A seven‑story Greek‑style building on a square in downtown Odessa contrasts with the surrounding baroque architecture. The land on which the building sits once housed the city’s down‑and‑out. Now it is home to some of Odessa’s up‑and coming businessmen.
Built by Greece’s Michaniki investment group, the mixed‑use building offers retail space on the ground floor, with six stories of apartments above.
In 1995, Michaniki came to Ukraine and set its eyes on Odessa’s untapped market for Class A real estate. Michaniki subsequently opened an office in the city and began to consider its options.
The firm decided to build a large mixed‑use complex in the central Greek square in place of several decrepit old buildings that were being used as temporary housing at the time. Old structures were demolished to make space for the development.
Acquiring permits became easier after Michaniki ceded a 17 percent share in the property to the city administration.
The group hoped to market the property to wealthy foreigners residing in Odessa who would be willing to pay a premium for the benefit of living in a luxury building.
To ensure quality, Michaniki used its own Greek builders, bringing engineers and construction workers from Greece and Bulgaria to work on the project. Most construction material was also imported.
Michaniki completed the building in spring 1998 and began trying to sell and lease space. But the building, the first of its kind in Odessa, failed to generate the interest among the local expatriate community that Michaniki had hoped for.
The regional financial crisis of fall 1998 exacerbated the situation. Even City Hall wasn’t able to help attract buyers or tenants to the 8,692 square meters of space in the building.
“We were hit particularly hard by the 1998 crisis,” explained Michaniki Finance Director Viktor Ivanov. “Since most of our supplies and labor were imported, the appreciating dollar increased the cost of our investment against falling hryvna revenues.”
The effects of the crisis would loom over the project for the following two years, as the building remained mostly vacant. Last year, however, the situation began to change.
“In the last two years, we have added a substantial number of tenants,” Ivanov said. “We’ve been especially successful this year, with the occupancy rate jumping from 30 percent last summer to 55 percent in the last month.”
Space at the complex is expensive by Odessa standards. At $700 to $1,000 per square meter, sale prices for apartments range from $45,500 for 65‑square‑meter, two‑room units to $140,000 for a luxurious 140‑square‑meter “maisonette,” some of which are two‑story units.
Monthly rents for apartments run from $975 to $2,500.
Surprisingly, most new tenants are Ukrainian businesses and individuals.
Ivanov said the building’s best days lie ahead.
“We expect to either sell or lease 70 percent of the space in the building by year end,” he said. “It should be fully occupied by next summer.”
Based on the building’s rough start, Ivanov’s forecast may be optimistic. Predicting a property’s future occupancy rate is as much guesswork as science.
Nevertheless, the unique building remains a landmark in Odessa and a fine example of Greek development in the city.
