Construction sector in Ukraine 2014 Development forecasts for 2014-2016
  • Date of issue: December 2013
  • Pages: 144
  • Delivery: Pdf file

Construction sector in Ukraine 2014

Development forecasts for 2014-2016

Consult this exceptional publication for a comprehensive view of the Ukrainian construction market and analysis of current and forecast activity in the engineering, non-residential and residential construction segments. The report reviews conditions in the market as a whole and examines the unique situation in each segment against the solid backdrop of Ukraine’s economic and regulatory circumstances.

 

Also featured: Profiles of 10 leading construction firms doing business in Ukraine that include financial updates, operational details, specialisations, position in the market and complete contact information.

 

Learn about the players and projects making news in Ukraine’s construction sector

 

The report explores these essential characteristics of the overall market:

  • Data describing market size, wages, prices
  • Construction output totals
  • Recent, current and planned construction projects
  • Distribution of construction activity around Ukraine
  • Leading construction companies: financial status, newsworthy projects and strategic outlook
  • Employment, wage and price levels in Ukrainian construction
  • Observed market trends and forecasts for materials and equipment costs
  • Cement market update – production, imports and exports and market demand
  • The regulatory environment for investment.

 

Did you know...

  • In May 2013 about 97% of the country’s roads were thought to be in need of extensive reconstruction and repair
  • Domestic production meets 34-37% of demand of natural gas and 10-15% of the demand for crude oil
  • Ukraine has about 60 m² of quality shopping centre GLA per 1,000 inhabitants
  • Ukraine has only about 24 m² of residential space per capita, including 22 m² in urban areas
  • The average interest rate on mortgage loans exceeds 19%, even though the National Bank’s refinancing rate has been reduced to 6.5%.

 

Track activity in the residential construction segment

 

Benefit from expert analysis of:

  • Most attractive types of projects to investors and developers
  • Available housing stock in Ukraine by location
  • Government housing development programmes
  • Types of residential structures most in demand in the Ukrainian market

 

Examine non-residential construction market conditions

 

Learn about existing stock, current and planned ventures:

  • Foreign and domestic developers and the types of structures they plan to build
  • Recently completed projects
  • Current supply, upcoming projects and rental details
  • Retail details – existing space, rentals, and projected area totals.

 

Survey planned and existing engineering and infrastructure ventures

 

What is the market share of this segment in relation to the overall Ukrainian construction sector?  Learn the answer, in addition to all the details about existing supply, current and planned new construction projects and upgrades to:

  • Road construction – permit totals, obstacles and opportunities for investment
  • The railway network in Ukraine – size and scope summary
  • Airports – cargo and passenger data, investment options
  • Power generation facilities – grid expansion, investment opportunities
  • Pipeline and other energy related ventures
  • Environmental protection projects and potential funding sources.

 

Selected companies analysed in this report...

 

Altcom, Altis, Arricano Real Estate, Azerkorpu-Autobahn, Budhouse Group, Cement Roadstone Holdings, Chevron, Donspetsmontazh, Dyckerhoff, ExxonMobil, Gulsan Construction, HeidelbergCement, Integral-Bud, K.A.N. Development, Karavan Real Estate, Krai Property, Kyivgorstroy (Kyivmiskbud), Kyivmetrobud, Naftogas Ukrainy, Onur Construction International, Shell,Todini Construzioni Generali, TPS Nedvizhimost, Ukrzaliznitsya, XXI Vek.

 

This report has been compiled to meet the informational needs of

  • Construction companies currently active in Ukraine or researching possible market entry
  • Business consultants, analysts and research services providers
  • Banking and investment services professionals
  • Government and construction industry agencies, embassies
  • Academic and policy research institutes.

 

Extract from this report

  • Between 2008 and 2012, the Ukrainian construction sector succeeded to expand year on year in real terms only once, in 2011, when it posted a double-digit growth rate (+18.6% year on year).
  • In the World Economic Forum’s 2013 Global Competitiveness Report, Ukraine was in the 70th place among 148 countries in terms of the quality of overall infrastructure (79th out of 133 covered countries in 2009). In terms of the quality of roads the country was in the 144th place (125th in 2009); in terms of the quality of air transport infrastructure it was in the 105th place; and by the quality of port infrastructure in 94th.Only in respect of the quality of railway infrastructure, was it placed in a higher position: 25th.

Market commentary by expert

 

In November 2013, Ukraine decided not to sign the Association Agreement with the EU. Taking into account that Ukraine is highly reliant on foreign sources of financing, the refusal to sign the agreement will most likely force the government to look for financing outside the EU and the IMF. Tough conditions set by the IMF for a new multi-billion-dollar bailout, demanding a substantial increase in gas prices for domestic consumers, restrained budget spending and set up of a more a flexible exchange rate for the hryvnia, will be hard to accept by Ukraine’s government facing presidential elections in early 2015. This refusal will most likely have a negative impact on implementation of state-funded infrastructure development programme in 2014, particularly on road projects. In 2014, the government plans to spend UAH 32.2bn (€2.9bn) on development of the country’s road network, of which 54% to be covered by loans. 
As well, the political unrest, a heavy debt burden, the large current account deficit and dwindling foreign currency reserves are forcing banks to be highly selective regarding long-term loans, thus providing little support to real estate developers, especially to those planning large-scale projects. 

 

Vitalie Iambla, Construction market Analyst

 

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  1. Methodology p. 9

  2. Executive summary p. 11

  3. Key macroeconomic indicators p. 17

    1. Macroeconomic background p. 17
      1. GDP p. 17
      2. Gross fixed capital formation p. 19
      3. Gross value added in construction p. 20
      4. Fiscal policy p. 22
      5. FDI p. 23
      6. Labour market p. 24
      7. Wages p. 25
      8. Consumption p. 27
      9. Inflation p. 28
      10. Market outlook p. 29
    2. Demographic information p. 30
  4. Construction overview p. 33

    1. Construction output p. 33
    2. Construction companies p. 37
    3. Employment and wages p. 38
    4. Construction prices p. 39
    5. Overview of the building materials industry p. 40
    6. Legal changes p. 41
    7. Forecasts p. 43
  5. Civil engineering construction p. 47

    1. Overview p. 47
    2. Environmental protection-related projects p. 48
    3. Road transport p. 53
    4. Railway transport p. 64
    5. Air transport p. 69
    6. Investments in heavy industry p. 72
      1. Oil and gas p. 72
      2. Power industry p. 74
    7. Forecasts p. 78
  6. Non-residential construction p. 81

    1. Situation on the non-residential construction market p. 81
    2. Office construction p. 82
      1. Kyiv p. 82
      2. Regions p. 85
    3. Shopping centre construction p. 87
      1. Kyiv p. 88
      2. Regions      89
    4. Logistics centre construction p. 94
      1. Kyiv p. 94
    5. Hotel construction p. 97
      1. Kyiv p. 97
      2. Regions p. 98
    6. Forecasts non-residential construction p. 100
  7. Residential construction p. 103

    1. Housing stock p. 103
    2. Housing completion p. 108
      1. Individual housing construction p. 115
    3. Overview of major residential projects p. 117
    4. Housing construction development programmes p. 120
    5. Housing prices p. 122
    6. Mortgage market p. 124
    7. Forecasts p. 127
  8. Competitive environment p. 129

    1. Market competition      129
    2. Mergers and acquisitions p. 130
    3. Financial standing p. 130
    4. Major contractors and producers of building materials p. 131
      1. Key contractors p. 131
      2. Key producers of building materials p. 135
  9. List pf graphs p. 137

  10. List of tables p. 141

  11. About PMR p. 143

List of graphs

  1. Total construction output in Ukraine (UAH bn) and real change (%, y-o-y), 2010-2016       13
  2. GDP at current prices (UAH bn) and its real change (y-o-y, %) in Ukraine, 2007-2019       19
  3. Gross fixed capital formation in Ukraine, real change (%, y-o-y), 2006-2020       20
  4. Share of gross value added in construction to total GVA and real change in Ukraine (%), 2006-2012       21
  5. General government debt and deficit in Ukraine (% to GDP), 2006-2012       22
  6. Inflow of foreign direct investment to Ukraine, current prices ($ m), 2006-2012       24
  7. Unemployment rate, annual average for working age population (%), 2006-2020       25
  8. Average monthly gross wages in Ukraine ($), real and nominal change (%, y-o-y), 2006-2020       26
  9. Average monthly wages, household consumption (real change, %, y-o-y), and unemployment rate (% of labour active population), 2006-2020       27
  10. Annual average CPI inflation in Ukraine (%, y-o-y), 2006-2020       28
  11. Total population (‘000) and its change (%, y-o-y) in Ukraine, 2006-2020       31
  12. Construction output in Ukraine (UAH bn) and real change (%, y-o-y), 2008-September 2013       34
  13. Financial performance of the construction industry in Ukraine (UAH bn), 2008-H1 2013       38
  14. Average monthly wages in Ukraine (UAH), 2006-Q3 2013       39
  15. Construction price indices in Ukraine (%, y-o-y), 2007-Q3 2013       40
  16. Total construction output in Ukraine (UAH bn) and real change (%, y-o-y), 2010-2016       45
  17. Share of civil engineering in total construction market in Ukraine (%), 2010-2013       48
  18. Length of Ukrainian public roads and hard-surface roads (‘000 km), 2001 and 2005-2012       53
  19. International transport corridors on the territory of Ukraine, 2011       55
  20. Length of renovated and constructed roads and motorways put into use in Ukraine (km), 2008-2012       56
  21. Completion of hard-surface roads in Ukraine (km), by public and non-public roads, 2000 and 2003-2012       56
  22. Ukrainian railways within the Trans-European Transport Network, 2011       65
  23. Transportation of cargo (‘000 tonnes) and passengers (millions) in Ukraine, 2002-2012       69
  24. Total civil engineering construction output in Ukraine (UAH bn) and real change (%, y-o-y), 2010-2016       79
  25. Structure of demand for office space in Kyiv, by type of deal, 2012 and H1 2013       84
  26. Expansion of Kyiv warehouse property market (‘000 m2), 2006-2013       94
  27. Total non-residential construction output in Ukraine (UAH bn) and real change (%, y-o-y), 2010-2016       101
  28. Breakdown of number of homes in Ukraine (%), by number of rooms per dwelling, 1 January 2013       105
  29. Distribution of urban and rural households in Ukraine (%), by completion date of their dwelling, 2013       106
  30. Total floor space of housing registered in Ukraine (million m2) and change (%, y-o-y), 2006-H1 2013       109
  31. Total floor space of housing registered in Ukraine (million m2) and change (%, y-o-y) except for space registered based on the Temporary Order, 2006-H1 2013       109
  32. Total number of housing units completed in Ukraine (‘000 units) and change (%, y-o-y), 2006-H1 2013       110
  33. Average total living floor area of newly registered dwellings in Ukraine (m2), by urban and rural area, 2010-H1 2013       110
  34. Average size of dwellings completed in Ukraine (m2), 2006-H1 2013       111
  35. Breakdown of newly registered residential space in Ukraine by type of development work (%), 2010-H1 2013       112
  36. Breakdown of registered residential space in Ukraine by number of floors in residential buildings (%), 2005-2012       112
  37. Breakdown of newly registered residential space in Ukraine by building material used for construction of walls (%), 2005-2012       113
  38. Single-dwelling house construction in Ukraine (‘000 m2) and change (%, y-o-y), 2006-H1 2013       116
  39. Share of single-dwelling houses in total newly registered housing space in Ukraine (%), 2006-H1 2013       116
  40. Number of home sale contracts registered by notaries in Ukraine (‘000), 2007-H1 2013       123
  41. Average prices of housing in Ukraine (UAH/m2), October 2012 and October 2013       123
  42. Number of mortgage backed deals registered by notaries in Ukraine (‘000), 2007-2012       125
  43. Number of home sales registered by notaries in Ukraine (‘000), 2007-H1 2013       125
  44. Total value of outstanding mortgage loans and of loans granted for house purchase in Ukraine (UAH m, e-o-p), 2006-September 2013        126
  45. Total residential construction output in Ukraine (UAH bn) and real change (%, y-o-y), 2010-2016       128

 

List of tables

  1. Construction output (UAH m) and construction output index (%, y-o-y) in Ukraine, Q1-Q3 2013       36
  2. Construction output in Ukraine, by administrative region, 2010-2012       37
  3. Production of basic building materials in Ukraine, 2007-Q3 2013       41
  4. Sources of funding for environmental protection-related projects in Ukraine, 2012       49
  5. Value of major investment and current works in the field of environmental protection in Ukraine (UAH m), 2008-2012       50
  6. Major environmental protection-related projects in Ukraine, 2014-2020       51-52
  7. Structure of hard surfaced public road network in Ukraine, by road category, 2012       54
  8. Key goals to be achieved under implementation of the State Target Economic Programme on the Development of Road Infrastructure (km) in Ukraine, 2013-2018       57
  9. Planned funding for the State Target Economic Programme on the Development of Road Infrastructure (UAH bn) in Ukraine, 2013-2018       58
  10. List of major national road construction and reconstruction projects in Ukraine, including planned annual spending (UAH m) and completion plan (km), 2013-2018       60
  11. Major planned road construction projects in Ukraine, 2013-2020       62-63
  12. Construction works deployed in the rail infrastructure segment in Ukraine (km), 2007-2013       64
  13. Distribution of railway means of transportation by period in use in Ukraine (%), end of 2012       66
  14. Major railway projects in Ukraine, 2014-2022        68
  15. Major airport projects in Ukraine, 2014-2015        71
  16. Oil and gas production and consumption in Ukraine, 2006-Q3 2013       72
  17. Combined generating capacity of power plants (GW) and electricity production (million kW/h) in Ukraine, 2012      74
  18. Combined generating capacity of power plants in Ukraine (GW), 2010 and 2030       75
  19. Total investment in the power industry in Ukraine, 2012-2030       75
  20. Major energy industry construction projects in Ukraine, 2014-2018       77
  21. Number of stalled or under construction non-residential buildings in Ukraine, 1 January, 2012-2013       82
  22. Key data on the office market in Kyiv, 2008-2013       83
  23. Basic indicators for Kyiv office property market, 2011-2012       84
  24. Planned large business centre projects in Ukraine, 2014-2015       86
  25. Key data on the shopping centre market in Ukraine, 2008-2013       87
  26. Number and GLA (‘000 m2) in Kyiv shopping centres, 2008-2013       88
  27. Shopping centres opened in Kyiv, January-October 2013       89
  28. Projects with at least 20,000 m2 of GLA commissioned in the regions of Ukraine, 2011-2013       90
  29. Large shopping centre construction projects in Ukraine, 2014-2017       92-93
  30. Large warehouse construction projects in Ukraine, 2014-2017       96
  31. Breakdown of the hospitality market in Kyiv, by category and room supply, H1 2013       97
  32. Basic indicators for the Kyiv hospitality market, H1 2013       97
  33. Major hotel launches in Kyiv, 2012       98
  34. Large hotel construction projects in Ukraine, 2014-2016       99
  35. Housing stock in Ukraine, 2000, 2005, 2009, 2012       103
  36. Average housing space per capita in Ukraine, by administrative region (m2), 2005, 2008, 2011, 2012       104
  37. Ukraine’s provinces with more than 50 million m2 of total housing, 1 January 2013       105
  38. Distribution of households in Ukraine by level of satisfaction with their housing conditions (%), 2012-2013       106
  39. Distribution of households in Ukraine by level of satisfaction with their housing conditions (%), by administrative region, 2013       107
  40. Construction of housing space in Ukraine, by administrative region, 2011-H1 2013       114
  41. Housing construction by individual builders in Ukraine, 2000-2010       115
  42. Completion of single-dwelling houses in Ukraine (‘000 m2 of floor space), 2011-H1 2013       117
  43. Major residential projects in Ukraine, 2014-2018       118-119
  44. M&A transactions in Ukraine’s construction and property development, 2013        130
  45. Financial results of companies active on the construction and property market in Ukraine, 2012-H1 2013       131
  46. Financial data of 20 major contractors in Ukraine (UAH m), 2009-2012       134