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support 39 infrastructure projects to upgrade many of Ukraine’s highways, ports, airports, and railroads to EU standards. Largely designed to speed freight and passengers on east-west lines between Ukraine and the EU and to move export goods to the Black Sea ports, the aid is coordinated by the European Commission and is composed of European Investment Bank and World Bank loans and some grants, Infrastructure Minister Volodymyr Omelyan tells reporters. The building package includes: 13 highways -- €2.15bn; nine ports -- €873mn; nine rail -- €851mn; six airports -- €470mn; and two river projects -- €112mn. Several projects will be open to public-private partnerships.
9.1.4 Construction & Real estate sector news
Construction last year grew by 4.4%, to nearly $5bn, the State Statistics Service reports. Residential construction was down slightly. But the largest segment, infrastructure was up 9%, to $2.6bn. Overall, the 2018 growth represented a cooling after 2017, when construction shot up by 26%. As usual, Kyiv region led the country, with $1bn, followed by Odessa region, with $550mn; then Dnipropetrovsk region – nearly $500mn; and Kharkiv region -- $455mn. The trend is down, with housing construction down 25% in December y/y.
After opening five stores on Kyiv’s right bank last year, Rozetka.ua, Ukraine’s largest online store, now finds it cannot find warehouse space. “Ukraine is growing fast enough - this is good - but the problem is that the infrastructure is not keeping up with such growth,” Vladislav Chechetkin, co-owner of Rozetka, tells Interfax-Ukraine. “The vacancy of the warehouses is zero. Therefore, if you want a warehouse on the right bank, this means that you have to find (land), get approval, permission to build ... is a significant time lag.” Two years ago, Rozetka bought a warehouse on Kyiv’s left bank. Although that space is full, the retailer plans to open a sixth Kyiv store this year, on the left bank.
Six new shopping centres, containing a record 400,000 square meters of rentable space, are to open in Kyiv in 2019, according to the Ukraine Retail centre. This would be eight times the new leasable space of last year and a record for the capital, says Daryna Kulaga, a market analyst for Jones Lang LaSalle Ukraine. Although developers often do not reveal construction costs, the six could total around $350mn.
The overall vacancy rate at Kyiv shopping centres fell to 3.7% at the end of 2018 , Jones Lang LaSalle reports. This is down from 5.6% at the start of 2018. Annual store rents rose to $1,140 per square meter, almost the level of 2013.
6-story business centre has opened at UNIT.City, effectively doubling the constructed area of this Kyiv IT hub to 30,000 square meters . Designed for 1,000 workers, the new business centre has two large corporate tenants: Metinvest Digital and DTEK Academy. Vasyl Khmelnytsky, the founder of UFuture investment group, said last week of UNIT.City: “We have already invested $50mn, and in the next year and a half we want to invest the same amount.” Next month, his KAN Development starts construction of residences. At build out, this 46-hectare development, located between Dorohozhychi and Lukianivska stations on the Green Line, is to be 300,000 square meters – 10 times the size of today.
60 UKRAINE Country Report March 2019 www.intellinews.com