Format of Investment in Agricultural Land in Ukraine
Investment in agriculture land in Ukraine is conducted under farmland lease agreements. Lease contracts are closed directly with pai-holders for different periods averaging at 10 years and going up to 49 years. Farmland pai lease contracts enable contractors to consolidate large fields of 50-200 hectares located close to each other for the ease of crop rotation planning, cultivation and harvesting.

Ukraine’s agricultural land cannot be purchased, but lease agreements for agricultural land enable as much freedom for performing farming operations as ownership while also providing a primary right of purchase in case of the agricultural land sale moratorium lift and given that pai holders would be willing to sell off their property.

Cost of Investment in Agricultural Land in Ukraine
Cost of investment in Ukraine’s farmlands is the lowest in Europe while it provides the highest return potential given the high soil fertility and unrealized agri-ecological potential of Ukraine’s soils. The cost of investment is composed of the lease rights acquisition cost, annual lease fees and annual cultivation (actual farming operation) costs.

Land lease rights acquisition cost in 2009  has ranged from USD 120 to USD 300 per hectare depending of the region and soil quality. Lease rights are normally acquired through the transfer of corporate rights from the current lease holding company to the new owners. Lease rights can also be transferred through re-registration of land lease agreements.

Annual land lease fees are legally fixed at a minimum 3% of the land plot value level but may vary from region to region. Lease fees in 2009 have ranged from USD 25 to USD 45 per hectare.

Agricultural land lease agreements carry a legal obligation of land cultivation which inevitably requires a lessee to perform actual farming activities. Since agricultural equipment lease is not very common in Ukraine, most farms invest in tractors, tillage equipment, seeding equipment, harvesters, etc. Capital investment into agricultural equipment in Ukraine may vary from USD 350 (locally produced equipment or mixed) to USD 800 (high-end Western equipment) per hectare.

Calculated per annum with fuel, spare parts, seeds, fertilizers, crop protection, labor costs, etc. included, annual cultivation cost from USD 200 per hectare using organic farming methods up to USD 500 per hectare with conventional/chemical farming.
Organic farming, as opposed to intensive conventional farming, provides a better investment opportunity in Ukraine due to high natural fertility level in the soils. In most of the cases, there are no yield losses when growing organically in Ukraine compared to what most of the Western European farms experience during the transition period.

Optimal investment cost in Ukraine’s agricultural land in 2009 is one of the lowest at  USD 600-800 per hectare compared to Americas’ (USA and Argentina) USD 4,000+,  and Western European level of USD 12,000+. At the same time, the current harvest yields in Ukraine suggest that the agro-ecological potential of 6.2 metric tons per hectare  can be easily obtained under proper farm management and with the use of optimal organic technologies. Besides, the land lease price is expected to double in 2010.

Agricultural Land Valuation in Ukraine
Ukraine’s soil quality is subject to bonitet valuation system. Most of Ukraine’s soils boast a bonitet above 40. Chernozem (black soil types) have a bonitet of 70-80 and more. Soil fertility is a complex quality of soils and not limited by bonitet. Land valuation in Ukraine has no standardized system and in most of the cases is based on the yeilds history for particular farms or individual fields.

Agricultural Land Management in Ukraine
Soil quality tests are easy to obtain in Ukraine and cost USD 200-450 per measured field (50-200 hectares). Such tests often include detailed recommendations for further soil treatment making it very easy to draw cultivation and fertilization plans per each individual field.

Farm management, on the other hand, is a more complex issue. Many Ukrainian farms lack new equipment or sufficient knowledge of modern farming technologies and sustainable farming methods.

An optimal size of an individual farm in Ukraine is 5,000 to maximum 10,000 hectares. The farm volume is considered optimal when any commercial crop can be harvested and sold at the minimum export volume of 3,000-5,000 metric tons.

Harvest storage is a critical consideration for operational independence and financial stability of a farm not only in UKraine. A capital investment of USD 120-150 per metric ton of storage should be considered to secure long-term performance of a farm.

How to Invest in Agricultural Land in Ukraine?
Agricultural land investment made easy: InvestUkraine agriculture experts can provide you with further information and details on how to practically realize agriculture land investment opportunities in Ukraine.  Please contact us for more details.

But even though Ukraine’s hosting of the upcoming EURO-2012 football championship has raised interest in the market, the new projects are meant to fill growing overall demand and offer higher quality in a country where absolute majority of hotels are renovated premises from from the Soviet days.

The Rezidor Hotel Group of Belgium, which already operates one hotel in the country, Kyiv’s Radisson SAS, announced the most ambitious expansion plans of the three hotel chains. The Belgian company plans to open eleven Radisson hotels and sixteen Park Inn hotels throughout the country according to Darren Blanchard, business development director for the Rezidor Hotel Group. The Redizor company also operates the five-plus-star Regent and five-star Missoni hotel brands.

Rezidor plans operating the Ukrainian hotels under management contracts with local partners.

All four of Redizor’s hotel brands will operate in Kyiv while Radisson SAS and Park Inn hotels will be opened across major Ukrainian cities including Kharkiv, Dnipropetrovsk, Odesa, Donetsk, Zaporizhia, Yalta and Lviv. Park Inn hotels will be also opened in other smaller Ukrainian cities where touristic attractions will continue to raise demand for quality hotel services.

Accor of France is currently working with Ukrainian business partners to build its five-star Sofitel brand hotel and two three-star Ibis hotels in Kyiv. Accor plans to build four-star hotels in Ukraine’s cities with over one million residents which are Kyiv, Dnipropetrovsk, Donetsk, Odesa and Kharkiv.
The InterContinental Hotels Group is backing two hotel projects in Kyiv, a Holiday Inn and a five-star InterContinental hotel. Developer Toronto Kyiv plans to complete construction of the Holiday Inn in 2009. In addition to the InterContinental,?  a five?­star Fairmont brand hotel will also appear in Kyiv by the end of 2009 at an investment of more than $150 million.

More than 1.5 million tourists visited Ukraine in 2007 and over 2 million are expected this year. More business travelers are also arriving, in line with larger inflows of foreign investment since the Orange Revolution of 2004 and with the growing market opportunities in all industries and across Ukraine.

More than 100 hotels currently operate in Kyiv, but most of them do not even match the 3-star level servicing. Kyiv now offers only four hotels with services stated to be at the fivestar level:?  the Hyatt Regency, Premier Palace, Radisson SAS Hotel and Opera Hotel. Recently opened four-star Riviera hotel is probably the only one to fill the gap between the fivestars and the Soviet style hotels in Kyiv.

Investment Consulting business in Ukraine has grown rapidly in the past few years with more CFA’s, MBA’s and LLM’s leading professional teams of financial analysts and commercial lawyers and providing ground market research, feasibility and due diligence studie. A profile of a Ukrainian-native Investment consultant would normally include a Western business education diploma, few years of financial, industry or legal experience in Ukraine, as well as abroad including Russia, a wide networking base within Ukrainian commercial and official offices and a solid reputation in the market.

InvestUkraine is launching its independent research of Investment consulting companies in Ukraine to provide a better preview of the leading investment consultants with their possible specializations by industry or geographic region.

If you represent an Investment consulting company and would like to participate in our research, do not hesitate to contact us before May 1st, 2008 in order to participate in the listing.

If you are an investor considering investment consultants in Ukraine and would like to receive pre-publication sneak preview, you are welcome to contact us anytime.

The agreement was signed in November 2007. Wyndham pursuits to become the Ukraine’s market leader in 3* hotels segment.

The franchising model is widely used by Wyndham Hotel outside the US market. Ramada hotels were introduced in Russia last year with a plan of ten hotels opening in the Moscow residential areas.

Ukrainian horeca market is growing rapidly to meet the increasing inflow of foreign tourists and especially to cope with the peak year of 2012 when European soccer championship finals are expected to take place in the Ukrainian capital city of Kiev.

No visas are required for US and EU citizens to visit Ukraine which makes it a much easier touristic venue than Russia.

???As many of the lots immediately adjacent to Kyiv have already been purchased in the last several years, investors are scouting out more remote, affordable areas,??? he said. ???These regions further from the capital will become more popular and will, as a result, stimulate price growth.???

In recent years, investors bought up most of the best land for residential development in Kyiv??™s immediate suburban districts of Kyiv-Sviatoshyn, Vyshhorod and Vasylkivsk .

Prices in one nearby hot spot, the Brovary district, jumped by an astronomical 115 percent to $4,821 per 100 square meters in 2007, according to Kostetsky. Prices will continue to grow in the district closest to the capital, but future price leaps will not be as extreme, he added.

SV-Development estimated land prices will increase by an average of 30 percent in suburban Kyiv this year. High demand has lured a wave of fresh investment into Western-style model suburban housing developments, locally known as cottage neighborhoods. The lion??™s share of land purchased last year outside Kyiv was for cottage development projects.

In 2007 alone, about 100 cottage villages were under development in suburban Kyiv, compared to 40 the previous year. Growth of about $1,500 to $2,100 per 100 square meters is projected this year in the Borodiansk, Baryshiv, Fastiv and Pereyaslav-Khmelnytsk districts, which are about 40 to 60 kilometers from Kyiv.

Prices can vary significantly depending on specific conditions of a particular district, first and foremost the availability of basic infrastructure, said Viacheslav Sobutsky, an analyst at DEOL Partners, a Kyiv real estate consultancy.

???The Tarascha, Bila Tserkva, and Kagarlyk districts are, for example, expected to cost more due to their proximity to the Dnipro and Ros rivers and scenic nearby forests,??? Sobutsky said. ???In contrast, much of the most prized land close to Kyiv was sold to the rich, blocking off access to the Dnipro River in many cases, making the neighboring land less attractive.???

The two main Kyiv suburban developers are investment bank Dragon Capital, with projects in the Borodiansk, Boryspil, Makarovsk and Brovary districts; the Yevropa group of companies is currently building the Kyiv Region??™s biggest cottage community called Olympic Park, about 19 kilometers from the city along the Zhytomyr highway.

The community??™s 290 hectares will consist of 1,030 lots, between 1,500 and 3,500 square meters each, for middle-class homes to be built by 2013. A single Olympic Park plot is priced at $200,000, though the price will increase by about 25 percent in 2008. Experts estimate the project??™s cost at more than $270 million.