Search in blog

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...