How to build the future — the transformation story of entrepreneur Vasyl Khmelnytsky
He has no watch on hand and is wearing a white shirt and blue jeans. In the morning, he has a course on the creative economy and in-depth reading in the evening. Vasyl Khmelnytsky, the founder of the UFuture holding company and the first innovation park in Ukraine UNIT.City, spends more than half a million dollars on training each year. He believes that the amount of capital is essential, but the ability to respond flexibly to change and create liquid projects is also necessary.
Forbes Ukraine published an article in the November issue of the magazine about the transformation of Vasyl Khmelnytsky. The well-known entrepreneur has gone from the owner of traditional for Ukraine raw materials businesses to the pioneer in creating innovative ecosystems.
KIG is the foundation
- Working in the fuel market of Ukraine brought Vasyl Khmelnytsky the first big money. For 10 years, in the early 2000s, together with the first partners, he created one of the largest at that time Kyiv Investment Group (KIG).
When the market is just being formed and specialization is not so important, KIG, as a portfolio investor, buys shares of various companies to sell assets at a higher price.
- In 2008, the 150 projects owned by the group were valued at $ 700 million. The most successful case of KIG’s portfolio strategy was the purchase and sale of the Zaporizhstal metallurgical plant: Khmelnytsky bought 30% of the plant for $70 million in 10 years and sold it for a record $405 million.
- After closing this considerable agreement, the entrepreneur realized that it is more promising to choose one specific direction from many group projects. He decided to stop at development.
UDP — turn and continuation
- UDP, a subordinate of KIG, managed a 5,000-hectare land bank and large commercial and residential projects. Among the flagships, in particular, the capital’s residential district “Novopechersky Lypky”.
- The crisis of 2008 forced the entrepreneur to take full responsibility. To save the company from failure, Vasyl Khmelnytsky sells his own plane, yacht, expensive car and agrees on a new credit line to continue construction.
- UDP had unsold and unfinished elite complexes. The decision not to stop the construction of facilities, not to reduce the price and class of real estate, was risky, but in the end, it paid off. The “Novopechersky Lypky” facility, which is significant for the company, demonstrated incredible competitiveness even in difficult times: at that time no one built complexes with a developed closed infrastructure. The secret of success determined Khmelnytsky’s future views on development.
UNIT.City — the next level of value
- From the construction of apartments and commercial real estate complexes, Vasyl Khmelnytsky moves to the creation of large-scale ecosystems. Now it’s not just about building and selling square meters, but mostly about managing value chains for customers. According to the entrepreneur’s plan, all participants actually become partners in the ecosystem and grow faster.
- The reason for creating an innovation park was the understanding that it is necessary to develop the country’s growth points. The idea was honed during regular trips abroad to similar places of technological and scientific power, particularly the curricula of American, European, Asian and Israeli universities.
- It is known that infrastructure significantly increases the cost of housing and commercial real estate. At the same time, Khmelnytsky’s approach is much more profound because the ecosystem’s principle is convenient and quick access to resources to create innovations.
- The success of the UNIT.City model is evidenced by the huge demand for office and residential premises. Today, there are almost no vacancies in the park, and recently due to the excitement, the sale of apartments is limited, although the cost per square meter here is much higher than average market prices.
- Today, Vasyl Khmelnytsky’s capital, earned in energy, metallurgy and development through the UFuture investment holding, is virtually nationwide, developing assets in real estate, infrastructure, industry, renewable energy, pharmaceuticals and IT. UFuture’s assets are valued at $500 million, and the total capitalization of the businesses in which it has invested is up to $1 billion.