Investment in housing

Specificity, risk minimization – Investment in housing

Housing problems for the majority of residents of Ukraine for many years do not lose their relevance. In order to save money, many citizens are forced to enter into investment contracts for the construction of residential premises, focusing primarily on the relatively low prices per square meter of housing under construction. But, as always, the cheapness is closely in contact with significant risks. These are errors in economic calculations (lack of financial opportunities for the developer to complete the construction), and the poor quality of construction work, and errors in the design, as well as many other problems. It should be noted that the developer is not insured against a number of risks. Construction of a residential building is a long process, during which the ever-growing inflation index leads to a rise in the price of building materials and the work itself. Thus, a significant increase in construction costs can lead to bankruptcy of the construction company itself. Inflation also affects the purchasing power of the population, which varies depending on seasonal demand, which also does not help to attract new funds for the construction of the facility. All this increases risks and can cause significant property damage to investors.

In order to better understand the process of investing in housing under construction, we propose to consider the specifics of contracts of investment in housing construction.


Despite the fact that the right to investment construction is declared by a number of regulations, none of them regulate the procedure for concluding such contracts. That is why investing in housing construction is associated with significant risks for investors. The absence of the procedure established by the legislation for the conclusion of such agreements, clearly defined rights and obligations of the parties, the registration of ownership of the constructed object, leads to a number of negative consequences for investors.

By its nature, an investment contract for the construction of housing is a kind of investment contract, but has its own specific subject, a special subject composition, the order of conclusion and the term of obligations. Investment agreements for the construction of housing are primarily aimed at the construction and acquisition of property (houses, apartments). The investor pays the developer a certain amount of money, and receives the apartment, i.e. in essence it is the contract of purchase and sale with the provision of goods (housing) in the future. The seller in this case is the developer, and the buyer is the investor.

In this regard, it is appropriate to apply the provisions of the Civil code to the legal relations between the investor and the developer, which regulate the procedure for concluding contracts of sale.

According to part 1 of article 656 of the Civil code of Ukraine the subject of the contract of sale may be the goods to be created (purchased, received) by the seller in the future. In addition, article 673 of the Civil code of Ukraine provides that the seller must transfer to the buyer the goods, the quality of which corresponds to the terms of the contract of sale. Since at the time of conclusion of the contract the seller (developer) does not have the appropriate goods, in order to ensure the necessary quality of the goods (housing) in the investment agreement it is necessary to clearly define the object of “sale”, its parameters and main characteristics. The data can be partially specified (changed) both in the process of construction and upon its completion.

Existing legislation does not provide for state registration of investment contracts for the construction of housing, although given the specificity and importance of the relationships which arise on the basis of investment contracts for the construction of housing, to protect the rights of the investor and verification of the credentials of the developer, and such registration could be a significant mechanism for the protection of investors ‘ rights.


Investment agreements for housing construction are bilateral – each of the parties to the agreement (investor and developer) has rights and responsibilities. Under the investment contract for the construction of housing, the investor is obliged to make investments in the manner provided for in the contract, and has the right to acquire ownership of housing after the completion of construction works, and the developer is obliged to build housing at the expense of the investments received.

In addition, taking into account the peculiarities of investment contracts for housing construction, the following rights of investors can be identified: to choose the object of investment; to assign property rights under the investment agreement to third parties; to change the object of investment by the consent of the developer; to obtain documents necessary for registration of ownership of the object of investment; to demand compensation for losses in case of improper performance by the developer of its obligations. As for the obligations of the investor, in addition to timely investment in the manner provided for by the investment agreement, the investor may be charged with the obligation to compensate the losses of the developer for the late performance of obligations, to accept the investment object under the act of acceptance, notify the developer of a change of address or details, etc.

The scope of the rights and obligations of the developer in investment contracts for the construction of housing depends on the functions that are assigned to the developer. The universal rights of the developer include: the right to require the investor to fulfill its obligations under the investment agreement, including the investment; the right to engage third parties to perform works on the construction of housing; the right to demand the adoption of the investor in the ownership of housing; the right to terminate the contract in case of failure by the investor

As a rule, investment contracts for housing construction display the following obligations of the developer: to use investments transferred to him by the investor exclusively for the construction of the object provided in the contract; to issue to the investor the documents necessary for registration of the investor’s property rights to the investment object; to provide the investor with information regarding the implementation of the investment agreement, the use of investments and the construction of the investment object; to ensure the commissioning of the residential building and to register it in the bodies of technical inventory.

By agreement of the parties, the range of rights and obligations under the investment agreement may be expanded and specified.


One of the main conditions of the investment agreement is the transfer of funds to the investor for the construction of a residential building. The procedure for making investments by the investor is determined by separate provisions of the contract, investments can be made both in full and in part. In order to minimize the risks, investment contracts for housing construction should contain comprehensive data on investments, namely: the size of investments, the order and terms of their introduction; regarding the object of investment – data on the location of the residential building (building address), the floor on which the apartment should be located, the location of the apartment, the total and living area of the apartment, layout, arrangement of the apartment (installation of plumbing, plastic Windows, etc.).

As mentioned above, the developer under the investment agreement is obliged to ensure the transfer of property to the investor. In order to avoid difficulties in the performance of these obligations in the investment contract for the construction of housing should be specified clear terms in which the investor provided the necessary documents, and the terms in which the act of acceptance and transfer of housing to the investor. Also, persons responsible for registration of ownership of the investment object should be identified.

As for the legal documents, according to Art. 662 of the Civil code of Ukraine, the seller (developer) at the same time with the goods is obliged to transfer to the buyer his accessories and documents (technical passport, certificate of quality, etc.), which relate to the goods and are subject to transfer together with the goods under the contract or acts of civil legislation. Thus, in the text of the contract, it is desirable to initially provide a list of documents that the developer is obliged to transfer to the investor at the same time with the signing of the act of acceptance and transfer.

Categories: Housing Real Estate

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Commercial real estate projects announced for commissioning

How the commercial real estate market of Ukraine has changed since the beginning of the crisis, what happened to the rental rates, what is the share of free space, what formats will be in demand in the next few years, the portal “Capital real estate” said Maria Shkarpetina, analyst of the Department of economic and strategic research of Jones Lang Sallee.
Less than 30% of the commercial real estate projects announced for commissioning will be implemented in Kiev until 2010.

Maria tell us what is happening today in the commercial real estate market, in particular in the commercial sector?

First of all, under the influence of the financial crisis, rental rates have significantly decreased. The transition to their mixed form (a fixed amount plus a percentage of turnover) is gaining popularity. However, the non-transparency of accounting for turnover of trade operators is the main reason for the unwillingness of many owners to move to a percentage of turnover. Instead, they are ready to cancel the indexation of the rental rate for several years, and offer a diversified rate (step rent), that is, fixing a certain amount of rental rate for each year.

Increasingly the tenants are trying to lock in rents with the purpose of minimizing fluctuations in the exchange rate. Often tenants can also get from the owners to reduce the guarantee payments from 3 to 1 month.

With the decrease in income of the population there is a reorientation of consumer preferences from the expensive segment (imported goods of the premium segment) to the cheaper segment (goods of economy class, domestic products).

All this makes the trading operators change their development strategy, including prices and range of products. For example, many operators have started to produce goods under their own brand, which significantly reduces the cost of logistics and distribution of goods and reduces the cost of production.

Also note the trend of mergers and acquisitions among trading operators who prefer to consolidate and consolidate their assets to improve efficiency.

What are the rental rates today?

If before the crisis, back in mid-2008, the maximum annual rate was $ 2,200. It is $ 1,080 per sq m, but today it does not exceed $ 1,080 per sq m. USA. Thus, the decrease was more than 50%.

How many fell yield shopping centers?

From the point of view of cash flows of owners, the fall in rental rates has caused a decrease in their income and profitability of the shopping center.

If we are talking about capitalization rates, for the most quality objects the rate increased from 10.5% in Q3 2008 to 15% in Q2 2009, and as a result the investment value of retail real estate decreased by 2-4 times.

What shopping centre projects can be implemented in the next few years?

Most of the planned projects of shopping centers will remain such until at least 2012. At the same time, the majority of developers will carry out project re-conception taking into account new market trends.

If to speak about projects that have a high probability of implementation in 2009, this second phase of the shopping center “Dnipro Landing” (leasable area: 45 000 sq. m), Dream Town – phase 1 (50,000 sq m), 4Room (22 of 230 sq. m), Rainbow (15,800 sq m).

In the first half was entered first “Domosfera” – specialized center of furniture and home products (20 000 sqm).

Thus, the total leased area of the new proposal in 2009 will be about 133 thousand square meters, which will exceed the same figure in 2008 more than twice.

In 2010, we expect the commissioning of two projects: “the Esplanade” (33,000 sq m), “Domosfera” – phase 2 (64 500), which amount to just 30% from stated output for this period volume.

How will the formats of shopping centers change taking into account the new realities of the market?

The crisis resulted in the disappearance of a number of projects and a more attentive attitude of developers to the location of shopping centers and the development of the concept.

In the short term, the most popular formats will be those that represent a cross between traditional markets and modern shopping centers. For example, such market, or, as called by the owners, “Eurobase”, recently opened on Osokorki. The market consists of modern trays arranged by product groups. The rental rate in such trading units is low, and, accordingly, the goods for consumers are offered at an affordable price. Great popularity will use the shops discount goods. At the same time, these formats will not become market standards in the long term.

The advantage will still be in modern shopping centers with the presence of entertainment component.

What is happening with the entertainment part of shopping centers today?

The entertainment sector is still one of the key parts of the shopping center. Despite the crisis, the entertainment sector of shopping centers remains attractive to visitors. Despite the decline in income, the population has not stopped spending money on entertainment. Naturally, as for the rest of the tenants, the rates for the entertainment sector have significantly decreased by about 20%.

What is happening with office real estate today?

In this segment, as in all the others, there was a temporary easing of conditions of rent: rental rates decreased, there was a transition to the calculation in UAH. In addition, the terms of lease agreements to a year and Deposit payments to two months were reduced.

Now the interest of tenants has also shifted to the premises with finishing, because such offices are the least capital-intensive. Today, more than 60% of the office space is offered with a basic finish.

There is a reorientation of market participants from projects on paper to ready-made projects: the share of preliminary contracts has significantly decreased – almost everyone wants to rent premises in already built business centers.

There is a growing interest of office space owners to management companies that can stabilize cash flows and increase the investment value of buildings.

What square footage of office space is the most popular today?

In 2007, the greatest demand space of size 150-200 sq m, in 2008 – already up to 500 sq. m. Today popular or small area (about 200 square m), or Vice versa large (2 sq m).

There are a number of companies on the market that want to consolidate their units in one building at affordable rental rates or buy it (at our request, these are companies from the automotive industry, the media, FMCG, which request an area of more than 2,000 square meters).

Companies that enter the Kiev market or move to other office centers are interested in premises with an area of 200-250 sq.m. at the same time, there are enough requests for small premises.

Companies from which business sectors are forming the demand for office space today?

The tenants who showed the greatest demand for rental of premises before the crisis – banking, financial and construction companies. At the moment, production companies dominate the demand, as they are less dependent on other industries than service companies. Companies from the pharmaceutical and IT industries are particularly active now.

If before the crisis the greatest demand was shown by companies that first entered the market, now it is, basically, moving from one office to another in search of more favorable conditions.

How have rental rates changed?

If the maximum annual rate in Q3 2008 was $ 1,200, the maximum annual rate would be $ 1,200. USA per sq ft, while today the rate has decreased approximately three times – up to 420 USD. We forecast a slight decrease in rents by 10-15% by the end of 2009.

What is the current level of vacancy in business centers?

Today, the share of free office space in Kiev is more than 23%. For comparison, in Q3 2008 this figure was less than 5%.

Recently, it was reported that some office space rent almost free of charge, the tenant is required only to pay maintenance costs. Is that so?

There is no such practice in high-quality business centers. However, the owners of the business center have made serious concessions: reduced rental rates, offer free Parking spaces, rent offices with a basic finish. Conditions for tenants are quite interesting, but owners are unlikely to rent premises for free.

Will there be a shortage of office space in a few years due to the suspension of the implementation of a number of projects?

Fundamentally, the office real estate market is unsaturated, but due to the crisis, supply exceeds demand. If we compare, for example, the Kiev office market with London, as the most developed, the total volume of high-quality office space per capita, Kiev is 5 times behind. Therefore, it is expected that the deficit will be high enough, but its level will depend on the overall economic situation. We expect demand to increase from the second half of 2010 after the economy stabilizes, but it will be lower than supply until the end of 2011.

In 2009, it was planned to put into operation 50 business centers, which of them will be completed?

We expect to release only 16 business centers, with a total rented area of 134,000 square meters, which will be only 20% of the declared volume of space.

What changes have occurred in the warehouse real estate segment?

The main lull in the commercial real estate segment is in warehouse real estate. If at the end of 2008-beginning of 2009 a large number of areas were declared and put into operation, now almost all new projects are frozen at least until 2012. Projects that can be implemented are objects that are built according to the built-to-suit scheme (construction for the needs of a particular tenant – approx. Yu. V.).

How have rental rates decreased in this segment of real estate?

If before the crisis the maximum annual rate was $ 150. USA per sq m, it has now dropped to 96 dollars. US (fall was 36%).

What is the vacancy rate of warehouse real estate today?

In Q3 2008, the share of free warehouse space was less than 3%, today this figure exceeds 28%. Such a significant increase in vacancy was mainly due to the output of a large number of new areas at the end of 2008 (290 000 sq. m in 3-m and 4-m sq).

Who forms the demand for warehouses today?

Today, the most active are logistics operators and manufacturers. Previously, they were supplemented by retail operators, but due to the significant drop in retail turnover, representatives of these companies are now the least active. In General, the demand for storage facilities fell by 2-3 times.

There is an opinion that the demand for warehouses was artificially “inflated”, which was the reason for the current level of vacancy…

At a time when the economy was actively developing and a large number of both international and national operators were entering the market, the demand for warehouses was high. This is evidenced by the share of free space last year (less than 3%). At the same time, high-quality class a warehouses began to appear only in 2006, before that, there were only non-professional warehouses on the market. So, to say that the demand was “blown out of proportion,” he said. As soon as the economic indicators start to grow again, the demand for quality space will resume again, and the free space will be filled.

What is the situation in the regions?

In regions, the warehouse market is mainly represented by the premises of Class C. In the pre-crisis period developers, especially international, is actively eyeing regional markets. Began construction of several major projects in the cities with the largest number of them in the Odessa area. Now, as in other sectors, the planned projects are postponed until 2012 and later.

The highest probability of commissioning in 2009 is Odessa logistics Park – phase 1 (leased warehouse area: 47 000 sq m).

If we talk in General about the commercial real estate market, were there significant transactions for the sale of objects over the past six months?

Now almost all companies are ready to sell their assets in order to optimize resources and raise funds for more profitable projects. Companies are actively looking for strategic investors and partners. But there have not been any significant transactions yet.

On what conditions are investors ready to enter the project today?

First of all, it should be high-quality projects with full permits for construction, or with a high stage of readiness, with a good selection of tenants and entertainment component. Today, such projects are few. There are interesting objects, but many of them are at the concept stage without permits, so they are unlikely to receive investment.

Is Kiev still the most attractive for the implementation of commercial real estate projects?

Kiev remains the most attractive city for investment. However, million-plus cities are also considered by investors, especially the trade segment.

And along the road – terminals with warehouses are…

The development of logistics infrastructure is one of the priority directions in the framework of the integration of the economy of our country into the world economic community. In the November round table, we offered our invited experts to evaluate such a component of the logistics infrastructure as warehouse real estate.


Sergey Karamnov (S. K.) President of Real Estate Solutions

Alexey Chaika (A. CH.), Director of Architecture and technologies construction company»

Alexander Marchenko (A. M.) the analyst of the company “TIKO construction»

Victoria Pasechnik (VP) project Manager of BauMarketing

Oksana elmanova (O. E.) General Director of FIM group

– According to the available statistics, the warehouse real estate market in Ukraine is the weakest place among all segments of commercial real estate: the imbalance between supply and demand – the latter is sharply inferior to the first, the low percentage of high – quality and specialized areas, the weak development in most regions.

S. K.:

Yes, today the Ukrainian warehouse real estate market is one of the most promising and at the same time the least developed segment of commercial real estate. Despite the positive dynamics of economic growth of Ukraine, constantly increasing production and international trade, the organization of production of international FMCG companies in Ukraine, the increase in turnover of logistics Ukrainian and international operators, the Kiev market of professional logistics complexes is at an early stage of development. The demand for high-quality warehouse and logistics facilities exceeds the existing supply in the market several times, and new warehouse real estate projects are implemented in a very small amount.

Today the main part of the market offer consists of warehouses located in industrial buildings or abandoned garages, which have remained since the Soviet times – that is, premises not adapted for specialized storage and logistics functions. However, with the development of the economy and the business environment in the country, there is an update of outdated warehouses of the post-Soviet times and the construction of new professional logistics complexes. Only in the last two years, the situation in the warehouse real estate market, at least in Kiev, began to change dramatically, more and more large objects are introduced, which significantly affect the change in the overall situation in the market. Several large-scale professional warehouse complexes of class “A” have already been put into operation or are already at the final stage of construction. The volume of professional warehouse space in Kiev is about 620 thousand square meters, most of which are located in the reconstructed buildings. Of these, about 450 thousand square meters. located in warehouse complexes” A “and” B ” class.

Logistics operators and large trading companies, in turn, are already looking at the largest warehouse properties and plan to become tenants of new warehouse space long before they are put into operation. The risk of limiting business development without the necessary storage conditions forces tenants to negotiate the lease of warehouses long before the facility is put into operation. As a result, the landlord market is created in Ukraine – a situation in which the conditions of work in the market and rental rates are dictated by the landlord. In the absence of an alternative offer, tenants are forced to accept all terms and conditions of landlords.

The steady growth of demand increases the investment attractiveness of industrial real estate in Ukraine and contributes to the effective implementation of professional projects in the market. Large international companies, which have been successfully operating in the Russian and European markets for a long time, are already eyeing the Ukrainian market.

Most of the market today is occupied by low-quality warehouses of classes “C” and ” D ” with a total area of about 950 thousand sq.m. They are located mainly along the Railways in the industrial zones. To date, the most massive offer is still represented by the warehouses and other low-capacity facilities of low technical level.

– Ah.:

The industrial and warehouse real estate market has enough prerequisites for active development in the future. The trend of increasing demand for warehouse real estate is confirmed by the current process of growth of business activity in Ukraine, as well as the development of the trade sector, the increase in the purchasing power of the population, the saturation of the segments of retail and office real estate and other factors. During the year, the warehouse real estate market will not increase significantly, as most of the projects are under construction. However, in the next two or three years, large foreign developers interested in the development of the industrial and warehouse market may appear on the Ukrainian market.

– Ah.:

The warehouse real estate market of Ukraine is actively developing, which is facilitated by stable economic growth over the past few years, the growth of consumption in the largest cities of Ukraine and the associated positive dynamics of the number of retail facilities of national retail operators, which, in turn, necessitates the development of the market of logistics operators. The most attractive market for warehouse real estate is still the market of the Kiev region, where the bulk of both operators and consumers of this segment are concentrated. At present, the total amount of professional warehouse space is, according to our estimates, about 400 thousand square meters by the end of 2008 should grow significantly due to the commissioning in the 2nd half of 2008 number of major projects with a total area about 400 thousand square meters.

According to our estimates, the total volume of unsatisfied demand in the Kiev market is about 600-650 thousand square meters of warehouse space, which is due to the intensive development of companies operating in the retail market, pharmaceutical companies, enterprises specializing in Metalworking, as well as distributors of food products, household chemicals and cosmetics, logistics operators.

Due to the fact that demand is currently higher than supply, the vacancy rate of existing projects remains extremely low, and rental rates in the warehouse segment have also been growing steadily until recently.

However, the financial crisis can make significant changes in the balance of power in this market, because in the conditions of stabilization of trade growth and slowdown in the economy as a whole, the demand for quality warehouse space, the implementation of which until recently was quite difficult due to the small volume of supply of suitable land, may decrease, which will lead to the correction of the level of rental rates in this segment of the commercial real estate market.

– Oh.:

I would like to add that in the context of the global financial crisis it has become difficult to talk about demand, supply and make forecasts about the development of the market. We can talk about the results of the first half of the year. The demand for professional logistics space this year amounted to about 700 000 sq. m. among the objects declared to enter the market by the end of 2008 was about 690 000 sq.m. that is, with the successful implementation of the declared objects by the end of the year, we would almost satisfy the current demand. However, demand is growing by about 20-25% annually. And for the period January-February 2008 only 145 000 sq. m. was put on the market. Therefore, it is too early to talk about the saturation of the market. But the demand will subside, and the real supply will be much smaller. Already, many companies are leaving the logistics real estate market, selling their logistics portfolios. The construction of some facilities planned for this year is postponed for an indefinite period. Few companies remain in the Ukrainian market, which are ready to continue to develop the logistics segment. After all, it is the least profitable in the short term. And the payback period of logistics facilities is higher than that of commercial, office real estate. At the same time, these are very capital-intensive projects, so few companies will be able to implement their logistics plans in the time of crisis.

– In connection with the current situation in the warehouse real estate market, what formats do you consider the most promising for implementation in Ukraine?

S. K.:

In Ukraine, there is no officially adopted and approved classification of warehouse real estate. Today there are several classifications, which operate different groups of market participants. Basically, the letter graduation is used: “A”, “B”, “C”, “D”. For example, the market of warehouse premises in Kiev region has the following structure: class “A” – 8%, class “B” – 12%, class “C” and “D” – 80%.

As the most promising format for Ukrainian warehouse real estate, I would like to highlight logistics parks – large complexes with warehouse space from 20 to 50 thousand square meters, where the presence of a car and/or railway infrastructure, professional management is required. It is this type of warehouse real estate that is most interesting for developers and investors today, because here we are talking about the creation of a classic warehouse complex, the tenants of which, according to Western European practices, are large logistics companies.

– Ah.:

The priority format, which is primarily developed by developers, is the universal warehouse complexes of class “A”, which are characterized by the following criteria:

* A modern one-storey warehouse building of light metal structures and sandwich panels, preferably rectangular, without columns or with a column pitch of at least 12 meters, with a distance between the spans of at least 24 meters.

* Building area-40-45%.

* Flat concrete floor with anti-dust coating, with a load of at least 5 tons per 1 m2, at 1.2 meters from the ground level.

* Ceiling height-not less than 13 meters, allowing the installation of multi-level rack equipment (6-7 tiers).

* Adjustable temperature mode.

* Fire alarm system and automatic fire extinguishing system.

• Ventilation system.

* Security alarm and video surveillance system.

* Stand-alone power substation and thermal unit.

* Sufficient number of automatic dock type gates (dock shelters) with loading and unloading platforms of adjustable height (dock levellers) not less than 1 per 500 m2.

* Platforms for settling of heavy-load and Parking of cars.

* Platforms for maneuvering of heavy-load cars.

* Office space in the warehouse.

* Auxiliary rooms in the warehouse (toilets, showers, utility rooms, locker rooms for staff).

* System of accounting and access control of employees.

* Fiber-optic telecommunications.

* Fenced and guarded round the clock, illuminated landscaped area.

• Location close to major highways.

* Professional management system.

* Experienced developer.

• Branch line.

The development of specialized warehouse complexes (such as refrigerated warehouses, chemical storage warehouses, etc.), despite the higher rental rates, has not yet become widespread due to the higher cost of implementation of such projects.

– Ah.:

I agree that the most promising direction is the construction of modern warehouse complexes and logistics centers of class “A”. For example, as a result of removal of industrial zones outside of Kiev (according to the General Plan of development of the city till 2010) development of profile complexes in the nearest suburb of Kiev will go fast. Especially relevant will be warehouses within the twenty-kilometer zone from the Ring road, near the main routes of long-distance and international importance.

– If we consider the regional structure of warehouse real estate development in Ukraine, which regions can be considered leaders?

– Ah.:

The leader in the development of modern warehouse real estate is, of course, the Kiev region, which is characterized by the greatest activity of both developers and end users of warehouse complexes. Other regions are also actively developing, which is due to the attractiveness of the market as a whole due to the lack of quality warehouse facilities in the regions, especially in those that are located along international transport corridors and are characterized by a significant volume of transit traffic – namely, the southern regions – Odessa, Ilyichevsk, Central – Dnepropetrovsk, Eastern – Kharkiv, Western – Lviv.

– Oh.:

The most developed in terms of logistics real estate is really Kiev and the region. Such popularity is caused by the capital status and the fact that many highways pass through Kiev and here the main distribution points from which there is already a delivery of goods further to the East or Vice versa, from the East to the West are concentrated. The most active regions for the development of logistics real estate were Dnipropetrovsk and Odessa region. This is due to the access to the regional markets of the network of commercial operators and large logistics operators. The first announced projects appear in Donetsk and Kharkiv regions.

– Ah.:

But still, the market of warehouse space in the regions is very poorly developed. The most attractive is the creation of large logistics complexes in the Odessa region – the key factors of the region’s attractiveness are:

* possibility of trade relations between Central, Northern and Eastern European countries;

* the possibility of using the region as a major trading base between Europe, Asia and Africa.

– We have touched upon such a thing as the world transport corridors (ITC). Is the development of MTK in Ukraine the most significant factor that has an impact on the development of logistics infrastructure in General and warehouse real estate in particular? And what, in this context, regions of Ukraine, the MTC will play a catalytic role?

– V. P.:

The international transport corridor is a complex of land and water transport highways with appropriate infrastructure, additional facilities, access roads, border crossings, service points, cargo and passenger terminals, equipment for traffic control. For the successful functioning of the transport corridor, it is also necessary to introduce organizational and technical measures, legislation and regulations that would ensure the transportation of goods and passengers at the EU level.

I believe that the MTK will give impetus to the development of warehouse real estate only in the southern (sea) direction, and this is primarily due to the fact that this issue is very politicized. And so, until Ukraine has a clear understanding of where it is moving – to the East or West, and the East and West will be “idle” in anticipation of “will from above.” As for the South-whether because of the mentality of the Odessa region and its representatives, whether on physical and historical features, it has long been a clear position on this issue, and in General-is actively working and as far as possible (mainly by local investors) is developing.

– Ah.:

Yes, it is possible to make a forecast that the strategy of Ukraine’s integration into the world economic community as a transport and communication hub of the European level will be implemented to a greater extent due to the development of the Odessa region. However, the warehouse complex of the region requires large investments. At the moment, the warehouse is a building class C and below with a rental rate of 3.5 y.e./m2. The storage facilities of the class In amount to the total mass of the proposals only 0.4% with rental rate at 7-8.e./m2.

– Ah.:

The development of the MTC is a significant factor that affects the attractiveness of the region for the placement of warehouse real estate, as arising in such conditions, significant transit traffic requires further promotion of the relevant warehouse infrastructure, which ultimately stimulates the further development of warehouse real estate. Priority MTK in Ukraine are the ports of Odessa and Ilyichevsk, which annually serve a significant share of transit traffic, as well as highways Odessa-Kiev-St. Petersburg, Kiev-Chop, Kiev-Moscow, Moscow-Kharkov-Simferopol and located on them Kiev, Odessa, Kharkov, Dnepropetrovsk, Donetsk, Lviv. These regions are the main traffic flows connecting Western and Eastern Europe and Asia. These regions do not yet have a developed logistics infrastructure, which significantly affects the dynamics of trade turnover between Ukraine and its foreign economic partners. Accordingly, it is in these areas that powerful logistics hubs will have to be formed over time to ensure the proper quality of service required for the smooth transportation and storage of transit cargo.

– Oh.:

Relatively good transport and geographical position remain promising Odessa, Dnipropetrovsk, Donetsk, Kharkiv region, and in the West can be noted good conditions for the development of logistics terminals in the Lviv region, as well as a good potential for development in this regard has Volyn region. The most large – scale of the announced projects is the project of the Ukrainian Construction & Development Company (UCDC) – the logistics center “Eastern terminal” on 315 000 sq. m. in the Kharkiv region, the beginning of construction of which is planned for
1 sq. 2009.

– And what are the General trends in the development of warehouse real estate in Ukraine?

S. K.:

Most of the promising warehouse complexes are being built for commercial use. However, there is a tendency of construction of warehouse complexes for own use by large trading companies on the market. Many large trading and manufacturing companies are forced to independently create a warehouse complex in the absence of existing warehouse facilities that meet the professional requirements and demands of trading companies.

To date, the construction of warehouse centers for their own use said companies such as Roshen, Kvisa Trade, Fozzy. Data company plan to build warehouse complexes of a class “A” primarily in Zhytomyr and Brovary highway. Among the total number of warehouse facilities declared by trading companies, there are complexes with an area of more than 100 thousand square meters.

The declared warehouse facilities are characterized by scale, developed infrastructure, professional management. Taking into account construction and planned warehouses in the market will increase the share of facilities with an area of 50 – 100 sq. m., and also for the first time will have a large warehouse space of over 150 sq. m.

If the investment plans for 2008-2009 will be implemented, the total supply of professional warehouse can in 2010 to get closer to the mark of 4 million sq. m.

The growth of demand for professional warehouses is directly related to the dynamics of the retail real estate market.

Events, news, facts


In Obolon district of Kiev until the end of February 2009, the Corporation “Capital” intends to complete the construction of shopping and entertainment center DreamTown. The area of the complex will be about 160 thousand square meters. the Company is also developing the concept of a network of shopping centers with an area of 15-50 thousand square meters in cities with a population of 300-500 thousand people, a network of 4-5-star hotels in different cities of the country and a network of restaurants in Kiev.


The BILLA-Ukraine company plans to build a new shopping complex of the Austrian BILLA supermarket chain in Odessa. Progress-Stroy investment and construction group won the tender for the construction. Now in Ukraine there are eight BILLA supermarkets: three — in Kiev, two — in Kharkov and Dnepropetrovsk, one — in Zaporozhye.

HELP. BILLA-Ukraine was established in 1998 by the Austrian company Billa, a subsidiary of the German Rewe group, the third largest trading company in Europe.


The pre-project proposals for the construction of a transport interchange on Kharkiv square in the capital were approved on October 29 by the architectural and urban planning Council of Kiev. The project develops AOZT “Kiyevsoyuzshlyakhproyekt”. The customer was KP “Management of construction of put-transport constructions of Kiev”.

For consideration of the city Council was presented three options for the construction of a new junction.

The first cost 400 million UAH. includes lifting up to the overpass of the roadway with the direction of movement with Ave and further along the Boryspil highway. At the same time, local traffic along the ring remains at the first level of the junction.

The second option costs 850 million UAH. provides a three-level interchange with the addition of the exit on the overpass from Kharkiv to Borispol highway.

The third option is worth 1.2 billion UAH. also involves three levels, where the first local movement in the ring, and the second overpass in the direction of Bazhana Ave. – Borispol third overpass with highway Kharkiv to Boryspil highway and Light St. on Ave.

As noted by a member of the city Council Eugene Lishansky, given the promising development of Bortnichi and South Osokorki need to take a third option with a transport sleeve for street Light.

At the same time, the head of the city Council and the chief architect of Kiev Vasily Prisyazhnyuk recommended the customer and designers on behalf of the Council to continue to develop the project on the basis of the second option, but taking into account the promising construction of the branch on Board, as well as taking into account the passenger flow from the metro station to Boryspil and the promising location in the specified area of the bus station.


November 11 in Vinnitsa is expected to open a shopping and entertainment center “Terminal” on the street. 600th anniversary. In the shopping center there is a multiplex for four cinema halls, a bowling club for 20 tracks with a billiard area, an ice rink, a children’s entertainment center, a food court, cafeterias, and shopping areas. Total area is 42 sq m. the Developer of this project is the company Real Estate Solutions (Kyiv)


In the second quarter of 2009, OOO “GLD invest Ukraine” (Kyiv), part of the development company GLD Invest Group (Austria) plans to begin construction of an office and hotel complex with an area of about 48.5 thousand square meters.m on the street. Enthusiasts, 49 in the Dnipro district of Kiev. It includes office premises of class A with an area of 14.2 thousand sq. m, hotel (8 thousand sq.m), cafe (300 sq. m), restaurant (2 thousand sq. m), conference room (2 thousand sq. m).

HELP. GLD Invest Group is a private Austrian real estate development company. Main activities include: design, construction, leasing of commercial real estate in Central and Eastern Europe.


October 10, Kyiv mayor Leonid Chernovetsky has checked the progress of construction of section of Kurenivsko-Chervonoarmiiska metro line from station “Lybidska” station “Vasylkivska”. The mayor visited in particular on construction of stations “Goloseevskaya”and ” demeevskaya”. About it reports a press-service of KSCA.

According to Vladimir Petrenko, finishing works of the station complex “demeevskaya” are executed for 90%. The construction part of the works at the station “Goloseevskaya” has been almost completed, finishing works have been started. Also actively constructed station complex “Vasilkovskaya” – 30% are already completed finishing work, 65% built deadlocks behind the station.

“Today projected the continuation of the Kurenivsko-Chervonoarmiyska line of the residential area Teremki-3. Until 2012, it is planned to build three more stations: “Exhibition center”, “Hippodrome”and ” towers”. According to the General Plan of the capital, the fourth and final station on the line will be built near the cyber Center. There will also be a new depot”, – said the first Deputy head of KSCA Anatoly Golubchenko.

He added that the peculiarity of the construction of the metro on the Teremki are the specific properties of the local soil – there is a high level of groundwater, due to the flow within the work of the Lybid river.


At the session of the Kyiv city Council, held on October 2, it was decided to sell land with a total area of 5,826 hectares and a total value of 74,884 million.

The largest site was bought by the scientific and production center “borshchagovsky chemical and pharmaceutical plant” for 46,035 million hryvnias. The site is located on Mira street, 17 in Svyatoshinsky district, has a total area of 3, 615 hectares and is intended for the operation and maintenance of the complex of plant facilities located on it.

Kyiv city Council also sold 2 zemuchastka in the Desnyansky district of the company “Forest” for the renovation and maintenance market: land area of 1,044 hectares on the street Miropolskaya, 2 sold for 13,637 million hryvnia, plot 1,102 hectares on the street Dreiser for 14,341 million.


The Kiev authorities plan to increase the number of Parking spaces in the capital. “Additional places will be organized by the device of ramp congresses along the curbstone of the travel part. In addition, there will be installed limiting columns on the sidewalk of the streets of the first Parking zone, that is, on the Central streets of the capital. The work is scheduled to start this year, and to be completed next year” – so explained this decision Denis bass, first Deputy head of KSCA.


On December 1, 2008, installation work will begin on the reconstruction of the national sports complex “Olympic” in Kiev, where the matches of the European football Championship in 2012 will take place. For reconstruction, according to preliminary data, the amount of 1.5 billion UAH was determined..


October 15, 2008 at the Hyatt Regency Kyiv hotel held a press conference on the liquidity crisis and its impact on the commercial real estate market of Ukraine, organized by Colliers International (Ukraine). At the conference, Yuri Nartov, managing Director of Colliers International (Ukraine), made a presentation “The impact of the financial crisis: what to expect?”; Leonid Rybin, head of the project financing Department of OTP Bank, with the presentation ” Ukrainian banking system: impact on financial health in the field of commercial real estate»; Alexander Nosachenko, managing Director of Colliers International (Ukraine), with a presentation “the Crisis in the commercial real estate market? Excess supply or insufficient demand?”


The holding company” kyivgorstroy ” was released from the transfer to the city of the established deductions of the total area of apartments in the houses of the second residential district of the residential area of Poznyaki in the Darnitsky district in the amount of 200 million UAH. decision of the Kiev city Council.

According to the decision of the Kyiv city Council, this amount is determined by the costs incurred by the holding in connection with the resettlement of residents from the 54 private houses located in the territory of the district, in which 251 families live.


On October 16, at the session of the Kyiv city Council, 76 deputies supported the decision to approve the procedure for compensation in accordance with the legislation of the cost of investments made by the affected citizens for the construction of housing by the group of construction companies “Elite-Center”.

In addition, the deputies voted for the draft Preliminary agreement on the assignment of the rights of claims and restoration of the right of the victim of criminal activity of the group of construction companies “Elite-Center” for housing.

According to the decision, the victims must inform about their intentions, sign the preliminary agreement of the Kiev city administration (KGGA) by the relevant statement within a month from the date of publication of this decision. A month is available for inspection KSCA given victims documents.

In addition, the deputies determined that the KSCA should provide in the draft budget of the capital for 2009 to receive from the State budget of Ukraine the subvention necessary to compensate for the losses caused by the group “Elite-Center”.


On may 15, 2009, the final list of cities hosting EURO 2012 will be approved.

According to the head of the Executive Directorate of EURO 2012 FFU Ivan Fedorenko, Lviv and Dnepropetrovsk can be excluded from the list of cities that will be entitled to host the final games of the European football Championship in 2012.

According to him, in particular, until today the problem with the construction of the stadium in Lviv has not been solved – the city authorities have not signed an agreement with the General contractor for the construction of the stadium and a new contractor has not yet been established.

“The second city, which can be withdrawn from participation in the tender for the right to hold EURO 2012, is Dnepropetrovsk. The main problem in this city, of course, the airport”, – Fedorenko noted.


“DELTA-PF” won an investment competition, which was exposed to the cinema “Tampere”. The company should attract investments in order to reconstruct the premises and equip the cinema halls with modern technology. The work will last about two years. After their completion, the people of Kiev, in particular the residents of Solomenskiy district, will receive a cinema complex that will meet the needs of the capital’s cinema fans.

HELP. “The Tampere cinema (formerly” Otradny”) is located on 42, Heroes of Sevastopol street and was built in 1967 for 700 seats. For the last few years, only a small hall for 46 seats has been working in the cinema.


Management on fight against organized crime GU of the Ministry of internal Affairs in area exposed swindle with the commercial land worth about 2 billion 820 million UAH.

According to the UBOP, during 2008, a land plot with a total area of over 350 hectares was illegally alienated by fraud and forgery of documents on the territory of one of the village councils of Brovary district of Kiev region.

Now the involvement of civil servants of different levels, as well as individual judges in this land Scam is being checked. According to the materials of the investigation, a criminal case was opened for forgery and the use of fake documents.


On October 20, a revised version of the General plan for the development of Lviv until 2025 was presented to the public court of the city.

You can get acquainted with the General plan within a month, after which public hearings will be held. Immediately after the hearing, the General plan will be sent for examination, which will last up to 75 days, and after that the document will be submitted to the city Council of Lviv.

More than 10 zones have already been allocated for new housing construction in the General plan project. For their development plan to make the city industrial enterprises, garages, warehouses and military facilities. The revised version of the General plan also includes facilities, construction or reconstruction of which is provided in preparation for EURO 2012-a new stadium, the expansion of the airport, the modernization of public transport and roads, as well as the reconstruction of the railway station.


The draft decision “on approval of the Scheme of hotel accommodation in Kiev for the period up to 2020” was agreed by the permanent Commission of the Kyiv city Council on land relations, urban planning and architecture. This project provides for the construction of 55 hotels on the territory of the city for 13 thousand rooms, 15 of which are 5-star, 24 – 4-star, 14 – 3-star, until 2012.

HELP. At the moment, there are 85 hotels in Kiev, the security of one thousand residents is 6 hotel beds.


In Kharkiv on Svobody square Development company “XXI Century” (Kiev) will build a multifunctional complex with a total area of 83.8 sq m. the Complex will be located on a plot of 1 ha.

The IFC will include a class a office center (24,225 thousand square meters), a fashion center shopping center (12,600 square meters), a five-star hotel (20 thousand square meters) and an underground Parking with a capacity of about 70 cars.

The hotel will be managed jointly with the international operator.

The construction is scheduled to start in 2009 and to be completed in 2011.

Following an architectural competition, which was held at the end of September, draft IFC will execute the company “Seifert Kyiv”, the delegation of the international project company John Seifert Architects, and LLC “Institute “Kharkovproekt”.


By the end of 2009, twelve new ice arenas will be opened in Ukraine. This was stated by the Minister for family, youth and sports Yuri Pavlenko at a meeting with the Secretary General of the international ice hockey Federation Horst Lichtner.

According to him, work on planning and allocation of land plots has already been completed, all necessary preparatory work for the construction of 12 ice palaces in 12 cities of Ukraine has been carried out. The Minister also noted that in accordance with the state program of development of ice hockey in Ukraine, the construction of ice hockey grounds with the participation of the state budget continues. “The first site has already been opened in the city of Donetsk. We plan to open three more ice complexes before the end of the year – in Kherson, Kharkiv and Kalush (Ivano-Frankivsk region),” he said.


Leonid Chernovetsky signed the order on design and reconstruction of the municipal airport “Kiev” in Zhulyany.

The capital’s authorities intend to update the airport, which is now not working, reconstructing the runways and passenger terminals. The works are planned to be completed by 2012.


Specialists of glavkievarkhitektura, as well as the municipal Center of urban planning and architecture have started consultations with foreign experts on the development of a new master plan for the development of Kiev.

According to the head of the main Metropolitan Department of urban planning, architecture and urban environment design Vasily Prisyazhnyuk, domestic experts intend to use the experience of their colleagues from Russia, the UK, Austria, Germany and France in the creation of this important document for the city.


The pre-project proposals for the construction of a transport interchange on Kharkiv square in the capital were approved on October 29 by the architectural and urban planning Council of Kiev. The project develops AOZT “Kiyevsoyuzshlyakhproyekt”. The customer was KP “Management of construction of put-transport constructions of Kiev”.

For consideration of the city Council was presented three options for the construction of a new junction.

The first cost 400 million UAH. includes lifting up to the overpass of the roadway with the direction of movement with Ave and further along the Boryspil highway. At the same time, local traffic along the ring remains at the first level of the junction.

The second option costs 850 million UAH. provides a three-level interchange with the addition of the exit on the overpass from Kharkiv to Borispol highway.

The third option is worth 1.2 billion UAH. also involves three levels, where the first local movement in the ring, and the second overpass in the direction of Bazhana Ave. – Borispol third overpass with highway Kharkiv to Boryspil highway and Light St. on Ave.

As noted by a member of the city Council Eugene Lishansky, given the promising development of Bortnichi and South Osokorki need to take a third option with a transport sleeve for street Light.

At the same time, the head of the city Council and the chief architect of Kiev Vasily Prisyazhnyuk recommended the customer and designers on behalf of the Council to continue to develop the project on the basis of the second option, but taking into account the promising construction of the branch on Board, as well as taking into account the passenger flow from the metro station to Boryspil and the promising location in the specified area of the bus station.


The authorities of Lutsk discussed the new General plan of city development for 25 years, which was developed by the Ukrainian research Institute of design “Dipromisto”.

The new General plan of Lutsk “takes into account the demographic forecast, the forecast of urban development, strategic directions of territorial and planning development of the city, external production and economic, social relations, directions and scale of development of engineering, transport and social infrastructure”, the press service of the city Council.

The project of the General plan of Lutsk was developed by the group headed by the chief architect of the projects of the UNION “Dipromisto” Victoria Oleynik, who for 1.5 years conducted a comprehensive analysis of the current state of the city, and made a professional forecast until 2031. Prior to the current project, the General plan, developed in 1978, operated.

According to the law of Ukraine “on planning and development of territories”, the draft of the General plan of Lutsk should undergo the procedure of public discussion in the format of public hearings and approval by the session of the city Council. The Verkhovna Rada of Ukraine should approve the General plan of Lutsk.


The city authorities intend to develop the conditions for flying aircraft, in particular helicopters, over the capital.

The Chairman of the Commission of transport and communications of the Kyiv city Council Dmitry Oleynikov explains the need to provide a range of urban services (division of emergency medicine, rescue, etc.) rotorcraft. Meanwhile, while flying over the city helicopters are prohibited.

Experts note that the conditions of flights over Kiev should be quite strict and advise to use the experience of Western European countries.

Build on foreign land

Conclusion of lease agreements of land for construction

The land Code of Ukraine, in addition to the right of ownership of land, establishes the right to use land, which is divided into the right of permanent use of land and the right to lease land. The right of permanent use and the right to lease land is realized by land users and tenants of land plots according to its intended purpose.

This article deals with the right to lease land intended for the construction, operation and maintenance of a residential house.

The right to lease a land plot intended for the construction, operation and maintenance of a residential house is a fixed – term paid ownership and use of the land plot, which is necessary for the tenant to conduct business and other activities.

The main documents which regulate the leases of land in Ukraine, Land code, Civil code and the Law of Ukraine “On land lease” from the city of 06.10.98 of No. 161-XIV (with changes and additions).

General conditions of land lease agreements.

A land lease agreement is a contract under which the lessor is obliged to transfer the land plot to the lessee for ownership and use for a certain period for a fee, and the lessee is obliged to use the land plot according to the terms of the agreement and the requirements of the land legislation.

The conclusion of the lease agreement of the land plot from the state or municipal property has certain features. In particular, landlords of land plots that are in state ownership are Executive authorities within the powers defined by the law. And landlords of the parcels of land which are in municipal property, are local governments. The lease of the land plots which are in state or municipal property, is carried out on the basis of the decision of an relevant body of Executive authority or local self-government, within their competence, by the conclusion of the contract of lease of the land.

The procedure for the conclusion of the land lease agreement provides for the agreement between the landlord and the tenant on all important conditions and other conditions, registration of the contract and its registration.

According to Art. 124 of the Land Code of Ukraine and Art. 16 of the Law of Ukraine” on land lease”, the conclusion of the land lease agreement consists of several stages, each of which provides for the implementation of certain legal actions aimed at obtaining a person of land on the terms of the lease. These actions include:

* application (request) of the interested person to lease the land plot to the relevant Executive authority or local government body;

* consideration of the application (application) in the manner prescribed by the Land Code;

* the decision of the Executive authority or local government on the transfer of land for rent or refusal of such transfer;

• in case of a positive decision of the Executive authority or local government on the transfer of land from reserve lands to lease or with a change in its purpose, a project for the allocation of land is developed. The provision of land for rent without changing its purpose, the boundaries of which are defined in kind (on the ground), is carried out without the development of the project branch;

* the conclusion of the land lease agreement, in which all important and other conditions of land lease, its notarial certification (at the request of one party) and the state registration of this agreement are stipulated. The state registration of such agreement are subdivisions of the Center of state land cadastre at state Committee of Ukraine by making entries in the registration book under clause 3.2 Instructions on the procedure for the preparation, issuance, registration and storage of state acts on the ownership of land and the right of permanent use of land and land lease agreements and p.4.2 of the Temporary order of the state register of land cadastre.

The civil code of Ukraine establishes the legal basis of the land lease agreement, in particular its reality, urgency and payment.

According to Art. 14 of the Law of Ukraine “on land lease” land lease agreement is in writing and at the request of one of the parties can be certified by a notary. In addition, the concluded lease agreement is subject to mandatory state registration in the state cadastre. Also, the law provides for the introduction of a typical land lease agreement, the form of which is approved by the Cabinet of Ministers of Ukraine.

An integral part of the lease agreement is: the cadastral plan of the land plot with the display of restrictions (encumbrances) in its use and established land easements; the act of determining the boundaries of the land plot in kind (on the ground); the act of acceptance and transfer of the lease object; the project of land plot assignment.

The essential terms of the land lease agreement are:

* location and size of land;

* term of the lease agreement;

* determination of the amount of rent, indexation, forms of payment, terms, order of its introduction and revision, responsibility for its non-payment;

• conditions of use and purpose of land;

* conditions for saving the state of the rental object;

* terms and conditions of transfer of land to the lessee;

* conditions of return of the land plot to the lessor;

* existing restrictions (burden) regarding the use of land;

* identification of the party that bears the risk of accidental damage to or destruction of the rental object or part of it;

• responsibility of parties.

According to the law, the absence in the land lease agreement of one of the essential conditions provided for in this article, as well as violation of the requirements of articles 4-6, 11, 17, 19 of the Law of Ukraine “on land lease” are the basis for refusal of state registration of the lease agreement, as well as for the recognition of the contract invalid.

By agreement of the parties, other conditions may be specified in the land lease agreement, in particular, the quality of land, the order of fulfillment of the obligations of the parties, the order of insurance of the lease object, the procedure for reimbursement of expenses for the implementation of measures for the protection and improvement of the lease object, carrying out land reclamation works, as well as circumstances that may affect the change or termination of the lease agreement, etc. – however, they may not contradict the current legislation.

The term of the land lease agreement is determined by the consent of the parties, but may not exceed 50 years.

Changing the terms of the land lease agreement is carried out by mutual agreement of the parties. In case of failure to reach agreement on changing the terms of the land lease agreement, the dispute is resolved in court. If the term of the lease agreement has expired, and the tenant continues to use the land, then in the absence of written objections of the lessor for a month after the expiration of the contract, such contract shall be renewed for the same period and on the same conditions as were provided for in the contract. A written communication is carried out by a letter of communication.

Features of the terms of the lease of land for construction.

Chapter 34 of the Civil Code of Ukraine is called”the Right to use someone else’s land for construction.” In our opinion, given the purpose of land lease (for the implementation of construction), the land lease agreement should be concluded for a longer period than it is in most cases concluded, since the short-term transfer of land for construction does not give the tenant guarantees that the latter will have time to use its right to build an object.

The subject of the lease of land for construction is the land on which buildings or structures should be built (for this the land plot is provided). The lessee has the right to start using the land only after the state registration of the lease agreement. The tenant’s obligation is to ensure the development of the land plot for construction over three years (p.4. part 1. article 416 of the Central Committee of Ukraine), but the Land Code of Ukraine does not establish requirements for the timing of development of land. Given that such a requirement is contained only in the Civil code, it should be considered a direct rule that regulates the lease of land provided for construction.

The parties to the lease agreement have the right to provide grounds for termination of the right to lease the land granted for construction. When concluding a land lease agreement for development, it should be borne in mind that the Central Committee of Ukraine, together with the General grounds for termination of the agreement, establishes a special basis for its termination, which is not provided for by the current land legislation – the non-use of land for construction for three years in a row. Given this rule of the Central Committee of Ukraine, landlords often use it and determine the obligation of the tenant to complete the construction of the land for three years after the state registration of the lease. In addition, the lack of development of the land plot for three years established by the contract is considered to be a failure (improper performance) of obligations, which gives grounds to landlords to demand early termination of the contract.