British developer to build malls in Kiev and Odessa

2010-03-08

Parkridge Retail Ukraine, a company owned by the British developer Parkridge Holdings, is considering the possibility of acquiring land in Kiev and Odessa for the purpose of constructing shopping and entertainment centres. The company plans to build the malls from scratch and is interested in sites measuring between three and five ha.
It is worth noting that yet at the end of 2008 the developer did not plan to build retail centres in Kiev citing too high land prices as a reason. However, the economic crisis has served to drive down the price of property in the city. The recession has also prompted the developer to revise its plans and it now does not plan to open any malls in the next five years in cities with populations of less than 500,000. The company expects demand for premium-standard shopping centres in cities with populations of 0.5-1 million inhabitants to return in 2014-2015. This is likely to occur slightly earlier – in 2013 – in cities with over 1 million inhabitants, and sooner still in Kiev and Odessa, where growth in demand for such premises may be seen as early as mid-2011.

In our view, this is now a good time for foreign developers and retailers to develop on the Ukrainian market. The cost of land, as well as that of ready retail premises in the country, has fallen significantly when compared to those seen before the onset of the recession. Two more favourable factors coming in to play are the low levels of saturation on the Ukrainian retail market and the lack of large-format stores in the country. For example, for every one million people, there are 1.5 hypermarkets in Ukraine. In Poland, this figure is seven and in Germany 22.
Parkridge malls may emerge as serious competitors for the largest retail and leisure centres in Kiev (Karavan, Dream House, Bolshevik and Materik) and Odessa (Riviera Shopping City and Vuzovsky). Two main contributing factors to any such success will be the attractive location of the planned retail facilities and their optimal positioning.

Igor Guglya
GT Partners Ukraine
General Director