Nai Pickard

Spotlight on ... Terry Pickard

K.T.: Why and when did you decide to start this business?
T.P.: I started this business in Ukraine in 1992. Before that I was working in a major British construction machine manufacturing company for 19 years. I first came to Kyiv with Margaret Thatcher, the British Prime Minister in 1990 as a delegate of British business group trip. Then when Ukraine got its independence in 1991 the following year I started this business in Ukraine in September, 1992.

K.T.: Why did you come back?
T.P.: The main reason was that at that time I was the Divisional Director for Europe. Responsible for most of the distributors in Europe which then included countries such as Hungary and the Czech Republic and all the other new independent states that had previously been behind the Iron Curtain. I saw the tremendous growth that had occurred in all those countries during this period. So when Ukraine got its independence, a huge country of 48 mil-lion people, where there was virtually no western influence here at all. I decided this was too big an opportunity to miss. Ukraine’s independence meant that all of the major countries had to start establishing embassies here. It was a great opportunity to enter the property market. We were the first western property agency in the country to take up this opportunity. So we commenced buying old properties and converting them into offices.

K.T.: The economic situation in this young country was very complicated. Perhaps it was challenging to develop a business in the 1990’s?
T.P.: Because it was difficult that was the opportunity. We never had any Ukrainian partners, or JV’s and the company belongs solely to me. However I quickly engaged some very good young Ukrainians who advised and guided me.
We bought and refurbished properties and leased them out as offices. And although the law was in its infancy for a market economy we got it mostly right. At least we never "lost" a property.

K.T.: What was the first project your company did in Ukraine?
T.P.:  We bought, refurbished and then sold on a small office on Proriznaya St. between September 1992 and March 1993.

K.T.:  A few words about your company. What commercial services do you offer?
T.P.: NAI Global is the fourth largest real estate group in the world and NAI Pickard is their exclusive representative for Ukraine and Moldova.
And what we believe differentiates NAI Pickard from other international agencies I suppose is the following:

• The company is owned and managed by me and has been for I ft years. I have not been flown in from London or some-where to head up the Kyiv office.
• We are a full services property consulting, that is we offer our clients a one stop shop service and we are the only international group with regional offices around Ukraine.
• The fact that we have been here longer than anyone else has given us a breadth and depth of knowledge and experience second to none.

Our services include residential from daily rent to ambassadorial residences and on to 3000 unit suburban developments. We find accommodation for ex-patriot employees for companies such as OBI and IKEA. We set up and manage local companies for clients. Our valuation services are backed not only by our international reputation but also professional indemnity insurance placed by Lloyds of London. We also research and do concept studies across the entire property sec-tor. Buy. sell, lease out and manage shopping malls. Advise investors on all types of property acquisitions. Lease out everything from apartments to logistics. And we have an insurance broker JV with MAI Insurance Services where we offer a full range of insurance services from political and title to construction and another JV wild a company called 3D Solutions that creates virtual reality models of projects. And as an individual I am also a developer: I am currently developing a new type of out of town residential project for young professionals. As I say to clients over I ft years I have made my mistakes with my own money and not theirs.

K.T.: Where are you located?
T.P.: Our main office is in Kyiv with branch offices in Kharkiv, and associate offices in Odesa, Lugansk, L’viv. Donetsk, Dnepropetrovsk and Nikolaev. We go where our clients go. Three to four years ago people based their business only in Kyiv and then from Kyiv they went out to other major regional cities, for example. Metro, who are our client, are planning to do more stores all around Ukraine in the smaller cities. And other major retailing groups, the international brand names are planning to expand across Ukraine. Wherever they want to go we have to go with them and help find sites for their expansion. So we have to keep expanding. We are the only international agency with a regional presence which is a great advantage. We offer full service property consultancy nationwide.

K.T.: Who are your clients?
T.P.: Major investment groups and also Ukrainian groups and developers from countries such as USA, Canada, New Zealand, UK, Denmark, Germany, Austria, Israel.  Also major retailers such as Metro, Obi, Real plus banks such as Piraeus and Alpha.

K.T.: What makes your clients trust you?
T.P.: There is no one else in this country in this industry who has been here as long as we have. We’ve been through the good times and the bad times as far as Ukraine is concerned. Because we have a breadth of professional skills in the company and the fact that I am a developer investor in my own right, means we have a deep knowledge of the Ukrainian property market.
 
K.T.: What was the greatest achievement of your company?
T.P.: Our greatest achievement hasn’t happened yet. But this is probably going to be our best year to date.

K.T.: How can you describe the current situation in the property market m Ukraine?
T.P.: The property market in Ukraine is booming and our services are offered to western investors and developers and they are pouring into the country "big lime". Different investment groups from different countries in different spheres of the property market such as a 3000 unit suburban residential development, a golf course and residential project in Donetsk. And In August we were the advising agent for Uniqa Real Estate on the acquisition of a shopping mall in Nikolayev. And for a British group we are advising on the acquisition of a 160 000 sq m shopping mall in Kyiv. We are also looking for sites round Ukraine for the development of shopping centres for a New Zealand group. At the same time we are working for Metro to find sites for their expansion program. So the Ukrainian market is booming as more and more investment groups want to come in to Ukraine. On average at the momentthere are probably two or three investors each week coming to see me about investment opportunities in the country.

K.T.: Why now?
T.P.: Because basically western investors have taken a long time to get here. There is no fundamental difference in the economy of the country than there was tour years ago. It seems that suddenly at the end of last year everyone started to notice Ukraine as a big country with population of 48 mil-lion people with relatively little foreign investment compared with countries such as Poland. Now the rush to Ukraine has started.

K.T.: Are Ukrainian developers becoming more active in the realization of properly projects?
T.P.: There are a large number of Ukrainian investment groups getting involved in the construction development industry. However only a few have any in depth knowledge of the industry. Their concepts and projects unfortunately very often have a few "fundamental gaps" in their viability. It takes more than a good site and a pretty picture for foreign investors to get excited about a potential    project. Is the project concept right for that location? Is the project mix right’.’ Is the space utilization viable? Is the project viable? It needs a business plan. And if they want an investment partner what is the offer? What will the partner get for his money?

K.T.: What would be your advice to such developers?
T.P.: Engage good and/or famous consultant(s). Nave a professional audit report on the project. Is the concept right and viable for that site? Is it best use’.’ An international architect report on the building. Is it space efficient? Are the planed rental rates realistic/justifiable. A valuation report on the project. A business plan showing what the investor partner can expect to get out of the project. And "use" a name that investors will believe and trust. And some PII cover if they mess it up.

K.T.: Is it in any way difficult to deal with the legal system concerning properyty in Ukraine?
T.P.: According to the European Business Association among the obstacles of development the legal system in Ukraine is one of the biggest problems. That is something that desperately needs to be changed because nearly everybody says it is far too corrupt. As regards the tax legislation, sometimes it is a little vague and loo open for interpretation. It is difficult to fully comply with the tax laws of the country and some of them are even contradictory. But as regards of the law the situation in the property business is considerably better for title registrations, proper notarization of documents etc. But the biggest problem I think for this country at the moment is that ridiculous moratorium on the sale of agricultural land. There is land outside of Kyiv that has very little agricultural worth. The agricultural moratorium means that lots of pieces of land all around Kyiv which isn’t actually growing anything except weeds can’t be bought and developed. It is ridiculous for the land near the capital city. Kyiv needs to grow unless we release this land for development. Kyiv is restricted in growth. When the city grows and the market grows, we need more and more sites for retailing, more sites for people to build houses. We need more land to be able to develop logistic facilities. Ukraine is trying to develop the transit traffic across the country which is growing by 40-50 per cent a year. It is a good economic business for Ukraine, but that business needs logistics; it needs places where bulk goods brought into the country are re-palletize and distributed across the country.
Among the other biggest problems of Kyiv at the moment is that one of the most beautiful, attractive and valuable sites of Kyiv, along the banks of the Dnieper river from the Paton bridge to the Moscow Bridge, there is a beautiful area which is prime residential area, near to the city and main roads is full of old factories that should be taken out of the city centre. Together with the moratorium on agricultural land this is a restriction to the development of the capital. One may do the calculation if those sites were emptied and sold to people for high class residential projects the city could raise enough money It» double everybody’s pensions for the next ten years.

K.T.: What are your predictions for the further development of the property market in Ukraine in the next 5-10 years?
T.P.:  Very confidently I would say the country will continue to develop and improve for at least another 5 years. Look at the retail situation in Poland 10 years ago how many shopping centres and retail centres there were and look at how many there are today. And then you do the same thing for Ukraine. The Ukrainian map today looks very similar to how Poland looked ten years ago. For instance, ten years ago in Poland Metro and another couple of retailers had about ten sites around Poland. Look at the map today and you see many international names with sites all over the country. And in Ukraine today you would probably see three or four Billas and about 20 Metros and that’s it. How Poland was 10 years ago is how Ukraine is today, so it is not difficult to imagine what we’ll have in Ukraine in 10 years time.

K.T.: Is economical situation favourable for this development?
T.P.: Ukraine has probably got one of the most exciting economies in the world at the moment. I think Ukraine is very fortunate because it is a major producer of iron and steel products. The prices for iron and steel for the last 9-10 months increased in 90-100 per cent. Another thing is that Ukraine is a major producer of agricultural commodities. During the last year commodity prices increased by 50-80 per cent. And Ukraine is a major supplier of timber products because it has huge limber forests. The world demand for all these product] continues to increase. And according to some forecasts Ukraine could be energy independent in 5 to 10 years. These are four fundamentals why this country has an exciting future. So where there is a strong economy based on sound fundamentals then business will develop with it.

K.T.: How do you see your company in 5-11 years?
T.P.: Well, it has more than doubled in size in 12 months and grew from 24 people to 4S. We’ll probably be 60 by the end of the year. The business is expanding astronomically. Also my daughter is coming to work for us and then maybe my son. So I believe the next generation will follow.

K.T.: What is your next dream to fulfill?
My next personal ambition has nothing to do with the property business. I want to open my own restaurant in Kyiv. My greatest hobby is food. I love cooking. It will be called Terry’s English Restaurant and will have a completely different concept and style to anything we see in the city now. I shall do it more as a hobby than a business. And I will be responsible for all the menus.

K.T.: What makes your success?
T.P.: I believe primarily the integrity of our business. We try to do things honestly, openly and professionally. And we work hard. There is a fine English phrase: "The harder I work the luckier I get". And there is a lot of truth to that.

Text: Tanya Bogachenko
Source: The Kyiv Times