Elena Shulyak, the general director of the development company Midland Development Ukraine, talks about the supply and demand in the Ukrainian real estate market, the positive and negative trends of the domestic business, dance prejudices, as well as secret sources of strength and inspiration in a special interview for LDaily:
The head of a large company, an athlete, a dancer, an attractive woman, a loving mother and wife. Can one person successfully combine all these roles? At first our heroine thought that it would not work, but it turns out that with the skillful planning of time everything can be done. This discovery helped her to make the project LIVE.LOVE, which brought her back to an old passion – ballroom dancing. Today Elena Shulyak is an example of a successful Ukrainian businesswoman and a trendsetter of a new era, where life is not limited only to work and home; there must necessarily be a place for self-expression.
Main trends in the real estate market
LDaily: Elena, what is the real estate market today both local and global? Please tell us about trends that have probably appeared recently.
E. Shulyak: If we are talking about the construction market in general, the average contribution of the GDP in developed economies of Europe to the construction industry is 6-9%. The main trends in the real estate market are high rates of urbanization and, as a result, the intensification of construction in cities, an increase in the variety of investment projects, construction of environmentally safe houses, close cooperation of the investor with the state. The Ukrainian market is partly forced to drift toward global trends, but due to its structure and economy, it has its own characteristics.
For 25 years, the Ukrainian construction industry has reduced its share in GDP in almost 4 times – from 9% in 1990 to 2.3%. For more than a quarter of a century our country has been “stuck” in the status of a “transitional” economy, but even in such conditions market laws break through the inertia of the development.
The modern Ukrainian consumer can no longer be content with two concepts – urban development and a private sector. He is looking for more offers, especially when it comes to small market niches. That is how the townhouses, high apartment buildings (more than 20 floors), conceptual blocks of low- and medium-rise buildings under a single project became popular. One of the main trends of the recent years, which I would also note, is the growth in construction in the satellite cities of the million populations, and, first of all, it is, of course, Kiev. Boryspil, Irpen, Gostomel, Brovary, Vyshgorod are actively built up. I think that it forms a new trend such as a decrease in the interest of retailers (and as a consequence – developers) to cities with a million populations and the implementation of projects in small towns.
LDaily: Do you agree with the statement that the development of Kyiv requires more transparency? Which direction of development in Ukraine, in your opinion, is the most promising one?
E. Shulyak: What about the transparency, I totally agree with that. Development is an industry that lives when it attracts the investment, and investment is a sign of trust in the system of protecting investors’ rights. A priori: if there is no openness, there will be no investment. In 2015, there were 2118 unfinished houses in Ukraine. They are put on hold. It is a billion of loss. In many cases, the reason for illegal construction projects is the lack of transparency in decision-making at the local government level and the corruption conspiracy between officials and dishonest developers. In order to improve the situation, it is necessary to radically change many processes in development from the allocation of land to the procedure of connecting to engineering networks.
Concerning the directions of development, I would talk about the prospect of suburban multi-apartment construction of economy-class housing for large cities. If European developers solve the problems of increasing the comfort of living for their customers, then we need to banally provide affordable housing for our citizens in Ukraine.
LDaily: Do you think the real estate segment is more reliable than the rest? Does it mean that it is the most attractive segment for the investor?
E. Shulyak: Globally within the framework of the world economy – yes, it is. Developed countries have made clear rules for investing in the construction market a long time ago. Can this factor illustrate the election of the representative of the development business of Donald Trump as the US President? With Ukraine, the situation is a bit different, because the characteristic feature of the market of commercial and office real estate is their direct dependence on the state of the economy, and first of all – on the purchasing power of citizens and business expectations of business.
For the last year (from July 2016), the average cost of 1 square meter in new buildings in Kiev, according to the realtors, decreased to 2.5%. The main reason for this decline is the market factor of the “supply-demand” ratio. Now the offer in the residential real estate market exceeds demand. And the general fall in the level of incomes among people does not allow talking about the rapid growth in demand for real estate, and, as a consequence, about the growth of the cost of apartments.
LDaily: How do foreign investors evaluate the investment attractiveness of Ukrainian development?
E. Shulyak: Foreign investors enter the Ukrainian market extremely rarely. Now this is more an exception than a rule, which, of course, is a problem for the economy and the industry in general. Foreign investor, first of all, evaluates 4 factors: demand, political and economic risks, the cost of project implementation, business environment. And according to these components, Ukraine still loses even our nearest neighbors.
LDaily: Elena, tell us about your story with LIVE.LOVE. How long have you been in this project?
E. Shulyak: For me, the story of LIVE.LOVE began with a night message from my friend, who assured me that I should definitely try running. Taking into account that I have never run before, it encouraged me. As a result, I passed the challenge, achieved my goal, but at the same time I realized that I will not become a runner. The essence of LIVE.LOVE is to do what is truly enjoyable, to do something with love. For me, the love that goes through a lifetime is dancing.
I came to the school of ballroom dancing during my second year of the university, just from the street; I have never been dancing before. After the first class, I was taken to the dance ensemble called Troyanda, which I successfully performed with until the end of the university. Then I had to choose between a career and a hobby. Having made the choice in favor of the first one, I quit dancing for a long 17 years, but always subconsciously dreamed again to perform on the stage.
Like many others I was always thinking that dancing is only allowed in youth. Later I realized that 35-40 years old is exactly the age when you should start dancing. You have so much experience, you clearly understand what you need, how to show yourself. You become more sensual and dance more with your soul, not with your body.
In LIVE.LOVE, I started with the program of Argentine tango. We practiced a lot and enthusiastically. Our graduation was in the art pier, we chose the music, outfits, made the performance. And the emotions that I experienced at the performance were much stronger than at the age of 17. My next challenge was the Viennese waltz, and now my dream is foxtrot, which I want to dance to my favorite song of Frank Sinatra.
S & B model
LDaily: What does sport give you and how does it show up in business development? Perhaps, your character, or approach to business, or personnel management have changed?
E. Shulyak: Sport is an opportunity to feel the boundaries of your physical and emotional possibilities, something that will not be replaced by any business books. Even amateur sport, and especially in such projects as LIVE.LOVE, is a test of hardness and a test of the ability to concentrate on achieving the goal. You choose the path by yourself and it’s up to you whether you will run this morning or just stop halfway.
Combining sport and work for me has become a new level in business. This tandem forced me to cardinal changes in personal time management. As a result, I began to plan my days more clearly, removed the small things that had previously consumed an enormous amount of time.
Ukraine on the business map of the world
LDaily: Elena, do you think that Ukrainian business is closed or it straightens the shoulders (develops)?
E. Shulyak: Ukrainian business develops and that’s good already. It is a bit wild, it just starts to walk, it studies, and that’s why not everything turns out, sometimes there is not enough money, knowledge, opportunities. But I believe that with such a human potential, as we have in our country, business in Ukraine is expected to flourish.
LDaily: Do you agree with the statement that in recent days in Ukraine such a concept as a business culture has become stronger?
E. Shulyak: It is significant for me that in Ukraine the number of businesses that want to live according to the honest rules is increasing. They make informed decisions that they want to pay taxes and white wages. Perhaps they do not yet fully whitewash their activities, but they have come out of the shadows and this is already a good sign.
LDaily: You often go abroad. What do others say about our country?
E. Shulyak: 5 years ago it seemed to me that our country is not considered on the map at all. Now they see us, but more often in the context of political aspects and corruption scandals. So far, we look in the eyes of foreigners, as a country that tried to change everything, but it cannot work out in the short term.
LDaily: Where does the modern woman get strength and inspiration? You are a mother, wife, a top manager, and you do sport.
E. Shulyak: Any woman gets strength in the environment and in herself. My family, the desire to change something around me, to live with a dream and a goal, to breathe deeply, to build something for the future, in which my daughter will live – all this keeps me from waiting. I like to feel the movement, the comfort and joy of the family, the desire to escape, breathing in the frosty air, to dance, fully feeling harmony with the music. These things for me are not a waste of energy and strengths, but on the contrary – an incentive to move forward, a generator of some wild energy efficiency.