Ukraine is presently one of the most exciting countries in Europe to do real estate investments. The demand for all types of real estate is immense. Worth mentioning is that the growth in all types of real estate sectors in Kyiv have risen 25% collectively for November and December 2006.

In Eastern Capital Partners we singularly focus on so called Class A premises. There are large areas of real estate that are not interesting for international companies to use, due to poor quality and lack of facilities.

In a country where merchandising is undergoing such a dramatic change, many things need to fall into place: Stores, warehousing, logistics, offices and so forth. Many international companies are either on their way to establish or planning to do so in a short time.
The space available and the planned space, do not reflect the demands from these companies.

Example from logistics: England has as many inhabitants as Ukraine, about 47 million. In Ukraine existing and planned logistic facilities until 2009 only make up for 5% of the area that England has today.

Today there are only 3 top-end hotels, 4- or 5-stars in Kyiv. An ordinary room in such a hotel costs between 4 and 600 US Dollars per night, making Kyiv one of Europe’s most expensive places to spend a night in a hotel. Because of this there is no wonder that hotel chains such as Hilton, Sheraton and Marriot and a number of others are about to establish in Ukraine within a short time.

Housing in the city centres has undergone dramatic price appreciations. Prices in some areas have been reported to rise with up to 600% in the last 3 years. It is highly uncommon in the cities for young people to move away from home before you are 30-35 years, even if you are married. Rents, of course, are rising accordingly.

Worth noticing is the high focus on the city centre of Kyiv. Around Kyiv there are large unexploited areas, making these very interesting for future development.

Real Estate legislation in Ukraine can be challenging, questions connected to agricultural land in particular. Today it is not allowed to buy or regulate agricultural land. It is expected that these questions will be raised in the Verkovna Rada (national assembly) during the spring 2007.

Please contact us for our more extensive real estate report.