Perfect Storm is Just about Over

Fundamentally, the background of every construction project in the country was sustainable banking finance. The crisis revealed a credit bubble and indicated pitfalls of weak risk management. Evidently, 2009-2010 was a period of perfect storm for all market players.

Yet, the Ukrainian real estate sector has shown signs of recovery throughout 2011. Some of the so-called dead-end projects have seen restructuring and are expecting further continuation. This relates not only to residential premises with numerous unfinished constructions but also commercial property. Imminent growth is predicted by market experts and pre-crisis indicators are likely to be reached only in a couple of years time.

No wonder, as the country risks remain high and so foreign investors are not in a hurry to invest much even into favorable sectors of construction — neither into the hotel industry nor into infrastructure projects. Apparently, the driving factors for the recovery of project finance are still graded by an unfavorable regulatory field. The proceedings to initiate appropriate projects in Ukraine remain too sophisticated and time consuming. Legislative changes have lately touched upon market regulation and the taxation side. The new rules for granting bank loans were long-expected to prevent possible speedy overheating of the market.

In the current issue of the UJBL our contributors have attempted to provide an independent assessment of recent changes and to predict their implications. It means that the information appears to be useful not only for sectoral specialists but for everyone to be aware of business activity in this country.

Happy reading,
Olga Usenko