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The forecasts for 2015, experts presented in the course of the Ukrainian Annual Real Esate Summit 2014, are cautious optimistic. According to the real estate players Ukraine is keeping attract the foreign companies' interest, but it is, mainly, put on hold. Meanwhile, experts believe, in case of stabilization of the situation in the country and adoption of several efficient legislative initiatives, Ukraine stands a good chance to restore investor confidence as early as next year.
The Ukrainian Annual Real Estate Summit 2014 took place on November 27th at the Fairmont Grand Hotel Kyiv. The summit embraced 3 thematic sessions and new format of discussion – dialogue with authorities.
The first discussion pannel of the summit was dedicated to development of the real estate market in the new economic conditions. Experts analyzed the results and prospects of the retail, office and hotel segments. The main topics of the session were the benchmarking of crisis of 2008-2009 and 2014-2015, as well as possible solutions for commercial real estate in the existing economic context.
According to the experts, the main features of today business should be flexibility in decision making, eagerness to consolidate on the professional level, as well as active dialogue with authorities.
According to Anna Papazova, Head of rent department of Forum Group, «there are no specific standart conditions on the market today. Each client requires an individual approach to them, as they have personal needs and specificity. Now it is important to be flexible and to find interesting variants for every client. Taking into considerations all these factors, even today we can offer interesting commercial conditions both for lesee and lessor».
Continuing the topic of situation in the office real estate, Nick Cotton, Managing Director at DTZ Ukraine expressed his opinion, «at this point all attantion, of course, is drawn to the sutuation in eastern Ukraine. We are expecting we will need about 9 months in 2015 to restore the investor confidence of the international and local community to the country's real estate market. It will happen only if new authorities will implement reforms and encourage the business climate improvement in the country. In such a case, if we analyze the situation in the office segment, which is the best indicator of the business activity, we can see rather positive signals. Today the vacancy in business centers is 28%, mainly due to launch of new modern office objects. Besides, due to large volume of new supply, as well as due to depreciation of hryvna, we see attractive rental rates in Kiev ($25-30 for business centers of A class, for area at least 500 sqm). As a result, we are anticipating a high activity of lessees in 2015, which will decide to improve their rental conditions and move to the professional office center».
Anna Chubotina, Head of retail of JLL Ukraine, shares her opinion on still existing interest of foreign retailers in retail segment. «We can observe how Ukrainian retail market is transforming and switching to new development level. New large-scale shopping malls of new generation and institutional quality will be launched in the nearest 2-3 years in Kiev and in central cities of regions. It can cause fast expansion of new international retailers since their entry into the market. Even those retailers who have postponed their opening in Ukraine and held wait-and-see attitude, still are keeping watch over the situation in the country. For them Ukraine is the main untapped market», - expert says.
Aleksei Evchenko, Managing Partner of ArtBuild Hotel Group points out that open dialogue with authorities is necessary: «we need to be felxible, we need to consolidate, we need to push authorities to action. Thank to the fact that civil society started to evolve, we have such an opportunity. We need to create those rules of the game, which will help us to be able to find opportunities for development when factor of stability will arise».
Besides, there was a macroeconomic analysis of the situation in the country, presented by the moderator of the discussion, Head of analytical department of the investment company SP Advisor Vitaliy Vavryschuk. «Today all factors of the risk for Ukraine are expectable by now and it's unlikly new ones will come. By Understanding what are the reasons of the crisis, having well-elaborated formula of the crisis recovery, presented by international financial organizations or NGO, we will have a good chance to restore the confidence of international investors and players to Ukrainian market as early as an upcoming year».
It should be pointed out that all forecasts, according to specialists, are based on one presumption that situation in eastern Ukraine will not be getting worse and the military conflict will not be escalating beyond ATO.
Among the speakers of the first session were: Nick Cotton, DTZ Ukraine, Anna Chubotina, JLL in Ukraine, Aleksei Evchenko, ArtBuild Hotel Group, Anna Papazova, Forum Group and Vladimir Goraschenko, Double W. The moderators of the session were Vitaliy Vavryschuk, SP Avisor amd Dmitriy Sennichenko, JLL in Ukraine.
Related links
Ukraine needs efficient institutional reforms, and in justice system inclusively – expert | 04.12.2014
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