/ArzingerLawFirm /company/arzinger @arzingerlawfirm EDITORIAL Commercial Property Special Edition Guide to Ukrainian Real Estate Market 2020 Founder and Publisher: UCMGroup LLC Project Manager: Tetiana Antoniuk Commercial Director: Yulia Adeyeva, [email protected] Sales Department: Iryna Nasilnyeva, [email protected] Editorial materials: Tetiana Antoniuk, Oksana Babenko, Serhii Horskyi, Tetiana Khomiak, Maryna Paraliush For subscription contact us: [email protected] Forward your press releases to: [email protected] Dear Readers! Forward your journalistic materials and propositions to: [email protected] Web-site: www.commercialproperty.ua We are glad to present the new edition of the “Guide to Ukrainian Real Estate Market” of the year 2020. It features the analytical part with overviews of Legal support: the commercial sectors and residential segment of the Kyiv real estate Antika Law Firm market, and also of the commercial real estate sectors in the key regional Editorial Address: centers of Ukraine. Traditionally the edition also contains the catalog of 01030 Kyiv-30, Ukraine companies, which conduct activities in the country and can become your p/o box 265 reputable partners in diff erent business areas, and selection of projects that Cover: UNIT.City innovation park (Kyiv) have been commissioned or are developed now and can be of interest for investments and cooperation. We hope that the “Guide” will become your valuable source of information about the opportunities and perspectives of © UCMGroup LLC the Ukrainian real estate market. “Guide to Ukrainian Real Estate Market” is one of the numerous projects © Guide to Ukrainian Real Estate Market by Commercial Property, which is a В2В magazine about commercial real is published yearly by UCMGroup LLC. estate in Ukraine that has been published since 2003. Commercial Property Although the Publisher tries to make an information as accurate as possible, aims to make its contribution as media and event organizer to the country’s he accepts no responsibility for any loss, injury market development, to become an important communication and business or inconvenience sustained by any person platform for this sector and related industries players. Commercial Property’s using this magazine. Views expressed in this magazine do not necessarily reflect the opinion portfolio, besides specialized printed and online media resources, includes of the Editorial Team or Publisher. No part a number of B2B events, among them are International Architecture Forum, of this publication may be reproduced, stored Open Mind Conference on investments in real estate, National Real Estate in a retrieval system or transmitted in any form Award CP AWARDS, and others. In 2019, Commercial Property’s team by any means without written permission of the Publisher. Advertisers are solely responsible launched another project – that is the only in Ukraine integrated certifi cation for all claims based on nonavailability or course “Real Estate Development”, which is conducted in cooperation with nondelivery of merchandise appearing in this one of the leading business schools in the country – International Institute publication. of Business. We express gratitude to all the partners for support and participation in our projects, and invite for further cooperation! Tetiana Antoniuk, Project Manager CONTENTS АNALYTICS .............................. 6-44 COMPANIES .......................... 47-80 PROJECTS ............................. 81-93 BUSINESS CARDS ...................... 94 ANALYTICS INFOGRAPHIC Ukraine: Economy and Real Estate ....................... 6 REAL ESTATE OF KYIV Offi ce Property Market in Kyiv: Time to Grow ............................................................. 8 Retail Property: Development of the Kyiv Market ........................... 10 Kyiv Hotel Real Estate Market: Awaiting the Improvements .................................. 14 Warehouse and Logistics Property: Restart of the Market Development .................... 18 Residential Real Estate of Kyiv: Factors of Growth ................................................... 22 REAL ESTATE OF REGIONAL MARKETS Retail Property in Kharkiv: Awaiting for Large Malls ....................................... 26 Shopping and Entertainment Centers in Dnipro: the Market is Coming Back to Life ...................... 28 Lviv Retail Property Market: Close to Saturation? ............................................... 30 Lviv Hotel Sector: Unleash the Potential .......... 32 Odesa Hotels: Hopes for Stabilization and Belief in Market Growth ................................. 34 INVESTMENTS Investments: Analytics and Forecasts by Colliers International ........................................ 36 Article by Alexandr Nosachenko, Managing Director of Colliers International (Ukraine) LEGAL City Construction Changes in 2019 ..................... 40 Article by Alexander oy, Partner, and Vasyl Sheretko, Senior Associate, Antika Law Firm EVENTS Course “Real Estate Development” .................... 44 6 UKRAINE: ECONOMY AND REAL ESTATE IN 2019 3.3% Real GDP growth rate INFOGRAPHIC $2.5 billion Volume of foreign direct investments UAH177 billion Volume of executed construction works 120% Index of executed construction works 107.9% Consumer price index (infl ation index) 109.8% Real wage index UAH1,096.7 billion Retail trade turnover 110.5% Retail turnover index Sources: State Statistics Committee, National Bank of Ukraine UKRAINE IN WORLD RANKINGS Ranking Doing Business 2019 Doing Business 2020 Position 71 64 Ranking Global Competitiveness Index 2018 Global Competitiveness Index 2019 Position 83 85 Ranking Legatum Prosperity Index 2018 Legatum Prosperity Index 2019 Position 111 96 Ranking Global Innovation Index 2018 Global Innovation Index 2019 Position 43 47 Ranking Corruption Perceptions Index 2018 Corruption Perceptions Index 2019 Position 120 126 Sources: doingbusiness.org, globalinnovationindex.org, globalinnovationindex.org, weforum.org 8 OFFICE PROPERTY MARKET IN KYIV: TIME TO GROW The main trend of the last two years on the Kyiv real estate market is the activation of offi ce development. The increase in demand for such premises, a signifi cant decline in vacancy rates, and the rent rates growth give developers confi dence in the commercial success of business centers. OFFICE STOCK INCREASES The list could go on and on. For example, the offi ce According to the Cushman & Wakefi eld in Ukraine part of the UNIT.City innovation park is being actively built. consulting company, following the results of 2019, the Kyiv In the coming years, two campuses with a total area of KYIV PROPERTY MARKET offi ce property sector grew by approximately 104,600 sqm. 20,000 sqm are scheduled for commissioning, and in 2020 This fi gure is twice as big as the new market supply in the construction of another 70,000 sqm of new offi ce 2017 and 2018. But, of course, it is not such a big fi gure spaces will start. considering the whole volume of the Kyiv offi ce property The City Capital Group investment and development market, which now exceeds 2 million sqm. company is also widening its offi ce portfolio by developing The Colliers International (Ukraine) consulting company some new projects. In the mid-2020, it intends to open the estimates that the total stock of offi ce buildings under Platforma business center (20,500 sqm GBA). Its portfolio construction in Kyiv amounts to 250,000 sqm (this fi gure of future projects also includes Platforma Innovation Park includes all offi ce buildings of 5,000+ sqm GLA that are under with offi ces and coworking spaces, etc. construction or have been commissioned, but not ready for In addition, as Andrii Todorov, Lease and Advertising lease). The promising supply for 2020 includes business Manager at the Illinskyi business center, noted, a new centers Avenue53 (18,500 sqm GLA), HILLFORT Business project of reconstruction of the existing 3,000 sqm building Mansion (8,550 sqm GLA), RETROVILLE (11,140 sqm). into offi ces was developed in Kyiv. PHOTO: ALIK USIK, SERHII NIKIFOROV PHOTO: In the photo: Europassage business park, Kyiv 9 OCCUPANCY AND RENTAL RATES: The rental rates in office premises demonstrated KYIV PROPERTY MARKET POSITIVE DYNAMICS a moderate growth in 2019, compared to 2018. The gradual decrease in the vacancy rates and the rent According to Colliers International (Ukraine), average growth, that were observed on the Kyiv offi ce property rates amounted to US$22-30/sqm/month in class А, market during the last years, led to the resumption of US$14-21/sqm/month in class В, and US$9-13/sqm/ works on frozen or pending projects and the launch of new month in class С projects (VAT and operating costs ones. But the new stock is not so big to satisfy the existing excluding). In some facilities, the rates reach as high demand. During two years the Kyiv market has experienced as US$33-40/sqm/month. In short-run, rental prices the lack of offi ce premises that would meet the needs of will continue to grow. The volume of the Kyiv office property market reached 2 million sqm in 2019 potential tenants, including big lots of 1,000 sqm. Thus, FORECASTS as Colliers International (Ukraine) noted, a share of free Experts have diff erent views regarding the promising spaces on the offi ce property market amounted to 6.2% supply on the Kyiv offi ce property market for the coming in 2019 (for comparison, at the end of 2016 this marker years. For example, according to Colliers International exceeded 15.5%, i.e. the vacancy rates dropped 2.5 times (Ukraine), about