Russia's full-scale invasion of Ukraine has nullified all previous plans and put developers in a situation where decisions have to be made here and now, with unparalleled flexibility and taking into account various scenarios with constant variables.
However, it was this experience that allowed the company to withstand, preserve its reputation and, ultimately, create approaches to work and development that are not described in any strategic planning textbooks.
Sustainable development with Ukrainian character
The peculiarity of real estate development is that projects have a long preparation cycle before entering the market. The process of preliminary research, project preparation, urban planning documentation, and approval by all authorities takes three to five years. Accordingly, our planning horizon should be within this timeframe. But in the current environment, this is only possible if we immediately foresee static points and possible branches.
For example, if we have strategically planned the launch of a new project for 2026, but do not yet have any commitments to investors, such a plan falls into the category of branching and can be adjusted in certain scenarios. If a project is launched and already has sales, it is a static point for which resources have been accumulated.
In a turbulent market, the final decision on the variables is made the day before.
At the beginning of the full-scale invasion, a significant reduction in administrative costs was a safeguard against a negative scenario. At the time, we didn't know whether we would have any more sales, but we understood that projects needed to be completed. Therefore, we could not afford to waste money. We had to make decisions on the edge. And this is primarily about flexibility in processes and openness to manual control during a crisis.
Under certain conditions, sales may decline or even stop. And we are ready to tactically handle such scenarios without losing our reputation and sustainability in the long run.
Lack of statistics and internal tools
One of the major problems in planning is that the development market is one of the most underserved in terms of real statistics. There is no data on how much housing is currently being built, how much is being sold and how much is planned to be launched. There are a lot of grey areas that make it impossible to draw up an objective picture for forecasting.
The only available figures are the number of housing units being commissioned. Therefore, we rely on our own statistics and expertise. Based on this, we understand how to balance the supply portfolio so as not to have an overload in any class and maintain the proportion in line with market needs.
We, like all players in the development market, are also dependent on related industries, the situation on the construction materials market, imports, logistics, and the availability of contractors' staff. It is impossible to take all these factors into account comprehensively, so the scenarios are generalised based on current opportunities.
In the current environment, we do long-term planning with regular updates. The scenario that in 5 years everything will be the same as it is now is unrealistic, but it is a basic scenario from which we must proceed. And from there, more optimistic and pessimistic branches are formed.
If we look at the positive scenario, we anticipate that within five years a new round of development will take place in Lviv, many industries that are currently on hold, such as tourism, will return, and the development of industry with foreign capital will begin.
Accordingly, the demand for premium and business housing will grow. And we must be ready for this moment.
Marketing analysis and realistic expectations
At the level of the commercial department, we use tools to analyze our customers' requests and sentiments, to identify stable behavioral patterns that have been formed during the war. These patterns, selection criteria and decision-making are now more stable within six months.
No matter how bitter it may sound, we are all used to living in wartime and planning our lives and activities in these conditions. If in 2022 they changed chaotically even within a month, in 2023 massive shelling could cause a stupor for several weeks, now the jet lulls last for several days. And then everyone returns to solving their issues.
The factors that shape customer demands and sentiment and influence developers' plans are obvious:
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Situation inside the country, military risks,
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Geopolitical situation,
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General market trends,
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Norms and trends set by developers themselves.
The current risk factors for the market (apart from military ones) may be a significant increase in supply, which, against the backdrop of a difficult economic and demographic situation, may create a certain ‘bubble’.
And here it is very important for developers to take off their rose-coloured glasses and assess trends realistically, because they are the ones who are at risk in this situation.
As for the vision of the organisation as such, it is closely related to how the city will develop, in particular in terms of residential, commercial and public buildings. We, as a developer, are ready to synchronise with the processes taking place in the city.
I strongly believe that there will be positive developments and we will be able to invest part of our portfolio in commercial and hotel properties.
Our strategic goal is not quantitative but qualitative. To enter new segments and make the city better in terms of the development of landmark projects, create ecosystems, change the selection criteria and the value proposition that will resonate with people and create a new quality of life in all segments.