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under the bridge, he said, adding that the port’s volume has been reduced to nearly a third since the Russian aggression began in 2014. Recall, Russia opened the Crimean Bridge to traffic in May 2018. To improve the activity of Ukraine’s Azov Sea ports In Mariupol and Berdiansk, the government is considering investing domestic financing resources, as well as tapping EU funds, Chernysh said. A key decision has already been reaching on financing infrastructure projects to support the port’s work, including rail, auto and sea transit. The construction of the Mariupol port’s grain terminal is scheduled to conclude this year, he also noted. Zenon Zawada at Kyiv-based brokerage Concorde Capital believes that for the reason of lost economic activity owing to the Russian-Ukrainian conflict, the residents of southeastern Ukraine are supporting the candidacies of Volodymyr Zelenskiy and Yulia Tymoshenko over President Poroshenko’s re-election.
9.1.4 Construction & Real estate sector news
Real estate purchase transactions increased last year by 8% y/y, to 277,230, reports real estate portal domik.ua Drawing on statistics from public and private notaries, the news site reported that the two two regions were: Kyiv – 35,000; and Dnipropetrovsk – 28,500.
Across the country, construction was up 17% for the first two months of the year , compared to January-February of 2018. Driving the building were good weather in February and a whopping 41% y/y increase in infrastructure construction in February.
Kyiv office rents will rise for the next two years, until a “huge amount new [office] projects” open in 2020-2021, Ihor Zabolotsky, a commercial real estate analyst for Colliers International (Ukraine), said at Kyiv’s recent Open Mind conference. Making up for the post 2014 slump, developers plans to commission 406,000 square meters in 2020-2021 -- about two thirds more than the pre-2013 annual rate of 140,000 square meters. With office vacancies hitting 5%, IT companies are driving almost half of the new space demand.
Kyiv risks seeing “Dead Malls” this year, NAI Ukraine, the consulting company, writes in a new report on the city’s shopping mall scene. After 101,500 square meters in retail space opened last year, an additional 400,000 square meters are to open this year. NAI writes: "Such a large number of offers on the market may lead to the appearance of "Dead Malls" - empty, uninteresting for buyers and tenants of the mall. The concept that is common in America may appear in Kyiv due to the fact that such a large number of offers is not needed by the consumer.”
Warehouse vacancies fell to 2.8%, pushing rents up last year by 20-25%
in dollar terms, Property Times reports in a lengthy analysis of the warehouse sector, largely in Kyiv. Rents are to increase more this year as only two projects, with a total of 31,000 square meters, are to be commissioned this year. In face of the space shortage, many companies are responding with ‘build to suit’ premises that do not go on the open market. Over the next three years, developers have announced projects totaling 190,000 square meters. But, Property Times reports, several developers are waiting to learn the outcome of the presidential elections before starting construction.
With office space tight and tourism rising, the Rada rejected a bill that
44 UKRAINE Country Report April 2019 www.intellinews.com