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As of September 1, Kyiv’s Smart Plaza Obolon shopping and entertainment center has come under the management of its new owner. Retail & Development Advisor (RDA) acted as the intermediary in the transaction for the acquisition of the shopping and entertainment center between Leviter and Dragon Capital. The latter had owned the property since 2019.
“For Leviter, the acquisition of Smart Plaza Obolon is a logical continuation of the development of our portfolio, which includes the Kyiv-based Smart Plaza Polytech shopping and entertainment center, which has a similar concept. These properties were developed by the same developer and share common architecture, operating format and, to a large extent, the same tenant mix. Strategically, our idea is for the two shopping and entertainment centers to gradually develop into a network with unified high standards,” commented Oleg Baliash, owner of Leviter.
According to him, following the acquisition of the property, the company does not plan any major changes to its concept. However, it is considering options for targeted improvements and working with tenants to increase the level of comfort for visitors.
“Today, the shopping and entertainment center is in good technical condition and does not require significant capital investment, but we will consider individual local initiatives. These ideas include, among other things, the development of parking infrastructure, as the company has the relevant capabilities to implement such solutions. At the same time, we are not considering the property for resale; this is a long-term investment in a high-quality asset,” the businessman clarified.
RDA, in turn, emphasized that the main advantage of Smart Plaza Obolon is its unique location: the shopping and entertainment center is located in one of Kyiv’s largest residential districts and is part of a multifunctional complex. As a result, a significant portion of its audience lives directly within the multifunctional complex or in its immediate vicinity.
“Today, we clearly see a trend toward shopping and obtaining services close to home. People value the opportunity to meet most of their everyday needs without spending time traveling around the city. That is why high-quality retail properties in densely populated residential areas remain resilient and attractive assets. In addition, having two similar shopping and entertainment centers managed by one professional team makes it possible to expect additional synergies. This strengthens the negotiating position with tenants, expands opportunities for tenant rotation and attracting brands, and makes it possible to use management expertise more efficiently,” said Andriy Zhuk, Partner at RDA.
RDA also added that the transaction for the acquisition of the shopping and entertainment center was completed quickly thanks to the professionalism of the parties involved.
“Dragon Capital is a company with very high standards when it comes to working with assets and documentation. For a buyer, it is extremely important to understand the legal history of the property, the quality of its documentation and the technical condition of the real estate. In this case, the asset was well prepared for the transaction. On the other hand, there was a professional buyer who has a good understanding of the specifics of retail real estate and clearly knows what it is buying and how it will manage this asset going forward. Of course, the war and overall uncertainty make any investment transaction in Ukraine more complicated from a risk-assessment perspective. However, when a high-quality asset, a professional seller and a buyer with a clear investment strategy come together, this significantly facilitates the process,” Andriy Zhuk explained.
He noted that overall investment activity in Ukraine’s retail real estate market remains subdued. Although there are investors in the market who are ready to consider high-quality commercial assets, today they are much more attentive to risks, location, cash-flow stability and the potential of the property.
It will be recalled that Smart Plaza Obolon shopping and entertainment center began operations in January 2019 near Minska metro station. The total area of the three-level property is approximately 15,000 sq. m, while its leasable area is 10,000 sq. m. The complex’s anchor tenants include Silpo grocery supermarket, Polish fashion brand Sinsay, Rozetka store, Smartass fitness club, KFC, Eurasia and Puzata Hata restaurants, among others.
