Competition Works Wonders. Even When It Comes to Ordinary Garages

Sometimes people say that state-owned assets are uninteresting and lack investment appeal. However, the results of the State Property Fund’s auctions once again prove the opposite.

At recent privatization auctions, two seemingly ordinary garage properties demonstrated that competition is the key factor in determining a fair market price.

Lot 1 – Garage (78.6 sq. m) in Chernihiv Region
Starting price: UAH 2,309
6 bidders competed for the asset
Final bid reached UAH 253,100

Lot 2 – Property consisting of four garages with a total area of 138.6 sq. m in Chernivtsi Region
Starting price: UAH 12,000
15 bidders took part in a highly competitive auction
Final sale price reached UAH 1.5 million

These results provide the best possible answer to anyone who tries to assess state-owned property solely by its starting price. The true value of an asset is determined by the market. It is determined by competition. It is determined by participants who are willing to invest their own funds and compete for the opportunity to acquire the property.

It is also important to note that winners additionally pay 20% VAT on top of the final auction price. As a result, these two auctions alone may generate more than UAH 2.1 million in potential revenue for the state.

And this is not only about money. It is about efficiency. It is about transparent rules. It is about the fact that even an ordinary garage, at first glance, can bring hundreds of thousands—or even millions—of hryvnias to the state when fair competition is at work.

That is why the State Property Fund offers assets for privatization through transparent auctions. Because competition always discovers the true market value.