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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.

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.

One Line News - October 10

• Intermarket company (Lviv) is going to start operations for new K96 sqm shopping center at 2H 2008
• Kiev City Planning council did consider master plan for the last large territory (Osokorki) at the Left bank for 5 mln. sqm of residential construction
• Rizidor Hotel Group intends to open 4 brand new hotel until 2011 - one Radisson SAS and two Park Inn in Kiev and one hotel (brand is unknown yet) in Crimea
• Baltic Development is developing a new K 46 sqm logistic complex in Borispil, 13 km far from Kiev with USD 45 mln. total cost
• Kiev City Planning council has approved a additional area for Bolshevik shopping centre expanding more than K25 sqm
• XXI Century has announced its Net Asset Value - USD 1.498 bln, 1Q 2007 EBITDA - USD 27.27 mln.

Raven Russia Seeks To Develop Logistic Park In Ukraine

By Jim Pickard, Financial Times, London, UK.

Raven Russia, the Aim-listed Russian property vehicle, is seeking shareholders' permission to develop a 1m sq ft logistics park in Kiev, Ukraine. The joint venture requires an EGM because the deal would be outside Raven's original geographical remit.

The shares rose 5½p to 96¾p as it said it had committed $1.9bn (£945m) to various projects. The group raised £453m in its 2005 flotation - and a rights issue in 2006 - to invest $3bn in Russian real estate.

Pre-tax profit of £32.1m (£4.5m) for the six months to June 30 was boosted by the revaluation of its investment assets. Net asset value per share rose from 106p to 110p.

My Last Article For CEPIF

I come back and would like to present short market overview, prepared for CEPIF Year book by me and Gerald Bowers. So, your comments are welcomed.

Real estate in Ukraine in 2007
S. Kalinin, G. Bowers

The Ukrainian market investment climate and potential for foreign companies

There is no doubt that the potential of the Ukrainian Real Estate market attracts foreign investors. However, globally-recognized market players have advanced slowly in general and are only now taking concrete steps to move in with projects. Political risk has played part in this process, but it also takes time to adequately study a new market. Apparently this course has been finished, for more and more foreign companies have started appearing on the Ukrainian market. The profitability seen in Ukraine’s real estate projects makes the attendant level of risk palatable for foreign investors. The expectation of long-term growth for the economy is also an important point for those entering Ukraine. And though Russian businessmen have been investors in Ukraine and they have made some impact, the wholesale entry of foreign investors into Ukraine is only a matter of time.

Politics, Economics and Football

The President of Ukraine, Victor Yushchenko, considers political stability as the essential factor in the formation of a proper investment climate in the country. “I assume that if we wish to have a stable investment climate, first of all our country has to learn to provide a stable political situation”, the President said.

Nowadays, the developing market in Ukraine provides a wide range of opportunities for investors, and the commercial real estate sector ranks at the top of these options. Its main advantages are based on the fact that adequate investment rules have already been adopted, and in some ways, it is easier to enter the commercial real estate market than other segments of the economy. Also, this part of the market is well protected by the state regarding ownership and the respect of foreign investments. As a result the market is seen as largely having concrete and comprehensible rules of play that correspond with those used all over the world.

From the economic point of view the Ukrainian market is one of the most attractive in the world. Profitability in particular segments (retail, offices) is approximately twice that of the European Union, and on top of that, it features constantly growing demand. An annual 11-12 % yield is normal for the commercial property market and in some particular cases it can greatly outdo these rates. For instance, according to AT Kearney’s ratings, Ukraine’s commercial property market is 4^th in the world as for its attractiveness to investors, and this has triggered moves into the market by a lot of players such as IKEA, Auchan, Tesco, Carrefour, OBI, Metro, Real, X5 in their rush to obtain a place in a European country that has constantly growing purchasing capacity.

The European football championship is definitely one of the most important factors that will give an extra impetus to the development of the Ukrainian economy for some years to come, and the commercial real estate market will be at the forefront of this development. This fact is difficult to overestimate. Properly preparing for the event will require almost 1bn Euros in investments, and these investments will come from domestic players as well as from international developers greatly experienced in handling business in similar conditions throughout CEE. Thus a lot of well-developed companies will take the opportunity to step into the market. First among these will be the companies that can bring hotel and retail projects to the table, and especially companies with experience in infrastructure development. The core idea would be to suggest sound decisions and projects that will become lucrative to the investor and at the same time useful to Ukraine as an investment recipient. There will be a great emphasis put on experience as well as mutual benefit.

One should also mention that among the main problems on the commercial real estate market that ought to be kept in mind is the implementation of a single proprietorship register accessible to anyone. The lack of it remains one of the principal factors affecting the investment climate in Ukraine and the possibility of creating high quality investment projects. In Ukraine currently there is no single real estate register that contains all of the information about a property and the rights for it. As a result the investor can’t easily find valid data about the vendor’s rights for the property. Another problem is that, for instance, the land and real estate situated on it are considered as two different types of property and as a result the ownership rights for them are listed in two different registers. Altogether this hinders the investors, both domestic and foreign, from taking more active positions in the country.

Kyiv, Odesa and Beyond

From the geographical point of view the most profitable location naturally remains the capital of the country, Kyiv. There’s a high deficit of office space and the annual yield reaches 20%. However, Kyiv isn’t the only city to take into consideration. Investors are paying quite a bit of attention to cities with populations of over a million people such as Dnipropetrovsk, Kharkiv, Donetsk and Odesa. L‘viv, the largest city near the Polish border, will be particularly important during the European football championship. Also, investors are starting to be highly interested in the hotel business in Crimea and in the Carpathian Mountains.

At present western investors coming into the market are mostly concentrating their attention on the Kyiv market though they are still very aware of the rest of the country. Only experienced companies well-acquainted with Ukraine are taking on business in the countryside. Above all, investors have been interested in the eastern portions of Ukraine. The industrial portion of eastern Ukraine has a certain accumulation of capital. To this list we may also include some southern port cities such as Odesa and Mykolayiv. At the same time one should remember that the west of the country is characterized by agriculture, and the east is known for metallurgy and heavy industry. That’s why one finds greater capital movement in the eastern and central regions.

Odesa Oblast and Crimea are perennially among the most interesting to foreign investors. And the real estate market both for commercial and residential property is one of the most attractive for their investments. According to the volume of foreign investments, Crimea comes ninth after Kyiv City, and Dnepropetrovsk, Kyiv, Zaporizhzhia, Donetsk, Odesa, Kharkiv and L’viv oblasts. But Crimea attracts mostly Russian investors, which can be partly explained by historical events.

In Odesa, which is not only a resort city but an important industrial region with highly developed transport infrastructure, the preconditions for commercial property development were formed a long time ago. Interest in commercial real estate is steadily growing, and one can find Russian, Polish, Czech and Baltic investors there already. Retail projects in particular are doing well in Odesa. Though most retailers are focusing on the Kyiv market, the opportunities available to those who look outside the capital are enticing, and 24% of retail network operators interviewed are interested in expanding into Odesa, with only Dnipropetrovsk ranking higher.

Nationwide, the most wide-spread proprietorship forms of land development are buying lots through acquiring the State Act of Proprietorship, or leasing the land for a period of 49 years by signing a land lease agreement with the owner. Forms such as leasehold (mostly of buildings) and Public Private Partnership, though popular practice in the European Union, are not yet dominant in the Ukrainian development landscape.

Attractiveness of various real estate market sectors in relation to investment projects

Residential property - Quick returns. Per capita living space half of western Europe. Local experience in this sector exists.

Retail - Great need for the development of retail spaces in cities with more than 200-300 thousand people. A first generation of trade centers exists. Highly developed retail networks within the country. Increase of personal incomes being felt.

Hotels - Shortage of good hotels. Increasing numbers of tourists and businessmen coming to Ukraine.

Warehouses (logistics corridors) - Beneficial geographical position of Ukraine. The development of warehousing has been triggered by the development of trade spaces.

Office property - Mostly concentrated in Kyiv where there’s a serious deficit of quality supply. A lot of projects to be implemented in Kyiv in the next several years.

According to the Ukrainian Investment Survey 2007 done by the Adam Smith Institute, foreign companies characterized the investment climate of Ukraine in the following way:

63 % of interviewed investors think that Kyiv has the greatest potential and the most attractive investment climate in Ukraine. 11 % preferred Donetsk, 10% Dnipropetrovsk, 5% Kharkiv, 4% - L’viv, 3 % - Odesa. The remaining oblasts attract only 5 % of investors.

In Ukraine the most attractive branch for investors is also Real Estate. It got 44 % of the votes; the second-favorite business is retail trade (15 %) and only after that - financial services (13 %).

The survey was held in February 2007 with 250 Ukrainian and foreign companies.

The Ukraine Market by Segment

Office property

The annual yield of Ukrainian commercial property investment is up to 10-15 % while markets of Poland and Czech Republic see 6 % less. To totally cover the invested money in Kyiv office property takes from 3 to 5 years while investors in European countries have to wait 12-15 years, which becomes a great advantage to foreign companies building office spaces in Ukraine.

Economic growth, reflected in positive trends for macroeconomic indices and an increase in the volume of foreign direct investment into the economy of Ukraine, has caused an even greater mismatch between supply and demand, particularly regarding A class business centers. This has resulted in a 17-33% increase in rents in A and В class business centers respectively, indicating one of the lowest vacancy rates, 1.7%, in Europe.

Foreign developers investing into office property may see high income but not as quickly as with a residential property investment, for instance. However, after delivery, the owner may sell it as a working business and see even higher income.

The increase in business activity that has been observed in recent years has led to very high demand for office property. Accordingly, this has become an incentive to investors and developers to bring about projects in this sector of real estate. The retail and office property segment, with its high rental rates and low supply of quality office spaces, will remain the top issue for investors in the short-term period.

Over the last 2-3 years one may observe that foreign companies have been buying active business centers that are already operating and that are filled with tenants. This is due in part to the fact that it’s much cheaper and certainly easier in Ukraine to buy an existing object than to get the land, to settle all of the issues regarding documentation, fill in other gaps such as project management and finally start building. Thus about 80 % of all office centers at the moment of being bought from domestic companies were ready to be delivered to the market or, in the case of older sites, were ready to undergo reconstruction. And only 20 % of Kyiv’s office centers were built from scratch by foreigners.

The demand for purpose built or dedicated business centers in Kyiv has continued to grow primarily due to the influx of foreign companies. These companies account for 71% of the tenants in class A and B+ office centers in 2006 in comparison with 62% in 2005. As of mid-2007, the vacancy rate for class A and B+ offices is 1.7% in comparison with 3% in 2005, confirming a continuing shortage of high class offices. There is also a trend now for domestic firms, especially business and financial services companies, to upgrade to better locations when possible. This tendency should continue for several years to come.

Retail premises

Retail projects in Ukraine are quite attractive for investors, and investments are completely covered in 5 – 8 years, or about half the time of the European average. Unlike warehousing and specialized industrial projects, domestic developers have some experience in meeting the requirements of building modern retail centers.

A look at 2006 shows how the retail market is evolving. The sale of Piramida – the first sale of a modern retail object in Ukraine - gives an example of yields, and the fact that 45 000 square meters of retail premises was delivered, both point to increasing and unsatisfied demand on the part of retailers. Taking into consideration the rise in the country's economy which in turn is increasing per capita income, developers expect the high demand for retail real estate to be maintained for several more years. The year 2007 has been characterized by the increase of developers' attention to the oblast centers of Ukraine though the retail real estate market in Kyiv remains undersupplied.

During 2005, Dnipropetrovsk Oblast led retail real estate development. Odesa oblast was the market leader for 2006. According to forecasts, L’viv Oblast should become the next hot spot for retail real estate development in Ukraine. A number of regional retail chains, such as "Intermarket" (L’viv), "Amstor" (Donetsk), "Tavria B", "Ideal" and "Kopeyka" (Odesa), "Soyuz" (Chernihiv) have declared their expansion intentions including the Kyiv market. It can be assumed that the tough competition and the shortage of vacant land plots in Kyiv itself will become a limiting factor, though building just outside the city limits is expected to pick up.

With the entrance of large foreign retailers on the Ukrainian market, the appearance of new formats and the strengthening of competition between domestic and foreign players is certain, and the need for purpose built retail sites will only grow.

Warehousing and logistics

Considering the fact that the warehousing market in Ukraine and in Kyiv in particular has just begun to develop it’s difficult to estimate its turnover. According to data from DEOL Partners, in the beginning of 2007 the capital’s supply of adequate warehouse premises meeting international requirements was about 184 000 square meters, despite a market capacity of about 0.85 – 1 million square meters. Class C and D class warehouses provided 70 % of the market space available. And this is despite constantly growing demand.

At the moment, all segments in Kyiv’s commercial real estate market, like that of Ukraine in general, are attractive to investors as the market is undergoing a period of high-speed investment development, but in 2007 the logistics segment is clearly becoming a favorite.

By the end of the next year developers hope to bring to market 4 to 6 warehouse complexes, with a total area of 230 – 370 thousand square meters. However, in 2007 only one A class complex, with a total area of 27 000 square meters is being put into operation. Major delivery slippages are the norm, especially for this market segment. The warehouse property market is the least developed major segment in Ukraine. There are a scant number of professional warehouses, so the potential for this segment is high. At present the potential demand for warehouses in the capital is a million square meters with 20 % an annual increase expected. The annual percentage yield is 12-15 % compared to other CEE countries, where it has dropped to only 5-10%).

In the next several years there could be built not more than 300 thousand square meters of modern sophisticated warehouses but upon the condition of realization of all declared projects at the moment, the influx of new investors on the market and growth of Ukrainian developers’ interest in this segment. In 2007 – 2008 the supply may become 400 – 500 thousand square meters but a lot of specialists are not so optimistic and call it in question. Nevertheless, disregarding its present lagging far behind the rest segments, real estate market analysts are unanimous as for booming development of this segment in the nearest future as western operators such as Ramstor, Auchan, OBI, and Praktiker have stated their intentions to come into the Ukrainian market within the next 2 years.

There is room for anyone who wants to enter the warehousing market, as the present demand for professional warehousing facilities exceeds the supply by a factor of two. Domestic developers do not have as much experience in the segment as in office or retail development, and foreign developers should take this into consideration when looking for a domestic partner.

As of the beginning of 2007, rental rates averaged $10-14/m² monthly, excluding VAT. The rental rates depend on the location of the warehouse, infrastructure, technical charac­teristics and range of services provided. Along with the high demand for warehouse complexes, there has been a noticeable tendency for rental rates to increase.

Hypo Real Estate Bank International Finances MLP Chaika Logistic Complex

Hypo Real Estate Bank International has opened a USD 82mln loan line to MLP company (International Logistic Partnership; Russia) for construction of MLP Chaika logistic complex near the Chaika in Kyivo-Sviatoshynskyi district of Kiev region.

According to the report, the purpose of funding a financing of the construction and further refinancing of MLP Chaika logistic complex.

«That is the fourth project financed by Hypo Real Estate Bank International. In 2006-2007, MLP received four credits from the bank for over USD 530 mln," the report reads with the reference to MLP partner Bruce Gardner.

According to MLP's CEO Vitaliy Kaschenko, it is the first time when the bank to provide project financing for construction in Ukraine.

Investments in the development will exceed USD 78 mln.

Terry Pickard About Warehousing Demand

From Business Ukraine #15

Local Developers Becomes Stronger

Recently, I've wrote about Kharkov company Avek, which builds office center Ave Plaza. Today, I found new info on its plans regarding logistic market. Company started seeking a land plots in various regions of Ukraine.

The development of logistics centers approved by the shareholders and management as strategy for company in 2007-2011. The initial planned investment in this business is about USD 50 mln.

Business plan includes the development of a logistics center in the southern, western and eastern regions of Ukraine. As most attractive places for the location of logistic complexes, company considers area surrounding Odessa, Kharkiv and Western Ukraine. Besides, Avek plans and development the similar objects in Russia (Belgorod region), on border with Ukraine.

For that construction will be established Avek-Logistic, which in the future may become manager of logistics centers.

It's great that local companies, like Avek, invest significant fund in development, especially at their own regions, where Kiev developers not presented yet.

TMM Is Going To Logistic

Actually, we all know that well-known developer TMM is residential, office and retail player. But now they intend to go further. Company released information that they plan to build about 10 logistic complexes in Kiev region with USD 7 mln. cost each of them.

According to market information, the construction of the first complex could start as early as next year.

Now, the cost of logistic construction is USD 700, at least. And if we will take a standard size for such project, which could be around K10-15 sqm, so minimal investments in every single complexes will USD 7 mln at least, depending from type of property.

Of course, such "big fish" could not pass through great demand for logistic. From several assumptions the demand for free spaces can increase up to 1 mln. sqm.

"This market segment Western investors considered to be less risky than residential. Moreover, the profitability of construction of warehouses is acceptable to us. So we are planning to diversify our portfolio, "says CEO of TMM Nikolai Tolmachev.

Regarding funds for the project, they are likely to be obtained through the IPO, as I posted recently.

MLP Leases Over 30K Square Meters of Offices and Warehouses

MLP company (International Logistic Partnership (Russia) has leased over 30,000 square meters of warehouses and offices to Fordon logistic company at MLP Chaika logistic complex in the village of Chaika in Kyivo-Sviatoshynskyi district of Kyiv region.

MLP company disclosed this in a statement, text of which Ukrainian News has.

Colliers International company, which represents interests of the leaser, was the consultant of the deal.

Fordon received an independently located building with the area of 30,000 square meters, which is to be leased in October-December 2007.

Two warehouses with the area of 75,000 and 7,800 square meters are planned to be leased in January-March 2008.

Leasing negotiations are currently being held.

Fordon Ltd was created in October 2005.

The company aims building of large and up-to-date logistic company in the Ukrainian conditions.

As Ukrainian News earlier reported, in October 2006, MLP started construction of the MLP Chaika logistics complex near the village of Chaika in Kyivo-Sviatoshynskyi district of Kyiv region.

The Aerobud company is the general contractor for the construction project.

Investments in the construction project will total USD 78 million.

The company is aiming its project at major tenants: Ukrainian and transnational manufacturers of consumer goods, distributors, and complex logistics operators.

Warehousing space will be leased by Colliers International Ukraine at USD 12 per square meter.

MLP and the Kyiv regional administration signed a memorandum on cooperation and coordination of their actions on September 29.

MLP specializes in development and management of international-class warehouses in Russia and Ukraine.

The aim of the company is to create and manage a large network of class-A logistics parks with a total area of 1.3 million square meters in Russia and Ukraine.

Source: Ukrainian News

Powerful Alliance In the Logistic Market

Pretty new, but fast-developed companies Cube Capital, PPF Investment and Vicus Limited are going to finish a brand new A class logistic complex is located near Makarov and Kiev-Zhitomir highway. Planned term of completion is 4Q 2007.

The total space of new property is 70K sqm, what is significant amount for the market in this year.

Project adviser is well-known Dragon Capital, managing company and exclusive landlord rep - Giffels

Logistics Markets in CEE from DTZ

Next presentation for Time To Invest Kiev IV, from from DTZ. It calls "Logistics Markets in CEE". I removed a couple slides not related with Ukraine (sorry guys:)

Download

MLP is building a new logistic complex

International Logistics Partnership (MLP) has acquired land for the construction of a A-class warehouse complex. The sire is located in Borispil city, near Borispil airport, 15 kilometres away from Kiev. На участке размером 20 га планируется построить складской комплекс класса «А» общей площадью 100 тыс. Size of the site is 20 ha and they are going to build warehouse complex with K100 sqm. total space. This project is a logical continuation of the MLP's developing a single logistics network in Russia and Ukraine.

This land site has been chosen because of the potential demand in this destination and the ckose positions to major transport routes. Land for the construction is situated on the left bank of the Dnipro in the area of the main transport traffics.

Investment in the project is estimated to be about USD 80 mln. Construction of logistics facilities will be held for a 2007-2008.

Interesting notes from the picture: on the lift machine I see a Aerobud logo. If you you remember, it is a another company was included in Privat Group interests.

Short news - XXI Century goes at logistics market

XXI Century is going to invest USD 280 mln. in logistics project until 2012.

It is planned that the logistic complexes would be located at major highways near largest Ukrainian cities.

The company has signed agreements on purchase of three land plots for construction with total area of 78 Ha in Kiev and Odessa. An agreement on designing a complex in Odesa has already been signed. The construction is planned to take place in summer of 2007.

Company logistic department director Andrii Zaitsev said that main task of the project is provide quality multifunctional warehouses with additional e services based on Supply Chain Management system.

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.