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AN
ADVERSITING SUPPLEMENT TO THE WASHINGTON POST MAGAZINE |
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academy
there, and rose quickly through the ranks of the
Black Sea Shipping Company to be a chief engineer
at the remarkably young age of 29. Frustrated by
the dim prospects for promotion and stupidity of
the Soviet-type management, he left the merchant
navy in 1988 to form a rock band! He has written
many songs himself, and still has 12 keyboard instruments
in his Kyiv home, along with a large CD collection.
He plans to produce two CDs of his own music soon.
However, he didn't sing himself into good fortune.
In 1990, he turned his efforts to filling the need
for building materials he saw in the market. It
was the age of Perestroika, and business was stirring
- especially construction. He struck deals with
timber companies in Komi and Siberia, and began
producing furniture, windows and doors. Later he
established a number of construction companies and
joint ventures to import tiles and other building
supplies.
But despite strong growth in this field, he left
it after 5 years for greener pastures: development.
The margins are much greater, and he said he does
not undertake projects that promise less than 250-300
percent return. "No less. Never."
He said he has consciously gone through the effort
of being recognized by international players in
the development business, spending millions of dollars
on well-known Western consulting companies, lawyers
and banks, including the European Bank for Reconstruction
and Development (EBRD) and Austria's Raiffeisen
Bank, who helped finance the Radisson project.
"What was really vital for the Radisson Kyiv
project - the local developer ("Double W")
was totally committed to the project all the way
through… He knows what to do and when; he really
knows the ropes," wrote the EBRD in its 1999
Ukraine Country Profile.
This hard-earned credibility stands him in good
stead now. His company was the first real estate
developer approved by the
International Finance Corporation unit of the World
Bank, and international companies are eager to partner
with him on a range of projects.
Typically, after the construction and beginning
of the operations, he sells his share in a project
and uses that income to invest in new projects.
"I am very aggressive," he said with a
smile. He said his partners have also likened his
business approach to a submarine: "Like a U-Boat,
he comes to the surface, finds the best projects,
and then drops out of sight to do the development.
Finally, when the project is completed, he puts
it on the market." |
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Today he is one of Ukraine's top developers,
with over one million square meters (10.7m square
feet) worth of projects in his
pipeline, at a projected cost of some $1.5 billion.
Some of these he does alone, some with partners.
After his success with the Radisson, which is
a brand owned by Belgium-based Rezidor (42 percent
owned by America's Carlton Group), he has been
approached by several large chains to help them
get into the Ukraine market. He has not agreed,
preferring to stick with Rezidor. "We are
similarly aggressive," he said, by way of
explanation.
Among the properties he will develop for Rezidor
in Ukraine are two Radissons in Yalta and two
in Odessa. A Regent (Rezidor's luxury brand) will
be built in Kyiv, and two moderately priced Park
Inns, in Zaporizhzhya and Sevastopol. The Regent
Kyiv and another top-line property in his pipeline,
the Misoni "Faberge", will be "among
the best hotels in Europe," he promised.
In addition, he is working on several major developments,
including a resort with three hotels in the Crimea,
and several large projects around Kyiv. In 2005
alone, he put 95,000 square meters of finished
space on the market.
Real estate in central Kyiv can be several times
more expensive than other major European cities.
This and the dearth of quality hotel rooms are
driving the market. The second hotel chain to
open a property in Kyiv was a 234-room, five-star
Hyatt, earlier this year.
A standard room at the Radisson goes for 390 Euros
a night, or about $563. At the Hyatt, a standard
room goes for 410 Euros, or $592. Compare that
to 300 Euros ($433) for a room at the Radisson
SAS Hotel Charles de Gaulle, outside Paris, 125
Euros ($180) for a Radisson in Brussels, and $119
for one at Reagan National.
Radisson General Manager Conrad Meier said his
hotel is normally fully-booked on weekdays, and
that 97 percent of his guests are there for business.
Unlike many city-center hotels elsewhere, he does
not lower his prices at weekends, because there
is barely a tourist market to take advantage of
weekend specials.
You can see why the hotel chains have beem so eager
to get into Ukraine, and why Gorashchenko's services
have been so sought after.
He says that the West has misread Ukraine. It has
failed to |
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recognize its differences from Russia.
"You have not recognized what is happening
in Ukraine," he said. He pointed out
by way of demonstration that in Ukraine
it has been local business people that have
done all the development, using primarily
local banks. This differs from Russia and
most CIS and East or Central European countries,
where foreign hotel chains arrived with
the support of their own foreign banks,
and struck deals with locals to build properties.
The same pattern has applied to most major
development projects in those countries,
with local developers only gaining strength
and leadership after some time.
Today, he said, Ukrainian banks have sufficient
funds to support developers, and Ukrainian
developers are seeking worldclass services,
in architectural design and the like, to
make successful projects. "They are
working for us," he stressed. "And
not the other way around."
< The 'Leonardo' respects an original
facade while adding a modern tower.
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