Some 70,000 square meters of new office real estate will be offered in Kyiv in 2018-2019, Head of the Consulting Department of UTG Rostyslav Symonov has said. “We are planning to commission 70,000 square meters in 2018-2019. These will be the third line of Astarta Business Center, which has shown a very good pace of renting out, Europassage Business Center, Forum Amursky Business Center, office buildings on Volodymyrska and Sahaidachnoho streets, and Unit City,” he said during a press conference on the results of the real estate market in H1, 2018 hosted by the Interfax-Ukraine News Agency on July 11.
The expert said that IT companies, which account for 44% of tenants, will form the principal demand for rent of offices in the capital. He added that this makes office real estate more resistant to currency fluctuations that might occur in 2018-2019 due to the payment of Ukraine’s foreign liabilities.
According to UTG, 128 business centers operate in Kyiv. Class A offices account for 30.7%, class B – 63.9%. Class B offices are in high demand, while demand for class A offices is formed mainly by movement of the existing tenants.
Symonov also said that Kyiv office real estate market will grow significantly as soon as Ukrainian IT companies start making their own products. He added that a trend for investment in purchase of offices should be expected in Kyiv.
Kyiv-based UTG was founded in 2001. Its core business is overall support for development projects. More than 100 real estate objects were opened with the participation of UTG, including Lavina Mall, New Way, Ocean Plaza, Gulliver, Pyramida, and Komod (all based in Kyiv), Megamall (Vinnytsia), Most City Center (Dnipro), French Boulevard (Kharkiv), and Global.UA (Zhytomyr). UTG also operates in Russia, Belarus, Georgia, and Moldova.
Kyiv has enough liquid chlorine for disinfection of drinking water and Ukraine is considering options to replace this solution, Director General of OJSC Kyivvodokanal Dmytro Novytsky has said. “Today Kyiv has enough liquid chlorine which Kyivvodokanal uses for disinfection of drinking water,” the press service of Kyivvodokanal quoted Novytsky as saying. The company also said that Ukraine is considering various alternative methods of drinking water disinfection in order to replace liquid chlorine. Several options are being studied to replace it with modern safe solutions, including low concentration sodium hypochlorite, mixed oxidizing agents or chlorine dioxide.
As reported, in the middle of June, Dniproazot, which is a producer of liquid chlorine used by water services companies to disinfect drinking water, warned that it was stopping supplies and stopping the production of liquid chlorine. A complicated situation arose at Ukraine’s enterprises involved in the disinfection of drinking water. Some enterprises have chlorine reserves from a week to 20 days.
In turn, Kyivvodokanal warned that problems with drinking water disinfection could occur due to the cessation of supplies and production of liquid chlorine by Dniproazot.
DISINFECTION, DRINKING WATER, KYIVVODOKANAL, LIQUID CHLORINE
Developers returned to active construction of suspended commercial real estate projects in Kyiv in 2018, Deputy Head of the Strategic Consulting Department of UTG Kostiantyn Oliynyk has said. “A development boom occurred on the commercial real estate market in late 2017 through early 2018. Numerous projects have resumed development activities and are planning to open, new concepts will be developed for some facilities. For example, Podol Mall, which was initially designed as a shopping mall, will be a three-story shopping mall with three floors of office premises,” Oliynyk said during a press conference on the results of the Ukrainian real estate market in H1.
He added that shopping malls Retroville, MegaMarket Nyvky, Blockbuster Mall, Podol Mall, River Mall will be commissioned in Kyiv in the next year. A range of other shopping facilities are at a high level of construction readiness. In particular Smart Plaza Obolon, Oasis (at Heroiv Dnipra metro station), Good Life are under construction, while preparations for the construction of the second line of Auchan Rive Gauche are conducted. The shopping mall will be commissioned in Q2, 2019.
“There are several suspended facilities which might resume at any time – Lukianivka, Respublika, and Happy Mall,” the expert said and added that Kyiv-based developers are planning to build five or six more shopping malls, but have not made public information about them.
Oliynyk also said that around 400,000 square meters of commercial real estate will be commissioned in Kyiv in the next one or two year.
The expert added that the commissioning of new facilities could result into outflow of tenants from older facilities constructed in 2000 through 2010.
According to UTG, goods turnover in retail trade increased by 18% in 2017, but was 14% down from 2016 (taking into account inflation).
UTG also reported that average daily attendance of shopping malls at the beginning of May 2018 was 647 people per 1,000 square meters (against 701 people per 1,000 square meters in May 2017). Attendance of district shopping malls did not change, while in regions it was 14% down in the first months of 2018 year-on-year. According to UTG, rent rates at shopping malls in Kyiv are $15-30 for restaurants and cafes, $4-15 for cinemas, $1.5-20 for large shops (600-1,500 square meters in area), up to $70 for fashion galleries, up to $12 for electronics stores, and $1.5-15 for food retailers.
Most Ukrainians are convinced that the country is not moving in the right direction, according to a poll done by the sociological group Rating. The problems that concern the respondents the most are the war in Donbas and corruption.
According to a poll published in Kyiv on Thursday, 75% of the respondents believe the situation in Ukraine is not developing in the right direction, 13% have the opposite opinion, and 12% are in doubt. In the perception of the problems existing in the country, respondents retain the opinion that the war in the east of Ukraine and corruption are the most important national problems, social problems also prevail: low salaries and pensions, as well as high tariffs for housing and communal services.
The poll was conducted by the sociological group Rating in the period between June 22, 2018 and July 5, 2018. It surveys 3,200 respondents aged 18 or older.
The European Bank for Reconstruction and Development (EBRD) will provide a loan of EUR10 million to Kyivsky cardboard and paper mill (KCPM), a leading company in the sector and based outside Ukraine’s capital. This will be a seven-year loan to boost energy efficiency and reduce CO2 emissions, the EBRD said in a statement on July 13. The purchase of a shoe press for cardboard drying will help KCPM reduce the use of steam, increase production volumes and improve the quality of coated cardboard. The replacement of pumps will halve the electricity needs of this equipment. Combined annual savings are expected to reach up to EUR2 million.
New converting and packing lines for the production of tissues will be procured as part of the project and will allow the company to widen its range of products for use in office buildings, hotels, schools and airports. It will also help KCPM increase its domestic and export sales, including those to the EU.
KCPM will upgrade its waste-paper processing equipment, which will allow the firm to improve the quality – and reduce the cost of cardboard production. These improvements will make it possible to reprocess waste paper up to four times. This will be the first production cycle in the country to implement the EU principles of using fewer resources and increasing energy efficiency.
The investments are expected to reduce the company’s annual CO2e emissions by up to 11,000 tonnes. Kyivsky cardboard paper mill is one of the largest cardboard and paper producers in Europe. It employs almost 2,200 people. It sells produce to almost 700 companies in Ukraine, some CIS member states and the rest of the world. In 2017, the mill saw a 14.8% rise in production from 2016, to UAH 4.85 billion. The mill is owned by Pulp Mill Holding GmbH (Austria), its ultimate beneficiary is businessman Volodymyr Krupchak.
The EBRD is the largest international financial investor in Ukraine. Since the start of its operations in the country in 1993, the Bank has made a cumulative commitment of almost EUR 12.1 billion across some 400 projects in Ukraine.
