goloseevskiy district, mixed-use retail and office center - Podil Center and the Airport City, mixed-use complex in Boryspil.

Their plans also include construction of suburban shopping mall and toll roads that would connect the Polish border with the Donetsk region and Russian border with Black Sea ports.

Currently, the company is involved in 3 projects: Park Avenue, Podil Center and City Airport.

Park Avenue - residential complex, which will be located in front of Goloseevo park in Kiev on the 4ha land plot. The total area is K 200 sqm., including K 120 of housing, K 10 sqm – the offices. The complex will include a sports centre, swimming pool, shopping center, underground parking, restaurant, bar. Now the site is being prepared for construction.

Podil Center is located near Kyiv - Mohyla Academy and will be a combination of A Class offices (K22 sqm.) and the K 30 sqm. shopping center. The company intends to begin construction through 14 months.

Airport City will be located on the 50 ha land plot near the Borispil highway.

According to the Seven Hills’ CEO, Ari Schwartz, the PB period for Park Avenue is 1.5-2 years, Podil Center 3-3.5 years, City Airport 4.5-5 years respectively .

All land plots for the development are under the long-term lease, in particular for the Park Avenue construction - for 5 years, Podil Center for 10 years, and Airport City in 49 years

Main Suspect On Elita Center Fraud Is Detained In St.Petersburg

The Ministry of Internal Affairs has confirmed that the detained in St. Petersburg person is really Alexander Volkonskiy, the founder of the well-known "Elita-Center", who was wanted as suspected concerning the biggest fraud in the Kiev real estate market.

"The information is checked. I can say that we have received confirmation that he is" said Mikhail Korniyenko, temporarily Minister of Internal Affairs, commenting the detention in St. Petersburg.

According to investigation information, the total amount of stolen funds is almost USD 100 mln.

Hyatt Regency Kiev - Direct Answers

I'm glad to present you a short interview with Irina Pshenna, recently Commercial Director of Hyatt Regency Kiev. It has been taken at August 2007 when Irina was charging for hotel. Now she is Director for Hotel Development for FUD (First Ukrainian Development). By the way, Irina perhaps the only one specialist who holds Cornell University degree for Hotel management.

I've planned to release this interview simultaneously with a hotel opening but there were much work for Irina, you know. Anyway, I hope it would be interesting for you.

S.K. What is Hyatt's market advantage in Ukraine?
I.P. Hyatt Regency Kiev is the first five star international hotel in Ukraine. Located in a heart of Sofievska square this 234 luxury rooms hotel provides extensive conference and banqueting facilities for any occasions. The hotel offers over 1,000 square meters of meeting and function space including a 371 square meter ballroom, 8 meeting rooms and 3 board rooms. All facilities are equipped with state-of-the-art technology. The Regency brand has the specious product as Regency Club with separate check-in for business guests and . The Hyatt Regency brand is the oldest brand in the Hyatt hotel chain.

S.K. How do you forecast a hotel market developing in Ukraine within next 2-3 years?
I.P. Before EURO 2012 it will be a huge hotel development within 2-3 years, fastest when it was previous 15 years in Ukraine. All the investments will be done by Ukrainian and foreign private investors, not governmental. Most of the international hotel chains are very interested in Ukrainian market with a high RevPar and AvRate as well as occupancy in all of the hotel business and leisure segments. But die to unstable political situation and as a result high risque economical situation none of them is ready to invest in Ukrainian market. The main players are the Russian investors who are already some experience in this field in Russia as well as foreign private foundation who are ready to take a big risque awaiting a fast return of investment and low capitalization rate ( Ukraine in 8-10 years compare to Europe and States up to 20 years).
Intercontinental Hotel Group is announced already 2 hotels in Kiev: Intercontinental Golden Dome and Holiday Inn. Radisson has already 2 projects: Radisson Yaroslavov Val and Radisson Airport under development. Marriott is actively looking for the projects. Accor group announced Sofitel in Kiev and a first brand which is ready to develop destinations with 3-4 star product as Novotel and Ibis. Hilton is going to open the first hotel in Kiev in the end of 2009.

S.K. Why the office and retail markets are more booming now rather than hotel one?
I.P.Due to the fact that hotel industry is more specific one and return of investments is longer (7-8 years) for 4-5 star sector comparing to offices and trade centers which is around 5 years. Main reason is the absence of professional advisors and expertise in this field at the market.

S.K. Why international investors should pay more attention to local opportunities?
I.P. International investors have already some expertise and background in development of that type of real estate. It is a big advantage to Ukrainian investors which are staring to learn that opportunity and sometimes it takes years to learn the ways and strategies for development.

S.K. How do you estimate market share for well-known international brands in period till Euro-2012?
I.P. I think that the main players will be Radisson with expertise of Radisson Yaroslavov Val doing very well at the market and Intercontinental Group which is very pro-active and open for Ukrainian market. As for other brands my feeling are quite pessimistic as Hilton and Hyatt are to much luxury for Ukrainian market to build second property.

S.K. What is the price policy in Hyatt hotel?
I.P. Price policy is Euro 370,- up to Euro 410,- .

S.K. Irina, thank you for your time and information,

For further reference visit Hyatt Regency Kiev