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Construction Sector in Ukraine 2014: Development Forecasts for 2014-2016

  • Published:
  • 144 Pages
  • PMR

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...X

  • 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 m**sup2**/sup** of quality shopping centre GLA per 1,000 inhabitants
  • Ukraine has only about 24 m**sup2**/sup** of residential space per capita, including 22 m**sup2**/sup** 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 segmentX

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 conditionsX

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 venturesX

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...X

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 ofX

  • 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

Table of Contents

Methodology p. 9

II. Executive summary p. 11

III. 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

IV. 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

V. 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

VI. 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

VII. 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

VIII. 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

IX. List pf graphs p. 137

X. List of tables p. 141

XI. 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
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