Despite the challenges of the war, steady growth demonstrates warehouse real estate market in Ukraine. This year, the revitalization of this segment continues, particularly in the West and in the Kyiv region, which remain attractive to investors.
The price for building warehouses in Ukraine varies depending on the type of building, area and materials used. Thus, the construction of quickly assembled hangars can be 30-40% cheaper compared to capital structures. Specific calculations depend on the individual needs of the customer and the specifics of the project.
Investments in warehouse real estate in Ukraine can bring yield up to 15% per annum, which exceeds the indicators of residential real estate and European warehouses. In particular, investment projects near Kyiv offer a yield of 10-12% per annum with an entry threshold of $74,583.
Warehouses under fire and closer to the EU: how the war reshaped logistics and real estate in Ukraine
The war radically changed domestic logistics and the warehouse real estate market. If earlier the main hubs were located in Kyiv, Kharkiv, Odesa and Dnipro, today companies are relocating en masse to the West. The reasons are obvious: security, access to European markets and new logistics routes.
It was only in the Kyiv region destroyed or more than 380,000 were damaged. sq. m of warehouse space is about 1/5 of the pre-war volume. In general, losses in the country also exceed 20% of all professional teams.
In the first months of the full-scale invasion, businesses massively moved warehouses to the border regions — Lviv Oblast, Transcarpathia, and Volyn. However, such a strategy did not justify itself: long distances to the main sales markets and regular blocking of borders, in particular by Polish farmers, made logistics difficult.
Today, the main demand is concentrated in Kyiv region and western regions. Kyiv is a powerful consumer market and a management center for many companies. The west of Ukraine is attractive due to its proximity to the EU, the availability of transport infrastructure and relative security.
In the near future is expected commissioning of a record number of new warehouses — about 500,000 square meters. m. Of them, 300,000 square meters. m falls on the Lviv and Khmelnytskyi regions, and the rest – on the Kyiv region.
Due to constant shelling, occupation, destroyed infrastructure and high business risks, Kharkiv, Donetsk, Luhansk, Kherson and Zaporizhia regions are currently practically excluded from logistics plans. Even in controlled territories, the demand for renting warehouses is minimal.
A particular deficit is observed in the segment of refrigerating warehouses. Only about 5% of all warehouses have the necessary temperature regimes for storing perishable goods. This creates additional challenges for retail and pharmaceuticals.
Despite all the challenges, the warehouse real estate market in Ukraine is stable attracts investors. Investments in this segment can bring up to 15% per annum, which exceeds the indicators of residential real estate and European warehouses.
How the state helped warehouses and why communities are now in the first roles
At the beginning of the war, when businesses were faced with the dilemma of fleeing the shelling or folding, the government launched a relocation program. That is, he offered companies safe locations, organized transportation, sometimes even helped with premises and communications.
According to the Ministry of Economy, the program was successful in two years of operation to move almost 700 enterprises, of which more than 470 are already working in new locations. Some of them are factories, some are logistics companies, which later started building or renting warehouses in new regions. The Lviv region became especially active, where a whole cluster of production and warehouse sites was formed.
Domestic government officials understand that the investor must not only be attracted, but also convinced. Therefore, in 2021, the state launched a law on “investments”, and in 2023-2025, it expanded incentives: in particular, you can not pay income tax for up to 5 years, import equipment without VAT and customs duties, and sometimes you can get land for an industrial park for a nominal fee.
All this concerns and investors in warehouse infrastructure. Especially when it comes to logistics hubs, multi-temperature warehouses or clusters for export.
It is interesting that it is not uncommon for local communities today decide the fate of new logistics projects. They look for plots, change zoning, help with the connection of electricity or water. Thus, in Vinnytsia there is a municipal business support program that allows you to rent land on preferential terms for the development of logistics facilities.
And industrial parks with a logistics component are being created in the Lviv region: warehouses serving not only Ukraine, but also transit to Poland are already operating near Novoyavorivsk.
The state set the stage, but now the main drivers of development are the communities themselves and business. It is decided on the spot whether there will be another hangar here, or whether a real logistics cluster with infrastructure, entrances, energy and even a railway branch will appear. Ukrainian warehouse logistics is no longer just going through a war — it is shaping a new map of the economy.
How to finance the construction of a warehouse in Ukraine: banks, tokens and caution
Warehouses in Ukraine are becoming more expensive and bring in income, but a lot of money is still needed at the start. The question arises: where to get financing, if you are not an international holding with millions in the account?
Despite the war, Ukrainian banks did not close down in the “bunker”. Yes, within the framework of the “5-7-9%” state program, you can get a business loan even for the construction of a logistics facility. This is a real option for those who have a clear plan, land and already the first tenants.
Loans up to UAH 60 million with preferential rates offers Kredobank is not only for agriculture or trade, but also for industrial projects.
New times — new tools. One of them is crowdinvesting. The idea is simple: you don’t take money from one big investor, but attract many small ones: everyone gets a discount, gets a share and counts on income. In Europe, this model is the norm, in Ukraine it is still a novelty, but there are already cases.
Another format is tokenization real estate This is when your object (there is one in Brovary) is broken into digital tokens that investors buy. One token is one share. Everything works through the blockchain, without notaries and paper transactions.
Financial institutions do not rush into warehouse projects headlong. After 2022, they introduced new risk assessment models: they calculate how close the front is, whether there is insurance, who the tenants are, what the energy risks are.
National Bank two years ago updated methods of risk analysis for banks and insurance companies. All this is necessary to avoid “frozen” objects and bankruptcies.
So, currently, it is realistic to invest in the warehouse. But if a business plan and business acumen were enough before the war, now it is also necessary to be able to calculate risks, attract funds from several sources and convince not one, but dozens of small investors.
Who rents warehouses today and why a long-term contract is worth its weight in gold
During the three years of the full-scale war, the warehouse rental market in Ukraine has drastically changed has changed. If before the company chose according to the principle “to be fast, cheap and closer to the track”, today every meter of space is worth its weight in gold. Vacancy is kept at the level of 1–2%, although at least 5–7% is considered optimal. Free warehouses are disassembled at the design stage.
During the war, the owners of warehouse real estate became more cautious. According to Fedor Arbuzov, CEO of Watermelon Development, most of the deals are now done agree in the early stages of construction, sometimes even before the appearance of the foundation. This gives the renter priority in the queue, but also commits them to long contracts.
Most of the contracts are now agree for 3–5 years, often with a fixed currency peg (dollar/euro) and mandatory force majeure clauses associated with hostilities. Short-term rentals are almost impossible to find, especially when it comes to Class A warehouses.
Yes, even warehouses with an area of 1,000–2,000 square meters. m, which in 2020 could be rented for half a year or a year, are now simply absent from the market. Because the demand is consistently high, and the owners do not want to take risks. They seek long-term partners – companies that guarantee stable payments and consider the warehouse as part of the logistics system, not a temporary storage. In Kyiv and the region, most modern warehouses are already occupied by large logistics companies or international networks.
Today, the main tenants are large national and international logistics operators (3PL), pharmaceutical distributors, food retail players and car companies. Cold warehouses and large units (from 10,000 square meters and above) are in particularly high demand. Rooms are looking for “turnkey”, with the possibility of flexible zoning and special temperature regimes.
One of the most striking examples is the RLC logistics complex near Kyiv. It provides storage of products at +1…+8°C and frozen goods down to -24°C, and is almost fully occupied by tenants even before the construction is completed.
…Next time we will consider how the average rental rate by region has changed over the last five years, should we expect the market to overheat after stabilization, which foreign players have already invested in warehouse real estate during the war, are there prospects for the entry of logistics giants – such as Prologis or Goodman?
Also, in the context of considering the topic of warehouse real estate, it is appropriate to monitor how protected the real estate is in case of shelling or occupation, what role does insurance play in this segment, are there enough specialists in logistics, warehouse operations and automation in Ukraine? Also, what trends dominate the automation and robotization of warehouses, who exactly builds new logistics centers, and are developers ready to work without a pre-guaranteed tenant?
Tetyana Viktorova
