Most investment processes in key EU countries such as France, Germany, and Italy are slowing down. The euro is in a state of decline against the stronger dollar. The economic policy of former British Prime Minister Liz Truss, which caused a catastrophic fall in the pound sterling, has also affected the pan-European investment climate. However, Rishi Sunak can improve the UK economy, especially with the beginning of spring 2023.
All of these processes also affect the Ukrainian investment climate, given that our country is now heavily dependent on cash injections from Europe and the United States. The fintech sector is on hold, and the banking and payment systems sector itself has lost stability.
The inflow of new investments into Ukraine should be expected, of course, only after the war is over. Undoubtedly, the world has learned about Ukraine over the past 11 months as never before, as previously major investment players perceived our country exclusively through colonial optics and did not consider Ukraine as an independent player at all.
Ukraine as an independent investment player
Ukraine has now become an attractive country for investment, but so far almost all foreign investors have put their projects on hold, waiting for the opportunity to enter our market. In my banking practice, I have repeatedly encountered the fact that someone intends to buy a bank, someone is interested in plants or factories as assets, or the possibility of opening a branch of existing companies, and someone wants to refinance loans. There are more and more examples of this every day.
The inflow of investments after the war will undoubtedly be much higher than before the war, because, as I mentioned earlier, Ukraine has finally been fully recognized.
Mechanisms of Ukraine’s revival – what to expect
The war has hit most of the key sectors of Ukrainian business, ranging from agriculture to metallurgy and, of course, fintech. Effective mechanisms for reviving these production facilities should already be developed and their role in Ukraine’s further European integration in the post-war period should be taken into account. However, we should expect a boom in investment in the postwar period in green and energy-saving technologies, alternative energy sources, and businesses that are responsive to the current agenda. Ukraine already has a unique chance to become a leader in Eastern Europe in the implementation of the most environmentally friendly technologies in all key sectors of the economy, and because of the increased level of environmental friendliness, it will become the engine of Ukraine’s post-war recovery.
Real estate is the most attractive area for investment in times of severe crises and historical upheaval, as this asset can not only be preserved but also increased, regardless of currency fluctuations. This trend is observed all over the world, especially now, when the demand for housing or any other type of real estate has inevitably increased. And the war, of course, cannot be an obstacle to investment, although, of course, for any investor it is a high-risk game. Especially if you invest in real estate, which is the most stable asset of all.
Qiuntex Bank Technology has such a stable asset – Besora Hill House complex, which is being built in Zakarpattia, on the territory of Slavske. The western regions of Ukraine have managed to demonstrate their resilience during the eight months of war, including the ability to accommodate a large number of people on their territory and return their economic subjectivity. The complex itself will be located in a safe place, in the mountains, with a difficult terrain, which gives a huge advantage against potential military operations in this area. Slavske is the region where, according to the locals, during World War II “one tank drove in and fell into the river.” This, of course, does not negate the urgent need to insure our eco-village as soon as possible, and we are on the way to resolving this issue.
In many ways, the implementation of the Besora Hill House project has a personal dimension for me. During the first phase of the war between Russia and Ukraine in 2014, I went to Slavske with my family for a month to seriously consider which direction to move forward after Donetsk. I really liked Slavske and decided that one day I should have a house here. Many years later, the Besora Hill House project appeared. For me, this is a new experience that simultaneously manifests everything I have encountered as a banker before: the construction sector, the tourism industry, and interaction with farmers and metal producers. Together, this makes Besora Hill House a unique project with huge development potential for the entire region.
Real estate market outlook in 2023
Regarding the prospects for the real estate market in Ukraine, there are several key points formulated based on the results of industry monitoring by its main players:
1. Increase in the cost of construction of residential and industrial facilities;
2. Introduction of new construction standards, including the need for bomb shelters and shelters at new facilities;
3. The market expects to reformat with the inevitable increase in prices and demand for housing that meets the increased safety standards.
4. Demand will be mainly concentrated on almost finished objects.
Transcarpathia and all western regions of Ukraine in general have more opportunities to reboot as full-fledged tourist centers with a European level of service quality and customer service. And Besora Hill House, due to its favorable location and the implementation of environmental policy throughout the complex, despite the still existing investment risks (primarily due to Russia’s military unpredictability), will be the impetus for further processes of transforming the region into an attractive place for tourists from all over the world, a real Ukrainian alternative to eco-resorts in Spain, France, Italy, Norway or Canada.