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Saturday, December 29, 2007

Thank You All!

Thanks you all. Love and peace. See you next year! Sergey Kalinin

Monday, December 24, 2007

Monthly Economic Monitor Ukraine, September - November 2007

Monthly Economic Monitor Ukraine from Institute for Economic Research and Policy Consulting. Here is November issue.

  • The official results on pre-term elections to the Verkhovna Rada were published on October 27, with two weeks delay.

  • Real GDP growth was 7.3% yoy between January and September, relying mostly on high private domestic demand.

  • Exports of grain harvested this year will start not earlier than in December due to cumbersome quota administration procedures.

  • Between January and September the current account deficit increased to USD 2.5 bn, but was sufficiently covered by high inflows of long-term capital.

  • Central fiscal deficit widened to UAH 7.5 bn (1.5% of GDP) in September.

  • Inflation accelerated to 14.8% yoy in October.

  • The NBU revised the regulations on the costs of external borrowings.

Amstor Has 19 Store Already

Amstor Company (Donetsk) has increased number of its supermarkets to 19, having opened a hypermarket in Zaporizhia at December 21.

According to the statement, shopping center has 13,500 sqm. The object is able to provide services up to 10,000 customers daily. The shopping center is conveniently situated near road intersection and three large multifamily areas, where 200,000 people live, at least.

Amstor is focused on shopping centres development and management in Donetsk and Zaporizhia regions.

Mass December Expansion - New JLL Kiev Ofiice Head

Jones Lang LaSalle announced today that Peter Honey is to become Head of its Ukrainian business and lead the firm’s growing team to success in Kiev and other core markets across Ukraine. Mark Jagger, Jones Lang LaSalle Managing Director of Russia & CIS: “Ukraine is a very important part of our growth strategy in the Russia & CIS business. We already provide clients a full range of property services in this market and our plan is to be number one in all our major disciplines within the next 12 months.”

“Peter is a long serving member of our firm and has delivered a first class service to our international clients over the last 15 years. His experience with us has given him a broad skill-set and perspective which is essential for such a business development role in an exciting emerging market.”

Jones Lang LaSalle opened in Kiev 18 months ago and the rapidly growing team now comprises of 20 professional staff. Currently, the Kiev office provides retail, offices, warehousing agency, capital markets, strategic consultancy, tenant representation and valuations services and this is set to grow as the office integrates into the wider global Jones Lang LaSalle business.

“Our presence in Russia & CIS is growing exponentially and I very much look forward to contributing to its exciting future. We have a great book of business in the Ukraine at the moment and by adding my personal experience from across a number of Jones Lang LaSalle’s service offerings we’re sure to achieve our ambitious targets for the Ukraine,” concluded Peter Honey.

Peter Honey joined the Jones Lang LaSalle in 1996 and his career in property has stretched across many areas of the industry including valuations, consulting, capital markets and corporate real estate. Peter will join the Ukrainian team in January 2008.

Sunday, December 23, 2007

Ruslan Oleksenko - Commercial Real Estate Investment Prospects

Ruslan Oleksenko - Managing Partners, DEOL Partners

1. Is it the truth that commercial real estate is much more attractive for investment objectives rather than residential real estate?

It is difficult to compare the attractiveness of commercial real estate and residential real estate as these two real estate segments have different peculiarities of investment and ROI. So residential real estate development provides formation of investors' assets on the prime stage of building. That is why residential real estate projects are characterised with shorter period of payback (payout) and have higher rate of internal profitability. At the same time commercial real estate has more attractive future in long-term period of investment. Nowadays the situation that commercial real estate is more attractive for western investors is determined by these factors while the Ukrainian developers are still the main players at the residential real estate market.

2. Is it true that the opportunities for high returns have reduced?

It is quite an interesting question, but I would like to interpret it differently. There is a good English proverb: «No free lunches». The level of profitability of investment nearly always has the straight proportion to the level of risk which an investor is ready to take. With the other equal conditions, as less the risks of an investment, as less the profitability the investor could count on. Ukraine offers reasonable balance between the level of risks linked with the investment and the level of expected profitability or capitalization rate. This is the reason of the foreign investors' interest to the Ukrainian market of real estate. Thus the rates of capitalization for all kinds of commercial real estate in Ukraine at the end of the second part of 2006 were twice higher than the average European index: for office and trade real estate at the level 11-12% compared with 5-6 % in European countries. For warehouse estate - 12-15 % compared with 7-8 % in European countries. Development and saturation of the market rings appropriate capitalization rates reduce: for the present moment they are 8-10 % and in the nearest future they will decrease till 7-8 %. At the same time investment interest to the Ukrainian market of real estate from the side of the most successful businessmen and structures will gradually reduce.

3. Which kind of commercial real estate is easier to purchase?

The question is not about what kind of estate is easier to buy but what kind of real estate can bring the expected profitability to the investor. According to our forecasts during the short-term period land speculations will stay one of the most profitable businesses on the real estate market. The internal rate of profitability within the purchase and sale of land will vary from 40 % to 90 %. DEOL Partners recommend to clients that 60 % of all their investors profiles to be land deals. At the same time with the long term period (2010-2013) investors will be forced to redirect do the projects of strategic development because in some period land speculation will lose their investment attractiveness. In 3-4 years the interest of land operations will not exceed 10% in portfolio of investors while the part of projects of strategic development will increase from 30 % to 80 %. Moreover the increasing competition on the market will be conducive to develop projects in spare niches. As the examples of niche positioning on the market of office real estate can be Business Parks, Research and development complexes; Regional Shopping Malls - in trade segment; Flex Spaces, Self Storage is some kinds of warehouse and logistic real estate) - in the industrial segment; Master Planned Communities (some kind of cottage towns) - at the residential real estate market; Corporate Houses (service apartments) and Extended Stay Hotels (long-tern living hotels) - at the hotel market.

4. What amount of money should an investor need to purchase commercial real estate in the capital city?

Major investors, such as investment funds and companies are interested in projects which are valued from 30 to 100 m. US dollars. Moreover purchasing of land for building of large office, trade or warehouse premise should constitute 10-15% of its value. An essential sum of investment depends on lots of factors including of course size and lay-out of real estate project. However in commercial real estate the concept «price for 1 sq.m» is rare for project value definition in general. The main factor for definition of real estate value is net profit which characterize the ability of the object to generate cash flow. So, the average lease rate for Shopping Malls with total area of 10 000 sq.m can be 120$ for 1 sq.m, while larger units of real estate - 15-20$ for 1 sq.m. 5. Is it cheaper to purchase commercial real estate in the regions? Nowadays Kyiv, like other large capitals all over the world is like a magnet for foreign investors in spite of lower prices for commercial real estate in regions. The fact is that building costs in the regions will be the same as in Kyiv. It will be cheaper for investors to buy the ground area only. However, in the capital it is possible to lease the object of commercial real estate in a shorter period and at a higher price after finishing building. In addition while purchasing of functioning object of real estate in Kiev its rate of capitalisation is 8-10% but in the regions is from 14 to 17%. As a result of selling of commercial real estate object the developer can lose from 40 to 70 % of profit in regions in comparison with Kyiv.

6. Are there any hazards while purchasing commercial real estate?

How long is the process itself? Of course, there are a lot of questions while purchasing commercial real estate. First of all they are regarded to financial, commercial and legal audit. All these spheres need much attention, competence and professionalism as well as flexibility from the investor, customer and transit manager. So, real estate deals are connected with lots of risks. Some of them can be acceptable, some not. If nevertheless risks are unacceptable, chances for concluding a bargain are minimal. Inability to make a concession can cancel all the efforts of partners to conclude the deal. The process of structurization of a deal with amounts from $50 m. can take 3-5 months.

7. Foreign investors who enter the Ukrainian market maintain that lease rates are exorbitant in our country. Does the quality of office and trade real estate objects correspond to present prices?

Are there any differences between other European countries? In fact, in comparison with other Eastern Europe markets the leases rates in Ukraine are a bit overpriced. However simple economy laws allow this phenomenon to be proved. High tempos of lease rate increase mean the initial phase of development of real estate market and that there are no critical mass of areas on the Ukrainian market which could satisfy the requirements of all potential clients. Also when demand exceeds supply it goes to that the market is in the hands of owners of real estate who, in their turn, do not feel the necessity to make extra investments for improving their own commercial real estate. The process of saturation of the market and a large quantity of offers will stimulate developers to plan and build more qualitative premises and lease them at lower lease rates.

8. How much does the management of commercial real estate in Ukrainian conditions differ from the western «rules of the game»?

Both quality of the real estate objects and professionalism of the Ukrainian companies, which deal with the management of the commercial estate, characterize this level of the market development. It is not a secret that a lot of owners face with the lack of high-quality proposals when choosing the managing company to which they are ready to hand over all the volume of responsibility for the effective usage of their real estate. That's why we can state that future of the Property Management products presupposes the essential increase of professionalism.

9. How can the level of competition among real estate companies be determined?

To my mind, now it is too early to speak about the competition among the current real estate companies. Developing, a rapidly-moving market is able to ensure every player with a great deal of work. That's why I think that vice verse at the moment one can feel the lack of professional companies which can manage with the professional services demand in Ukraine. Competition exists only on the coordination level with the most prestigious real estate objects.

10. What factors does the profit of the managing company depend on?

Surely, the profit of the managing company depends on the volume of the accomplished work. Experience and professionalism allow the managing company to set the higher price for their services in comparison with the less professional players. Nevertheless, a more expensive solution is not always a loss for an owner of real estate according to the proverb which says that the cheapest things are not always best. That's why from the professional point of view it is more prospective to pay a high price but to get an expected and best result.

Saturday, December 22, 2007

Shopping by Retail

From Property Times

At present, over 30 shopping centers are functioning in Ukraine, and more than 400 network operators of all the product groups are working here.

Ukrainians' infatuation for cheap markets seems to be passing into history. What influences that? Either people are paid better. Or dwellers' mind has altered so they give more credence to shops which have cash registers and provide warranties for products. Or marketing policy of retailers who, for example, launching various actions and clearance sales, reduce prices for their products to the level of the marketplace (or even below it), has improved.

However such as there were, people reach out for shopping centers, at that not only in the capital but in the regions, too. And this means that heterogenous shopping centers and shopping and entertainment centers are necessary and the more of them, the better. According to the calculations of 'Ukrainian Trade Guild*, there is some 170 complexes in Ukraine, which lay claim to be named shopping centers (SC) (31 of them - in Kiev). Though the capital used to be the leader in such complexes' trade space density per individual ratio, yet last year it lost its position - now Kiev is ranked third (after Dnepropetrovsk and Nikolaev), only slightly being ahead of Odessa and Donetsk.

In the words of director of the consulting company "Uvekon" Vladimir Shalaev, three types of retail exist - markets, shops, and cyber-retail. To the "shops" can be referred both traditional formats - a kiosk, a food store, a department store, and modern ones -hypermarkets, Cash&Carry, supermarkets, discounters. Cyber-retail is a mode when goods/services are ordered through the post, by phone, by catalogue, through the Internet. However, as to the markets, the head of the Ukrainian Trade Guild leasing department Sergei Khomenko is putting them into the retail category only nominally, since, though it is a trade, however it is predominantly a network trade, i.e. non-professional.

A trend is observed: Ukrainians gradually become disaccustomed to the marketplace's service. The degree of loyalty towards the contemporary trading modes has grown over the past year in Ukraine. In those commodity sectors, where network operators already put their fingerprints, market trade was noticeably squeezed out. "So, the share of food markets in the regions already shrinked to 20 % of sales, in the household appliances/electronics segment - to 10-15%. The share of markets selling clothes and footwear remains to be large (up to 50 % and more), though even here it has contracted during the year by 10-15 %," UTG discloses in Ukrainian realty market survey 2006.

So, what destiny is in store for capital's markets. Food markets will be step by step declining, yet they will not totally disappear, as many people prefer choosing on their own fruit, vegetables and dairy products originated from the housekeeping, Sergei Tomenko believes. As far as manufacture goods markets are concerned, then the specialist predicts the letter's significant shrinkage, though in the future. In the nearest time, most likely goods of economic assortment will be sold there, i.e. of low quality, or of doubtful origin. As a matter of fact, the customer has already come to a realization that, say, purchasing of clothes and footwear goes better not in the dark "container", but at a well-equipped and generously lit trading floor, with comfortable fitting-rooms and absence of bustling.

Vladimir Shalaev is also judgmental: "Markets' perspective is obvious - being forced out to the town's periphery, both in a sense of market share, and geographically."

Average monthly salary in Ukraine UAH/month

Head of marketing department at the development company "Forent", Andrey Shabayev, suggests the contrary: "At the present time, there is no tendency observed toward more civilized retail modes having very soon forced the capital markets out. Until there is a proper consumer available - the markets will fail to decease."

Still, there is one more reason that will provide impetus for markets' disappearance: they occupy huge, very expensive areas, which are used unpractically, i.e. yielding less income than a multi-story SC at the same territory provides. So, the market's owner can shut it up on his own, deciding on construction at his site of a large commercial facility, or on just selling the land under retail outlet. And the city government will hardly begin objecting it, since they realize that we are significantly falling behind the West Europe and even Russia in this realty segment, Sergei Khomenko suggests.

According to him, there are many SC projects available, which can appear on the spots of the former markets. The question is, when might they be implemented? After all, there is a need in political and economic stability in the country, since creating this kind of realty is a continuous process, which takes on average five years from the moment when it is conceived and up to the moment of its opening: for small complexes it could be 3 years, and for larger ones - 7-10.
Yesterday, today, tomorrow

As is said above, over these several years the people have changed their retail culture. "Whereas 5 years back one could say that most people buy things at the 'natural' markets, now people prefer a more civilized shopping. Parallel to rising incomes, the population is shopping in the stores and supermarkets, as well as in shopping centers. Just SCs today take one of the leading stands in retail development. And this trend will retain its place later on," Andrey Shabaev notes.
Immersing in history a bit, let's recall that the firstling of 1999 was SC "Kvadrat". "It marked the beginning of Ukraine's commercial property market development. Then appeared "Metrograd" and "Karavan" - in some aspect they had been successful, in another - not so, but, at any case, they were the first and enjoyed popularity from the start. The 2004-2005 period was characterized by appearance of a number of developed projects, but they were suspended owing to political situation that became complicated. In the country's crucial moments the owners always poise if they should invest money in commercial property, that's why a large number of projects had never seen their fruition," Sergei Khomenko recalls.

In 2006, an attempt was undertaken to come back to the previous tempo of areas enlargement. In fact, over the five past years a 80 percent of SCs were built in Kiev. As of today, there are above 30 SCs in the city: according to the data provided by Dmitriy Siniukov, Director on Development at LLC "IBT", there are 33 such objects (360 thousand sq. m.), yet according to UTG's statistics -they number 31 (343 thousand sq. m.), 5 of them were commissioned in 2006. But it is less than was expected. According to the statement of Dmitriy Siniukov, yet in the past year it was planned to put into operation over 100 thousand sq. m. of space, however, in reality less than 40 thousand sq. m. were launched. SEC "Komod" at Lunacharskogo st., circumurban SEC at Kharkovskoye shosse, the largest in Ukraine cinema complex with the capacity of 14 hans integrated with SEC "Multiplex-Plaza" at Moskovskiy prospect, "Kva-drat-Avrora" were sure declared for opening, still they are to welcome the customers only this year, at best. As far as circular road SEC at Kharkovskoye shosse is concerned, it might not be finished at all - there is a design for it re-design into the business center.

On the whole, Kiev is steadily lagging behind the majority of European capitals and even large Ukrainian cities of Dnepropetrovsk and Nikolaev as regards trade areas volume per head ratio (126 sq. m. to 1000 dwellers), Ukrainian realty market survey 2006 by UTG reads. Dmitriy Siniukov informs that in Moscow some 150 sq. m. of trade space falls at every thousand citizens, while in the capitals of Eastern Europe countries - around 200-300 sq. m. So, the leaders need to be caught up with. There is a hope that the present year's space accrual may amount to the level of 90 thousand sq. m. - appearance of 7 SCs is expected. In 2008, the construction of yet some 174 thousand sq. m. is awaited - 7 SCs, too, the most interesting of them being SEC "Troitskiy" on Bolshaya Vasilkovskaya st. and SEC "Dneprovskaya pristan" at the Vatutin prospect. Beginning from 2008 on, trade areas growth may start outpacing retail market capacity. As of 2007 year-start, there is known around 60 projects of shopping centers in Kiev, with a total area of over 2,5 mln sq. m., which can be implemented before 2012. But the main bulk of this projects can be put into service already in 2010. Though at present the projects are being implemented slowly, which is moving terms of market saturation away into the future.

The most successful shopping centers in Ukraine (data from network operators' survey)

Incidentally, the opening of SEC "Komod" on the left bank will be a bright event for Kiev inhabitants, Sergei Khomenko is confident. It is going to be a first fashion class shopping center for the left bank. Varied brands will be represented there, both renowned network Ukrainian operators and new ones. Its level is oriented to the people of the category "medium+" and higher. I.e., this facility is being positioned as the most elite complex upon the Kiev's left bank.

As a matter of fact, earlier on, the main trading activities were collected up on the right bank. "Everyone was bent on constructing shops as close to the city center as possible, on the main highways, so that to enjoy an opportunity of "capturing" large flows of potential buyers," Sergei Khomenko explains. - "These shops keep on being in requisition, however for an interesting complex' creation there are, basically, no appropriate land left in the center." Just because of that, the processes of further area redistribution will be going on in favor of SCs' placement in large "bedroom communities" and on the circular road, and not in the city center. For the next two years, a share of trading space in uptown city districts will significantly increase. I.e., if earlier the majority of population were forced to go onto the right bank to shopping centers ("Caravan", "Globus", "Arena"), now they will be able to shop without leaving the left bank.

One more trend, along with trade areas growth and increasing of SCs trade areas share in the uptown, is extending the Kiev shopping centers' format. During 2001-2004, newly built SCs' average size rising could be traced in Kiev, the Survey reads.

Interestingly, in the last year active development of the trade center market was going on in
the regions. The cause lies in that networkers are actively mastering their market segment, but quality areas are in short supply, and the majority of retail operators cannot boast of availability of a clear strategy of development. That's why, given the offering is appropriate, virtually every operator considers coming to any region's central city. The interest of networkers grew stronger towards the cities of Ivano-Frankovsk, Khmelnitskiy, Poltava, Sevastopol, Zhitomir, Nikolayev, Uzhgorod...New SCs and projects appeared in towns with population amount under 200 thousands: a first SC was opened in Alchevsk (the Lugansk region), some projects are assigned to Severodonetsk, Lubny, Shostka and other small towns.

As reported in the Survey, the leading tendency of the commercial property market in 2007-2008 remains the offer increase, on account of new shopping facilities being built. As of the 2007 year-start, over 80 shopping centers are known to have to be built (including as parts of multifunctional complexes), with a total area of over 1.7 mln sq. m. Thus, the number of SCs may increase 1.5-fold, and the total area - more than threefold. If at present in the regional capitals some 50-70 sq. m. of trade space fall at 1000 inhabitants, in 2008, given the declared projects are implemented, this indicator may grow twofold-threefold, and in some cities - four times -five times.

Only the question remains - whether they will be profitable. After all, consumer potential of some cities does not correspond to such an amount of new offerings, even taking into account the retail market growth and Ukrainians' loyalty increase towards contemporary trading modes. First of all it applies to Dnepropetrovsk, Kharkov, Chernovtsy, Nilolaev, Lvov, where particularly many projects of big SCs emerged.

than 30 percent. Out of them 30 percent are clothes operators. In 2006, the networker structure didn't change significantly: just maybe the share of clothes and catering operators had increased a bit, and, else, foreign companies, such as Praktiker, OBI, Auchan, Real, Imax, O'Key were actively getting familiarized with our market.

For example, Imax plans in 2007 opening its first cinema-hall in Kiev, and during next 2-3 years intends to "open up" Ukraine's large million-strong cities. The bright event is the appearance in Ukraine of the first clothes department store "Marks&Spencer", which is to open within SEC "Komod". Over 2 last years, several foreign networks have appeared in Ukraine, with an especially impressive share of Russian operators - "Dikaya Orhidea (Wild Orchid)", "Sbarro", "Krasnyy Kub (Red Cube)", "Shololadnitsa (Chocolate-lover)", "Arbat-Prestige", "Chili-Pizza" etc.

In particular, networkers account for the principal source of demand for quality trade premises. They, developing their own "web", experience lack for trading areas for extending their presence. In 2006, retail networks operating in Ukraine enlarged the number of their shops by 28 percent, as had been declared by them back in 2005. Leaders of the Ukrainian retail in 2006 had increased their turnover by 50-70 percent. According to the very networkers' schedules, in
2007, an increment of shops on average will amount 21 % y-o-y. In absolute values it totals over 900 thousand sq. m. of trade space.

The most successful center in Ukraine three years in a row is named "Caravan" - the opinion of 42 percent of network operators; at the same time 16 percent of them believe that good SC-project are absent in Ukraine.

By the way, the networkers willingly grow roots at the ground-floor shops along the downtown streets -and the so-called street-retail takes form. "Street-retail means separately standing shops of famous brands, companies' boutiques, which can be entered right from the street, for example, on Kreshchatik, Krasnoarmeyskaya, Lesia Ukrainka streets, as well as on the central highways," Sergei Khomenko elucidates.

Andrei Shabayev reckons that nowadays, the street-retail format remains on demand predominantly in the central part of the city, where large flows of pedestrians are observed: in particular, tourists visiting the historic part of the city, as well as Trading Network Population's increased well-being, retail market growth foster development of network operators. "They can be, by convention, divided into two groups: domestic nation-wide, working in several regions of Ukraine, and international. Also, such a notion exists as a city-scale network operator, which works only in a single regional capital. At that, a subcategory to international operators, for example, Russian ones, exists, who, except in Russia and Ukraine, nowhere are presented," Sergei Khomenko explains.

By the beginning of 2007, over 400 network operators in every product niche were present in Ukraine. For the last 1.5 year, their number increased by more city-dwellers who enjoy their leasure time at the center. And, though Soviet-related recollections say that we hardly knew anything else back then besides ground-level shops (except some department stores), street-retail in its contemporary format continues developing, and there are no prerequisites for saturation of this market segment so far, the specialist states.

According to data of Dmitriy Siniukov, Kiev's saturation with SCs remains as high now as in 2006 and reaches a level of 90-100 %. The share of free premises amounts to some 1 %, being situated primarily inside unsuccessful projects.

Trading space market deficiency can be scanned through the trend of ever increasing rental rates. Their highest values in Kiev have long ago outrun the ones in Eastern European capitals - Warsaw, Budapest and Prague.

Rent for trade areas in a SC depends on the letter's classification level, which is determined by its identical compliance with the European standards and by its residence.

For example:
• $150-200 per 1 sq. m. - "Globus", "Mandarin Plaza", "Arena City", "Caravan";
• $100-150 per 1 sq. m. - "Metrograd", some units of "Kvadrat" network, "Ukraina", "Gorodok";
• $60-80 per 1 sq. m. - some units of "Kvadrat" network, TSUM, "Magellan";
• $40-50 per 1 sq. m. - SCs in remote districts. UTG's specialists surmise that, along with the
growth of trading space amount, rental rates are supposed to decrease, finally approaching the European standards. But this is just for the long-run. However that may be, the 2007 market will enjoy its growing phase. The demand for commercial property will keep on rising. Reasons: further economic growth, rising confidence in Ukraine, appearance of new, including Russian, network operators, as well as conserved shortage of specialized trade areas. The next stage of SC development will feature an enlargement of a SCs average size, the latter's recreational sector share going up, as well as an increase of peripheral SCs share and functioning of anchor operators.

Thursday, December 20, 2007

Short News - Praktiker In Ukraine Already

Pretty silently (I mean in whole Ukraine point), but this opening has been done.

First Praktiker' DYI store is located in Makeevka, Donetsk region. The total area of this store is 9790 sqm, where 8354 sqm GLA and 295 parking lots. Total investment amount was about EUR 11.5 mln. I took a very short time - the construction was started at April 2007.

Company intends to open another 4 stores at 2008.

Tuesday, December 18, 2007

Kyiv Ex-Mayor Omelchenko - Kyiv City Council Decisions On Allocation Of Plots Without Auctions Illegitimate

From Ukrainian News

Former Kyiv city mayor and Verkhovna Rada deputy of the Our Ukraine People's Self-Defense Bloc faction Oleksandr Omelchenko considers that decisions of Kyiv city council on allocation of land plots for construction without holding of auctions are illegitimate.

Omelchenko disclosed this in an interview to the Contracts magazine.

He reminded that when he was the mayor, in September 2005, he signed the order on auctioning-off plots to later refuse from allocation of land by the city council.

It was planned that allocation of land without holding auctions would be undertaken only in the case potential investors had managed to submit bids before September 1, 2005.

However, Omelchenko said that current Kyiv city mayor Leonid Chernovetskyi did not cancel the decision of his predecessor and resumed old scheme of land allocation.

«In fact, all recent decisions of Kyiv city council are illegitimate, as my order on holding of land auctions is still in force,» Omelchenko said.

Besides, he is sure that to terminate unlawful land sales by Kyiv city council it is necessary to have political stability.

As Ukrainian News earlier reported, in September 2006, Kyiv city council amended temporary order of plot purchase via competition, excluding the item foreseen allocation of lands only to those investors, who had submitted their bids before September 2005 and bids, which had not been considered by the city council before 1, 2006.

I guess this post is slightly wrong spelled, but that's just a source copy. Hope you will clear with it.

Monday, December 17, 2007

New CEO In Cushman&Wakefield Kiev Office

Robert Grant has been appointed as a CEO of Cushman & Wakefield office in Ukraine.

He has significant experience in the banking and financial areas, as well as in real estate in Ukraine and Russia. Before joining to Cushman & Wakefield, he held CEO position i well-know Midland International (just remember Midland F1 Team) is involved in real estate investment in Russia and Ukraine, as well as managing director in investment banking ING Barings, where he was responsible for Central and Eastern Europe development; finally a chairman of ING Bank Ukraine.

This is a worthy substitute for Bud Moore who was tragically died a couple month ago.

New JV for RE in Ukraine

Marbleton Property Fund, Alfa Bank Ukraine and Griffin Investment Partners have founded a joint venture named Metropolitan Properties to manage commercial real estate projects.

Investment strategy is portfolio of high-yielding assets, including new development, adding value to existing properties, reconstruction, proper tenant mix. Every part of this vehicle bring EUR 10 in equity.

Marbleton Property Fund specializes in investments in real estate, with total of USD 321 mln. under its management.

Griffin Investment Partners (GIP) is an investment company involved in real estate projects in Central and Eastern Europe, it manages over EUR 360 mln. from institutional and private investors.

Wednesday, December 12, 2007

Morarorium Comes Back

Lytvyn group in parliament is initiating prolongation the moratorium on sale of agricultural land until 2010.

The relevant draft law, which Parliamentary Deputy Kateryna Vaschuk of the Lytvyn Bloc prepared, has already been registered in the parliament. Lytvyn Bloc favored a land inventory with the aim of determining who actually own the land and the legal basis on which it is owned.

Early, parliamentary deputies Petro Symonenko, Oleksandr Tkachenko, and Volodymyr Matveev from Communist Party recently proposed that the parliament extend the moratorium on sale of agricultural land from 2008 until 2011.

President Viktor Yuschenko is confident that the moratorium is the cause of corruption on the land market.

Friday, December 7, 2007

The Ukraine Construction Qualitative Study 2007

This report is kindly presented by Jiri Vacek, who is the leader of construction research project, performed at the University of Economics in Prague and sponsored by KPMG Czech Republic.

To obtain this report you have to send me your company name, business sector you operate and email.

More info

Sorry For Silence

Dear readers!
It's all OK with the blog. Just a huge amount work to do. But I promise to find time slots to go ahead. Thanks for all of you for support.
Regards, Sergey.