The growth of the Construction industry in Ukraine slowed down.

According to the State Statistics Service, the volume of construction output in January–July was valued at ₴76.8 bln ($2.88 bln), compared with the same period of the previous year. Illustrating a slowdown in construction, as the industry grew by only 0.2% in the first half of the year. Residential construction output increased by 19.9%, commercial construction and infrastructure construction output dropped by 3.9% and 4.3% respectively.

The State Property Fund is selling a distillery in the Poltava region.

For the fourth time, the State Property Fund has put the Vishnyakovsky distillery up for auction. The asset includes the separate property of the Vishnyakovo place of operation and the storage of alcohol of the State Enterprise Ukrspirt in the Poltava region. The Online auction is scheduled to be held on October 22nd. The successful bidder will receive 25 real estate assets with a total area of 11,134.2 square meters. The distillery is also located on a land plot with

The Deputy Chairman of the Fund, Yuliya Byelova, announced that the new Automatic Real Estate Valuation Service has already issued 380 thousand certificates.

The Automatic Real Estate Valuation Service is an innovative product that allows users to quickly and free of charge receive certificates with the appraised value of their real estate. The Valuation Service uses data of registered valuation reports, information from SPAs, and open sources of the real estate market, including data from search engines such as LUN and OLX, with which the Fund entered memorandums.

Housing prices continue to grow.

The cost of housing in the primary market is expected to grow by 5-10% and in the secondary market by up to 7% by the end of 2021, the President of the Realtors Association Yuriy Pita says.  The cost of new apartments in the largest cities of Ukraine – Kyiv, Dnipro, Lviv, Odesa, and Kharkiv – has risen by 18-20% since the beginning of the year. In other regional centers, including Vinnytsia, Ivano-Frankivsk, and Rivne, the price on the primary

Privatization of the large-scale titanium plant falls through and serves as a lesson.

 According to the Kyiv Post, on August 31 the State Property Fund was due to sell United Mining and Chemical Company (UMCC) — the largest titanium ore producer in Europe and the country’s most attractive asset so far — for $125 million as a starting price.  Only one undisclosed bidder emerged, and the sale has had to be postponed because according to the law more than one bidder is required.  It seems that the problem is not the lack of

LUN housing search service wants to attract foreign investment.

It has launched a campaign to attract international investment in residential real estate in Ukraine. According to LUN, the volume of the market for new buildings in Ukraine is about $4 billion per year, of which about $2 billion is Kyiv with the suburbs, another $1 billion – Odesa and Lviv, and the rest is in other regions. Today, almost the entire amount is domestic investment.

New foreign investment in construction in Ukraine should add up to $2 billion by 2025, Valeriy Kodetsky, president of City One Development,

 tells Interfax-Ukraine. “Powerful foreign investors” are interested in building new factories and production facilities, participating in large infrastructure projects, and building commercial and residential real estate projects, Kodetsky said, summarizing conversations he had last month in Monaco at the CC Forum Global Investment in Sustainable Development.

With six major state companies scheduled for privatization auctions during the second half of this year,

75% of revenue is to come from “the sale of ‘blue chips,’ the worn-out but potentially competitive industrial giants inherited from Soviet Ukraine,” Dmytro Sennychenko, head of the State Property Fund, writes in an Atlantic Council blog. Noting that 16 companies have registered interest in the Aug. 31 auction of United Mining and Chemical Company, a major titanium miner, Sennychenko writes: “We can confirm that international investor interest in Ukraine’s privatization program is back.”

The former Kyiv headquarters of Russia’s VTB Bank goes up for auction next Tuesday with a starting price of $10.4 million

, reports the Deposit Guarantee Fund. Located at a prestige address – the corner of Taras Shevchenko and Pushkinska – the 8-story building has 6,000 square meters and an underground garage. Since the start of the war in 2014, the government has pushed most Russian-owned banks in Ukraine out of business.

The Lease of new office space in Kyiv in the first half of this year was 60,000 square meters, 66% higher than in the first half of 2020

, reported Colliers International Ukraine. Of this new takeup, 64% went to IT companies, Oleksandr Nosachenko, the Managing Director of Colliers (Interfax-Ukraine). So far this year, five business centers, with a total area of 71,000 square meters, opened in Kyiv. In the second half, eight business centers are planned for commissioning in Kyiv, with a total area of 130,000 square meters.

The average prices for a new apartment in Kyiv rose 16.2% during the first half of this year, compared to January-June 2020, Halyna Martynenko,

spokeswoman for City Communications, tells Interfax-Ukraine.  The market fell 2014-2017, rose by 10% in 2018 and by 22% in 2019, then stayed flat in 2020, she said.  According to City One Development, the square meter increases during the first half  of this year are: elite +9%, to $3,571; business + 22%, to $2,252; comfort +17%, to $1,205; and economy +15%, to $978.

Houses in suburbs within 20 km of Kyiv City have increased in price by 10-15% this year,

 says Yuriy Pitu, the President of the Realtors Association of Ukraine. Over the two-year construction cycle, prices can increase by 40-50%, he tells UNIAN. He adds: “The popularity of private estates or housing in apartment buildings depends on the location, the convenience of transport links with Kyiv, the quality of construction.”

Demand for apartments across Ukraine has returned to pre-pandemic levels,

reports Viktoria Volkovska, Director General of the Finance and Investment Association, a group of 41 construction finance funds. A poll by the group found that 77% want to buy a new apartment to improve their living situation. The rest are looking for an investment. Yuriy Zavialych, director Lviv’s Intersvit, tells Interfax-Ukraine: “In early 2021, due to a prolonged quarantine period and a drop in income, we noted shrinkage in real demand. Now the real estate market is showing a tendency

The governments heavily promoted “Mortgage at 7%” program is not having an impact on housing sales,

Volkovska said of the Association’s online survey of 41 construction finance managers. Of the group, 54% said they have not noticed any impact. Looking ahead, 38% said they hoped it will spark more sales. So far, the program has largely financed dacha sales, largely because buyers can use their primary residences as collateral. For buyers who receive their pay ‘in envelopes’, bank mortgages are impossible or too expensive.  In a new National Bank of Ukraine survey, bank managers predict an

The government will issue $750 million worth of housing bonds

 after completion of an ongoing merger of the State Mortgage Institution and the Ukrainian Financial Housing Company, reports the Cabinet of Ministers. Priority recipients will be veterans, young families, and people force out of Crimea and Russia-controlled Donbas. Prime Minister Shmygal said: “Our task is to expand such programs as much as possible so that Ukrainians can improve their living conditions today.”

To speed up demolition of the 1950s-era Khrushchovky,

the five-story concrete panel apartment buildings, the government plans to lower the barrier of consent of residents to demolition to 75%, from 100% today. A renovation program adopted 15 years ago has stalled, reports Gordon. Olena Shulyak, Deputy Chairman of the relevant Rada Committee, says: “You can never get 100 percent consent from all tenants for resettlement. It’s simply impossible.”

Of the 50 existing industrial parks, only 10 are working,

 said Chernyshov. This year, the government is investing $3 million to build infrastructure in four industrial parks. To jump start the rest, the Rada recently passed on first reading a bill that would, depending on levels of exports, compensate companies in industrial parks for up to 50% of the cost of connecting to the power grid and up to 70% of initial capital expenditures and loan interest payments. Two more bills in the Rada would give companies in industrial parks

Ukrzaliznytsia is auctioning 22 ‘non-core’ real estate properties in six cities this week

, Ivan Yuryk, the Acting CEO of the state railroad, said yesterday. Through the Prozorro.Sales electronic platform, UZ is selling properties in Kyiv, Dnipro, Kryvyi Rih, Sinelnikovo, Smela and Chop. Joining a national movement to give dead state properties a new life under private ownership, UZ plans to sell 182 such properties this year. “All objects offered for sale are located in attractive places for doing business, potential buyers will be able to see them in person,” Yuryk tells the

Prices of new apartments in Ukraine could increase by 25% this year,

as predicted by the National Association of Realtors. During the first half of this year, hryvnia prices increased by 15-18%. In the resale market, apartments may increase by 12% this year. Yuriy Pita,  Association President, tells UNIAN that these factors drive prices up: Ukraine’s 9.5% inflation rate; a 14% increase in construction costs for the first half of this year; and a 6% drop in construction work for January-May, compared to  last year.

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.