Colliers Report: which of the international brands is actively developing in Ukraine

The foreign retailers interest to the Ukrainian market will grow in the event of situation stabilization in Ukraine in the coming years.

The commercial real estate Colliers International (Ukraine) department director Natalia Kravets was expressed this opinion during the retail and development industry RDBExpo 2017 specialized exhibition.

According to her, Ukraine is one of the most urbanized countries in Europe with a large population, and considering the several new generation SEC opening in the last three years and the other projects number active development, we can talk about the potential increase in the international companies representatives interest in the Ukrainian retail real estate market.

At the same time, the factors that reduce the international retailers interest to Ukraine are still:

• the population incomes low level ;
• the economic instability (high inflation, weak currency, a significant increase in utility tariffs, etc.);
• the military actions in Donetsk and Lugansk certain regions;
• the corruption high level and an “opaque” market;
• the complex customs procedures and goods certification.

Now, according to Colliers International, about brands 90% in the market work under franchise and/or are Ukrainian, and only about 10% are international brands that work through the parent company.

Such international chains are actively developing according to Natalia Kravets:

• Auchan (the existing stores number – 12, the planned to opening number (2017-2018) – 5-6).
• Billa (the existing stores number – more than 20, the planned to opening number (2017-2018) – 8-10).
• JYSK (the existing stores number – more than 30, the planned to opening number (2017-2018) –
• Leroy Merlin (the existing stores number – 3, the planned to opening number (2017-2018) – 5).
• Inditex: Zara, Bershka, Pull & Bear, Stradivarius, Lefties, Uterque, Zara Home, Massimo Dutti, Oysho (the existing stores number – 59, the planned to opening number (2017-2018) – 15-20).
• LPP: Cropp, Reserved, Reserved kids, Sinsay, Mohito, Mhouse, Promostars (the existing stores number is 68, the planned to opening number (2017-2018) – 12-16).
• New Yorker (the existing stores number – 5, the planned to opening number (2017-2018) – 3-5).
• LC Waikiki (the existing stores number – 15, the planned to opening number (2017-2018) – 6-8).
• CCC (the number of existing stores number – 5, the planned to opening number (2017-2018) – 10).

At the same time, in the near future, the entering such Turkish brands as Collezione, Koton, Flo and DeFacto own stores to the market it is possible. Also, several more long-awaited international brands are considering the entry into the Ukrainian market in the 2018-2019 perspective.

Colliers company also notes, that new international retailers offer such conditions in negotiations with retail facilities owners:

minimum fix, payment from turnover %;

OPEX is included in turnover %;

• the rent payment amount from turnover is 4-8%;
• the owner completely compensates for the finishing work (in the cash payments form, discounts in rent, the premises advanced condition);
• the tenant accepts the premises in the “turn key” state or with the costs part compensation for repair work;
• the lease possible term – 15 – 50 years;
• the rent payments are indexed by CPI.

The active international players in the Ukrainian retail real estate market will become more, provided that the political and economic situation stabilizing process in the country will continue, as well as the sharp fluctuations absence in the hryvnia exchange rate in the next three years, according to Natalia Kravets.