Trends in development, opportunities for emerging markets, working with investors. Results of Kyiv at MIPIM 2019

Thirties international investment exhibition MIPIM took place in Cannes from March 12th till March 15th and gathered 26800 participants, among which are over 5600 investors, 560 political leaders from over 100 countries. Kyiv takes place in the event 15th time in a row and this year the city was represented with the separate stand. During the tight schedule of events, stand gathers people around to discuss investment opportunities at the investment conference Kyiv as an investment gateway to Ukraine, panel discussions with local and international experts. 2nd time Mayor Vitali Klitschko recognized local companies, supporters of the city during Kyiv Friends Awards.

On March 20th in the press center of Kyiv City State Administration key partner of Kyiv at MIPIM told about the results of the exhibition.

Participation in MIPIM means presence of the cities on the global investment map

According to Dmytro Dopiro, representative of MIPIM in Ukraine, during the first years of the exhibition, only business representatives were among its key participants. In due course official representatives of cities, political leaders started to attend MIPIM as well. The key goal of the city at MIPIM is not only to find an investor for the realization of public projects but also to support business interested in the realization of commercial projects in a specific city. Only these type of initiatives helps to attract serious investment companies making the business environment more appealing.

Because of this, traditionally MIPIM is a good occasion for the cities and business, which is hard to ignore. It is proved by the numbers. This year France at MIPIM gathers over 7300 participants (last year – 6725); 6472 people came from Great Britain (in 2018 – 6112); the number of delegates from Poland increased as well (477 attended last year and 561 – this year). Ukrainian delegation is relatively small. Though, every year the number of attendees from Ukraine grow as well. In 2019 Ukraine gathered 77 people, last year – 59.

Yulia Tur, CEO of Kyiv Investment Agency stated that this year Kyiv was recognized by two important awards. Kyiv was rated among the TOP 10 cities for return on investments. This award of investment attractiveness was received by the mayor at the annual fDi Location Awards by Foreign Direct Investment Magazine, part of Financial Times. Also, Ukrainian capital was awarded for the red tape reduction.

It was also noted by Yulia that the mayor’s support was very important. Investors need to listen to the first-hand information about the city. Presence of the mayor means for them transparency and openness of the government, readiness for the dialogue and guarantee of the stable work afterward.

Kyiv Investment Agency noted the interest of investors in the local projects – private educational institutions, office centers, and medical institutions.

Interest in alternative real estate projects is an up-to-date trend on the market. During MIPIM a lot of attention was paid exactly to such socially focused assets. As an example, this year in the category best residential project at MIPIM Awards received WOODIE Hamburg (Hamburg, Germany), an innovative student housing with wood micro apartments by Sauerbruch Hutton Architects.

Country in the eyes of investors. Who and why is interested in investments in Ukraine?

Natalia Kochergina, the partner at DLA Piper Ukraine, who firstly attended MIPIM in 2016, noted that the Kyiv stand was becoming more professionally organized this year and role of the mayor during the official city presentation was crucial. For many representatives of international companies, Kyiv at MIPIM was a must visit. It was a venue for meetings with international players. Ukrainian capital, through the year, is considered by international business as part of Europe.

Natalia confirmed, that interest in Ukraine was growing and shared interesting insight. It was a pleasant surprise that many hotel operators vested interest not only in Kyiv but also in other Ukrainian cities.

– It is a good trend, it demonstrates that foreign players consider Ukraine as a state where they can invest money; the state where they can expect good geopolitical and economic situation, – Natalia shares her opinion. – Second trend – interest in alternative real estate – such as educational and medical institutions – they also are considered more often as good projects to invest in. This trend is a result of growth and change of the way people consume.

Yuriy Kryvosheya, managing partner at Toronto-Kyiv believes that proactive position and leadership role of the city will allow attracting and retain investors.

– Every company during the trip undertake the role of ambassador of Ukraine and his/her city, – said Yuriy. – Proactivity allows implementing a dialogue with investors into processes. Today, even the most conservative investors, those who earlier did not consider the Ukrainian market, started to vest interest in projects.

Yuriy believes, Kyiv emerging market not importantly will overtake – in some cases it can “jump over” specific stages of evolution and even surpass other emerging cities.

Participation in MIPIM: success stories of Ukrainian companies

Iryna Skorokhodova, vice president of Alfa Bank Ukraine told about the positive experience of participation in MIPIM.

– It is better for the company to be part of a joint stand and represent Ukraine.

In 2017 Alfa Bank was a main partner of the city and occupied one-third of the Kyiv Stand. The portfolio of property presented at MiPIM was sold out through the further two years for $ 160 million. In spite of the fact that investors in projects were not those companies we negotiated with at MIPIM, participation in the exhibition was a success as many foreign investors were interested indeed.

Las year after MIPIM, German fund was interested in the property of Alfa Bank, Horizon Capital. In spite of the fact that the deal was concluded with other investors, additional interest always helped as a result.

Participation in MIPIM increase project image: the myth that bank projects are problematic or with poor quality can be unveiled.

Iryna Skorokhodova agreed that every year MIPIM participants, representing not only their product but Ukraine becoming ambassadors of the country.

This year Alfa Bank there were many meetings: in addition to new acquaintances, negotiations with the last year contacts continued.

– It is interesting to tell about the local projects and to listen to foreign colleagues. It is possible to make 10-12% yield on the Ukrainian market. At this time, for instance, in France, the yield is not more than 4%. Though, they have access to the capital, which you can be loaned at 2%interest  in case of 90% occupancy rate. Therefore, the return on capital is even higher than in Ukraine, explained Iryna. – We made a conclusion and now working on loan product, which can equal out this situation in the country.

Technologies and innovations. Trends in the projects of development

Project manager at UDP Aleksandr Didyk told about the company’s unique for Ukraine project UNIT.City. This innovative object is interesting as it is closely connected with advanced global trends of innovative office real estate.

– We think not about the increase of square meters, but about the comfort of tenants, newly created jobs able to retain intelligent population in the country. UNIT.City cooperates with IT companies which do not offer outsourced services but develop their own product.

Among the key trends at MIPIM which go in line with the innovative projects is creating of ecosphere in the office spaces.

– We make sure that today developers do not discuss architecture as office planning. Developers consider concepts with no fixed working place, even in companies earlier couldn’t follow this trend because of the business specificity – for instance, banks.

– There are many types of research to understand where exactly value for work is generated – in office, or, probably, far away from office space. At MIPIM everyone discusses the level of one’s satisfaction at office place. In the meantime, architects discuss not architecture but process understanding which will be implemented in the buildings they design for the company. Now architects speak the language of project management.

The large-scale project of regeneration firstly presented at MIPIM

First time at MIPIM City One Development presented its large-scale project Lipki Island City Resort. One of the largest model at the exhibition was a point of attraction for many foreign players and received the prestigious awards CEE Investment Awards by EuropaProperty.

Lipki Island is a project of redevelopment which transforms territory of old shipyard into the modern urban space uniting amenities and high-quality infrastructure making it one of the most comfortable projects for a living. It includes residential, commercial and public facilities on the 40 ha territory at Rybalsky peninsula. The construction budget of the project is $ 600 billion.

Future for the joint efforts and cooperation of business and the city

Discussing the future of development, it is worth remembering words of Ban Ki-moon, the eighth Secretary-General of the United Nations during his first speech at MIPIM 2019.

– Former Secretary-General has immense access to the information, noted YuriyKryvosheya, managing partner at Toronto-Kyiv, – One of his key messages was about preservation of the environment. If we do not make it together, our development efforts will lead to nothing.

According to Yuriy, in Ukraine and in Kyiv there are a lot of initiatives, potential solutions within proptech and beyond to create socially responsible projects.

Anyway, the amount of foreign direct investments is growing, investors entered Ukraine, understanding they can realize the most successful projects right now.

– Kyiv is among the five largest metropolises of Europe including Moscow and Istanbul. During specific periods of time some international companies “move” from these cities to others. Can Kyiv be a platform for such move? It is a question to all of us, and what we do for this.

Organizing partner of Kyiv at MIPIM is company Invest in Projects. Invest in Projects is a B2B agency with a mission to promote the image of Ukraine and its investment property projects in the eyes of the international business community, potential investors and partners.

According to the founder of Invest in Projects Anna Nestulia, the key in the successful organization of participation at investment exhibitions is well-timed preparation of the projects, program and open communication with the international audience. Support of partners is crucial. This year due to strategic information partnership with Europaproperty, Business Ukraine magazine, Commercial Property, fDi Intelligence, we were able to convey important messages about Ukraine, Kyiv and its projects with the professional language of international business.


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