The National Bank has raised its forecast for Ukraine’s international reserves at the end of this year to $38.3 billion from $34.5 billion in its April forecast.
According to the NBU’s updated estimates presented at a briefing on Thursday, Ukraine’s international reserves will reach $42.6 billion at the end of next year and $44.1 billion a year later, while in April the National Bank gave more modest estimates of $36.1 billion and $37.1 billion, respectively.
The NBU expects that this year the external financing of the state budget alone will amount to $42 bln, and next year it estimates such a need at $37 bln.
According to its forecasts, such a large-scale financial external support will fully cover the negative current account balance, which this year and next year the NBU estimates at $11 bln, $17.2 bln and $16.1 bln, respectively.
As reported earlier, due to a significant inflow of external financing, Ukraine’s international reserves rose by 4.5 percent in June to a record high of $39.00bn.
Natural fires in Greece on Thursday reached the outskirts of the capital, reports Associated Press.
As noted, in particular, the fire in the area of the capital’s suburb of Kifissia spread rapidly due to increased wind. However, several helicopters and fire brigades were deployed to extinguish this fire. It was eventually extinguished.
Meanwhile, in the central part of Greece, near the city of Volos, the spread of forest fires has not yet stopped. Because of them closed part of one of the busiest highways. The movement of rail transport is carried out with interruptions.
Firefighters in Rhodes are fighting the raging fires for the 10th day. New fires are also reported in the forests on the island of Euboea.
Greek Prime Minister Kyriakos Mitsotakis on Thursday said more action is needed to combat climate change.
“Climate change may be a reality, but it cannot be an excuse. Our country needs to take more measures to be prepared to mitigate, as much as possible, the effects of this reality, which we are already beginning to feel and which could have dramatic effects on many aspects of our economic and social life,” he said.
On average, 75% of residential complexes in Ukraine have resumed construction works, while 82% have resumed sales, according to statistics from LUN portal.
According to the research presented at the conference “Analytics of the Ukrainian Real Estate Market: First Half of 2023”, more and more developers are resuming construction. As of today, 75% of residential complexes have resumed work on construction sites, while at the end of last year this figure was 69%.
The leaders in the resumption of construction work are the western and central regions of Ukraine, where the number of active construction sites is 88-96%. At the same time, 62% of residential complexes in Kyiv resumed construction, and 68% in the region. Kharkiv (19%), Mykolaiv (35%), and Zaporizhzhia (32%) regions show low rates of construction resumption.
According to LUN, as of July 25, 82% of new buildings out of 1,772 projects that were sold before the full-scale invasion began were sold. This figure corresponds to the data from June and is the highest since February 24, 2022.
Sales are most active in the western regions of Ukraine: 98% of residential complexes are sold in Zakarpattia region, 97% in Ivano-Frankivsk region, and 94% in Lviv region. Cherkasy, Kirovohrad, Zhytomyr, and Vinnytsia regions also have high rates (over 90% of open sales). In Kyiv and the region, the figure is 79% and 80%, respectively.
The lowest number of residential complexes for sale is in Mykolaiv region (67%), Zaporizhzhia region (40%) and Kharkiv region (19%).
At the same time, some developers completed sales during the full-scale war. According to LUN, 218 residential complexes were sold in Ukraine, most of them in Lviv region (46), Kyiv and Kyiv region (20 and 25 respectively), as well as in Odesa (23), Ivano-Frankivsk (20) and Zakarpattia (14) regions.
PJSC Ukrhazvydobuvannya (Kiev) on July 27 announced a tender for compulsory civil liability insurance of owners of land vehicles (MTPL).
As reported in the electronic public procurement system ProZorro, the expected cost of purchasing services is UAH 4.424 million.
The deadline for submitting documents is July 4.
In the first half of 2023 concluded lease deals for 69 thousand square meters of offices in Kiev, which is 51% more than the same period of 2022, follows from the research of CBRE.
“These are not the volumes we saw before the war. But tenants have increased their activity in the market on the background of attractive discounts and the opportunity to improve the quality of their offices,” said Anastasia Kachan, Senior Office Real Estate Consultant at CBRE, at the conference “Ukrainian Real Estate Market Analytics: first half of 2023”.
According to her, most of the tenant categories have reduced activity in 2022-2023. – FMCG, business services, wholesale, medicine. At the same time, there is an increase in inquiries from public sector companies and non-government public organizations. Before the war, these tenants gave up to 5% of lease transactions, now they have almost 30%. As for the IT sector, it managed to keep its leading positions, last year its share decreased from 45% to 32%, now it is about 47%.
New supply is insignificant: in the first half of the year the office real estate market was replenished with only 13 thousand square meters, which is 86% less than the volume of new supply in the first half of 2022.
“Now only the objects started before the war are being completed, and this situation is likely to last for quite a long time, given the vacancy rate,” Kachan said.
As of the end of Q1 2023, 26.4% (+0.4% vs. the beginning of 2023) are vacant. At the same time vacancy in Class B office centers decreased from 29.2% to 28%, in Class A increased from 22.3% to 24%.
The expert explained the growth of vacancy in class A primarily by a significant amount of new supply of class A at the end of last year.
The effective prime rate has stabilized at $21/sq. m/month.
As for the timing of contracts, Kachan noted the willingness of businesses to plan for the medium term in a war-torn environment.
“Last year, contracts were more often renegotiated for three to six months with the expectation that the war would end soon. In 2023, the terms are fixed “until the end of wartime,” where the “war rate” is prescribed and there is an agreement that after the war it will be revised to reflect market conditions,” Kachan said.
In the spring, CBRE conducted a survey of companies’ plans for their offices. Most of them, 56%, intend to keep the volumes, some are negotiating more favorable lease terms, some are doing nothing. 13% reported that they will partially reduce the office, 12% are considering moving to a co-working space, 12% are closing/canceling the office, 4% are thinking about sub-tenants, 3% want to move to a cheaper office.
At the same time, actual office attendance ranges from 15-20% to 50+%, depending on the business model.
Factors in choosing a new office remain unchanged. Top requirements: equipped bomb shelter, distance from critical infrastructure, energy autonomy.
“Given the uncertainty of energy supply during the 2023 heating season, we anticipate an increase in fall/winter attendance,” Kachan reported.
Headquartered in Los Angeles, CA, CBRE is the world’s largest commercial real estate advisory and investment company, with revenues of $30.8 billion in 2022, according to Fortune, a Fortune 500 list of the world’s largest companies.
Shares of CBRE Group Inc. are traded on the New York Stock Exchange.
CBRE’s Ukrainian office was opened in January 2008 and is part of the company’s affiliated network.
Ukraine’s state budget on Thursday received a $1.5 billion concessional loan through the World Bank’s Trust Fund mechanism under guarantees from the Japanese government, the Finance Ministry said.
“The raised funding will be used to restore the economy and strengthen social protection of the population,” the release quoted Finance Minister Serhiy Marchenko as saying, thanking the WB and Japan for the allocation of funds.
The Finance Ministry recalled that since the beginning of Russia’s full-scale invasion, Ukraine has received more than $581 million in concessional financing from the Japanese government through the Japan International Development Agency (JICA).
“This year, the Japanese government is expected to provide another $2 billion in direct budget support through the World Bank Trust Fund,” the ministry added.
As previously indicated by the Ministry of Finance, as of July 21 this year, Ukraine’s state budget received funding from international partners in the amount of $23.6 billion, compared to $32.1 billion last year, with a need for this year of about $42 billion.
Since then, the budget has also received EUR1.5bn of the sixth tranche of EU macrofinancial aid.
