Page 97 - UKRRptFeb24

9.2.4 Construction & Real estate corporate news
Ukraine’s leading investment bank Dragon Capital Property Management invested about $10mn in the real estate portfolio in 2023, despite the war, Interfax Ukraine reported on January 25.
In a strategic move last fall, the company divested the Pory Roku (Seasons) business centre to a final buyer, keeping the transaction details confidential as per the agreement, the firm's commercial director, Natalia Kravets, in a conversation with Interfax-Ukraine.
Presently, Dragon Capital PM oversees a diverse portfolio comprising 28 commercial properties, which includes 12 business centres, six retail facilities, and 10 logistics complexes, encompassing a total area of 647,000 square metres.
Kravets elaborated on the company's strategy, stating, "Currently we have no plans to sell properties from the portfolio; on the contrary, we are considering attractive opportunities for privatisation. We are constantly investing in our real estate properties: we complete the construction we have begun, carry out reconstructions, make repairs and improvements for tenants, carry out finishing and landscaping work. In total, in 2023, we invested about $10mn in our real estate portfolio and are planning the same level of investment for 2024." Despite a challenging market environment, Kravets expressed cautious optimism for the year's performance. She noted significant reductions in vacancy rates across the company's business centres in Vinnytsia and Lviv, with minimal vacancies in prime locations within the capital's central business district and near metro stations. However, she acknowledged increased vacancies in Kyiv's business centres located near critical infrastructure, at a distance from the city centre, or on the Left Bank.
The tenant landscape has evolved markedly in 2022-2023, shifting from a predominance of IT companies pre-war to a more diversified tenant base including FMCG companies, retailers, and industrial firms. Kravets remarked, "Recently, there have been a lot of requests from so-called call centers, but we prefer not to even negotiate with such companies because of their toxicity." The past year has seen a significant adjustment in rental rates and tenant expectations, yet 2023 remained a dynamic period for the office segment. "During the year, we signed contracts with tenants for more than 2,000 square metres, and for smaller areas. The main thing is that the majority of our current tenants extend their contracts with us for 12-60 months, and this inspires us to work even better. We really care about the safety and loyalty of all our residents," Kravets added.
In addition, Dragon Capital Property Management is expanding its coworking space offerings, with four business centers already equipped and plans underway to include them in nearly all business centers through ongoing negotiations in Kyiv and Lviv.
For the retail segment, 2023 has been notably successful for the company's five shopping centers, indicating a resilient performance amidst evolving market conditions.
97 UKRAINE Country Report February 2024 www.intellinews.com