On February 11, Mykhailo Merkulov, CEO of Arricano Real Estate Plc, took part in the sectoral Open Mind Conference where the representatives of the real estate market discussed the investment climate in Ukraine.
30 speakers and over 150 participants, representatives of investment, consulting and development companies, financial and banking institutions, funds, industry agencies and associations, owners and managers of real estate, discussed investment aspects during 5 thematic panels.
Mykhailo Merkulov became the speaker of the panel “Investments in Ukraine influenced by local and global factors”, where the strategic issues of the sector: reforms in Ukraine and their impact on the business environment and the investment market, the attractiveness of the country's real estate market for local and foreign investors, development prospects and market potential were discussed.
CEO Arricano noted that only optimistic companies work in the field of real estate in Ukraine. They actively operate in the market and influence the improvement of the investment climate, not only demonstrating the growth of business parameters, but also strengthening the country's reputation. The speaker emphasized that a big step towards the formation of civilized transparent relations was provided by ProZorro service. “In the course of the development of the investment climate, steps that ensure the transparency of the rules of the game at industry markets, protection of property rights and reduction of corruption are of great importance,” CEO Arricano said. “As a result, the relationships of market players become transparent, business processes understandable and corruption impossible.”
Yaroslav Hrehirchak, the moderator of the panel, Deputy Business Ombudsman in Ukraine, spoke about the results of the activity of the Office of the Business Ombudsman aimed at helping businesses in the fight against corruption and increase of investment attractiveness of Ukraine. Among the 5,000 appeals for help filed to the Office of the Business Ombudsman, the appeals of the representatives of Construction and Real Estate industry occupy the 4th place. Among the most relevant are the abuses of state authorities related to tax issues, the actions of law enforcement officers and local governments. The number of appeals to the Ministry of Justice is the highest among other industries and makes 5%.
The speakers of consulting companies noted positive changes in the real estate market. Thus, in 2018, the total volume of investments into the sector increased significantly and made $335 million. Dragon Capital was No.1 investor into office, warehouse and retail real estate.
The participants of the first panel Mykhailo Merkulov (Arricano), Ihor Verkhohliad (Soul Partners), Stanislav Ivanov (CBRE Ukraine), Olexander Markus (German-Ukrainian Chamber of Commerce), Volodymyr Mysak (Cushman & Wakefield in Ukraine), Olena Shuliak (Midland Development Ukraine, Office of Effective Regulation - BRDO) are optimistic about the investment potential of the real estate sector. The speakers agreed that in spite of the riskiness of investments into the Ukrainian economy, the real estate market is attractive for investors for many reasons. This is also because the rate of capitalization of commercial real estate objects sometimes is 2-3 times higher than in European cities.
“The future in the field of commercial real estate belongs to the companies that change the rules of the game in the market and develop the industry forming the investment attractiveness of the sector,” CEO Arricano said. “In complicated social and economic conditions they provide an increase in business parameters, introduce new technologies and strategies in development, management, approaches, communications, and relations with partners. The best modern commercial real estate facilities are comfortable social spaces that are being developed due to new management strategies, collaborations and partnerships.”