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Today people actively discuss the possibility of new wave of the crisis in Ukraine in 2013 which, of course, will also influence the building sector. Are such suppositions reasonable?
Of course, economic and political situations in the country provide some reasons to believe it will be true. Some foreign investors leave real estate market and do not plan to come back yet. There aren’t so many orders. As for competition, it’s becoming stronger. It’s survival of the fittest. However Sergey Fedorik, Managing Partner of Ukrbudcontract believes that it’s not a reason to expect another wave of the crisis. The main argument is the prospects of the property market this year.
«For instance, the situation in the retail segment is clear enough. This year the construction of several large scale regional retail centers has already been contracted for both local and foreign customers. There are also plans to develop some local retail chains and to construct or reconstruct such objects. Kiev can’t compete with such cities as St. Petersburg, Moscow, Prague and Warsaw in terms of retail space per capita. For instance Kiev has a twofold lag compared to St. Petersburg: 171 sq. m per 1000 inhabitants in the Ukrainian capital against 350 sq. m. in St. Petersburg. Such colossal undevelopment of the segment in terms of retail space supply in shopping centers per capita causes a significant potential in the segment – and this year it will keep on realizing, - Sergey Fedorik says. – It is based on the fact that today the vacancy level of the retail areas amounts to 3%, being 5% in 2008 as well as the fact that maximal annual rental rate has increased from 1080$ in 2009-2010 to 1176$ in 2012. And it is in spite of putting into service about 250000 sq. m of the retail area in the million cities. Special activity in 2013 in the segment is expected in Kiev, Lvov, Donetsk and Kharkov».
The projects of the industrial segment run on the companies of mining and smelting and agribusiness industries as well as FMCG producers. Each segment has several contracted large projects for the following year.
Situation in the office segment seems to be much complicated. Expectations that economy in the country will change for the worse make some companies to regress and pass to the «submarine» mode – maintaining minimal functions for company operation and execution of the current orders. Thus, office occupancy at the profitable rental rates today looks like hunting in an empty forest.
According to Managing Partner of Ukrbudcontract Sergey Fedorik, the 4* and 5* hotel segment is in demand by corps and businessmen. The tourists prefer good 3* hotels which are in short supply in Ukraine. The most important thing is a professional property management – it isn’t less actual compared to 4* and 5* hotels. The million cities as well as resort towns are the main focus of the hotel developers in 2013.
Information about the company:
Ukrbudcontract LLC is a general contracting enterprise which operates more than 12 years in the sphere of projecting and construction of the commercial property objects. The portfolio of the company has more than 600 ths. sq. m of completed projects.
