The Fund will return the state property lease term to five years - the Parliament has adopted a law

The Parliament has supported the initiative of the State Property Fund to extend the lease term to five years. The relevant provision provided by the draft law № 8250, which was fully adopted on May 30.

Before the full-scale invasion, the State Property Fund leased state property for up to 49 years. Most contracts were concluded for five years (in 2021, the share of five-year contracts was 88.8%).

However, at the beginning of the war, there were concerns about low competition caused by participants` hesitation, therefore lease auctions would not ensure effective lease. This could lead to losses for the state budget.

Thus, on April 1, 2022, the Parliament limited the duration term of the new agreements (during martial law + 12 months after its repeal). Since then, the SPFU has concluded 1153 of such agreements.

In recent months, Ukrainian business has gradually adapted to the challenges of martial law. Businesspersons and government bodies appealed to the SPFU with a proposal to return the previous lease terms for state property. The time limit does not encourage entrepreneurs to participate in lease auctions, so 38% of them are currently not held due to lack of demand. Most of the state property is shabby and needs to be repaired. Moreover, it is difficult to return investments in one year. This will take at least several years.

After the law comes into force, the SPFU expects an increase in revenues from leasing state property by 20-25% per UAH 100 million annually. In addition, the extension of lease terms will refine and improve its efficient use, as well provide for additional jobs.