No MIRAX Any More

March 3, Board of MIRAX, formerly, one of the biggest developer in Russia, has desided to stop MIRAX brand and TM respectively. As official notice says, all obligations will be fullfilled, particularly for projects with back from Sberbank (Moscow City project, for instance)

Mirax Plaza flows away to GazStroyConsult which is, according to rumors, very close to Prime Minister Vladimir Putin.

Most undefined issue is with international projects and desicision will be taken according the mutual agreement with local partners. The same situation with Mirax Plaza in Kiev. No information about its destiny so far

So, say goodbye to MIRAX...but who care the names     

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?

Kiev warehouse market overview (part 2)

Activity of a large companies constrained by the lack of suitable land sites with the necessary communication and legal status for their use. Most of this is a rural or agricultural, and changes with a view to further build warehouses is a difficult and long-time process. Especially according with well-known land moratorium. Few international companies will not engage in “hidden” transactions that could damage the their brand and image and lead to a legal proceedings. And the construction of new warehouses in Kiev city is limited by high land prices and low offer.

Increasing demand for warehouse facilities leads to an increase in rental rates. During the 2006 rental rates are increased by 15% and amounted to approximately USD 8-12 and up to USD 25 for 1 sq.m. without operating costs.

The building cost of warehouse space, according to the Real Estate Solutions at the USD 300-500 for 1 sq.m, Build & Live Development reports about USD 500-650 for 1 sq.m.. Specialized premises (freeze spaces, pharmacies, etc.) costs up to USD 1000 for 1 sq.m. And PB period for quality warehouse property is estimating at 7-8 years level.

Warehouse grade market share

А class – 5%

В class – 10%

С class – 40%

D class – 45%.

There is big demand for quality spaces. One of the reason is that almost all A class warehouses are build-to-suit project. So market demand for free space still high.

In 2007, the demand for warehouse will continue to increase and the new supply would not be able to meet. This will lead to an increase in rental rates until 2008.

Some planned projects

In 2007, Intereuropa company (Slovenia) plans to set up a logistics center in Ukraine in Kiev suburbia located on 24 ha. They are going to invest EUR 15.6 ml

In 2008, near Brovary will be built logistics hub. It will be places on 250 ha. Total investment amount of the project announced about USD 300 ml.

About their plans to develop new projects say Asnova Holding, FIM Group, Kuehne&Nagel, Komora-S, MLP

Kiev warehouse market overview (part 1)

Despite the in industrial and retail growth and the demand for warehouse real estate, the market in Kiev and in the regions is far filled demand. There is not only huge demand for warehouses, but also low supply that meets Western requirements.

In 2006, a significant improvement in the situation has not happened. Demand for professional warehouse facilities will continue to grow rapidly, outpacing the offers. Coming on the market new built logistics complexes could be expected only by late 2008. Rents will be raised.

Regarding to the improvement of the investment climate in the country, lower investment risks in the industrial production, rising imports and other factors, demand for warehouse real estate is growing constantly.The capacity of Kiev warehouse property market is about 1 million sq.m. But at the end of 2006, total professional warehouses space in Kiev and the area was just over 200,000 sq.m. And all the high quality warehouses in Kiev and the Kiev area is already filled by customers almost at 100%.

At the same time, some 80% of the warehouses in the city and the area did not meet international standards can be assigned to class C at most. As a result, the warehouses are located on the non-professional premises, which in the past were factories and plants So they did not meet the basic requirements : no special loading platforms and equipments, no conditions for the appropriate staff and cargo security, not complied with the height conditions, accessible is difficult. The estimated amount of such space is about K 500 sq.m.

The demand for specialized warehouses partially meet former fruit and industrial base, usually situated near major transportation routes, roads, railways. An important advantage is the availability of loading ramps, as well as facilities supporting proper temperature for storing food or medicines for example. But among such objects only a few ones meet the necessary standards.The total area of such facilities in Kiev about K100 sq.m.

In 2006 the market was filled with only K60 sq.m. of warehouse and 2007 it would go up to K170 sq.m. But only in Kiev must build at least K300 sq.m. of warehouses Class A. Now, as on the Ukrainian market is increasingly facing international logistics company we can expect to increase a market. Thus, there is new “MLP – Chaika” mixed-use (office-warehouse) with total area about K110 sq.m., located on Kiev-Lviv higway. GLD Invest Group planned opening at 2007, their first logistics complex - East Gate Logistic with area more than K40 sq.m.

My opinion (and other experts as well), the most suitable for the development of warehouse real estate is the Odessa and Zhitomir destination. Areas near Gostomel and Irpen (Warsaw direction), Glevah (Odesske direction) and Obukhov (Dnepropetrovsk direction) outside Kiev in 35 km distance are good as well.

Right bank is preferable for the warehouses is defined as congestion bridges connecting the right and left banks, and the absence of district roads in the Kiev' eastern part.

Bratyslava company suggests building entertainment centre

The Kiev-based Bratyslava company suggests that the Kyiv City-Planning Council approve its pre-design propositions for building an entertainment centre on Raisy Okipnoi street in Kiev's Dniprovskyi district. The project foresees the construction of an eight floor centre on the area of 0.13 hectares.

It is planned to arrange bowling and billiard facilities on the ground floor, and a large Internet cafe on its first floor. Offices will be located on the centre upper floors.

According to the project, the centre will have a restaurant for 50 seats, a cinema (80 seats), and cafe (40-45 people) and a gym. It is also planned to build a parking for 25-30 cars.

The council members recommended that the project be elaborated; particularly the building’s height should be brought down to 2-3 floors while the parking lot should have more places.

LV Holding discusses with Kiev authorities new mixed-use

The Kyiv Town Planning Council has recommended that the LV Holding (Kiev) split the office and residential sections of the mixed-use complex called Livoberezhnyi Public Centre that it plans to build on Mykilsko-Slobidska Street in Dniprovskyi district in Kiev.

The Kiev Town Planning Council's architects have recommended that the designers of the project (the Architectural Union) design a transport layout that will allow entry to and exit from the territory of the complex. They also recommended that the designers of the project create a pedestrian zone along Dnipro and make a recreation zone that includes an aqua park and dolphins pool.

The project provides for construction of three separate high-rise buildings: an office centre with apartments, an office centre, and a residential building. The building will have 650 apartments, and a fitness centre will be located on its first floor.

The buildings will be located on three separate land plots with a combined area of 15 hectares. According to the project’s chief architect Maria Suska, implementation of the project will require about three years. Construction is scheduled to start in 2007.

Sounds good, but there is one strange remark: this company is absolutely new in Kiev construction market, no previous projects and the owners on LV Holding are some unknown persons. Main question is: who is behind the deal?

New mixed-use complex in Kiev

Rele-Invest company is going to build new mixed-use complex at the Gorkogo str, in Goloseevo district in Kiev.
Total space for new complex will exceed K440 sq.m. including K243 sq.m. in residential, K29 for offices and about K65 for retail and entertainment. And I forgot about parking. Sure, it is, more than K96 sq.m. as underground one.
Rele-Invest was set up as SPV espesialy for this project, which has been bought from well-known Kiev company TMM.

XXI Century Investments starts to fit-out in the new “Kvadrat” shopping centre

XXI Century Investments starts to finishing out in the new “Kvadrat” shopping centre. This shopping centre – one of the biggest commercial real estate object in Kiev. Architectural project was made by famous Chapman & Taylor design company. They offered a couple innovation for current retail market, i.e. shop front made as glass screen, where is located the food-court. There are many first time new lighting and colour solutions. For example, Scott Lighting has made a special lighting panel.

Some data about new “Kvadrat”. Total space - K41 sq.m., GLA (retail) - 18 sq.m., and land site with 2,45 hectares. There is underground car parking for 589 places. Term of construction – 4 QT. 2007

Kiev city planners approve 350 m USD shopping/office complex

Ukrainian real estate company XXI Century Investments Public Ltd said the city planning committee of Kiev has approved a 350 mln usd mixed-use Vyrlytsia complex in Kiev's Darnytsia district.

The complex comprising shopping, entertainment, hotel and office space would be on a total building space of around 500,000 sq metres. Construction is expected to commence in the third quarter of 2007.

Earlier this year, XXI Century extended its leasing agreement to 25 years with Kiev City Council on the land where the mixed-use Vyrlytsia complex in Kiev will be built.

Vyrlytsia is a station on Kiev Metro's Syretsko-Pecherska line