PrivatBank (Kyiv) will start selling its property with discounts, as well as at Dutch auctions through the electronic trading platforms LOT.PB and OpenMarket (SETAM state enterprise), the press service of SETAM has reported.
“In the near future, such auctions will be held on objects agreed by the board of the bank,” the report says.
According to the report, PrivatBank will put up for sale own real estate objects in almost all regions of Ukraine.
“The decline in real estate prices is planned for a large number of non-core assets to accelerate the sale of the facilities that are not used in the bank’s operating activities,” the report says.
PrivatBank specified that, in addition to traditional sales, it is planned to conduct bidding according to the Dutch auction model, which implies the reduction of the lot price during the bidding process.
National Energy Company Ukrenergo in 2018 sold property for the amount of UAH 170 million at open auctions in the ProZorro e-procurement system. “Everything that was written off and accumulated in electric power systems for years, from car tires and used transformer oil to large-sized scrap metal, equipment and old cars, is put up for sale,” the company said.
The received funds in the amount of UAH 113 million in 2018 were sent, in particular, to the reconstruction of the 330 kV Kremenchuk substation, the installation of a group of single-phase transformers at the 400 kV Mukachevo substation and the reconstruction of a number of 330 kV transmission lines with the replacement of a ground wire.
In addition, Ukrenergo held 2,400 tenders in the ProZorro system with the expected cost of purchases of more than UAH 4 billion. According to the company’s calculations, the savings on the concluded contracts compared to the expected price amounted to almost UAH 200 million.
As Director of Supply Chain Management at Ukrenergo Maryna Bezrukova said, the company has developed its own methodology for predicting the cost of goods, labor and services based on the price reference book. “In European companies, the indicator of effective procurement planning ranges from 5% to 15% of savings. Ukrenergo has already reached this level,” Bezrukova said.
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.
Dragon Capital Investment Fund, together with its partners, has invested $400 million into Ukrainian real estate since 2016, the press service of Dragon Capital has reported.
“Since 2016, Dragon Capital, together with its European and American partners, has invested $400 million into Ukrainian real estate. Our future investment plans will significantly depend on the pace of reforms in Ukraine, above all in judiciary and law enforcement,” Dragon Capital CEO Tomas Fiala said.
The partners of the fund are Goldman Sachs, George Soros, and OPIC.
As reported, Dragon Capital Group jointly with co-investors since 2016 has been actively investing in purchase of commercial real estate, mainly in Kyiv city and region.
The portfolio of the investment fund, as of October 2018, includes several business centers – Kyiv’s Prime and Eurasia, business center located at 98, Velyka Vasylkivska Street, Horizon Park, Business Center Platinum, and Zaporizhia-based Eco Tower Business Center.
The portfolio of shopping centers includes the Victoria Gardens shopping center (Lviv), Sky Park shopping center (Vinnytsia), Pyramida shopping center (Kyiv), logistics centers near Kyiv — West and East Gate Logistic, Omega 1 and Omega 2; a logistic complex and industrial complexes in Brovary.
Dragon Capital Investments Limited is part of Dragon Capital group of companies, founded in 2000 and one of the largest in the Ukrainian investment market. It works in the field of direct investment and financial services, provides a full range of investment banking and brokerage services for corporate and private clients.
Ukraine’s Prosecutor General Yuriy Lutsenko has spoken for the adoption of a special law on the confiscation of real estate and funds in bank accounts that have no official explanation, and believes that the need for such a law may be used in an electoral campaign to the Verkhovna Rada.
“The most urgent issue is an introduction of a law similar to the recent British one – a special law that allows the confiscation of real estate or accounts that have no official explanation. This is the law that Ukraine has needed for a long time,” the prosecutor general said on air of the 112.ua TV channel on Tuesday after the debate in the European Parliament on corruption in Ukraine.
He recalled that the Verkhovna Rada had several times considered the bill on the so-called special confiscation, but failed to pass it. Therefore, at the moment, the law-enforcement agencies confiscate property obtained through criminal means based on the provisions of the old law, and the confiscation procedures are very complicated and “often subject to attacks by interested persons, both publicly and legally.”
“Therefore, we need a law on special confiscation, and it is very important to take into account the British experience, which is very simple and clear: if a law enforcement system asks a question of any citizen or guest of the UK: ‘Please show the sources of, for example, a five-story house in central London’ and if these sources do not exist, this property passes into the state ownership and later is sold at an auction. The same goes for the funds that are frozen in the accounts. From my point of view, such procedure would speed up cleansing Ukraine of corruption and criminality,” Lutsenko said.
At the same time, the prosecutor general said he doubted that such a law could be adopted by the Verkhovna Rada of the current convocation. “I think that this law will not be passed by this parliament, but it can become one of the key concepts around which it is possible to build the next election campaign to the next parliament,” he said.