Page 65 - UKRRptSept19

The government will double the Road Fund next year. The money would come partly from a crackdown on the ‘hundreds’ of ‘gray’ gas stations that do not send to Kyiv excises taxes on sales of gasoline, diesel, and oil. The goal is to repair or rebuild all 24,000 km of ‘main’ roads, those connecting regional capitals and key districts.
9.1.4 Construction & Real estate sector news
Construction was up 21% y/y in the first half of this year, reports Lev Partskhaladze, deputy minister of Regional Development, Construction, and Housing. While residential was down 2%, non-residential – largely office and retail – was up 35%. From January to June, $2.6bn worth of construction was underway in Ukraine. Kyiv accounted for almost one-quarter of that amount.
Driven by IT demand, Class A and B office space in Lviv will nearly double over the next three years, hitting 378,000 square meters, calculates UTG, the real estate consultancy. “Growing office space demand, triggered mainly by the IT sector has led to a shortage of quality space in the market, a decrease in vacancies to 2.2%, an increase in rental rates, and, unthinkable years earlier, a surge in developer activity,” writes Oksana Gavrilevich, a UTG analyst. Reviewing projects nearing completion and in the pipeline, she gives these figures: 2019 – 56,400 square meters; 2020 – 31,500; and 2021 – 88,200 .
9.1.5 Retail sector news
With retail the main driver of Ukraine’s economic growth this year, 44 major retail projects are underway in Kyiv, placing on the nation’s largest market 1.3 million square meters of new leasable space, reports the Ukrainian Trade Guild. “The lion's share will open before the end of 2020,” reports the real estate consultancy. The retail vacancy rate is to rise above the current level of 5.5% and outdated shopping centers are expected to close. Several shopping centers owners are investing in modernizations, said Konstantin Oleinik, UTG’s head of Strategic Consulting. By contrast, Kyiv’s retail vacancy rate in 2016 was 12%.
Three new shopping centres are to open in Odesa this year, adding 59,000 square meters of leasable area, reports UTG. Last year, three centres opened, adding 50,000 square maters. For the next five years, 16 projects have been announced. If built, these centres would double the city’s current retail space, to 900,000 square meters. Due to corruption and bureaucratic controls, retail in the Black Sea port lags the nation, ranking sixth in Ukraine for retail space per 1,000 inhabitants. Next year’s opening of the long-delayed airport runway is expected to increase international tourism.
9.1.6 Agriculture sector news
Ukraine on course for new record harvest. With a strong corn crop starting to come in, the national harvest of all grains this year could hit 76mn tons, up 8% over last year’s record, Alfa-Bank Ukraine reports in its reading of the USDA’s latest World Agricultural Supply and Demand Estimates. Noting that farmers harvested a record 28mn tons of wheat this summer, Alfa research head Oleksiy Blinov writes: “It is clear that the country is about to set a new
65 UKRAINE Country Report September 2019 www.intellinews.com