Ukraine Real Estate Report Q3 2011

Includes 3 FREE quarterly updates

Ukraine’s real estate sector appears to have turned a corner following sharp falls in property values. Change has been driven by a rebounding economy accompanied by a rising demand for property, leading to a lift in both values and rents.

Over the course of 2010, rental rates rose by about 5-10% on 2009 levels in Dnipropetrovsk and Kiev, and by about twice that amount in Kharkov. We expect that rental rates will track sideways, or decline very slightly, during 2011. However, at this stage there are good indications that growth will resume in 2012.

Some of the key opportunities currently in the real estate market are:

• A recovering level of demand for, in particular, high quality property in the office and retail space.
• An increase in rents from the very low levels seen during 2008-200
• A recovery in values at a rate that is expected to see yields track sideways. The implication is that capital values will track rental rates.
• Our bullish outlook for global commodity prices bodes well for Ukraine, which is heavily dependent on raw material exports. We expect Ukrainian exports to grow by 5.2% in 2011.

Some key risks to the current real estate market are:

• One or more of the leading players in the commercial real estate market might fail.
• The economic recovery is weak and could be derailed. Our long-held view is for the economic recovery to slow in 2011. We expect final consumption expenditure to expand by just 0.4% in real terms. Credit growth to households in Ukraine continues to stagnate and we broadly expect this to persist over the medium term.

Contents

Executive Summary
SWOT Analysis
Ukraine Real Estate/Construction SWOT
Ukraine Economic SWOT
Ukraine Business Environment SWOT
Real Estate Market Overview
Table: Ukraine’s Real Estate Market – Historic Rents, 2009 And 2010 (m2/month, EUR)
Table: Ukraine’s Real Estate Market – Net Yields, 2010 And 2011 (%)
Table: Ukraine’s Real Estate Market – Terms Of Rental Contract/Lease, Mid-2010
Table: Ukraine’s Real Estate Market – Available (m2) And Vacant Space, Mid-2010
Real Estate Market Analysis
Industry Forecast Scenario
Real Estate Outlook
Table: Ukraine’s Real Estate Market – Rentals, 2010-2012 (m²/month, EUR)
Table: Ukraine’s Real Estate Market – Forecast Net Yield, 2008-2015 (%)
Construction And Infrastructure Outlook
Table: Ukraine Construction And Infrastructure Industry Data
Table: Ukraine Construction And Infrastructure Industry Data
Macroeconomic Outlook
Table: Ukraine - GDP By Expenditure, 2008-2015
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Europe Real Estate/Construction Business Environment Rating
Ukraine’s RECBER
Project Finance Ratings: Outlook For Central And Eastern Europe
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating
Ukraine’s Business Environment
Table: BMI Business And Operation Risk Ratings
Table: BMI Legal Framework Rating
Table: Labour Force Quality
Table: Emerging Europe - Annual FDI Inflows
Table: Trade And Investment Ratings
Table: Top Export Destinations
Competitive Landscape
Company Profiles
Aerobud
Aisi Realty Public Limited
Kyivmiskbud Holdings
Seven Hills LLC
TKS Management
TMM
XXI Century Investments
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase – Commercial Construction
Table: Commissioning And Operating Phase – Energy And Utilities
Table: Commissioning And Operating Phase – Transport
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