Amour Club News

? 

Almost each fourth registered fund in Ukraine is actually a closed estate fund. The niche of estate funds remains rather vacant. The real competition between share investment funds of estate only begins. This happens because all main companies try to establish their businesses in regions. It can be considered the first noticeable tendency. And another one is the rapt attention of foreigners towards Ukrainian estate market.
? Today the only stocks of DUPD (Dragon-Ukrainian Properties & Development Plc) are circulating on an international stock exchange. It is the first investment fund of estate in Ukraine. Its capitalization makes up $275,3 million. ???Foreign investors evaluate very positively the perspective of Ukrainian estate market and the level of income that could be potentially reached here???, - says the manager of Dragon Capital Partners.
Only three years before the market of estate investment funds didn??™t exist in Ukraine. The single firm ???ART-Capital??? was trading with its stocks during August 2005. A little bit later such companies as ???Synergy Real Estate???, ???Parex fund of Ukrainian Estate??? appeared. As the time goes by, joint investments in estate market are becoming more and more popular both among corporate and private clients. However, usual citizens may find such type of funds particularly attractive too. Mainly these are people those incomes are not impressively high and those who cannot afford mortgage in banks. Now the majority of shareholders is presented by corporate investors. And this fact is not surprising at all. As experts say that the largest part of existing funds was designed as certain projects for certain people. Besides, the price of ???entrance ticket??? to all estate funds was rather expensive. The up-to-date development of closed funds can be characterized as slow, but confident motion towards the retail client.

? Today there is no any generally adopted classification of estate funds in Ukraine. Simplistically they are divided by professionals into two categories: rent and development funds. First ones usually buy some property or commercial buildings and make money while leasing it. However, the majority of Ukrainian funds can be referred to the second category. Managers of such funds usually have tied business with building companies. Such funds finance the building of estate at the expense of the capital accumulated by fund. The main income shareholders obtain after projects realization. The advantage of such funds is that they secure very high yield (about 35-60% annual). On the other hand, the shareholder bears all developer??™s risks. The rent funds are more transparent and reliable as they assume buying of already existing object. The risks are connected with the dynamics of rent rates. Their main disadvantage is comparatively low income (12-15%). There is a substantial lack of investment fund which deal with land. The scheme of their work is following: the fund obtains the land, signs the contract with building company and sells cottages and land under them. Players of estate market are sure that such kind of business, which involves funds, can become very popular for out-of-town estate segment. Let??™s consider other views. Analysts of company ???Colliers??? say that office and trade estate will appear as most attractive for funds in Ukraine. At the same time, the segment of storage rooms is also interesting to them, as there is lack of assets too.

In conclusion, it is important to stress, that a yield for all types of commercial estate in Ukraine is almost twice higher than average European level is: for offices and trading centers ??“ 12-15% (the European level is 5-6%), for storage estate ??“ 15-17% (the European level is 7-8%). ? ? ? ? ? ? ?