Business news from Ukraine


The total supply in the commercial real estate market will reach 633,000 square meters by 2020, which is 1.5 times more than now, expert in the field of commercial real estate Ihor Zabolotsky has said. “At the end of 2018, the vacancy rate dropped to 3.8%. This is an extremely low level not only for Ukraine, but also for the world. In 2017 there were practically no new projects, 8,000 square meters were commissioned. This year the figure is more significant: taking into account those objects that are to open in December 2018, the figure will reach 85,000 square meters. But these are mostly small objects with an area of 10,000-20,000 square meters, and the appearance of each of them could not affect the market as a whole. The total supply over the next two years could exceed 600,000 square meters. The total stock might increase by more than 1.5 times,” Zabolotsky said at a press conference in the Interfax-Ukraine agency.
In particular, he noted that the opening of the River Mall shopping center is scheduled for the second quarter of 2019 and the Retroville trade center for the third quarter of 2019, as well as the opening of the Blockbuster shopping center was postponed to February 2019. According to the expert, the success of the projects will be determined not by the level of rental rates, but by the purchasing capacity of the population in 2019.



The market cost of some commercial property could double in next two or three years, Managing Director of Colliers International in Ukraine Oleksandr Nosachenko has said. “The current value of assets is very cheap. Market players in the next two to three years expect an increase in the market value of commercial real estate. If nothing dramatic happens to our country and economy, in particular, in three years, in some cases we can get the cost twice as high as the one paid by buyers,” he said at a press conference at Interfax-Ukraine.
According to the expert, given the relatively low prices for assets, now it is a good time to purchase high-quality real estate: some investors are in a hurry to close deals. Nosachenko said that in the medium and long term, the share of foreign investors in the Ukrainian market will increase. At the same time, international investors mostly look at the finished facilities, which value is below the market value, with a good location, with a stable cash flow, and quality tenants with long-term contracts.
“This is a good time to purchase the best facilities. This year very high quality facilities were sold. There will be no appearance of many good facilities, the market is very limited. I do not see the tendency for banks to get rid of high-quality collateral property. Today it is not so easy to find a good and problem-free facility, which tends to increase its value,” the expert said.
According to Colliers International, among the main facilities sold in 2018 is Horizon Park BC (GLA is 69,000 square meters in Kyiv), Sky Park SEC (GLA is 30,000 square meters in Vinnytsia), warehouse complexes located at 8 and 68, Obyizna Street (Brovary, Kyiv region), an office building located at 98, Velyka Vasylkivska Street (GLA is 9,000 square meters in Kyiv), an office building located at 29, Kovpaka Street (GLA is 6,300 square meters in Kyiv), an office building located at 100, Velyka Vasylkivska Street (part of the Toronto business center, GLA is 5,500 square meters in Kyiv).
The company also said the process of selling one of the largest and best retail properties – the Ocean Plaza shopping and entertainment center (GLA is 72,200 square meters) – is one of the events significant for the investment market.
Dragon Capital Group remains the largest real estate investor in the Ukrainian market.

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