NEST And Double W Go To The Close Cooperation With Rezidor

Double W and NEST plan until 2010 to start five projects in Ukraine for the hotels development. Slotted to build two 3-star-hotels, two 4-star and one 5-star one. Then, all these projects will be under the management of the Rezidor Hotel Group. Also, Double W plans to invest in improvements and infrastructure of ski resort in Yalta.

Earlier Rezidor Hotel Group signed with the Double W and NEST contract, which Rezidor Hotel Group will manage the hotel complex Radisson Paradiso Big Yalta in Yalta with of 44 000 sqm total area which will be provides by two hotels (4-star and 4+) for the 550 rooms, 11 bars, restaurants and cafes, 4 pools and SPA.

Currently, the draft is under way. Construction of the first phase of the complex will be completed by summer 2009, and the second one by the summer of 2010.

Monthly Economic Monitor Ukraine, September - October 2007

Monthly Economic Monitor Ukraine from Institute for Economic Research and Policy Consulting. Here is September and October issues.


October 2007

• Preliminary election results: five parties will be represented in the new Parliament.

• Real GDP growth decelerated to 7.5% yoy between January and August due to slowdown in agriculture value added.

• The President blocked the privatisation of Odessa By-Port Plant and suspended the sales of oblenergo shares.

• Current account deficit widened to USD 2.0 bn (3.4% GDP) in the first half of the year.

• Central fiscal deficit went down to 1.0% of GDP in August, primarily due to under-execution of expenditures.

• The Draft State Budget 2008: social standards are to be further increased.

• Inflation accelerated to 14.4% yoy in September.

• First Internet transaction took place at the PFTS.

September 2007

• Parliamentary election campaign is going forward.

• Real GDP grew at 7.7% yoy between January and July backed by still high agricultural growth.

• The subordination of the National Commission on Communication Regulation remains unclear.

• According to the Derzhkomstat, the positive service trade balance started to shrink due to lower volumes of gas transit through Ukraine.

• In July the central fiscal deficit increased to 1.2% of GDP.

• Although reduced, unemployment is still more widespread among females, youth, and rural population.

• The NBU tries to impose new capital controls.

• Inflation accelerated to 14.2% yoy in August.

Rezidor Wants To Cover Ukraine

Rezidor Hotel Group, an international hotel business operator with headquarters in Brussels, plans in future to manage hotels in all of the largest Ukrainian cities, Group Vice President for Business Development Arild Hovland has told the press.

"Talks [on the management of hotels] are being held in cities like Odesa, Lviv, Donetsk, Kharkiv, Dnipropetrovsk and Zaporizhia," he said at a press conference in Kyiv.

He said that the group is considering a possibility to manage three-, four- and five-star hotels under the Radisson SAS Hotels & Resorts and Park Inn brands.

Hovland also said that Rezidor Hotel Group plans to realize its plans irrespective of hosting the European Football Championship 2012 by Ukraine, as the group sees large potential in Ukraine.

At present, Rezidor Hotel Group manages two projects in Ukraine - the Radisson SAS Hotel in Kyiv - and soon it will open a second Radisson SAS Hotel near Kyiv's Boryspil airport.

New Forecasts From World Bank

The World Bank expects that GDP growth in Ukraine in 2007 will be 6.7%, while earlier the forecast was 6%. According to a World Bank report, the index of consumer prices is expected to grow by 12.5% in 2007, though the bank's previous forecast was 9.7%.

According to the bank, in 2008, 2009 and 2010, Ukraine's GDP is expected to grow by 5.5%, 5% and 5% respectively. Inflation in these years is expected to be 9.6%, 8.3% and 7.4% respectively.

Earlier this year, in July, the World Bank reviewed its forecast for Ukraine's real GDP growth in 2007 upwards from 5.5% to 6%, while the inflation forecast was changed from 10.9% to 9.7%.

Ukraine's real GDP growth was 7.1% in 2006, while in 2005 it was 2.7%. The government forecasts a GDP growth slowdown to 6.5% in 2007, along with a fall in inflation from 11.6% to 7.5%.

Ministry of Economy have also improved their GDP forecast: in October their forecast for GDP growth for 2007 was 7%, while in July it was 6.9%, according to a posting on the
Ministry's official Web site. However, the ministry said that the inflation forecast for 2007 had risen in October to 11.6% from 8.6% in July.

According to an October consensus projection, GDP growth in 2008 will be 6.4% with 9.8% inflation, while in July 2007 these figures were 6.4% and 7.9% respectively.

The exchange rate by late 2007 will be UAH 5.05/$1, while in July it was forecasted at UAH 5.07/$1, and by late 2008 it will be UAH 5.06/$1 (UAH 5.11/$1).

At the same time, World Bank experts stress that it would be expedient to make the exchange rate of the hryvnia, Ukraine's national currency, more flexible, as the revaluation of the hryvnia could slow the pace of inflation in the country.

Although Ukraine was possibly not ready for a shift to a free floating exchange rate, the revaluation of the hryvnia could, under current conditions, treat the fever on the markets.

Short News - new METRO Cash&Carry in Chernivtsi

Another one METRO was opened in Chernivtsi, Western Ukraine. This brand new shopping center has K11.8 sqm total area and K7.4 GLA.

METRO has bought 4.25 ha land plot for own property form the secondary market. Total funds invested are UAH 117.3 mln (USD 23.2 mln.) includindg land purchase, construction an equipment)

Ukraine Retail: $500M Investment For BRYSNYTSYA Chain

News Analysis: The Economist Intelligence Unit Limited New York, New York, Monday, Oct 15, 2007

Diversified holding group SCM Holdings has announced that it plans to invest around up to US$200m by 2013 to expand its recently launched retail chain, Brusnytsya, across Ukraine to as many as 500 stores.

SCM entered the retail sector earlier this year with the opening of its first Brusnytsya outlets in the Donetsk region in eastern Ukraine. Currently the company operates nine stores through its subsidiary Ukrainskiy Retail.

SCM explained that it plans to operate 20 stores by end-year, and that by end-2008 its retail network would reach 80 stores across the country. In the first phase, Brusnytsya stores are being built in a smaller format of 300-400 sq metres. Phase two calls for the construction of supermarkets of 800-1,200 sq metres.

SCM is Ukraine's largest holding company and one of the country's largest domestic investors. For the 2006 period, SCM posted consolidated pre-tax profit of US$1bn. Sales reached over US$6.7bn, a nearly 19% rise over the previous year. The group's assets reached over US$11.4bn at end-2006.

New B+ Office Building In Lviv

Commercial real estate in Lviv growth with significant trend. So, in January 2008 is opened new office center Optima Plaza on Nauki str.

Total area is more than K7 sqm. First 2 floors are situated for retail premises (2420 sqm) , while from 3 to 10 floors there are offices and 11 floor for conference facilities.

The developer is Optima Capital , who has been an investor for Opera hotel in Lviv.