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Tuesday, December 30, 2008

Let 2008 Go With Peace and Honour

Dear friends,

2008 is almost gone. It has not to be a great guru to look at all that mess and make sad conclusion. We all have lost many things. Many cash, many deals, many projects. And to straight with you we all expect worse times, particularly at 1H 2009. That's why we, in New Park, just freezing our project for 6 month, at least. And going to new side project to middle-to-high consumer market, which seems be most stable in these conditions. Thanks to God we haven't debts and loans, there is some cash and I guess we should be successful with that. btw, if want to know more on that kind of activity, email me. And my best advise ever - looking for new opportunities on fallen RE market if you have free funds, as well as other markets, like we are.

I'm going to post 2008 RE overview at mid-January, so be in touch.

And Happy New Year! Only we can make it so.

Warm regards, Sergey

Wednesday, December 10, 2008

Investment Opportunity

Hello everyone.

I'm seeking an investor (or co-investor) for multistory parking complex in Borispil international airport.
Feel free to discuss for.

Regards, Sergey

Monday, November 3, 2008

Hot Rumours - XXI Century

Today I've heard hot news - XXI Century is going to be sold. People taking... no more evidence, but I won't be surprised. Big debts, weak portfolio management, credit crunch...will see.

Thursday, October 30, 2008

About Mirax

Someone of you definitely know that Mirax, one of the leading developer in CIS, stopped its activity in Ukraine. It covers tallest complex in Kiev - Mirax Plaza on Podil district. They have decided to close head office (even if they're taking about lease end-term). The building will be frozen at 11th floor and they who bought the properties can move in or get the payment back. But I do not understant clear how they going to offer uncomplect building, which did not pass the state expertise.

And last details - today I did not watch the huge Mirax roof sign on Maidan. Total cost cutting. How long it will?

Friday, October 24, 2008

Couple Words On My New Project

You asking me about my new job and project.

I’ve been in Colliers not so long as many others guys there, but I happy that it was, really. But some forces lead me to New Park as a new project. Currently, I am a Managing Partner in New Park - the first Ukrainian company, which specializes solely on the development, design, construction and facility management of multi-storey automatic parking solutions, ground and underground. We have our own equipments, designed last year, as well as equipment from Italy, Korea and Turkey. You can visit New Park web-site, but it is still in Russian only

It was not so easy to deep in completely new and unpredictable market. But all of you who know the situation with parking lots in Kiev quite clear what I’m taking about. And do not forget about Euro02012. I believe that parking as property is very attractive in Ukraine, particularly in Kiev, Odessa, Lviv and Dnepropetrovsk. For instance, 1 parking lot in Kiev costs K70-130 USD in CBD (I meant in residential buildings). Why not to develop that sort of property? I have a very strong and reliable partners in that projects with own funds and side business. I’m responsible for all operational activity. Our target markets are:
  • Office buldings
  • Multi-storey residentials
  • Single familiy residentials with lack of land

And we are seeking freehold land plots for our own development, for sure.

But one of the biggest idea(I guess so) to establish an investment fund for developing 5-10 parking property and sell them out with 12-13% yield.

That’s what I’m doing now. Hope a credit crunch won’t be too long.

Monday, October 20, 2008

DUPD and XXI Century Go Deeper And Deeper

Because of the mortgage and financial on fund market, real estate and construction sector fell, while Ukrainian developers have little or no benefit from the support of investors, which led to the downfall of their value.

The most liquid shares traded on AIM (London Stock Exchange) - XXI Century and DUPD - lost 49-52% of capitalization.

Saturday, October 18, 2008

Global Financial Crisis – A Test for Ukraine

It was pretty interesting to meet with point of view from current Minister of Economy of Ukraine, Mr. Danylyshyn. Sounds great, but life is correcting some of points. Particularly, taking into the possible fate of given Government.

From Zerkalo Nedeli

Ukraine Is Falling In Fitch Rating

From Fitch Rating

Fitch Ratings has today downgraded Ukraine's Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'B+', from 'BB-' (BB minus). The Outlooks on both IDR remain Negative. The agency has also downgraded the Country Ceiling to 'B+' from 'BB-' (BB minus) . The Short-term foreign currency IDR is affirmed at 'B'.

"The downgrade reflects Fitch's concern that the risk of a financial crisis in Ukraine involving a large depreciation of the currency, further stress in the banking system and significant damage to Ukraine's real economy is significant and rising. Such a scenario would damage the sovereign's balance sheet. Nevertheless, Fitch believes risks to Ukraine's ability to meet its sovereign obligations remain low in the near term owing to the sovereign's modest refinancing needs," said Andrew Colquhoun, Director in Fitch's Sovereigns Group.

Ukraine has officially requested assistance from the IMF and a Fund team is currently in Kyiv. Fitch would view a sizable and appropriately-designed IMF programme as a positive factor, although the agency awaits precise details before drawing firm conclusions. However, depositor confidence in the banking system may remain shaky and the economy will face a difficult adjustment even if a programme is arranged, extending Ukraine's exposure to financial instability.

On 13 October, Fitch signalled rising concerns over the health of Ukraine's banking system amid a sharp tightening in liquidity conditions and some deposit withdrawals from the system following the failure of sixth-largest bank Prominvest. Fitch is unconvinced that the raft of emergency support measures announced by the central bank, including stepped-up liquidity provision and a ban on early redemption of term deposits, will be adequate to shore up depositor confidence and forestall further banking-system stress. New central bank rules restricting loan growth threaten to exacerbate a slowdown in the economy, which could hit banks' asset quality relatively soon.

A relatively high share of FX-denominated lending (51% at end-August) exposes the financial system to risks from enhanced currency volatility. Ukraine's currency, the hryvnia (UAH), fell to 5.6 against the USD by 8 October, down 10% on the month, before climbing back to around 5.2-5.3 on intervention by the central bank. The UAH is likely to stay under pressure from a widening current account deficit, which Fitch projects at around 7% of GDP in 2008, versus 4.2% in 2007. Falling steel prices will intensify a terms-of-trade shock originating in a likely strong increase in Ukraine's gas import price next year. Strong borrowing by the private sector took Ukraine's gross external debt to USD100bn by end-June 2008, including USD28bn of private-sector short-term debt. Hard numbers on private-sector external debt maturities for 2009 are not available, but Fitch estimates these could be around USD19bn for longer-term borrowing. With many private-sector borrowers likely to find it hard to refinance their maturing external borrowing, the sovereign may be forced to provide resources from official reserves, which are also needed to shore up confidence in the exchange rate.

Fitch continues to draw comfort from Ukraine's moderate sovereign refinancing needs for 2009 of USD2.5bn, of which USD0.9bn are domestic (mostly in UAH) and USD1.6bn are external (including a USD0.5bn eurobond maturity in May), compared with the latest disclosure for official reserves of USD37.5bn on 9 October. The country's low general government debt/GDP ratio of 10% for end-2007 is well below the 'BB' median of 34% (and the 'B' median of 33%). However, worsening economic prospects and requirements for official support to the economy could erode Ukraine's fiscal strength in the medium term.

Friday, October 17, 2008

Who Need The Land? No One? Sorry....

The owners of large suburban plots began to massively ask them for sale. Land near Kiev in a rapidly losing value very quick. Owners of large pieces of commercial land are ready to concede the real buyers third of the price. Land already is not a tool for speculations.

Prices at suburban for the first time in the past seven years have stopped to grow, and in some cases even started to fall. According to Knight Frank, prices of large commercial land plots in 1H2008 decreased on average of 8%, and some of them even 25-30% down. At this spring large areas (several hectares) with access to the route on 10-15 kilometres zone from Kiev offered for USD 700-900 sqm. now owners have already agreed to sell them not more than 300-500 per 1 sqm.

The main reason – no buyers at all. No crazy income, no glammy speculations. Land owners put own assets up for sale. Huge land lots put up for sale from developers, who need funds for projects in progress. Land, which offers now has a speculative pricing, and we all know that. That’s why it is hot offers but no one need them. Therefore, in order to find a real buyer, you must put the price down significantly.

But owners in Obukhov district can sleep well: our tycoons still want to live there. Take a breath.

Saturday, October 11, 2008

First Is Coming!

Hello my old friends. And new ones, too. I would never have been able to imagine what situation we will find when I returned back for blogging. No extra words, you know that. Mirax just has closed its head office and stoped the highest building in Ukraine at 11th floor. XXI Century lost more than 60% value since IPO. DUPD should buy back to stop price fall. That is our horizon for now. And to be straight with you no one know where the down is. They tell that investment activity still alive but that in most cases this is just a smilie face. No more.

Btw, I leaved Colliers for my own project. I miss you guys.

So, I'm online again. And I hope you as well. CU

P.S. Alex, you're rock, chuvack! ;)

Friday, October 3, 2008

Ukraine Real Estate Market: Reload

Coming soon, stay tuned...

Friday, March 21, 2008

The Next Big Thing: Risks Fail To Dampen Market

From Financial Times By Daniel Thomas
Published: February 27 2008

Over a late night dinner between some of the most active international property investors and developers 18 months ago, there was one country that everyone agreed would be the next big investment market: Ukraine.

The numbers just added up, they agreed, it would be the “next Poland”. The large and increasingly affluent population clearly need offices and retail outlets, while its location with Russia to one side, and Poland, Romania and Hungary on the other, seemed neatly positioned for industrial requirements. Strategically, it is at the crossroads between Europe and Asia.

Now, these predictions seem to be coming true, with the Ukraine believed by many regional experts as an essential market to invest. The problem, however, is that the speed of acceptance of the country could mean that returns are coming down too quickly in a country where there are still risks to Western investors.

The Ukraine is the second-largest country in Europe, with a population of more than 46m people. It is still a poor country, however, with almost 40 per cent of its population below the poverty line, according to 2003 statistics.

The most obvious risk about conducting business in the Ukraine is in the political sphere following a crisis last spring that sparked an early legislative election and, by December, a new prime minister.

Analysts say that the government could do more to improve the investment outlook, including more efforts to crack down corruption, the development of the capital markets and improving the legislative framework.

On the long-term economic horizon, there is the potential threat of a reinstatement of tax, trade, and customs privileges, and a government promise to maintain restrictive grain export quotas.

But the Ukraine’s economy remains buoyant in spite of the political turmoil and background concerns about the mechanisms of government. Real gross domestic product growth reached almost 7 per cent in 2006-07, fuelled by strong consumption, which was in turn spurred by rising pensions and wages.

This is why many developers see the country as ripe for retail development, in particular, to soak up some of this money. Developers predict that the country has capacity for at least one substantial mall in every significant city. And a significant city in the Ukraine is one with several million people.

Property advisor Cushman & Wakefield says that the economy has mostly ignored the political problems, adding that “following recent elections some normality is returning to the Ukrainian market”.

The market is still relatively undeveloped outside the capital city of Kiev, which has already attracted Western companies. Investment in the country is primarily by developers at the moment, with comparatively little good quality commercial property for investors to buy even if they wanted to.

Fund managers say that Ukraine has significant scope for opportunistic strategies, despite the higher country risks and the poorly developed real estate market practices.

The market has attracted London-listed investment company Raven Russia, which recently received shareholder permission to extend its remit into the Ukraine. Although it will remain focused on Russia, the developer sees the country as an important market for future growth.

“Ukraine has great potential,” says Glyn Hirsch, executive deputy chairman of Raven Russia, “particularly logistics development. Investors need to be very sure what they are doing and do their homework, but the returns could be very good.”

Yields in Ukraine are still relatively high compared to neighbouring counties, which makes agents predict a growing investment market.

“Countries to watch are Ukraine and Turkey where a few property opportunities exist but are not well known yet,” says Simon Moore, analyst at Collins Stewart, who points to the potential for greater capital growth and possibilities in the “property development stages”.

But there are worries that the market is just not ready for the levels of capital being targeted at the Ukraine.

Mark Mogull, founder of Benson Elliot Capital Management, warns that the weight of money could cause a bubble. “The Ukraine has a relatively small economy, and so there is a limit to how much capital it can absorb before causing a dangerous liquidity bubble.”

There are more practical problems. Land ownership is key for a developer, says one local agent, and the Ukraine seems prone to having disputes about who exactly owns what.

Because of this, many developers have established relationships with local partners, which is also useful for aspects of construction such as installing utilities.

There is also a currency risk to the Ukraine, as with all countries outside the EU, and investors are advised to hedge the risk through one of the many complex instruments such as currency options and swaps, or buy currency protection through an insurer. Any hedging method is likely to cost disproportionately, which needs to be factored into any investment.

Wednesday, March 19, 2008

'Ukraine: Investment Infrastructure: EURO 2012' Investment Forum

Information from American Chambers of Commerce in Ukraine

We would like to inform all interested Member companies and Embassies on the Investment Forum planned to be held in a framework of the EBRD Annual Meeting held in May 17th, 2008, "October Palace" in Kyiv. Ukrainian State officials, leadership of the many leading Ukrainian companies, bank and investment companies, consultants, the NGOs and Embassies, leading experts and scientists as well as foreign guests representing both governmental and private sectors are among the participants of the "Ukraine: Investment Infrastructure: EURO 2012" Investment Forum.

Among the main goals of the Forum are presentations of the investment projects related to the EURO 2012 form different Ukrainian regions, discussion of the different aspects of the preparation process, and opportunity to hold discussion on the following topics: knowledge economy: innovations, technology transfer and venture business; Finance: financial sector, stock market; trans-border cooperation; globalization and business activity; WTO accession; discussion on the specific industry sectors including energy, machine-building, travel and tourism, agriculture, etc.; infrastructure including transport and communication; legal aspects of the investment projects' implementation, etc.

Currently Ministry of Economy of Ukraine is acting as the main responsible State body to prepare the agenda, speakers, round table topics and the guest lists. We would like to draw your attention that there is an opportunity to provide your feedback and proposals on such important issues as:

  • Specific topics needed to be included into agenda and Round Tables of the Forum.
  • Your companies' presentation and guest speakers, which you would like to offer.
  • Names of organizations and institutions you would like to see among the participants of the Forum.

Please contact Ms. Svetlana Kovalivska at the Ministry of Economy at and/or Tel/Fax: 38 (044) 281-9553 to indicate your organizations' interest, to provide a feedback and to get more information regarding the Forum.

Thursday, March 13, 2008

Famous Colliers Maps

I'd like to offer you a famous Colliers' maps, which present rent rates, yields and pipeline across Europe. You can download they here

Tuesday, March 11, 2008

Lviv Presented Its Investment Projects For EURO-2012

On March 6th, 2008 Mr. Oleg Synyutka, 1st Vice Mayor of Lviv and Mrs. Oksana Slysarenko, Deputy Head of the Presidential Secretariat hosted a special meeting for investment and diplomatic community on the priority investment projects for the upcoming EURO-2012.

Mr. Synyutka together with his colleagues from the Lviv City Administration responsible for the economic and investment policy presented Lviv as one of the cities hosting EURO-2012 outlining advantages of Lviv City, many important areas needed foreign and local investments as well as detailed description of certain projects. For more detailed information please contact: Tel/Fax.: +380 (322) 97-5900 / 03, e-mail: or

Here the short presentation, which includes statistics, economic updates, investments and EURO-2012 projects including airport reconstruction, hotels, and sport facilities, city development chapters and others.

The Fights With The Illegal Rents

State Tax Administration of Ukraine fights with illegal market of apartments for rent in Kiev.

In 2007 Kiev Tax Administration did 891 cases on the property lease property without the appropriate tax documents. The State budget received an additional UAH 253.4K. Only in January 2008, they has found 67 facts, paid UAH 33.6K of taxes

The main sources for information on those property was tracking information in the media, particularly in specialized magazines and Internet.

With growth in this income business, tax officers will pay more and more attention to real estate property profit. For sure, this affects in the first place to private owners, who pay taxes very rare. And this is a pretty clear signal from Yulia Timoshenko (through the tax administration) that State budget need more tax funds for social issues.

Friday, March 7, 2008

Ukraine: Catching Up With The Neighbours

From Financial Times By Roman Olearchyk

Published: February 27 2008

Ukraine’s hot property market has produced some superior returns over the past eight years, providing investors with double-digit annual price growth rates.But it was not until last year that structured investment instruments appeared, such as real estate funds, offering international investors exposure to this fast-growing market.Most of the benefactors over the past decade were privileged domestic investors who snapped up flats and land in a frenzy, often at very low prices.Many who managed to close several acquisitions, typically with cash, turned into millionaires overnight as annual prices surged for seven years at double-digit rates.

Residential flats that a decade ago were selling for about $50,000, have reached astronomical levels, typically more than $2,500 per sq m. That is enough to make Kiev (pictured above) one of the world’s 20 most expensive cities in terms of property prices.

The sharp surge in purchase prices and rental rates is tapering off, but Kiev real estate experts do not expect a big downward correction in the immediate future. Demand consistently exceeds supply, particularly for commercial space, where the most growth is expected in coming years.The market holds ample opportunities for large foreign investors seeking strong returns by investing in a new wave of real estate funds and property developers, some of which have listed on the London Stock Exchange’s Alternative Investment Market (Aim).

“To keep up the pace of development and raise money for future development projects and land acquisition, large local developers started to more actively explore capital raising opportunities through IPOs and private placements,” says Tomas Fiala, managing director of Kiev-based Dragon Capital.

Dragon raised one of the largest sums from an IPO on Aim when it listed Dragon-Ukrainian Properties & Development, bringing in $208m, followed by secondary private placement for $100m.One developer, TMM, raised $105m. AISI Realty raised $33m, adding to a flurry of private placements by developers and funds.“These placements raised $664m in the aggregate, or 39 per cent of the total amount of capital attracted by Ukrainian companies through IPOs/private placements last year, says Mr Fiala.“To compare, there were only two real estate company share placements in 2006 for a total of $85m.”

Cast back in time by virtue of its membership of the USSR last century, and the collapse that followed the end of the USSR, experts say Ukraine’s real estate market is about seven years behind its peers in central Europe.While the foreign investment raised thus far is small, the expectation is its growth will imitate its neighbours’. New shopping centres, office space, warehouses and residential space continue to sprout up across the country.

“Foreign capital is a latecomer to the Ukrainian real estate market, having become active in the country only in 2006 due to complex legislation and intricate legal procedures. In addition, international property buyers were restrained by a lack of available stock for sale,” says Mr Fiala.But investments in both property development and property acquisition will continue to grow as local returns are much higher than on the alternative central and east European markets, according to Mr Fiala.

Petro Radchuk, vice president, at KDD Group, the developer that raised $130m last year in an IPO on Aim, says the listing “has allowed investors to get exposure to the fast-growing Ukrainian real estate market”.Like other developers and funds, KDD Group can offer large scale investors a chance to take part directly in some of its projects.

“Real estate consultants estimate that supply will equal demand not earlier than in 2010-2011. This explains why office rent rates grew 40 per cent in 2006 and 35 per cent in 2007. Retail centres increased rates by 15 per cent in 2007,” says Mr Radchuk.Last year saw acquisitions bring new landlords to top retail and office space in Kiev.

“The simple fact is that there are opportunities to invest here, whether through direct investment or via a vehicle like one of our groups’ non-listed funds or future listings like the ones we have seen on the Aim,” says Paul Niland, director of Primeros Property Fund.

Thursday, March 6, 2008

GLD Takes Good Speed

GLD Invest (Austria), one of the leading international player in Ukraine, is going to to expand own activity in Ukraine. Recently company sold its K40 sqm logistic project East Gate to another Austrian investor, Akron Group for EUR 35 mln. At the same time, another their logistic property West Gate is very successful and almost rented out. Also they are going to Odessa with new logistic property, as well as Kharkov and Zaporizhia.

Besides, a company intends to go next level of the operations, taking into interest to office market, too. In this market, company announced funds about EUR 200 mln. This fguure quite correspondent with funds amount which is announced for Ukraine' project and exceeds EUR 450 mln.

That's pretty clear, because for now, GLD has good experience on local market with comprehensive expertise, with own experience and feeling of Ukraine market. And good relation within professional community. I could wish to Clemens Lehr (GLD' Head in Ukraine) and company in whole good results and noticeable project.

Wednesday, March 5, 2008

One Line News - March 5

  • CB Richard Ellis has opened office in Kiev
  • GLD Invest starts to build A class logistic complex in Odessa with total area exceeds K60 sqm
  • In 2007, Kviza Trade (Velika Kishenya' managing company) increased its profit in 4 times (to UAH 35.134 mln.) comparing with 2006
  • VSE Energy is going to invest in 4 logistic complexes about USD 120 mln.
  • Retail turnover in January 2008 has increased up to 27.1% comparing with the same period in 2007.
  • KDD Group (Kyiv Donbass Development) has signed strategic partnership with Osnova-Solsif, one of the largest Ukrainian-French construction company.

Tuesday, March 4, 2008

Upon Madrid Conference

As I posted before, I've been in Madrid for participating in conference regarding real estate in Ukraine. There were many well-known Spanish companies like Riofisa, Hypo Bank, Forum-Development and many more.

I guess I've done my presentation well indeed, 'cause there were many warm feedback for my speech for. Main focus was on real estate overview in Ukraine in general, with real estate analyze for regions.

I was happy to be there. Good contacts, good results and great weather :)

You can download my presentation here

Friday, February 29, 2008

On Air!

Hello everybody!

So, I'm trying to come back. There were huge new things recently. First of all, I'd like to announce that now I'm a Associate Director in Colliers International Ukraine. This is definitely new moving in my RE way. I'm very pleased indeed with the company, its experience, track records and people here! So it was a very overloaded month with new deals, projects and customers. That why I did not make any line. Sorry, I will. Thanks for all who have been writing me, it is very important for me.

Another great issue that I've just came back from Madrid, Spain. I was a key speaker at the "Opportunities in Real Estate in Ukraine" conference. It was a great event. I'm going to upload my presentation for you. I've been proud to do this from the Colliers team.

Anyway, there is a lot information from the market in Ukraine and blog is going to be one of the leading sources for that. Stay tuned!