ECONOMY

Michaniki’s bold move into Ukraine pays off handsomely

Many eyebrows were raised in 1995 when the Michaniki construction group announced that it was establishing a subsidiary in the Ukraine. Nine years later, the group’s multiple activities in the Black Sea country prove that it was a successful business choice in a developing and promising market. At the same time, it proves that there exist opportunities for Greek construction groups in the Balkans and in Eastern Europe at a time when expanding beyond the Greek market is considered to be imperative for company growth. «The truth is that we faced difficulties in Ukraine, but we persisted as we firmly believed that the local market was promising. At the end of the day, we were able to gain the trust of local authorities as far as our plans and goals were concerned,» says Melina Emfietzoglou, chief executive officer of the Michaniki Group. «To date, our plans have focused on two projects, now completed, in Odessa, a city with a strong Greek presence. The first project was the construction of a 9,954-square-meter office, shopping and housing complex, with 77 condominiums and 16 shops. The second, also located in the city’s central square called «Greeks’ Square,» is the «Athena» shopping center which was inaugurated in early September. «Athena» is a six-floor commercial center, spreading over a total of 30,000 sq.m., with 65 percent of spaces already sold. As expected, several Russian and Ukrainian commercial firms dominate the city center, while among the Western companies that have bought space, one can find McDonald’s, with a 150 sq.m. restaurant, the Paul & Shark clothing chain and the local offices of telecommunications firm Siemens. «With the two Odessa projects, Michaniki has established its presence in the city and we are now focusing our interest upon the Ukrainian capital, Kiev, where there is great demand for high-quality housing. Sale prices in prestigious housing areas range between 3,500 and 5,000 dollars per sq.m. as the upcoming middle class in the country seems to have ample cash available,» says Emfietzoglou, adding that return on housing projects construction is extremely high. Michaniki has already invested in three plots in Kiev and is going ahead with development plans for three construction projects of a total covered space of 73,000 sq.m. They include a 37,000 sq.m. complex in the Darnitsa area that will feature housing, shopping centers and a multiplex cinema, while the Sirets area plot will include high-quality housing and shops. Michaniki’s plans also include a smaller housing project, totaling 5,340 sq.m., to be developed at the third plot. Yet Michaniki has more big plans for Odessa, where it bought a 25-hectare plot by the sea from the municipality. The plan to develop the area is expected to have been concluded by spring. It involves the construction of luxury housing and shops, a gym and other installations. The buildings will cover a total area of 100,000 sq.m. Currently, Michaniki is also looking into two other luxury housing projects in Moscow, with areas of 3,500 and 50,000 sq.m. respectively. In Sofia, in neighboring Bulgaria, the group has bought a number of plots, also being included in its developing plans. Michaniki’s presence abroad resembles that of a «developer» rather than that of a straightforward construction company. Yet in the Greek market such activities represent a relatively small part of its overall turnover. Among its largest initiatives in Greece is the «Dryades» housing project in the Athens suburb of Ekali, consisting of 55 luxury single-family homes. The development is taking place on a plot owned by the Young Women’s Christian Association of Greece (YWCA), which will retain ownership of 25 houses, with the rest being offered for sale. The first homes will be ready in 2005 and the project will be completed by the end of 2006. Emfietzoglou noted that Michaniki is very careful in choosing such development projects in the Greek market, where land is overvalued. As she explained, «In Greece we are very careful, always keeping in mind the need for a competitive final product.»