Privatization receipts will increase fourfold this, reaching $450 million,

said Kyrylo Tymoshenko, the Deputy Chief of Presidential staff, predicted yesterday at a government forum “Ukraine 30. Economy Without Oligarchs.” Starting prices for three big government corporation sales are: United Mining and Chemical Company, the titanium producer: $138 million; Kyiv’s Bolshevik plant: $50 million; and Kyiv’s President Hotel: $12 million.

16 business centers will open in Kyiv, with a total area of 376,000 square meters by the end of next year

, Radomyr Tsurkan, managing partner of CBRE Ukraine, predicted last week in an interview with Interfax-Ukraine. “The collapse of the offices that scared everyone at the start of the pandemic did not take place,” he said. “According to a study conducted by CBRE in 2020, 73% of those surveyed want to return to the office and have a hybrid work format.” This year, 12 business centers with a total area of 207,000 square meters are to open in Kyiv.

Apartment prices in Kyiv could nearly double – to $2,000 per square meter — by the end of 2023,

 predicts Serhiy Pylypenko, general director of Kovalska construction and construction materials company. Driving prices up 15-20% this year will be the rising cost of building materials, he told the Confederation of Builders conference, “Post-Quarantine Development” Wednesday in Kyiv. The world runup in iron and steel prices are pushing local prices up by 30-40%, he said.

Budhouse Group, one of Ukraine’s largest developers, plans to invest €314 million in three projects over the next three years,

 Anatoliy Shkribliak, company founder and shareholder, tells Interfax-Ukraine. In Odesa, the group is spending €12 million to complete work on Yessa shopping and entertainment center, aiming for opening in the fall of 2022. In Zaporizhia, Budhouse starts work this summer on Khortitsa Mall, an €82 million shopping center project on a former industrial site on a major highway. After completing these two projects, Budhouse is to start an €220 million project on Kyiv’s Peremoha Avenue, near Zlatoustivska St. Called Hartz

Dragon increased its Kyiv warehouse holdings by 50% last week

by buying a 100,208 square meter office and logistics complex in Bilogorogoda, six km from the Kyiv ring road, between the Odesa and Zhytomyr highways. With the purchase of Amtel Logistics Complex, Dragon’s portfolio of 11 warehouses totals 294,000 square meters on the right bank of Kyiv and 391,000 square meters across Ukraine, the company has reported. Dragon also is building the first stages of two industrial parks – 25,500 square meters on the E40 in Kyiv; 14,500 square meters

The privatization drive is “irreversible,

” Kyrylo Tymoshenko, Deputy Presidential Chief of Staff, wrote on Facebook after President Zelenskiy chaired an inter-agency Zoom call Monday on the campaign. Over the next six weeks, there are to be 100 auctions of large-scale and small-scale state properties. He said: “It will, firstly, give new life to unprofitable property and, secondly, attract billions of investments.” Arguing that investors are taking notice, he said the average number of auction bidders has risen, from 3.67 in April 2020, to 4.57

Construction companies reported positive expectations for the first time since September 2019

 on the back of a seasonal rebound in activity and rising investment demand for housing construction. The sector’s index finally moved above its equilibrium level in April, to 51.5, up from 40.6 in March. Respondents expected an increase in construction volumes, the number of new orders, purchases of contractor services, and purchases of raw materials and supplies. Companies across all sectors expect a rise in selling prices on the back of higher raw material and supplies prices. They also report

Estonian shareholders of Arricano Real Estate Plc registered in Cyprus, the management company and developer of a number of shopping and entertainment in Ukraine, have demanded $750 million in compensation for what they say is the illegal seizure of Sky Mall in Kyiv.

 “According to the press service of Arricano, after filing the notification, the parties have six months to settle the dispute before arbitration. If the parties fail to agree within the specified period, Estonian investors will apply to international investment arbitration against Ukraine” Interfax-Ukraine has reported.

President Zelenskiy yesterday signed a law allowing resumption of sales of large state companies,

a privatization process that was suspended one year ago due to the coronavirus pandemic. All sales are to go through electronic auctions. Zelenskiy said: ““Despite the coronavirus crisis, our goal of privatizing state-owned enterprises, which are often managed extremely inefficient and breeding grounds for corruption, remains unchanged.”

Ukroboronprom, the defense industry conglomerate, has reorganized its structure to eliminate Mustafa Nayem,

the reformer who worked for two years as Deputy General Director for Asset Management. “Today is my last day at Ukroboronprom,” Nayem wrote yesterday on Facebook. Of his work, he wrote: “Our team has moved the company closer to corporatization than anyone before us. We completed the inventory of all property, increased revenues from the sale of non-core assets by almost one third, tripled the processing of applications for property transactions, and transferred 17 companies to the State Property Fund.”

Ukraine’s goal of quadrupling revenues from the sale of state companies this year “is entirely realistic,” wrote

 Dmytro Sennychenko, the Head of the State Property Fund, in an Atlantic Council blog: “Ukraine moves closer to large-scale privatization breakthrough.” The $430 million goal will be met through the sale of “blue chip assets:” United Mining and Chemical Company, the President Hotel and six regional power distribution companies, or oblenergos. Sixteen companies – “mostly from abroad” – are interested in United Mining and Chemical, which mines titanium-zircon deposits and produces rutile, ilmenite and zircon concentrate.

The 17 state defense enterprises transferred to the State Property Fund 10 days ago are “the remnants of property that has been torn apart, plundered,

” said Yuriy Husev, Director General of Ukroboronprom, the defense production conglomerate, in an online forum last week.  With names like the Ivano-Frankivsk Boiler and Welding Plant, the Transcarpathian Helicopter Production Association and the Lviv Research Radio Engineering Institute, these defunct Soviet-era companies might end up being sold for their real estate. By shedding these companies, Ukroboronprom now controls 97 companies.

Bolshevik, the oldest machine building plant in Kyiv, will probably be sold for the value of its 35 hectares of prime real estate,

predicts Dmytro Sennychenko, head of the State Property Fund. Founded 140 years ago by a Swiss engineer, the state-owned factory has fallen on hard times, with production dwindling and bushes growing out of rooves. But, for a developer, the location is gold: fronting on Peremohy, Kyiv’s 10-lane access highway from the west, Bolshevik is next to the Shuliavska metro station and near the Zoo, two parks and Kyiv Polytechnic Institute. Sennychenko predicts earnings from the sale will go to paying

By this time next year, work should start on Ukraine’s first highway built by a private construction company as a concession,

Alexander Kubrakov, head of Ukravtodor, told the Transport Infrastructure Forum. There will be two types of concession: road repair and building a road from scratch. The head of the highway agency said the Rada is preparing bills to change the Budget Code. He predicted: “Construction work on these projects will begin at the end of the year – the beginning of the next one.”

Poland’s BGK Bank has agreed to fund 60% of the first phase of Lviv’s Innovation District IT Park,

the technology park has reported. The State-owned Bank, Gospodarstwa Krajowego, will loan €81.5 million for the €136 million first phase of development. With a first phase expected to be completed by of end 2023, the general contractor will be Unibep, one of Poland’s largest construction companies. Spreading over a 10-hectare site which is located 4 km south of Rynok Square, the Park will feature research laboratories and offices for 10,000 IT workers and students. Companies that have already reserved space include:

In Lviv, the continuing investment in property development includes the construction of a business and city administrative center on a prime 7-hectare lot which had previously been a military base,

 the Lviv City Council has announced. The triangular lot which is located 1.7 kilometerss west of Rynok Square, is to become a mixed use area.  The project will include a park, a business center, a congress hall and a new administrative building for the City Council, (Interfax-Ukraine).  On the site, bounded by Horodotska, Taras Shevchenko and Yaroslav Mudry streets, City Architect Anton Kolomiytsev has proposed to repurpose the site’s historic, Hapsburg-era buildings to new uses.

While shopping malls close in the US, they have a future in Ukraine, said

 Sergiy Sergiyenko, Managing Partner of CBRE Ukraine, (Kyiv Post). “Living in Kyiv and Ukraine, in general, there are no quality public spaces in winter…So, people go out and go to a mall,” he said adding that in Kyiv residents travel to malls using mass transit. “Malls are places for hanging out, for window-shopping or for trying on clothes. They may not be so profitable, but they still continue to be used…Rental rates in shopping malls did get hammered, but they

During the pandemic year, online shopping increased by 26% and shopping mall rents softened. Despite these conditions 20 new malls are expected to open across Ukraine by the end of next year.

This will add a total of 1.8 million square meters of leasable area, reported the Kyiv Post. This year, Kyiv is to see the openings of Ocean Mall with 100,000 square meters and Blockbuster Phase 3, with 55,000 square meters. Next year, if construction plans hold up, five new malls are to open in Kyiv, adding 173,000 square meters of retail space.

Kyiv’s office vacancy rate doubled last year, to 11%,

the highest level since 2014. In turn, rents fell by 10 to 20%, reported the Kyiv Post. Faced with uncertainty in the pandemic year, CBRE Ukraine said that developers offered only 125,000 square meters of new office space — half the initial plan. This year, Cushman & Wakefield has predicted that 160,000 square meters in new office space will come on the market in Kyiv. Total current supply is 2 million square meters.

Ukraine’s real estate magnates were recently ranked by Forbes Ukraine. The top eight are:

Viktor Polishchuk, owner of Gulliver and the Eldorado retail chain. $70 million Vagif Aliyev, developer of Blockbuster Mall, Lavina Mall, and Mandarin Plaza. $61 million Tomas Fiala, founder/CEO of Dragon Capital, which owns six shopping centers, 10 warehouse complexes and 13 office buildings. $54 million Alexander Yaroslavsky, owner of Caravan shopping mall chain and Kharkiv Palace Hotel. $46 million Adnan Kivan, owner Kadorr Group. $45 million. Roman Lunin, Equator shopping malls. $35 million Rinat Akhmetov, TSUM, Leonardo Business Center, Opera

The government’s ‘Big Construction’ program will invest in infrastructure for four industrial parks this year,

 Oleksiy Chernyshov, Minister for Community and Territorial Development, says according the government website. The announcement came at a meeting with Dragon Capital, which is building two industrial parks. The Ministry will spend almost $3 million this year on industrial parks, 10 times the amount spent in the last five years. By definition, an industrial park can contain factories, ports, warehouses.

To promote ‘green’ energy efficient commercial real estate, the EBRD is lending Dragon Capital $12.5 million for construction on Grand Business Center and two warehouses,

one in Brovary and one in Kharkiv. Last July, Grand Business Center became Kyiv’s first office building to receive a sustainability certificate under the Building Research Establishment Environmental Assessment Method, or BREEAM, an internationally recognized environmental rating system. A 15-story Class A office center, with 9,000 square meters of leasable space, Grand Business stands at Vasylkivska 98, across from the St. Nicholas Roman Catholic Cathedral. By the end of this year, Dragon intends to have eight buildings in Ukraine certified

The Rada passed a bill yesterday to resume privatization of large state owned corporations – one year after sales were suspended due to the coronavirus pandemic.

The State Property Fund hopes to raise as much as $430 million this year by selling six large state companies, including Kyiv’s President Hotel, Kyiv Bolshevik Plant, the Odesa Portside Plant and United Mining and Chemical Company. Dmytro Sennychenko, head of the Fund, wrote on Facebook: “The Fund will bring the budget, through transparent privatization auctions in 2021, 4 times more than last year!” Included in the auction earnings goal is $110 million from small-scale privatizations. So far this year,

Addressing the aftertaste of corrupt privatizations of the 1990s

, Sennychenko wrote: “The speculation that someone wants to buy up state property cheaply will not work! Absolutely transparent privatization auctions with offers for any wallet demonstrate only a fair price of the asset. If earlier the term ‘privatization’ had mostly negative connotations, now auctions, where more than 20 participants are stubbornly competing for victory, is a common practice.”

Private investment will breathe economic life into dead state assets,

 Economy Minister Ihor Petrashko wrote on the Ministry website. He said: “Removing restrictions on the sale of large state-owned enterprises will not only fill the state budget, but also attract large amounts of private investment in the development of these companies and the economy of Ukraine.”