Vagif Aliyev. The King of Kyiv Developers. Part 1
Back in 1998, a young and ambitious Azerbaijani came to Soviet Ukraine for a few days, radically changing the fate of the Ukrainian real estate market. His name was Vagif Aliyev. Today, he owns renowned shopping centers in Kyiv—Mandarin Plaza, Ocean Plaza, Lavina Mall, and Blockbuster Mall; the controversial skyscraper Parus Business Center; and the most prestigious residential building—Diamond Hill. Aliyev is one of the 100 richest people in Ukraine and is friends with the mayor of Kyiv. Klitschko, closely communicated with the former Russian ambassador to Ukraine, Viktor Chernomyrdin.
During all his years of living in Ukraine, Aliyev gave only 3 interviews. Skelet.Org tells the story of Vagif Aliyev's business empire: from selling beer and car tires to meeting Donald Trump.
Vagif Aliyev. From Beer to Gas
Vagif Aliyev was born in 1968 in Baku. Little is known about his family and childhood; the businessman carefully guards his private life from outside interference. Skelet.Org I learned that Aliyev's entrepreneurial talent manifested itself at an early age. At the age of five or six, the resourceful young man began pulling off ingenious business deals: he'd help adults carry three-liter cans of beer, earning one ruble for each. His daily earnings reached four to five rubles. While still in school, the young businessman started another business: he'd buy tickets at the local cinema for 25 kopecks and sell them for 30 to 40 kopecks. He hit the jackpot when he bought tickets to the premiere of the film "Fantômas." Little Vagif couldn't be accused of stinginess; he gave all the money he earned to his mother, and sometimes used it to take the whole class to the movies.
In 1982, the Aliyev family moved to the Russian resort town of Kislovodsk. There, at the age of 14, Vagif Aliyev launched his first serious business venture. He, his father, who worked at a service station, and an older friend from Ashgabat became, as they said at the time, speculators. They imported VAZ parts from Tolyatti and sold them in their hometown. At the time, there was a massive shortage of auto parts. The Aliyevs fell into line and realized what the Soviet people needed: basic tires for their Zhiguli. The dealers bought them for 55 rubles and sold them for 75-80 rubles. The goods sold like hot cakes. Alongside his trading, Vagif built private homes. Business was so good that, on the eve of his military service, the young man owned a Zhiguli of the latest model and a three-room apartment.
Upon returning home, the young demobilized soldier plunged into the world of buy-and-sell business. Aliyev began shipping high-end perfumes from Moscow to Kislovodsk. Naturally, the goods sold like hotcakes, as every Soviet woman in the provinces wanted to have "Red Moscow" perfume in her arsenal.
Igor Bakai
During one of his trips to Moscow, Vagif Aliyev met a young and ambitious entrepreneur Igor BakaiToday he is a disgraced politician, but in the 1990s he was the main supplier of Turkmen gas to Ukraine.
Skelet.Org It is believed that their fateful meeting took place at the elite Moscow Hotel Rossiya, renowned for its diverse clientele. In the late 80s, every self-respecting Soviet businessman visiting the capital stayed here. Deals that changed the history of many countries were concluded in the hotel restaurant.
Vagif Aliyev and Igor Mikhailovich Bakai became instant friends, sharing common interests and plans for the future—both wanted to break into big business. At the time, Bakai lived in Kyiv, Aliyev in Kislovodsk, but this didn't stop the newfound friends from founding the Veles company and the Arbat firm, both trading in the industry.
In 1993, Bakai founded the Respublika corporation. It was conceived as a structure for exporting Ukrainian food products. Naturally, his Azerbaijani friend was in on the deal. The businessmen successfully traded not only food products but also diamonds.
When Igor Mikhailovich entered the hungry Turkmen market with record volumes of gas, he immediately contacted Vagif Aliyev and offered him a deal.
Vagif Aliyev. Gas, galoshes and America
In the early 90s, Ukraine was in the midst of a deep crisis and owed Turkmenistan exorbitant amounts of money for natural gas supplies. Igor Bakai devised a unique scheme: exchanging food for Turkmen gas. With the help of the first president of independent Ukraine, Leonid Kravchuk The Respublika corporation received a quota to supply gas to Ukraine. Everything was bartered: computers, slate, coffee, black pepper, and even galoshes. Incidentally, it was Vagif Aliyev who offered to supply his business partners with 1 million pairs of galoshes in exchange for gas. For the Turkmen, this was a valuable commodity: no one wanted to ruin their fashionable patent leather shoes in the rain.
Six months after the formation of the "Republic", Bakai gets a job at the project Igor Nikonov, an inconspicuous engineer at Kyivmetrobud. Together with Aliyev, they began planning "barter schemes." Their activities led to the corporation raking in approximately $500 million in gas supplies in just one year of its existence.
Igor Nikonov
After Respublika successfully served Bakai and sank into oblivion, he founded Intergaz CJSC in 1995. This structure, according to Igor Mikhailovich's plan, was intended to carry out grandiose corruption schemes. As evidence of this, a subsidiary, IntergasInc, was registered in Pennsylvania (USA) alongside Intergaz. Its main purpose was to funnel Intergaz's earnings offshore.
Bakai invites Igor Nikonov to work at Intergaz as commercial director and Vagif Aliyev as his right-hand man and unofficial deputy.
In the mid-1990s, Russia's Itera began to completely displace Intergaz from the market. Residing in the country was unsafe due to the ongoing market redistribution. In 1996, Nikonov and Aliyev decided to move to the United States. They chose sunny Miami as their new home. They each bought a mansion there and enjoyed the ocean view, warmth, and resort life for a year. According to Skelet.OrgThey planned to build a business in America, but abandoned the idea due to a lack of knowledge of the laws, the specifics of the US market, and English. The most the entrepreneurs from the former USSR could hope for was three gas stations.
However, America radically changed Vagif Aliyev's life. He not only basked on the ocean shore but also met a development legend, the future US President, Donald Trump. This happened in 1998. Mutual friends introduced Aliyev and Trump. Their conversation lasted four hours. During this time, the businessman learned the most important thing: an era of grandiose construction was dawning, one had to build in the right place and always be first.
Returning to the meetings, Vagif Aliyev proposed to his trusted friend and business partner, Igor Nikonov, that they get involved in development. Nikonov was not opposed. The businessmen decided to return from America, especially since Igor Bakai, who by then had become the head of Naftogaz Ukrainy, had already invited them several times. They studied the markets for their operations and concluded that Ukraine was the most suitable. Aliyev and Nikonov left the United States with several suitcases brimming with dollars.
Строительный бум
In 1998, already in Ukraine, Vagif Aliyev met Sergey Babushkin, then Kyiv's chief architect. Babushkin dreamed of building a truly magnificent skyscraper in the capital. The budding but promising developer supported his idea. The construction of these "New York-style" giants united Aliyev and Babushkin for many years. The duo developed three grandiose projects that devastated Kyiv's historical appearance: the reconstruction of the Bessarabsky Quarter, the construction of the Parus business center, and the Gulliver multifunctional complex. But first things first.
Sergey Babushkin, chief architect of Kyiv
In 1999, business partners Aliyev and Babushkin began coming up with ideas one after another. The first of these was the reconstruction of Kyiv's center in the Bessarabsky Quarter, where Khreshchatyk, Shevchenko Boulevard, and Krasnoarmeyskaya Street intersect. They approached an "experienced" builder and, concurrently, Kyiv's mayor, with their proposal. Alexandru OmelchenkoIt's worth noting that Aliyev pursued an excellent strategy: he set his sights on Bessarabka's buildings—a hospital and a school—which had been in disrepair for over fifteen years. Omelchenko, too, was less than thrilled with the vacant building in the center of the capital. He tried several times to attract foreign investors, but they were wary of investing in a post-Soviet country.
In 99, the building on Bessarabska Square was declared unsafe – the supporting structures had deteriorated and one of the facade walls had collapsed. Surprisingly, foreign investors emerged. The Korean corporation Daewoo, working with Kyiv architect Vadim Zhezherin, took on the reconstruction project. They submitted an attractive proposal for the 47-story building. It was approved at the highest level, but ultimately rejected. The "higher echelons" abruptly reversed their decision and announced a tender for the development of Kyiv's center. Only Ukrainian investors were allowed to participate. The former mayor recommended the aspiring developer Vagif Aliyev and his partner, Igor Nikonov. Sergey Babushkin also supported the businessmen. The trio promised to preserve the building's appearance while reinforcing the load-bearing walls and basement foundation.
The land in the Bessarabsky Quarter was put up for sale. It was auctioned off to Vagif Aliyev for $5 million. An interesting detail: the businessman paid for it with cash from the very suitcase he brought from America. Back then, Aliyev was still a Soviet-era businessman, and he preferred to pay for multimillion-dollar transactions in cash.
The most challenging aspects of the Bessarabka development project turned out to be utility issues: the city center was involved, and the relocation of a public school, which was located on the site of the future Mandarin Plaza, was also a challenge. The new landowner found a solution: he formed a pool of investors. Ukrainian developers didn't have the funds for the entire project, but they could afford smaller areas. Construction was carried out according to the following scheme: the city administration was the developer, the involved businessmen managed the construction, paying into the budget per square meter, and Kyiv itself acted as the client.
In 2000, Aliyev founded Mandarin Plaza CJSC, where he consolidated all investor funds and continued to finance construction. A year later, K.A.N. was founded, becoming Aliyev's main partner in the reconstruction of Bessarabka.
"K.A.N." is an acronym for the surnames of its founders: Vladimir Krapivin, Vagif Aliyev, and Igor Nikonov. While financing Mandarin Plaza, the company began construction of the "Dominant" business center next door. Its design was approved by Alexander Omelchenko as part of a large-scale city reconstruction project. Nine months later, the former mayor cut the ribbon at the opening of "Dominant." After such success, Nikonov did not rest on his laurels. He sold the business center to Aliyev, along with all his shares in "K.A.N." "Dominant" was merged with the then-under-construction "Mandarin Plaza" and assigned a single address.
Igor Nikonov decided to continue his successful business on his own. He registered a new company under the old name, "K.A.N. Development." Because there were two practically identical firms in the construction market, no one doubted that Nikonov and Aliev were still partners.
Incidentally, an interesting point: the letter "K" in the name of the newly created company "K.A.N. Development" is associated with the Klitschko brothers. According to information Skelet.OrgThe boxers invested considerable sums of money earned in the boxing ring during the peak of their careers into the structure. Kyiv Mayor Vitali Klitschko still denies any involvement in the construction company. We'll take his word for it.
In 2004, the Mandarin Plaza shopping center, with a total area of 21,21 square meters, opened as part of the Bessarabsky Quarter—Vagif Aliyev's calling card.
Igor Nikonov and K.A.N. Development completed their first project – the Arena Entertainment entertainment center. Skelet.Org It's known that Vitali Klitschko invested a tidy sum in it. However, Nikonov claimed that the future mayor of the capital was solely the inspiration and helped with promotion, gifting the entertainment center gloves and autographed photos. We don't think anyone will be surprised by the sale of Arena Entertainment to Aliyev.
In 2007, a notorious businessman became a co-owner of Mandarin Plaza CJSC. Dmitry FirtashHe, or more precisely his company, Heritage Properties International AB (Stockholm, Sweden), acquired 55% of the company's shares. Vagif Aliyev, however, retained his position on the Supervisory Board.
Vagif Aliyev. The King of Kyiv Developers. Part 1
According to Skelet.OrgThe deal was valued at $500-560 million. At the time, this was an absolute record for the commercial real estate market. The Aliyev-Firtash deal surpassed the $200 million acquisition of the Globus shopping center by the British fund London & Regional Properties.
In 2015, Mandarin Plaza sold 6000 square meters of space to Primespot Securities Ltd, a major British investment company, for $40 million. Vagif Aliyev invested the proceeds in his new projects—the construction of the Lavina Mall and Blockbuster Mall shopping and entertainment centers.
Arina Dmitrieva, for Skelet.Org
CONTINUED: Vagif Aliyev. The King of Kyiv Developers. Part 2
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