Today’s Kyiv is among Europe’s fastest-growing cities. With a population already well above the official figure of around three million, it is also one of the continent’s largest capitals. This growth is fuelling a construction boom that presents both considerable investment opportunities and challenges as the city’s ancient heritage sites and famed green spaces come under threat. Kyiv Mayor Vitali Klitschko told Business Ukraine magazine how he intends to strike the right balance between development and preservation, and explained why he thinks now is the right time for international real estate investors to consider the Ukrainian capital.
What do you regard as the most exciting real estate development opportunities in today’s Kyiv?
The most interesting individual projects at present include the plans for an aerial cableway over the Dnipro River and the development of the amusement park area in Gydropark (a popular island recreation zone located in the middle of the Dnipro River in the geographical heart of Kyiv – Ed). Over the past three years, Kyiv has concluded 37 real estate investment agreements worth over UAH 1.35 billion. These projects involve a broad range of sectors including infrastructure services, commercial property, retail, residential, schools, healthcare, and sports facilities. Work also continues on plans to develop the city’s brownfield land. This should result in the transformation of abandoned Kyiv sites into venues for fabulous contemporary architecture.
How can Kyiv develop as a modern international capital city while preserving its historic architectural heritage?
Protecting Kyiv’s historic architectural heritage is a hot button issue nowadays. In the past, former city administrations have been guilty of transferring large numbers of publicly owned historic buildings into private hands. Some particularly unscrupulous developers have even intentionally engineered the deterioration and demise of historically important buildings in order to receive the necessary permission to erect shopping malls and residential buildings in their place. We aim to take back control of Kyiv’s neglected buildings and plan to pass the necessary legislation in the near future. Last year, Kyiv City Council initiated amendments to the Law on Cultural Heritage Protection and other related regulations. The bill has passed an initial reading and we hope it will become law soon. This is a particularly pressing issue given the pace of Kyiv’s expansion. The population of the Ukrainian capital is growing at a rate of around 200,000 newcomers per year, so there is strong demand for new residential real estate along with the kind of accompanying infrastructure necessary for a comfortable modern lifestyle. To meet this challenge, we have introduced a Smart City system of municipal government. The goal is to make city life more convenient and improve local services. We are also trying to keep pace with the latest global trends in urban innovation. This includes Kyiv’s new City Data Centre, the Kyiv resident card, online medical appointment and kindergarten enrollment schemes, e-petitions and more. At the same time, we are very conscious of the need to preserve the city’s heritage. Kyiv’s ancient history and extensive green spaces are essential elements of the city’s unique personality. The key is to strike the right balance between safeguarding this inheritance and implementing modern innovations that will improve the quality of life in the city.
For the first time in the modern history of the Ukrainian capital, we have created a database of Kyiv landmarks including information on the status of every historic building. This publicly accessible database already includes over three and a half thousand entries and is just one of numerous initiatives launched to protect ancient Kyiv. Last summer, Kyiv City Council adopted a resolution on the preservation of archeological treasures excavated close to Poshtova Square, including the remains of buildings dating back over one thousand years to the Kyiv Rus era. Work is underway to develop an Archeological Conservation Center and museum via open tender.
Kyiv is one of Europe’s greenest major cities. Are the city’s parks and green zones safe from property development?
It is true to say that Kyiv is a city of parks. As the municipal authority, we do everything we can to preserve this status by expanding the number of well-kept green zones while reconstructing and repairing old parks and squares. Over the last four years, 308 land plots have received protected green status from the city council. During the same period, we have redeveloped 339 parks and squares. One prominent example of these efforts is the formerly abandoned Natalka Park, which has escaped encroaching development thanks to a combination of the Kyiv authorities and urban activists. This is now one of the finest parks in the city. It has become a genuine Kyiv landmark and a real feather in our collective cap. This process will continue. Despite the many challenges we face, I am confident that Kyiv will remain by far the greenest major capital city in Europe.
Kyiv has witnessed significant real estate development in recent years without the accompanying development of local infrastructure to accommodate greater numbers of residents. How can this challenge be resolved?
As Kyiv has grown in recent years, we have indeed encountered problems due to chaotic development. The questionable distribution of construction permits as long as ten years ago has also created numerous contemporary issues. We are now attempting to untie the various knots resulting from this legacy, because property developers often ignore municipal development rules. The same is true for local infrastructure such as kindergartens, schools and hospitals. We are increasingly pressing the construction industry to adhere to development standards. This includes warning developers against the prevailing culture of “regulatory nihilism”. The feedback we receive direct from the community must take first priority and we will consistently cancel land tenancy agreements for property developers who break the rules or fail to meet their obligations.
What message should Kyiv be sending to international investors and real estate developers considering the city as a potential investment opportunity?
One of the cornerstones of Kyiv’s investment attraction policy is the transparency and accountability of the city authorities. This approach seems to work well. Over the past few years, Kyiv has been the largest Ukrainian recipient of investment, welcoming 60% of total investment and a third of all capital investment coming into the country. In 2018, Foreign Direct Investment Magazine recognized the Ukrainian capital for its attractiveness as an investment destination and positively assessed its approach to foreign direct investment. Meanwhile, Kyiv ranked third among major European cities for cost effectiveness and entered the top 10 for FDI strategy in the Major European Cities of the Future 2018/19 ranking. This approach includes a number of specific propositions designed to appeal to international investors. For example, the city has revised rental rates for municipal premises and now provides a 30% discount on all municipal properties. Anyone looking to invest in private education can benefit from a symbolic annual rental rate of just one hryvnia. In addition to this, we offer to refund 30% of costs related to energy efficiency improvements. Kyiv is also the first Ukrainian city to integrate Smart City solutions into its urban governance. Smart technology is one of the most promising fields for investment, especially as the Ukrainian capital is now among the leaders of the East European IT industry. Today’s Kyiv is an IT hub hosting 40% of the country’s IT professionals, making it the ideal place to implement Smart City innovations.
Whenever I am networking with potential investors, I always emphasize my readiness to serve as a personal bodyguard for each individual investor in order to protect them from corruption and bureaucracy. Anyone visiting Kyiv will see the dynamic pace of the city’s development for themselves and will quickly appreciate the investment opportunities this creates. My advice to investors is to seize these opportunities now while they are at their most attractive.