NAI Pickard has published a NAI Pickard survey of Kiev property market for the 1st 1H 2010. The survey highlights the main macroeconomic indexes for Ukraine and describes main trends in commercial and residential markets in Kiev.
Download link (PDF)
To date, there are at least 30000 flats in Kiev being empty and only 600 lease deals have closed last couple month. Compare these figures with early 2008 when 3000 deals were only per 1 month. Why that's happen? People inflow in Kiev is lower, many flats moved from sale to rent conditions and they are still expensive.
So you have a good options to find a proper deal.
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.
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.
Land plot for sale
Location: Odessa city
Size: 13 ha
Zoning: Retail and social development
Title: Private property
Price: USD 110/1 sqm
write: kalinin.sergey@gmail.com
Seven Hills (Kiev), a subsidiary of Scorpio Real Estate Group (Tel Aviv), a multinational group of developers, intends to invest more than USD 1 bln. in housing, offices and industrial property in Ukraine. Funds will be invested in the construction of residential complex Park Avenue in Goloseevskiy district, mixed-use retail and office center - Podil Center and the Airport City, mixed-use complex in Boryspil.
Their plans also include construction of suburban shopping mall and toll roads that would connect the Polish border with the Donetsk region and Russian border with Black Sea ports.
Currently, the company is involved in 3 projects: Park Avenue, Podil Center and City Airport.
Park Avenue - residential complex, which will be located in front of Goloseevo park in Kiev on the 4ha land plot. The total area is K 200 sqm., including K 120 of housing, K 10 sqm – the offices. The complex will include a sports centre, swimming pool, shopping center, underground parking, restaurant, bar. Now the site is being prepared for construction.
Podil Center is located near Kyiv - Mohyla Academy and will be a combination of A Class offices (K22 sqm.) and the K 30 sqm. shopping center. The company intends to begin construction through 14 months.
Airport City will be located on the
According to the Seven Hills’ CEO, Ari Schwartz, the PB period for Park Avenue is 1.5-2 years, Podil Center 3-3.5 years, City Airport 4.5-5 years respectively .
All land plots for the development are under the long-term lease, in particular for the Park Avenue construction - for 5 years, Podil Center for 10 years, and Airport City in 49 years
From Ukrainian News
The Kyiv city council is recommending Kyivans not to buy apartments from Mars company, which took on lease a land plot at 29 Miliutenka Street in the Desnianskyi district for building a residential house.
The recommendation was issued by a city council session on Thursday, May 24.
"To make it public with the aim of informing citizens about possible negative consequences from the purchase of apartment in the aforementioned house," the recommendation says.
The city council advises Mars not to sell apartments or conclude investment contracts for apartments until the city council decides on renewal or termination of its lease agreement.
The city council issued the recommendation following the decision passed by the Desnianskyi district council in March about inadmissibility of residential construction at 29 Miliutenka Street because of public protests.
Moreover, Mars, which took the land on short-term lease for three years in 2004, did not use it for construction purposes in the next three years, though began selling apartments in a house, which is yet to be constructed.
Anatolii Mukhovykov, head of Kyiv's main land relations department, said that 60 individuals, seeking to buy an apartment, concluded agreements with Mars to a total value of around UAH 12 million.
People started turning to courts, he added.
Mukhovykov thinks the city council should not extend the lease agreement with Mars.
The agreement expires in June.
As Ukrainian News earlier reported, the Kyiv municipal administration has registered 1,220 investors who have suffered from the Elite Center apartment fraud.
The fraud became public in early February 2006 when the committee of investors in the Elite Center construction investment group said that the company's executives had stolen over USD 100 million invested in construction of residential buildings in Kyiv.
Companies Parus and Alliansbud companies won the investment deal for reconstruction of the underground space under Peremohy Avenue near Polytechnic Institute subway station.
There is one news which could be funny, smart and strange in the same time. It is in close relation with Euro-2012.
According to the experts, almost K500 tourists are going to visit Ukraine for this event. So, Ukraine needs a lot hotels and housing to receive such huge number of people.
Lyudmila Mescherskih, Chief of Regional Development and Public tourist resorts has own solution She said that according to the concept developed by the Ministry of Family, Youth and Sports and Ministry of Economy, in a city where the championship will be held (Kiev, Donetsk, Dnepropetrovsk and Lviv), to be built 50 to 70 hotels of between 3 and 5 stars.
However, Mescherskih noted that after the championship these hotels will not be filled and thus might not be profitable for investors.
"... let this be a small residential district in which the State would build the infrastructure, and companies that want to make investments, to build housing," said Mescherskih.
According to her, in the there will be built multifamily houses, which after a championship can be sold to young families on the program of youth housing loan.
"It is much better than build luxury hotels, as in Kiev is not enough hotels for middle-class tourists who could not buy expensive hotel suites," she said.
Sounds very unexpected. Is anybody asked the tourists if they want to live in multifamily residential houses instead hotels??
From Ukrainian News
The average rent for one-room apartments in Kiev fell by 2.3% or USD 11.9 to USD 506.2 per month on May 4-11.
This was revealed in the data of the realtor portal Nerukhomist (Real Estate).
According to information of the portal, the average rent for two-room apartments in Kyiv fell by 0.6% or USD 5.3 to USD 826.5 per month, the average rent for three-room apartments rose by 1.9% or USD 27.4 to USD 1,436.9 per month on May 4-11.
The lowest one-room apartments rents in Kiev fell by 1.9% or USD 6 to USD 310 per month, for two-room apartments rose by 0.7% or USD 3 to USD 429 per month, for three-room apartments fell by 4.9% or USD 27 to USD 526 on May 4-11.
The highest rents for one-room apartments fell by 1.8% or USD 20 to USD 1,110 per month, for two-room apartments rose by 3% or USD 55 to USD 1,873 per month, for three-room apartments fell by 2.3% or USD 80 to USD 3,341.9 per month on May 4-11.
As Ukrainian News earlier reported, The average rent for one-room apartments in Kyiv rose by 5.1% or USD 25.3 to USD 518.1 per month on April 27 - May 4, the average rent for two-room apartments rose by 3.1% or USD 25.3 to USD 831.8 per month, the average rent for three-room apartments rose by 5.3% or USD 73.5 to USD 1,464.3 per month.
The residential prices won't down within next 5-7 years, said Lev Partskhaladze, Chairman of well-known Ukrainian developer XXI Century. His opinion is based on lack of new projects in Ukrainian market.
I don't know what really drove him to the such forecast, perhaps the desire for keeping all things happen. Or last chance to stop bubble collapse?
Donetsk-based company "Gerz" are reporting about residential prices in its city. So, since the last month prices increased up to 2.2% and within 2006 this figure has became 14.1%
At this time the average price for Donetsk residential real estate is setting as USD 965/sqm.
In this year Dnepropetrovsk region finished 74K sqm of residential buildings, which is 10K more rather than year before.
According to the press department of service of Dnepropetrovsk region administration, the total volume of residential construction increased by 15%, while in Ukraine it is 4% growth. The private developers built more than 80% of total residential buildings.
Nearly a third of housing built in the regional center.
Many people are talking now about situation on Ukrainian residential real estate market. My goal to discover the different thoughts and opinion to find right way of thinking.
So, I uploaded a new article from Business Ukraine regarding such issues. Please read and comment. PDF, 1.7 Mb
Kiev flat prices going down. During the summer time secondary market supply prices could decline up to 10%. In spite of lack real buyers prices can't grow any longer. Different residential experts say that since the end of last year, sales of each thirteenth flat cut prices USD 3-15 K, and the same number of owners to do so in negotiations with the buyer.
Sounds real, comparing that apartments in Kiev are in 1,5-2 times more expensive than in Warsaw, Sofia, etc.
As a result, there are a large number of "frozen" apartments. According to the "Planeta Obolon", as compared with April 2006 now the listings for sale have 25% more apartments and nearly 60% more than in December last year.
Realtors say that the disappearance of the buyers has led to some " step back" prices. However, as a 1, 5 year, this is regarding only those who can not wait and is interested as quickly as possible to obtain cash.
Most experts agree that at summer even more apartments reduce their price and the total trend could reach 10% down.
Current prices (average weighted) for one-room apartments on Kiev primary real-estate market has become USD 2,048 per sq. m., the average prices of two-room apartments on the primary real estate market on USD 2,699 per sq. m., for three-room apartments USD 2,534 per sq. m.
Next presentation form this event - "Kiev Residential Market. Is the “Trend Your Friend?” from Peter Gage Morris, Managing Director, Ober Haus.
Download
Current prices (average weighted) for one-room apartments on Kiev primary real-estate market has become USD 2,009 per sq. m., the average prices of two-room apartments on the primary real estate market on USD 2,670 per sq. m., for three-room apartments USD 2,471 per sq. m.
Kiev City council has leased a 1.07 ha land plot located at Hlybochytska Street, in Shevchenkivskyi district to the VK-Brok company for construction of an administrative and residential complex.
Kiev City council has leased a 0.85 ha land plot located at Hlybochytska Street, in the Shevchenkivskyi district to the Kyivmiskbud holding company for residential construction.
Kiev City state administration failed to find an investor for reconstruction of underground passage with construction of retail facilities under Peremohy Avenue near Polytechnic Institute subway station.
Kiev City state administration choose Comfort Market Lux to invest construction of a retail and entertainment complex at the intersection of the Chervonohvardiiska and Chervonotkatska Streets in the Desnianskyi district.
Kiev City state administration has selected Kiev Terminal company to invest into reconstruction of the Kharkivska Square.
Kiev City state administration selected Budmarket Group to invest construction of retail and entertainment complex and a hotel in the Desenka Bay in the Dniprovskyi district.
