Rental activity in the warehouse real estate market of Ukraine in January-June 2024 increased by 13% compared to the same period last year and amounted to about 70 thousand square meters, according to a study by CBRE Ukraine.
“Despite the ongoing war and related challenges, the warehouse market continues to show signs of recovery and is the most stable segment of commercial real estate today. Although the volume of leasing activity is still restrained due to the current market conditions, several large tenants are exploring market opportunities for expansion, which may have a positive impact on leasing transactions in the coming quarters,” the company said in its report.
According to the company, the main trend in the first half of the year was the predominance of preliminary lease agreements in the structure of gross absorption, which are concluded before the commissioning of facilities. The reason for this was the low vacancy rate on the market – at 2%, as well as growing demand from the wholesale and retail trade segment and pharmaceutical companies, CBRE notes.
In the second half of 2024 and in 2025, about 170 thousand square meters of new supply is expected to enter the market, which will reduce the pressure of minimum vacancy, according to the company’s analysts. In addition, over the next two years, it is planned to restore 100 thousand square meters of warehouse space that was destroyed as a result of the aggressor’s missile attacks in 2022.
By the end of the first half of 2024, the prime rental rate for warehouses in Kyiv amounted to $4.9 per sq m per month (excluding VAT and OPEX payments), which is on average 20% lower than in other capitals of Central and Eastern Europe. At the same time, the cost of construction of warehouse real estate in our country is 20% higher than in our neighbors: $500-600/sq m versus $400-500/sq m. This is influenced by the economic and energy crisis, hostilities, labor shortages and supply chain disruptions, the study says.
At the same time, there is an increase in investment activity in the Ukrainian warehouse market. CBRE points out that among foreign investors interested in industrial real estate, construction companies that plan to participate in the restoration of Ukraine after the end of active hostilities stand out.
In addition, European companies are actively considering nearshoring (outsourcing to neighboring countries) in Central, Southern and Eastern Europe, including Ukraine. According to the CBRE European Logistics Occupier Survey 2024, 68% of respondents believe that outsourcing will have a significant impact on the development of logistics in Europe in the near future.
CBRE, headquartered in Los Angeles (USA), is the world’s largest commercial real estate advisory and investment company, with revenues of $30.8 billion in 2022. According to Fortune, it is one of the world’s 500 largest companies. CBRE Group Inc. shares are traded on the New York Stock Exchange. CBRE’s Ukrainian office was opened in January 2008 and is part of the company’s affiliate network.
Source: https://interfax.com.ua/
