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Vitalii Boiko: today Ukraine is in an ideal situation to create crowdfunding platforms

21 June 2016 | Tuesday
URE Club

We are opening a new section - interviews with participants of URE Club. The first who has agreed to answer our questions is one of the leading experts in the real estate market, the founder and head of consulting company Urban Experts, Vitalii Boiko.

- Vitalii, tell us why you decided to sell your share in Ukrainian Trade Guild and create your own company?

- I have been preparing for it for a long time.  I became a junior partner UTG after the position of a director of a large company, Palma Group S.A., and before that I had a business in Mykolayiv. I have such a character trait, if I do something myself, I feel responsible for it; if you do with someone, you can always say "we've done it together." Just such a situation was in the KIA (Kyiv Investing Agency), many decisions were made democratically, by voting when absolutely random composition of people took part in voting, each one with equal voting rights. But despite the revolutionism of KIA and huge enthusiasm, there were a lot of those who wanted to vote and object, but there were few who were ready to implement it.

Sometimes, for effective actions it is necessary that one person should take the full responsibility. I realized that I had to take this responsibility by myself. This is the best motivation. On the other hand, it won't go without the advice. You need to consult with as many people as you can. It is important to find professionals and work with them. So, despite my desire to call the company after my own name, the name “Urban Experts” conveys completely my attitude to the company. This is not one person but a group of experts, and I am one of them. I am more a manager, and I want to shift a lot onto the shoulders of my co-experts.

Vitalii Boyko and Konstantin Oliynyk, head of consulting department, Urban Experts

- Why Urban Experts? How did this name appear?

- So we just want to be a part of the world. No wonder that all books about startups write that you should think globally and act locally. English is very important, we want to be a part of the international community and we want to make our product in Ukraine, but so that it could be sold anywhere.

And urban - because I still want to return to the city. Not only to Kyiv, but the cities of Ukraine. I want to be useful, to try to help. If I manage to provide communication with investors, so we need to offer a quality product. I have to be sure that we have chosen the best that the city has. Because in our country, the investor will not buy a trifle. To work with investors, you must find interesting places in the city. For it you have to audit.

There are detailed plans for the territories, but to work with them, you need to take into account the huge number of engineering and construction issues. You should analyse the market situation. Understanding of this situation can solve a lot of problems.

Working with commercial real estate, being involved in the office real estate market, plunging deeper into the residential real estate and actively working with hotel segment and infrastructure projects, it would be foolish not to get engaged in development of areas. We have already had several projects where we actively give advice on the development of DPT (Detailed Plan of Territory) in critical areas. And we want to develop and foster this trend. We understand that it is difficult to learn urban planning in Ukraine, there are no textbook, the approach to it is changing in the world, and not everywhere in Ukraine you can use the European experience. How can you apply the European approach, which assumes narrow streets, to Kyiv or Dnepropetrovsk?

On the other hand, we are not a guru in the issue of urban planning, we need a support. And to get the support outside of Ukraine, to develop further in this direction, we have managed to make a partnership agreement with international architectal company, Leslie Jones Architecture. This company, which has projected a new airport in Dubai, was chosen as an architect of Westfield White City and Stratford City in London. The start of work with Leslie Jones Architecture in the Ukrainian market was marked by high demand not only from Kyiv, but also from regional developers. In particular, we are working on the creation of commercial projects in Kyiv, Kyiv region, Ternopil and Kazakhstan. We will represent the interests of Leslie Jones in Eastern Europe, CIS and the Baltic countries.


Presentation of co-project with Leslie Jones Architecture

- Who are your co-experts?

- We have fully formed architectural, consulting and leasing departments. Now we are looking for a strong lawyer in our team and a professional appraiser.

A lot of time and efforts we have spent on architecture, and we are planning to develop this direction. The best expert here is Lidiia Gordiyevska, the leading architect of UTG in the last few years. Before she had a good experience at Chapman Taylor, she participated in the creation of "the Gorky Park", in the second stage of Sky Mall, a number of other prominent projects. The quality of her works, her knowledge completely come up with my expectations. We have a very strong designers, first of all it is Boris Slazhnyev. We have even made the first 3D-model for virtual reality in Ukraine.

Our expert in the area of consulting is Konstantin Oliynyk. He is the author of the majority of research and analytical reviews which Ukrainian Trade Guild produced. He worked with me in the KIA. Now Konstantin is actively working not only on the Ukrainian, but also on foreign projects, including a major project we are implementing in Astana.

- What other projects are you working on now?

- Today we have 15 projects on the agenda. Among them there are great objects like Lavina Mall, and a number of smaller regional projects in Ternopil, Kramatorsk, and Dnipropetrovsk. I mentioned the project of a big shopping center in Astana, we do for it a number of consulting and architectural works. A large-scale urban development project in the Kiev region is in the development stage. We involve Leslie Jones to this project in order to provide international quality of architectural planning, and NAI Global in order to attract global investors. The new brand NAI Ukraine will become a platform for the promotion of Ukrainian investment projects to the world market and for export of Ukrainian development.

 


Talk with Mauro Keller Sarmiento, NAI Global

- For which project are you planning to launch virtual reality 3D-models?

- We have already created two models, but I think that we will launch for Blockbuster Mall.

 In December I was at the ICSC in New York, there were hardly any stands where the the project could be seen, for example, in the booklet, all was in 3D-glasses. Everything is simple and effective. Not long ago, HTC brought us the latest model of virtual reality glasses. We invite the experts of URE Club to experience the new simulation technology in our central office.

At MIPIM penetration of IT-technologies is much weaker compared to the US. There was one special pavilion, but it was usually empty, for now IT is not a prerequisite of doing business in real estate. However, 50% of speakers were IT specialists and, especially, Big Data specialists who represented companies that collect huge amounts of data. They drew a lot of attention. Today the interest of the audience is taken not by the bankers and developers, but by them. They know nothing about the property and do not want to know, they just transfer all the data, and these data give necessary answers. In the US, this is already working, in Europe it only starts to work, but here no one even knows what it is. And since we are not the last country in terms of IT-technologies, I think, we can try to do something.

- Do you plan to continue to cooperate with local authorities?

- When leaving the KIA, I said that I would be back as a contractor. We understand what Kyiv is and how bureaucratic are local authorities. But we also understand that there are other cities like Ivano-Frankivsk, where everybody wants the quality development, where it is a common strategy. I am ready to go with my proposals there and ready to do it here. My task is to make money on the services that I've been providing for 15 years and I'm ready to invest in them, to finance some changes, or to invest in audits in the city. Today I do not consider a job with the city as a way just to make money. It is a platform where on the one hand, I can bring benefit, on the other, to ensure the development of my business.

We plan to develop the direction of evaluation, it is our obligation. I plan to develop asset management. This is what I brought out from my work in the city. The city has a lot of assets, but often they are not managed correctly, are not benefited with maximum price.

- But is it the task of the city?

- First of all, the city’d better not have so many assets. It needs to sell it. They have to sell everything. They can manage only that, what they cannot sell or what the city really needs or what can be optimized and be leased. All Europe did just that: before the crisis of 2008 they worked in palaces, but during the crisis they sold everything and wondered about the optimization of rental costs.

But in order to sell city assets, you need a buyer, investor. And we are currently working on the attraction of foreign investors, this is the main purpose of launching NAI Ukraine, Ukrainian representative office of NAI Global, a company included in TOP-5 consulting companies in the real estate market, the world's largest broker with an annual turnover of over 45 billion dollars, 400 offices in 55 countries with 7,000 employees.

Representing the interests of NAI Global in Ukraine, we open Ukrainian investment projects to the world, giving the opportunity to foreign investors to work in our real estate market in their usual format. With the participation of NAI in 2015 agreements totalling 5.9 billion dollars were  signed,  the parent for NAI C-III Capital Partners company has investment funds of $ 150 billion, it is a market in which Ukraine has all chances to get in.

Vitalii Boiko presents Lavina Mall during The Forum of New Retail Real Estate NEW COMERS

 - As far as I know, in your project you have found a place for crowdfunding?

- In the US crowdfunding projects are normal participants in the real estate market and make up 50% of the news flow. These are very powerful billion structures that once were websites and which are now hunted by investing funds. In Europe there are almost no such funds, but in my opinion, today in Ukraine it is an ideal situation for them. There is no reliable way to store money: confidence in the banking system and deposits is absent, we have never had a stock market, the situation with gold is not clear, to keep money at home is not safe regarding the recent increase in crime rates. Where to invest?

- In real estate?

- That's right. Year 2015 set a record in put into operation residential projects. It is telling that 70% of the new housing that was built in 2015, was sold. It became a kind of consolation for Ukrainians in 2015.

And precisely here new prospects for crowdfunding are opening. We are ready to invest ourselves in such projects and to involve companies that provide legal advice. The essence of our idea is like this: we are so confident in those projects that we consulted, we are so sure of a good project that we are ready to support it with our own money. Clearly, this is not the whole amount, but only a part of it. In addition, we now have the possibility to attract investments from the companies we work with for many years. The third, the last stage of funding is a crowdfunding platform. We want to try this platform very much.

We are working on two fronts. Firstly, we are working on the scheme: what we promise and what we want. In America, everything is easy and simple: an investor believes that in case of the failure there will be an honest bankruptcy procedure. We have no other responsibility except for the personal trust. We are currently developing the scheme, as each investor can become a full owner of not the share of business, but of real square meters. In exchange for real money, we should not give "a paper", but something real.

- Will It be big or small projects?

- Small. By the end year, we expect to begin implementation of our own development projects. And I think it would be right to start crowdfunding with our own development projects. It will be small, we cannot afford a big one for now. But it will definitely depend on us. Our developers are so spoiled with minimum requirements for contractors in the past 25 years that to take responsibility for yourself and for "that guy" who owns the land or real estate, is very risky and irresponsible. But for now that is only a plan.

- And in which segment do you see your own development project?

- Commercial real estate. We specifically look for some land in the secondary market, not to ask the KIA, so there will be no question about it.

- Tell us about your competitive advantages.

- Urban Experts started with a powerful package of projects in which we provide a full range of consulting, architectural and brokerage services. To strengthen our market position, we have made two important steps:  a partnership with Leslie Jones Architecture and joining NAI Global. Having the support, experience and connections with two powerful international players, we are solving two problems at once: we are reaching a new level of architectural and design work of the world quality and we are opening a platform for the promotion of investment projects in Ukraine.

These partnerships serve one purpose to achieve the highest quality of service of Urban Experts, to provide investment attractiveness of our projects and to conquer new markets in the near and far abroad. The combination of architecture and consulting is unique not only for Ukrainian, but also the global market. We are not just talking about guarantees of international architecture and consulting, but we also insure our professional activity at 1 million euros. Here we are also innovators in the Ukrainian market.

We talked about virtual reality and IT-solutions for the real estate market, in this we are flagships in Ukraine. Now we are developing our own application, which has no analogues in Eastern Europe, and by the middle of summer we are planning to organize Urban Hackathon, which will unite both market participants and the best developers of the country.

Of course, rich experience of mine and of all members of the team in the real estate business is the main reason why the well-known clients come back and new customers appear. Experience, innovation, work with international partners are key conditions that provide the leading position of Urban Experts in consulting and the real estate market.


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