Rusmin Lawin is Vice-President of Real Estate Indonesia (REI), Vice-President of FIABCI International Real Estate Federation for Asia Pacific Region, Member of Board of Directors of World FIABCI and President of Indonesia Hong Kong Business Association (IDHKBA) for Northern Sumatra Region. Citing his experience in the real estate industry, Mr Lawin tells LDaily what he thinks about the peculiarities of investment in the relevant sector in Ukraine and market stability required for that. He is also convinced that Ukraine has a great growth potential thanks to its educated and positively thinking population.
LDaily: What are the main criteria for you to make a decision whether to choose a market for investing or not?
R. Lawin: Of course, the main criterion is political stability, then economic growth, a sizeable population, a law system and the yield or return.
LDaily: What are the main elements necessary for sustainable property market development?
R. Lawin: The core elements important for sustainable property market development are:
– property right laws and enforcement;
– access to credit;
– efficiency of governance;
– rational dispute resolution;
– financial transparency;
– appropriate regulations.
LDaily: What level of return and investment payback period do you pay attention to when you advise your clients on a particular project?
R. Lawin: In global practice, investors are looking for 10-120 IRR, but I always advise them to invest for a bit longer period, so it takes time to learn the process and understand the right timing for entering and exiting.
LDaily: Which markets have your clients invested in during the last 3 years? Why did you pay attention to Ukraine?
R. Lawin: Residential, commercial and logistic are the most favorable subsectors for the last 3 years:
– Residential subsector is always attractive, especially in the countries that have significant numbers of young and dynamic population. Ukraine has this important criterion.
– Commercial one is related to the countries with a large population and to the people’s lifestyle. It means there is a high demand on commercial space like shopping malls, shopping arcades, hotels and restaurants. Every 200,000 people need a small shopping mall in one particular area.
LDaily: Which economy sectors are the most promising and trendy for investment in your country?
R. Lawin: In my country the most promising sectors are agriculture, maritime, mining and also housing industries. As the biggest archipelagos in the world with 17,400 islands and the population of 280 million people, we have a lot of special economic zones to attract foreign investment both in the industrial and tourism sectors.
LDaily: Why do you think it might be interesting for your clients to invest in a similar project in Ukraine?
R. Lawin: I have been to Ukraine. I saw a lot of young and dynamic people with a positive and progressive way of thinking, and we know that good people are the golden capital of every country.
I noticed a lot of international visitors in the city. The development is in order. All you need is a good and progressive government to attract more trading and investment activities.
Nowadays Ukraine is paving its way to be the center of economy in Europe, especially in Eastern Europe.
My intuition is telling me that Ukraine has a bright future. You have a lot of young talents at all kinds of technology development; they are the most important driver of this country.
The government should provide a good program to support its talents. I am dreaming that one day Ukraine will be the Silicon Valley of Europe. That’s the direction Ukraine should go in… However, it’s a big challenge. Ukraine needs more tax-free zones that can attract foreign direct investments, create jobs and generate the local economy.
LDaily: What risks do you see for your clients about entering the Ukrainian market? How long should they stay in the market?
R. Lawin: Every investment in every country has its risks, but we can measure and manage them, that’s why the investors need the professionals to do the job.
The most important issue for a client is a strong and stable government. You have a young, dynamic and forward-thinking government nowadays. It’s a good sign!
I would suggest my clients a 3 to 5 years cycle of investment at the beginning stage.
LDaily: What would you advise your clients after their first investment round has been successful: to continue investing in Ukrainian projects or to look for another market? Why?
R. Lawin: To invest in one country, we need a 5 to 10 years basis. It’s a deal scale to learn and win the market competition, and there is no instant process to achieve a success story.
Ukrainian market is one of the new emerging markets in Europe. Your country just opens up its door for foreign investments, the government keeps upgrading the law to become invest-friendly. This is a good sign and the right time to invest.
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