New supply on the office real estate market in Kyiv in 2019 was around 100,000 square meters and record-hitting 255,000 square meters of areas are announced to go live in 2020
“Over the past four years, the Business Expectations Index in construction has grown significantly (137.9 points) and has broken an eight-year record. Thus, the new supply almost doubled compared to 2018 and amounted to about 100,000 square meters, and the total supply of office space in Kyiv amounted to 1.8 million square meters,” CBRE Ukraine (Kyiv), the consulting company, said in a press release.
According to developers’ announcements, in 2020 a record number of areas should enter the market – about 255,000 square meters. Moreover, in 2021 an additional 250,000 square meters is expected to go live and in 2022 some 250,000-300,000 square meters.
“The shortage of quality space in Kyiv resumed the activities of developers, as evidenced by an increase in the volume of new supply by 70% year-over-year in 2019. Despite such a sharp increase in the volume of new space, it is expected that the bulk of it will be absorbed by IT and the flexible office segment, due to pent-up demand for large quality areas,” CBRE Ukraine said.
Thus, the average vacancy rate is likely to remain at the same level or show a slight increase in the best areas on the market.
“If in the next two to three years, demand will correspond to the supply, then significant fluctuations in rental rates are not expected,” CBRE Ukraine said.
The international rating agency Fitch Ratings expects acceleration of growth of the Ukrainian economy from 3.2% in 2019 to 3.5% in 2020 and 3.8% in 2021 due to private consumption and investment. “According to official estimates, the economy grew by 3.2% in 2019 and Fitch expects growth of 3.5% in 2020 and 3.8% in 2021 supported by private consumption and investment. The revised version of the land market legislation will be positive for economic growth in the near term through increased consumption (as result of land sales) and expected increase in the demand for credit for the agricultural sector. Nevertheless, the scale of potential investment and productivity improvements will be constrained by limits on foreign investors’ participation,” the agency said on its website.
“Fitch considers that growth and investment prospects depend on the adequate and timely implementation of reforms to address constrains such as the rule of law, corruption, customs and taxation and law enforcement. As with other emerging markets, downside risks to the growth outlook have increase due to uncertainty of the impact of COVID-19 on global growth and commodity prices,” according to the report.
“Fitch considers that the NBU’s (the National Bank of Ukraine) easing cycle, lower portfolio inflows, a wider current account deficit and increased global uncertainty will lead to a weaker hryvnia in 2020 relative to 2019. External financing needs will remain high relative to peers (70% of international reserves) due to still large debt repayments and wider current account deficits. External sovereign amortizations (government plus NBU) will rise to $5 billion in 2020 and $4.8 billion in 2021 (external bond repayments averaging $2.4 billion). Fitch expects the current account deficit to widen to 3% and 4% of GDP in 2020 and 2021, respectively, from a low 0.7% in 2019, driven by continued import growth boosted by domestic demand and reduced gas transit fees,” the document states.
“As inflationary pressures remain subdued (3.2% in January), Fitch expects inflation to average 4.6% in 2020 and 5.3% in 2021,” Fitch experts said.
“Risks from international financial market volatility, delays in the IMF program approval or stronger-than-anticipated domestic demand pressures will determine the future pace and scale of the easing cycle. Fiscal risks for 2020 stem from weaker revenue growth due to a stronger than budgeted hryvnia and lower privatization revenues in addition to still to be defined social expenditure increases announced by the incoming authorities. Receipts from the Naftogaz arbitration award will help cushion government revenues and provide room to accommodate expenditure commitments under the 2020 budget, targeting a 2.1% of GDP deficit,” Fitch stated.
Vesco Limited (Cyprus), uniting the clay mining business of UMG investment company from SCM Group, in 2019 reduced gross revenue by 6% compared to 2018, to $97.2 million.
According to a company press release, last year Vesco sold 2.7 million tonnes of clay, of which about 86% was exported to 25 countries. The largest consumers were ceramic tile manufacturers in Spain: they accounted for more than 30% of all sales.
“We have a stable business model and international relations for years. Therefore, we clearly understand periodic slight fluctuations in the markets. Last year, customers from Spain and Italy revised their stocks, therefore we adjusted production volumes. We worked as normal, with 100% of staff engaged, but without growth in sales volumes,” Vesco CEO Yevhen Tsymarman said.
According to him, pre-orders have already been received from the key customers, according to which the volumes lost during the optimization of partners’ warehouses are returned in 2020. Given that the global economy is expected to slow down, which may cause a decrease in production in many industries, the most realistic scenario for this year is to maintain sales volumes at the level of last year, the top manager notes.
“In 2020, we will focus on the implementation of strategic goals: strengthening the balance of raw materials and developing the “flexibility” of the product portfolio. At any time, we are ready to provide shipment of both existing and additional volumes of clay,” he said.
Kharkiv International Airport in February 2020 increased passenger traffic by 57% compared to the same period in 2019, to 103,400 people.
According to the airport’s Facebook page, the total number of departures was 421.
The most popular destinations were Sharm el-Sheikh (Egypt), Istanbul (Turkey), Boryspil (Kyiv), Krakow, Warsaw, Gdansk, Katowice, Poznan, Wroclaw (all Poland), Vienna (Austria).
As reported, the passenger flow of Kharkiv International Airport in 2019 increased by 40% compared to the same period in 2018, to 1.3 million people.
Kharkiv airport has a runway 2,500 meters long and 50 meters wide. Two passenger terminals with a capacity of 100 and 650 people are located on its territory.
Number of unemployed in Ukraine and job opportunities in dynamic from Dec 2018 to Dec 2019 (graphic)
