Yekaterina Berezinets, Investment Analyst for ESTA Holding, answered the questions of COMMERCIALPROPERTY.UA
24.07.2013
- How would you estimate the results of the first half of 2013 for Kyiv commercial property market in general and your company in particular? Could they be called positive rather than negative? Clarify your answer, please.
- According to the results of the first half of 2013 we can make a conclusion that the most players in office property segment have adjusted to the current conditions of economic uncertainty and market stagnation.
For example, a lot of tenants used the possibility to improve quality of leased premises with the comparable budget; when compared to the same period last year we could observe notable increase in demand as for number of transactions and activity of the tenants.
New projects are now under construction, as well as construction works on earlier suspended and postponed projects have been renewed. At the same time, the number of small and medium-sized business centers (5 to 20 thou. sq. m.) has increased.
It is the fact that the projects of ESTA Group have a steady demand from the tenants. According to the results of the first half of the year, the vacancy rate of the second phase of Leonardo BC has reached close 0%, and the vacancy of other projects of the Group, as compared to the previous year, has decreased significantly.
Constructive dialogue with tenants, market positioning of the rental rates and high satisfaction level of the Head of ESTA Property Management are the main reasons for such demand.
Summing up the results, I’d like to note that pessimistic feelings prevailing at the end of the last year have not been proved true – the market demonstrated relatively high activity in the first six months.
The increase as it was not observed and average rental rates decreased a little.
- What were the key problems for Kyiv market in the first six months 2013? What events did influence its development?
- No pre-conditions for economic growth, risks of national currency devaluation, and leaving of the Ukrainian market by some international companies do not permit hopeful forecasts, and to a great extent restrict long-term planning.
Having adjusted, both tenants and developers have become more conservative in their forecasts. The companies have learned how to work in the conditions of uncertainty and, as a rule, they “have plan B” in case of deterioration of business environment.
- Did your company participate in purchase and sales of property units/projects in the first half of the year? Are you going to enter into such transactions by the end of this year? How could you estimate in general the activity of the Ukrainian property market in the first half of 2013 as for purchase and sales transactions?
- ESTA Holding is constantly considering offers and opportunities emerging in the property market. Making transactions is quite possible in 2013 but negotiations results on the project purchase are of no small importance here.
When estimating general market situation, taking into account number of landmark projects it is so that one or two investment transactions are quite possible in 2013-2014. Local and Russian companies are the major interested investors.
- What are your forecasts for development of Kyiv property market in the second half of 2013?
- Given that current trends of the national economy remain at the same level, we are not waiting for significant changes in the property market up to the end of this year.