The build-to-rent segment is gaining momentum in Ukraine, with developer Standard One’s projects maintaining zero vacancy rates and average returns of around 20% per annum in dollars, despite the difficult conditions of the war, the company’s press service reported.
“We are creating a proven financial model that allows our investors to receive stable and predictable income. We build all properties according to the same concept. Investors follow us from project to project because they see real returns,” said Standard One co-owner Alexander Ovcharenko in the podcast “Real Estate Code.”
According to him, thanks to rising real estate prices and rental income, the average return on Standard One projects is currently around 20% per annum in dollars, taking into account capitalization.
He said that before building in Kyiv, the company studied the experience of the US, Austrian, and Polish markets in creating and managing buildings with well-thought-out infrastructure and services.
“When we studied their approach, we set up a mini-laboratory in Kyiv upon our return. It was a kind of ‘test’ apartment in full size. We filled it with furniture and appliances and arranged everything so that future residents would have comfortable housing ready for them. I think we succeeded. Currently, we provide a stable income for investors and offer residents a high level of comfort. The company’s portfolio of properties is growing,” says Ovcharenko.
Standard One’s first build-to-rent project was S1 VDNG, completed in 2019 near the Vystavkovyi Tsentr metro station in Kyiv. All 660 apartments were handed over to investors fully renovated and furnished. The specially created management company S1 Property took over the operational processes: finding tenants, legal support, and 24/7 service for residents. Currently, the occupancy rate in the complex is 99%, and it takes only a few days to find a tenant.
Focusing on residents’ requests, Standard One creates large co-working lobbies, develops service infrastructure near the buildings, and implements innovative engineering solutions in the buildings themselves. For example, one of the company’s new projects will install geothermal heat pumps, which will significantly reduce heating costs and make the building self-sufficient.
According to Ovcharenko, Standard One is reviving the tradition of Kyiv’s apartment buildings, which at the beginning of the 20th century provided the city with quality housing and a stable income for investors. “We combine historical heritage with international practices and modern technologies,” emphasizes Alexander Ovcharenko.
Standard One (S1) is a full-cycle development company that has been developing the build-to-rent real estate segment in Kyiv since 2016. Its portfolio includes the completed S1 VDNG project and the new S1 Obolon, S1 Terminal, and S1 Nyvky buildings.
The share of investors who repeatedly buy S1 REIT fund certificates from the developer Standard One has grown to 43% in the five months since the funds began operating, according to the project’s press service.
“We have provided investors with the opportunity to increase their profits by increasing their own share. The minimum additional investment is equal to the cost of one certificate, which is just over UAH 1,000. But despite our expectations, the average amount of repeat sales is significantly higher, at almost UAH 90,000,” said Viktor Boichuk, commercial director of S1 REIT, in a press release.
He noted that currently, the vast majority of investors are people with investment experience who already have a certain portfolio of assets.
“For them, S1 REIT is an opportunity to diversify their asset portfolio with a relatively small check. In the first weeks of our work, investors went through a ”getting to know you” phase, studying us and our offer. Now we see their confidence growing,” Boichuk added.
He added that the project plans to scale up by reaching a new audience—Ukrainians who have not yet had experience in investment activities due to a lack of knowledge or significant start-up capital.
“The key advantage of S1 REIT is its accessibility. The entry threshold is the equivalent of $3,000, which is significantly less than the initial investment in the Kiev real estate market,” said the top manager.
As reported, in April this year, Kiev-based developer Standard One, which specializes in Build-to-Rent projects, announced the launch of a new product, S1 REIT. This is an investment tool that allows you to become a co-owner of square meters in profitable S1 buildings without having to personally manage the assets. Currently, S1 REIT has two open funds: S1 VDNH, with a planned yield of 8.2% per annum in US dollars, and S1 Obolon, with a yield of up to 10% per annum.
Standard One, a company specializing in Build-to-Rent projects, announced the launch of a new product S1 REIT, which gives the opportunity to become a co-owner of square meters in S1 residential buildings, the company’s press service reports.
“We are the first in Ukraine to create and implement the concept of income houses in Build-to-Rent format. This is a high-class service for tenants and investors. The former get a high-quality living space with hotel service options, the latter – a stable passive income, which does not require involvement in the process of object management. The pilot project of S1 VDNG from 2019 testifies to the success of such a model, because the occupancy rate in the house reaches 99%,” explains CEO of Standard One Sergey Fitel.
According to him, S1 REIT is a step of scaling an existing concept. With a REIT (Real estate investment trust, IF-U), to join the project, one only needs to invest an amount equivalent to the approximate cost of 1 sqm. REIT provides not only an easy entry into the investment, but also, if necessary, a convenient exit. The company also creates a closed community for investors, where they can share experiences.
You can buy square meters for investment in Standard One’s first project – S1 VDNG. Already ready and inhabited by tenants, with almost zero vacancy, allows investors to receive from 8.2% in currency. The S1 Obolon fund is also scheduled to launch soon, with a projected 10% in currency.
“ Real estate investment funds are already on the market, their success confirms the demand for such instruments. While previously a significant amount of money was needed to invest in real estate, this opportunity is now open to many as the investment threshold has become minimal,” adds Fitel.
According to Oleg Bondar, CEO of S1 REIT, liquidity in the project is ensured by high demand for real estate from Standard One. In general, the rental market in Ukraine and especially in Kyiv is quite active, demand is increasing and rental rates are growing. In 2024, the increase in the average rental price of a one-bedroom apartment in the capital amounted to 21% in currency. Under these conditions, investing in real estate for rent becomes even more attractive.
“The potential capacity of the market is huge. Especially in the segment of new quality housing. The better the infrastructure and more advantages a project has – the higher its price. Such objects as S1 provide stable profitability without ‘downtime’,” summarizes CEO Standard One.
S1 is a project of the development company KDD Ukraine, S1 VDNG project has been operating since 2019, with three more projects in the pipeline.
