Crisis and political instability divided investors into two camps:
those looking for a depressive object, and strategic, which foresaw
crisis .

And they both are waiting for lower prices for land and facilities in general,
that may occur in the spring of next year. The greatest interest
produce projects that are in the final stages of construction. However,
According to experts, it is now possible to cheaply and quickly "to enter the market,"
because the buyer was a win-win situation: there is a choice and it can
to dictate terms. The market changed priorities from the seller to the buyer
According to experts, the maximum amount of investment in Ukrainian real estate
was recorded in 2007, with a capitalization rate of project
accounted for about 10%. This year the situation has changed dramatically. "Today
Many sellers have been forced to sell, and buyers are in no hurry to buy,
wait until the the sellers will shed more blood. Most expect the magic
March ... Today the situation is clearly in favor of the buyer, the investor:
there is a choice, the buyer is not forced to take the first partner that he is something
suggests, we come to a normal situation ", - said Managing Partner
of CB Richard Ellis Sergey Sergienko. Lack of liquidity from developers
forcing them to sell all that they can sell in order to continue
close to the completion of projects requiring funding. "Many of the projects
start to stop because of the impossibility of continuing the construction,
which leads to a situation of undervalued assets, which are
the hottest investment opportunities for international companies, "
- Says the expert. At the same time, the partner of Dragon Asset Management
Vladimir Timochko believes that construction projects today have lost their
appeal, because the crisis affects not only the reduction of rent
rates, but also to reduce the yield. "That has always been called by the market
seller's market has become the tenant, "- said partner. Although international
investors, as opposed to local seldom achieve success in his opinion,
today a good time for international projects: construction costs
decreases can be expected to yield around 20%. But priorities
investment have changed. If the earlier popular greenfield projects
(Designs from scratch), but now is better to invest in generation facilities
company. Some market players are in crisis and positive sides.
For example, the head of analytical department of company ESTA Holding
Maxim Gromadtsov believes that the crisis has gone from the market unprofessional
players and the quality of the projects will be better. The crisis was the impetus for many
make their companies more transparent: the developers are restructuring
businesses to attract financing, development projects and their future
sale. Funding: the impossible is possible despite the fact that in the present
conditions to attract funding hard, opportunities are still
exist. Senior Associate of the company В«DLA Piper Ukraine LLCВ» Anastasia Bolkhovitinov
recommends splitting the project in turn: first to complete one turn
and sell it to the proceeds be spent on construction of the second
queue. This is one way of raising finance, because
banks are not willing to lend to projects in the initial stages of construction. In
Banks can try their luck in getting short-term loans
from 1 to 5 years (average 3 years) in the national currency (in dollars banks are
not given). The required ratio of debt to the value of the object is
25-30%. Thus the cost of objects is greatly reduced: assessment, which
carried out two months ago, now banks are not satisfied, so the volume
funding is relatively small. In addition, banks in Ukraine
now require the greatest possible security for credit - is, first of all,
constructed and placed in service, or close to completion
construction, ownership of land and corporate law
and income accounts. At the same time, Ukrainian banks do not want to see as
mortgage lease rights to land and buildings that are on
the initial construction stage. As an example, a lawyer has recently
received a loan in U.S. dollars for the construction of residential and commercial real estate
for a period of 3 years at 14% per annum from the ratio of debt to value
Object - 25%. What are investing? The most interesting for investors who
are still willing to invest in real estate projects that are located in Kyiv
and regional centers (Donetsk, Dnipropetrovsk, Lviv), whose willingness
is 80-100%, with low-risk, ensure performance does not
less than 15% (as a rule, have a contract of lease and well filled.)
Investors are willing to consider multi-functional complexes, retail, hotels,
housing premium. At the same time, experts say, if it's retail
develops mainly in large cities and regional centers, after
2011 retailers will be able to expand into small towns. M. Gromadtsov
believes that demand will be greatest business centers class
"A" in the center of large cities, large-scale shopping centers (total area
100 thousand square meters. m) with good transport structure, the club house of a class
deluxe, five-star hotel, cottage villages in the prestigious areas.
At the same time, the deputy director of DTX in Ukraine Natalia Stelmach
believes that in the near future we expect a sharp drop in demand for expensive
offices of class "A", especially in the city center, and shift towards cheaper
office class "B", because the company will try to minimize waste
on the premises. According to S. Sergienko, in the short term
in the greatest benefit will be those developers who implement projects more
cheap office centers, and long term - a higher class.
Now he recommends to take up the construction of an office center, if the project
will pay off in rental rates for 3 years. Landlords have new competitors
Real Estate Market Participants characterizes his almost complete lack of
the arrival of new tenants. Landlords are now experiencing decline in revenue
rental and uncertainty due to the constant changes in currency
rate (fixed in the treaties binding for the course). There is also a risk nezapolnyaemosti
lease area. According to experts, most of the preliminary contracts
Rent is closing. Tenants are willing to pay a penalty out of contracts,
but do not take the new premises and expand existing facilities. At the same time
many tenants began to demand renegotiation of lease contracts
which are made up to three years. Against the background of the crisis appeared on the market
new trend - on the first place sublease. Companies that are rented
large areas are now adjusted their strategy and are willing to take
sublease the premises equipped to reduce costs. Thus,
they became competitors to landlords, for which the rent was the main activity
on the market. According to experts, landlords who are not willing to cut rates,
at risk of decline in occupancy in business centers. Those who
ready to do so will be able to maintain an existing one, or close to existing
occupancy. According to M. Stelmach, if you have 2-3 months ago for office
room rental rates were high (in Kiev rent 1 square. m office was
an average of $ 80), but now due to lack of demand for landlords willing to
to make substantial concessions and, "if there is no collapse" in the capital bid
fall to $ 60 per "square". According to the joint director of
"Capital Markets", Jones Lang LaSalle Herman Panikar, despite
the slowdown and a decline in rental rates for office real estate
in the capital over the medium term is expected to resume growth. In
However, he believes that in the long term will increase the quality requirements
location and business centers. G. Panikar believes that, in the first place,
a saturation of the warehouse property market. At the same time, most
commercial real estate projects will be commissioned at 1-2, 5
years later than planned, thereby reducing the input of these objects
in the medium term. If the earlier saturation of the market of office premises
in the capital forecast for 2012-2013, now such a prospect
postponed for another year. "Portrait" The market has changed investor note
that in recent years in Ukraine has changed the type of investors who invest money
commercial real estate. In particular, investors who are looking for depressive
objects with a cheap price (capitalization rate - 15-16%), as well as developers
and investors who expected the crisis and decline in land prices.
According to Mr. Panikar, investors left the market with highly leveraged,
but also began to appear private investment funds that are willing to
As a partner enters into joint ventures with the fact that when the situation
improved by replacing equity for debt. According to experts,
in the near future in commercial real estate in Ukraine is expected arrival of German
pension and investment funds. In addition, the market is now commercially
Ukrainian real estate development companies large study from the United States, Canada,
UK, Poland, Hungary, Bulgaria, Belgium, Holland, Portugal,
Austria. "What's on the table in front of a potential investor? We
see, in the long term, the market remains significantly nedozapolnennym
and the current crisis offers a unique opportunity to enter the market
very quickly and very discounted price ", - says Sergey Sergienko.
And this is especially important, given the negative outlook for the next
year on macroeconomic performance, which does not bode well
business representatives. Experts predict that in 2009 many of the reported
projects will not be built due to lack of funding. In the
2010 is expected to decline of capitalization rates for commercial projects
real estate. Market players expect the "light at the end of the tunnel" appears
only in 2011, when it becomes possible to reconstruct the economy, and with
it, and real estate construction. Representatives of the consulting
companies in one voice say that right now for investors is the
time to enter the Ukrainian market, as it can be done quite
cheap. According to A. Bolkhovitinov, today there are still investors
who are ready to enter the market, because now the cost of entry has fallen
You can get the best projects for less money, find good people,
increased competition between advisers. At the same time the consultants expect
transactions after the holidays and closer to spring, as
the majority of investors understand that at this time will have to peak supply
and falling prices for land. They suggest that the sentences
transactions decrease, the decision must be taken very quickly, while
as before the conclusion of transactions took 3-6 months. Managing Partner at
DEOL Partners Company Oleksenko believes that after the crisis
high-value real estate may drop by 40-60%.
"The market will throw out a wave of discounted objects, even profitable real estate,
which generates income. After the crisis, if we expect a capitalization rate
at the level of 15-16%, if we expect to reduce the rents, we can safely
say that objects lose their lucrative 40-60% of market value, which
we had before the crisis, "- he said. However, experts agree on one thing:
Real estate is always real estate. And, despite the fact that this low-liquid
asset, it may be long-term salvation for many
investors.

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