The document proposes developing a multifunctional complex in Kryvyi Rih, Ukraine. The project would redevelop 6 hectares of land containing vacant buildings into a business center with 2500 sqm of commercial space and 2000 sqm of recreational area. It would include a mall, offices, hotel, and restaurant. The estimated budget is 159 million UAH and the internal rate of return is 14.98%. The development aims to meet demand in Kryvyi Rih's population of over 1 million people within a 135km radius.

1. Investment
proposal
Complex development of the land on the territory of
Kryvyi Rih non-functioning budgetary buildings
* Presentation materials serve as a general introductory of investment opportunities in the city of Kryvyi Rih
for potential investors .
Some information needs more broad additional research and justification in order to be used for a
comprehensive business plan.
** Access mode for pictures: http://media-cdn.tripadvisor.com/media/photo-s/03/35/df/c0/lotte-hotel-moscow.jpg

2. Description of
the project
 The project suggests complex development of the land on the territory of the non-functioning child care complex, maternity
house and adjacent in the area of Kryvyi Rih city residential blocks of “44th Kvartal” (in Dnipropetrovska oblast)/ The total
area available is around 6 ha. The project suggests the building up of a new multi-functional complex with business center
and diversified trade-entertaining infrastructure on the total area of 2500 sq. m. of the described territory under beneficial
conditions for investor * (in case of recreational development of the adjacent area of around 2000 sq. m.).
Structural
advantages of
the location
 Zhovtnevyi district of Kryvyi Rih city – is one of the largest districts in the city with a population of around 132 500 people,
the area of the district is – 5 953 га (**).
 High paying capacity of the population in the district.
 Economic potential of the district is represented by 12 big industrial enterprises, including: JSC Central mining and
concentration complex, PJSC Kryvyi Rih iron ore complex, PJSC Sukha Balka, oduction enterprise, etc. (**).
 Employed at big industrial enterprises of the district – 17 000 people *.
 Employed at SMEs of the district – 2 534 people (***).
 The total area of buildings for business rent – 15 201,7 sq. m. (***).
Status of the
project
 The project requires design estimates for construction and building works.
Budget
 The cost of the project (in the initial period) 159 363 943 UAH. Project implementation resources – investors own funds.
Key project indicators
Indicator
Discounted Payback Period, DPP
Net Present Value, NPV
Internal Rate of Return, IRR
Unit
Value
year
14,9
thousand UAH
53 433, 588
%
14,98
Profitability Index, PI
Budget (own capital), in the initial period
** Source: official web-site of Zhovtnevyi district Administration of Kryvyi Rih City Counci
*** Source: Zhovtnevyi district Administration of Kryvyi Rih City Council
1,34
thousand UAH
159 363, 943 грн.

3. Description of the
contemporary situation*
 Zhovtnevyi district – is one of the largest in the city.
 The population of the district (132 500 people) owns high paying capacity.
 The list of functioning trade-entertaining establishments:
– trade-entertaining complex «Тerra»;
– children entertaining complex «Fidget»;
– children entertaining complex «Jumanji».
 The city does not have an establishment of the type: «multi-functional
trade-business center of A/B class».
Suggested solution
 The building up of the modern multi-functional complex with business center (A/B type) and diversified infrastructure on the territory
of “44 kvartal” in the Zhovtnevyi district of Kryvyi Rih city (Dnipropetrovsk oblast) with the following features:
– trade- entertating area (mall), 1 – 4 stories, area of around 10 000 sq. m. Accounting for the average market rent cost per sq. m. (**), possible annual
revenue from operational activity of the owner might be around 33,6 mln. UAH;
– offices, conference halls for lease, stories 5 – 9, area of around 6 500 sq. m. Accounting for the average market rent cost per sq. m. (***), possible
annual revenue from operational activity of the owner might be around 10,14 mln. UAH;
– hotel of 3 – 5 stars, possible annual revenue from operational activity of the owner might be around 3,36 mln. UAH;
– premium class restaurant with a panoramic view at the 12th story) - possible annual revenue from lease – 2,5 mln. UAH.
Special Condition
Effect from
implementation
Transfer of the land to the investor on beneficial conditions (1 UAH per year), in case of recreation development of the adjacent territory
of an area of 2000 sq. m. (approximate volume of initial investments – 4 mln. UAH).
Economic effect (for investor)
 Profit from business operational activity (lease/selling of the areas to subjects of
economic activity)
 Expansion of business-contacts and opportunities
 Synergic effect from interaction with companies, operating in the business center
 Possibility to conduct business in personally-owned premises
Social effect (for the city)
 Business infrastructure development in the city
 Creation of new jobsites
 Increase of municipal budget receipts as a result of
business operational activity
 Recreational development of the adjacent area of around
2000 sq. m.
* Source – Zhovtnevyi district Administration of Kryvyi Rih City Council. Access mode – http://www.zhrrkrog.dp.ua/node/13
** 280 UAH per 1 sq. m.
*** 130 UAH per 1 sq.m.

4. Potential volume of the market (population in the radius of 135 km)*
City/town
Population of the city
(town), thousand people
1. Kryvyi Rih
659,2
2. Kirovograd (114 km)
244,4
3. Nikopol (105 km)
121,5
4. Marganets (131 km)
49,7
5. Zhovti Vody (56 km)
48,8
6. Ordzhonikidze (97 km)
43,6
Total:
Кіровоград
1 167,2
Zhovtnevyi district, Kryvyi Rih city
Competitive advantages of the Kryvyi Rih city for
the implementation of this project
 The average monthly salary in the city of Kryvyi Rih is 3 796,00 UAH. (as for the І
quarter of 2013)
 Foreign direct investment exceeded 5180,3 million USD as for 01.01.2013.
 Well-developed transport infrastructure of the city, which allows to serve the
territory with a population of 1 167, 2 million people.
 A big number of kids in the district make it expedient to locate the kinder garden /
academy for early children development, etc., as well as to locate entertaining complex
in the building;
 A big part of the city population – is youth, which might be a target group for the
complex to attract them and start business in the offices provided.
The density of areas available for business rent per 1000 persons in
Zhovtnevyi district of Kryvyi Rih city – 114 sq. m. per 1000 persons*.
Analysis of social-entertaining infrastructure of Zhovtnevyi district of the
Kryvyi Rih city **




Theatres, culture centers, art schools – 6 units.
Libraries – 11 units.
Sport schools - 5 units.
Extracurricular establishments (PU) – 6 units.
Age structure of the
population of the
Kryvyi Rih city
Zhovtnevyi district **
0 - 17
18 - 39
40 - 59
60 +
* Dnipropetrovsk investment agency
** Official information from Zhovtnevyi district Administration of Kryvyi Rih City Council.

5. General tendencies
The biggest building projects of multifunctional complexes,
planned to be launched in 2014 - 2015*
 2012 was marked by the highest ratings in the respect of new foreign
brands entering the Ukrainian market.
 New brands entering the market are mostly from medium and premium
price market segments.
 The development of network operators in Ukraine is mostly
concentrated in Kyiv and cities with a population of around million
people.
 Big brand retailers are becoming more and more scrupulous in assessing
the quality of premises – the concept of the project, lease conditions,
management of the complex.
 It is expected that the leaders of the world retail will keep entering the
market in 2014 - 2015.
199
Kherson
256
Kyiv
325
Budapest
537
594
Warsaw
0
200
Area, thnd.
sq. m.
Planned
opening
1
“Respublika”
«К.А.N. Development»
135
2014
2
“Yappi Mall”
«Liko-Holding»
42
2014
3
“Lavina Mall”
Private investor
115
2014
4
“Prospect”
«Arricano
Development»
40,5
2014
5
“Blockbuster Mall”
Local developer
66,37
2014 / 2015
6
“Hartz”
«Budhaus group»
68
2015
7
“Manhatan Mall”
8
“Kvadrat Vyrlitsa”
«XXI century»
70
“River Mall”
Local developer
55
«Forum Evolution»
69,2
400
600
800
«Victoria»
54,3
11 “Kyiv Mall”
279
Simferopol
Company
10 “Victoria”
230
Mykolayiv
Name of the complex
9
The density of available rent areas in big malls per 1000 persons
in different cities
Khmelnitsky
№
«Dilais»
75,4
2015
2015
2015
2015
2015
 The development market is prevailed by investors with own capital not
credit capital.
 The threshold into the sector has increased from 10 million USD before
crisis to around 30 – 50 million USD after the crisis.
 It is expected that the malls will tend to become more spacious with a
more diversified infrastructure.
 It is expected by experts that minor shopping centers will become
extinct.**
* Source: http://korrespondent.net/business/realestate/1590422-korrespondent-stolica-shopinga-kiev-zhdet-nashestvie-torgovyh-centrov, August 2013.
** Source: http://korrespondent.net/business/realestate/1590422-korrespondent-stolica-shopinga-kiev-zhdet-nashestvie-torgovyh-centrov, August 2013.

6. The project suggests the building up of a multifunctional business complex (A/B class) with a diversified commercialentertaining and social infrastructure by an investor in the heart of Zhovtnevyi destrict.
Technical features of the plot
Location
The minimum total area of the land
plot, required for the building:
• commercial-business center
• parking
Residential area of “44 kvartal”,
Zhovtnevyi district of Kryvyi Rih
city
Territory available for
building
Residential area
min 2,5 thousand sq. m.
1 thousand sq. m.
The area of adjacent territory, which
will be maintained by an investor:
2 thousand. sq. m.
Technical communications:
The plot has access to electricity,
water and heat supply (others to
be determined)
The total area of the complex,
including:
21 700 000 sq. m.;
 Area reserved for placing a mall,
social and cultural infrastructure
(stories 1-4);
 Area reserved for offices (5-9
stories);
 Area reserved for hotel (10-11
stories);
 Area reserved for premium-class
restaurant (12 story)
10 000 sq. m. ;
6 500 sq. m. ;
2 600 sq. m. ;
1 300 sq. m. ;
Non-functioning buildings

7. І set of construction (1st – 4th stories), total area 10 000 sq.
m., 2015 year – mall with an entertaining complex
ІІ set of construction – (5th - 12th stories), total area is around
11 700 sq.m., 2016 – 2017 yy.
5th – 9th stories (area 6 500 sq.m. ) – office premises.
Possible content:
The offices of the following economic sectors:
•
•
•
•
•
•
•
Key leaser (food big-box store);
Boutiques ;
Beauty shops, massage rooms;
Cinema, food-zones;
Fitness-center;
Spa/medical centers;
Child care / early development academy for kinds / private
garden for late pick-ups.





Information technologies;
Financial services;
Legal service and consultancy, etc.;
Conference-halls;
Training center.
10th – 11th stories (total area 2 600 sq. m. ) – hotel 3 – 5
stars
12th story (total area 1 300 sq. m. ) – premium-class
restaurant.

8. Time-table of project implementation
Action
2014
2015
2016
2017
Budget,
thousand UAH
Preparation of the design estimates
and passing the official licensing
procedures
6000,00
Communications supply (gas,
electricity, water)
Preparation of the plot
18 392,9
892,6
Expenses for building up of the 1st – 4th
floors (10 000 sq. m.)
39 334, 9
Expenses for building up of the 5th – 9th
floors (11 700 тис sq. m.)
37 892,4
Виконання внутрішніх
оздоблювальних робіт
52 224,5
The recreation development of the
adjacent area* (2000 sq. m.*2000
UAH) and land rent*
2 847,1
Investments into the hotel
1 779,5
Commissioning of the object
Total of the project budget,
thousand UAH
11 000, 001
53 620,536
45 560,707
49 182,7
159 363,9
* In case of the recreation development of 2000 sq. m. of the adjacent area by the investor, the land will be given on the privileged basis (1 UAH per year).

9. Million UAH
600,00 UAH
500,00 UAH
400,00 UAH
300,00 UAH
200,00 UAH
100,00 UAH
- UAH
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Payback period
-100,00 UAH
-200,00 UAH
– Discounted cumulative cash flow (DCF)
– Cash flow of real money (NCF)
–Cumulative cash flow

10. 1. Shopping center with entertaining area*
 Around 10 000 sq. m.
 The expected revenue for investor will come from lease of the owned areas to
thoroughly chosen lessees, which are capable of securing diversified attractions for
potential customers.
 Potential annual revenue for the investor from operational activity (EBIDTA) –
33, 6 million UAH.
 Socially-cultural component of the multifunctional complex infrastructure might be
presented by:
• Key leaser (food big-box store) as well as shopping center with fashion boutiques;
• Exposition gallery;
• Cinema, food-zones;
• Entertaining zone with extreme attractions;
• Beauty shops, massage rooms;
• Fitness-center/ wellness center / spa;
• Spa/medical centers;
• Early development academy for kinds
• Child care / private garden for late pick-ups.
Expediency of locating the early development academy for kids
(twenty-four hour children garden) in the newly-built complex
 The amount of pre-school establishments (kinder gardens) in Zhovtnevyi
district is 27.
 The capacity of these establishments is – 3826 children.
 The factual occupancy of the kinder gardens in Zhovtnevyi district – 4938
persons.
 The amount of pre-school age children – around 5 516 children.
* Project needs additional research

11. 2. Office center*
 Around 6 500 sq. m. (5 – 9 floors).
 The expected revenue for investor will come from granting fullyprepared premises for the lease.
 Estimated expenses for construction – 37,89 million UAH. Estimated
expenses for final preparation of office premises (repairs, decoration,
etc. ) – 26,68 milliion UAH
 Potential annual revenue for the investor from
operational activity (EBIDTA) – 10, 14 million UAH.
Infrastructure advantages for business
 Ergonomic and convenient design of the office premises
(ergonommic and energy-efficient);
 Modern systems of communication and security;
 Modern system of heating, ventilation, climate-control;
 System of fire-alarm;
 Centralized security;
 100% readiness of general use spaces (toilets, halls, etc.);
 Developed adjacent territory;
 Convenient parking.
* Проект потребує додаткових розрахунків
** За умови вартості оренди 1 кв.м. – 130 грн.

12. 3. Hotel*
 Around 2 600 sq. m. (10 – 11 floors).
 The expected revenue for investor will come from running the hotel.
 Estimated cost of initial investments for equipping the hotel -– 1,779
million UAH.
 Potential annual revenue for the investor from
operational activity (EBIDTA) – 3, 36 million UAH(**)
 Internal rate of return – 16 %
* Проект потребує додаткових розрахунків
** За умови вартості оренди 1 номеру – 350 грн.
*** Режим доступу до фото: https://www.google.com.ua/search?q=spa+%D0%BE%D1%82%D0%B5%D0%BB%D1%8C&safe=off&client=firefoxa&hs=gS8&rls=org.mozilla:ru:official&source=lnms&tbm=isch&sa=X&ei=SapkUvH8C46r0AXh1IDICA&ved=0CAkQ_AUoAQ&biw=1366&bih=639&dpr=1#facrc=_&imgdii=_&imgrc=vnqhB

13. 4. Premium-class restaurant
 Around 1 300 sq. m. (12th floor).
 The revenue of the investor is expected to come from leasing the
approximate area of 1300 sq. m. to a lessee for locating a restaurant
on the top floor of the complex with a possibility of entering the
terrace.
 Potential annual revenue for the investor from
operational activity (EBIDTA) – 2, 5 million UAH (**)
* Проект потребує додаткових розрахунків
** За умови вартості оренди 1 кв.м. – 160 грн.
*** Режим доступу до фото: http://europeluxuryhotelfinder.com/prague-rooftop-restaurants/

14. Kryvyi Rih, Radyanskya Sq. 1, room. 305
tel. +38 0564 74-69-47
e-mail: u.economy@kryvyirih.dp.ua
Kryvyi Rih City Deputy Mayor
Director, Kryvyi Rih City Development
Institution
Head of the International Activity
Program, Kryvyi Rih City
Development Institution
Kryvyi Rih, Metalurgiv Avenue 28
tel: +38 0564 92 98 48
tel: +38 097 738 44 50
e-mail: irm_kr@i.ua
Kryvyi Rih, Metalurgiv Avenue 28
tel: +38 0564 92 98 28
tel: +38 096 479 96 25
e-mail: ilyana.yasko@irm.kr.ua