The real estate market in Ukraine is still in need of funding as it cannot offer high-quality real estate and high return on investments, which would cover the risks of an unstable economy. This matter was discussed by experts and leading operators of the real estate market who attended the Property Times Forum 2010 entitled “Investing in Real Estate in 2010,” which was held on April 8, 2010 in Riviera Hotel (Kyiv) and was organized by the Times Media Group under the auspices of the European Business Association (EBA) and the Ukrainian Construction Association (UCA). Vasil Kisil & Partners Law Firm was represented by Mrs. Natalia Dotsenko-Belous, Senior Associate.

The event was designed to establish a direct dialogue between the representatives of key operators of the real estate and construction markets: state and municipal agencies of Ukraine, architects, building owners, investors, developers, lawyers, financial experts, leading professionals, and mass media representatives.

In her speech, Natalia Dotsenko-Belous gave an insight into legislative and regulatory barriers usually encountered in the process of investing in real estate:

Constraints on land purchase investments:

- A moratorium on alienation of municipal agricultural land plots, on alienation of land plots for individual peasant farming and for agricultural commodity production;
- Difficulties associated with the acquisition of land plots;
- Restriction of the rights of foreign legal entities in the acquisition of title to non-agricultural land plots.
Barriers to foreign investments resulting from recent amendments in laws, namely Resolution No. 762 of the Board of the National Bank of Ukraine “On Regulation of Issues Relating to Making and Registration of Foreign Investments,” dated December 23, 2009.

In conclusion, Natalia highlighted that: “Virtually any legislative barrier can be overcome using certain financial and legal techniques.”

Within the framework of an overview of the commercial real estate in 2009, the speakers presented their vision of the attractiveness of investments in Ukraine in global terms and agreed that the commercial real estate gradually regains its investments attractiveness. Based on the office real estate market overview 2009 provided by CB Richard Ellis, an international consulting company, an annual volume of commissioned office space in Kyiv was 90 thousand sq.m., which is 40% lower than the 2008 figure and 70% below the 2007 result. In 2011, the situation with the new supply of office space will become much more complicated.

Experts especially emphasized the attractiveness of the warehouse real estate market and spoke positively about the situation in the commercial and hotel real estate segments. According to the rating from A. T. Kearney international agency (the 2008 data), the demand for commercial real estate in Ukraine was about four times higher than the supply. The warehouse and office property are in equally short supply – the occupancy rate of most of the facilities is nearly 100%.

Investing in Real Estate in 2010: Expert Suggestions and Forecasts