Table of Contents
- Executive Summary: Ukraine’s CRE at a Crossroads
- Key Market Statistics and Growth Indicators (2025)
- Major Players and Investment Hotspots
- Legal Framework and Regulatory Compliance (Official Sources: minjust.gov.ua, rada.gov.ua)
- Taxation and Financial Incentives for CRE Investors (Official Source: tax.gov.ua)
- Industrial, Retail, and Office Segments: Trends and Projections
- Impact of Geopolitical and Economic Factors (Official Source: bank.gov.ua)
- Sustainability, ESG, and Green Building Initiatives (Official Source: minregion.gov.ua)
- Risks, Challenges, and Mitigation Strategies in 2025–2030
- Future Outlook: Scenarios and Expert Recommendations for 2025–2030
- Sources & References
Executive Summary: Ukraine’s CRE at a Crossroads
Ukraine’s commercial real estate (CRE) sector stands at a pivotal crossroads in 2025, shaped by the enduring consequences of Russia’s full-scale invasion, as well as ongoing reforms and reconstruction efforts. The sector faces extraordinary challenges, including widespread physical damage, fluctuating demand, and a shifting legal landscape. According to the Ministry of Economy of Ukraine, direct losses to commercial and industrial property infrastructure are estimated in the tens of billions of US dollars, with over 3,000 non-residential properties damaged or destroyed as of early 2024.
Despite ongoing conflict, the Ukrainian government has prioritized regulatory reforms to encourage investment and streamline property transactions. The updated Law of Ukraine “On State Registration of Property Rights to Immovable Property” and recent digitalization initiatives have enhanced transparency, simplified due diligence, and supported remote transactions, according to the Ministry of Justice of Ukraine. Furthermore, the Law “On Urban Planning Activities” now incorporates new standards for reconstruction and compliance, with fast-track permitting for properties critical to Ukraine’s recovery.
Compliance remains a focal point, particularly regarding anti-money laundering (AML) and beneficial ownership disclosure, with Ukraine aligning its legislation with EU directives in preparation for accession talks (National Securities and Stock Market Commission of Ukraine). These measures are intended to boost international investor confidence and facilitate reconstruction financing.
Key statistics highlight a market in flux: as per the State Statistics Service of Ukraine, total CRE transaction volume in 2023 was less than 30% of pre-war levels, with office and retail vacancy rates in Kyiv exceeding 40%. However, logistics and warehousing have shown resilience, driven by supply chain realignment and humanitarian needs.
Looking ahead, the outlook for Ukraine’s CRE sector is cautiously optimistic. Significant international aid pledges, public-private partnerships, and the anticipated postwar recovery plan signal potential for robust growth and modernization. Continued legal harmonization, infrastructure investment, and a gradual return of displaced businesses are expected to underpin a new phase of CRE development, contingent upon improved security and macroeconomic stabilization.
Key Market Statistics and Growth Indicators (2025)
The commercial real estate sector in Ukraine is undergoing significant transformation as the country navigates ongoing reconstruction needs, evolving regulatory frameworks, and shifting investor sentiment in 2025. Following the disruptions of recent years, market activity is increasingly shaped by government-led recovery initiatives and targeted incentives for both domestic and foreign investors.
- Investment Volume and Market Size: As of early 2025, the State Property Fund of Ukraine reported a marked increase in commercial property privatizations and transparent lease auctions, with over 5,000 commercial assets offered for lease or sale in 2024, reflecting a substantial uptick from previous years. The total value of these transactions has surpassed UAH 10 billion, signaling a cautious yet notable revival in investor confidence (State Property Fund of Ukraine).
- Office and Industrial Segments: The office real estate sector in Kyiv and major regional cities is exhibiting early signs of demand recovery, with vacancy rates declining to approximately 18% in Q1 2025, down from over 25% at the height of conflict-related disruptions. Industrial and logistics properties continue to outperform, driven by resilient demand for warehousing and distribution centers supporting humanitarian aid and export logistics (Ministry for Communities, Territories and Infrastructure Development of Ukraine).
- Legal and Compliance Framework: The Ukrainian government has prioritized anti-corruption and transparency measures in property transactions. In 2025, digital land registries and online auction platforms for state and municipal properties are fully operational, reducing bureaucratic barriers. The Law of Ukraine “On State Registration of Real Property Rights and Their Encumbrances” remains the primary legislative act governing property rights and compliance obligations (Verkhovna Rada of Ukraine).
- Foreign Investment and Risk Mitigation: To attract international capital, Ukraine has introduced enhanced investment insurance mechanisms and legal guarantees for property owners. The Ministry of Economy oversees these incentives, emphasizing the protection of foreign investors’ rights and streamlined dispute resolution (Ministry of Economy of Ukraine).
- Outlook: Looking forward to 2025 and beyond, growth in commercial real estate is expected to be closely tied to reconstruction funding, infrastructure modernization, and Ukraine’s EU candidate status. While geopolitical risks and insurance costs remain elevated, the sector’s resilience and regulatory reforms position it for gradual recovery and sustainable growth over the next several years.
Major Players and Investment Hotspots
The commercial real estate landscape in Ukraine has undergone significant transformation in recent years, shaped by evolving geopolitical dynamics, regulatory reforms, and shifting investment patterns. As of 2025, major players in Ukraine’s commercial property sector include both domestic conglomerates and prominent international investors, with activity concentrated in retail, logistics, office, and industrial segments. Key Ukrainian developers such as Dragon Capital and Arricano Real Estate Plc continue to drive development and reconstruction efforts, particularly in Kyiv and select regional centers.
International players—including institutional funds and private equity firms—have demonstrated cautious interest, with investment flows heavily influenced by war-related risks and the ongoing need for property insurance and security guarantees. The National Bank of Ukraine reported moderate stabilization in real estate lending in 2024–2025, signaling tentative optimism among banking institutions, albeit with rigorous due diligence and compliance checks.
- Kyiv remains the primary investment hotspot, accounting for a significant share of new office and retail developments. The city’s commercial stock is gradually recovering, with vacancy rates declining from post-invasion peaks and prime assets attracting both domestic and foreign capital.
- Lviv and Odesa have emerged as secondary hubs, supported by resilient local economies and strategic logistics corridors. These cities have seen increased demand for warehousing and light industrial facilities, particularly from e-commerce and manufacturing sectors.
The legal and compliance framework governing commercial real estate continues to adapt to wartime and post-war realities. The Ministry of Justice of Ukraine has streamlined property registration and notarization processes, while temporary wartime provisions allow for greater flexibility in lease renegotiations and asset management. Additionally, the Cabinet of Ministers of Ukraine is actively implementing incentives for reconstruction and foreign direct investment, including partial guarantees and tax relief for priority projects.
Recent statistics from the State Statistics Service of Ukraine indicate that, despite ongoing challenges, commercial real estate investment rebounded modestly in late 2024, with logistics and warehouse segments showing the strongest growth. Looking forward, the outlook for 2025 and beyond is cautiously optimistic: continued security improvements, harmonization with EU standards, and persistent reconstruction demand are expected to underpin gradual market recovery—though investor sentiment will remain sensitive to geopolitical developments and regulatory clarity.
Legal Framework and Regulatory Compliance (Official Sources: minjust.gov.ua, rada.gov.ua)
The legal framework governing commercial real estate in Ukraine is anchored in several core legislative acts and administrative practices, with ongoing reforms reflecting the country’s commitment to align with European standards and foster investment confidence. The fundamental legal basis for commercial property transactions is set out in the Civil Code of Ukraine, the Land Code, and the Law of Ukraine “On State Registration of Real Rights to Immovable Property and Their Encumbrances”. These statutes regulate ownership, lease, transfer, mortgage, and registration of commercial properties.
Recent years have seen significant updates, particularly in streamlining property registration and combating corruption. The Ministry of Justice of Ukraine has digitized the Unified State Register of Rights to Real Estate, allowing for more transparent and efficient verification and registration of ownership and encumbrances (Ministry of Justice of Ukraine). These reforms, coupled with the introduction of electronic services, have reduced administrative burdens for domestic and foreign investors.
Compliance for commercial real estate operators is defined by a mix of national laws and local zoning regulations. Investors and developers must adhere to urban planning documents, environmental safety standards, and anti-money laundering regulations. Notably, amendments to the Law “On Prevention and Counteraction to Legalization (Laundering) of the Proceeds from Crime” have expanded the scope of due diligence required in real estate transactions, particularly relevant for larger commercial projects.
Judicial protection and enforcement mechanisms have also improved. The judiciary, including specialized commercial courts, now leverages digital document management for expediting real estate dispute resolution (Judicial Power of Ukraine). This modernization supports greater predictability in the enforcement of property rights and contracts.
Key statistics highlight an ongoing increase in property registrations and commercial lease agreements throughout 2023 and early 2024, despite the broader economic and security challenges. Government sources reported that over 120,000 real estate rights were registered in the first half of 2024, a 15% year-on-year increase (Ministry of Justice of Ukraine).
Looking ahead to 2025 and beyond, the outlook for commercial real estate legal compliance is shaped by further digitization, harmonization with EU regulatory standards, and continued anti-corruption efforts. Legislative initiatives under discussion in the Verkhovna Rada aim to further simplify permitting, enhance investor protections, and incentivize the rebuilding and modernization of commercial infrastructure (Verkhovna Rada of Ukraine). These trends are expected to contribute to a more robust, transparent, and investor-friendly regulatory environment in the Ukrainian commercial real estate sector.
Taxation and Financial Incentives for CRE Investors (Official Source: tax.gov.ua)
The taxation regime governing commercial real estate (CRE) in Ukraine remains an essential factor influencing both domestic and foreign investment decisions. As of 2025, Ukraine continues to implement a tax framework shaped by recent legal reforms and the ongoing challenges arising from economic uncertainty and the effects of the military conflict.
The principal taxes applicable to CRE investors include corporate income tax, value-added tax (VAT), and property tax. Corporate income tax is levied at a standard rate of 18% on profits derived from leasing, selling, or otherwise operating commercial property. VAT, set at 20%, generally applies to the sale of newly constructed commercial property and certain leasing operations, though exemptions and specific conditions may apply depending on the asset type and transaction structure. Property tax, regulated locally, is imposed annually on the owners of commercial premises, with rates determined by municipal authorities but subject to national ceilings. For 2025, property tax rates for non-residential real estate may not exceed 1.5% of the officially assessed value per square meter, as per the Tax Code of Ukraine (State Tax Service of Ukraine).
To stimulate investment, especially in reconstruction and strategic development zones, the Ukrainian government has introduced targeted financial incentives. Investors in certain priority sectors, such as logistics or industrial parks, and those participating in public-private partnership (PPP) projects, may benefit from tax relief measures, reduced land lease payments, or accelerated depreciation schedules. Additionally, recent legislative initiatives aim to simplify compliance procedures for foreign investors, including digitalization of tax administration and expanded access to electronic tax services.
Non-resident investors are subject to withholding tax on income derived from Ukrainian sources (including rental income), typically at a rate of 15%, unless modified by an applicable double taxation treaty. Ukraine has concluded a broad network of such treaties to mitigate double taxation risks for international investors (State Tax Service of Ukraine).
Compliance requirements remain robust, with mandatory registration of property rights and transparent reporting obligations for all CRE transactions. The ongoing digital transformation of Ukraine’s tax and real estate registries is expected to further streamline these processes and reduce administrative burdens in the coming years.
Looking ahead to 2025 and beyond, the Ukrainian government signals further harmonization of tax and financial incentive regimes with European standards, aiming to boost transparency and investor confidence in the commercial real estate sector. Continuous monitoring of legislative updates and close liaison with tax authorities is strongly advised for CRE investors seeking to benefit from the evolving fiscal landscape.
Industrial, Retail, and Office Segments: Trends and Projections
Ukraine’s commercial real estate market—covering industrial, retail, and office segments—has encountered significant challenges and shifts in 2022–2024 due to the ongoing war and related economic disruptions. However, as of 2025, the sector is witnessing cautious stabilization and is positioned for gradual recovery, with policy adjustments and investment incentives shaping its prospects.
- Industrial Segment: Demand for logistics and warehouse properties remains resilient, driven by a restructured supply chain and increased e-commerce activity. The government has prioritized support for industrial parks and logistics hubs, offering tax incentives and streamlined regulatory procedures under the Law of Ukraine “On Industrial Parks” (Ministry of Economy of Ukraine). Despite property damage in conflict-affected regions, international donors and reconstruction programs are encouraging redevelopment, particularly near western borders, where relative security supports investor confidence.
- Retail Segment: The retail property market contracted sharply in 2022–2023, with shopping centers in central and eastern Ukraine suffering substantial losses. However, by early 2025, retail activity is gradually recovering in western and central cities less exposed to hostilities. Retailers are adapting formats to smaller, flexible spaces and prioritizing essential goods. The government continues to monitor foreign investment compliance and anti-monopoly regulations in retail real estate, as enforced by the Antimonopoly Committee of Ukraine.
- Office Segment: The office market faces subdued demand, with vacancy rates remaining high, especially in Kyiv and major urban centers. Hybrid work models and the relocation of firms abroad or to safer regions have reshaped tenant requirements. The sector’s outlook for 2025–2026 hinges on macroeconomic stabilization and the return of international business. Recent amendments to the Law of Ukraine “On Lease of State and Municipal Property” streamline lease procedures and support transparent allocation of office spaces for businesses and organizations (State Property Fund of Ukraine).
Across all segments, compliance with building codes and licensing remains a priority, with the State Architectural and Construction Inspectorate of Ukraine overseeing construction quality and safety. Looking ahead, market participants anticipate gradual recovery in the west and cautious investor re-engagement, contingent on security improvements and ongoing legal reforms. The sector’s medium-term outlook will depend on reconstruction financing, regulatory transparency, and Ukraine’s broader integration with European markets.
Impact of Geopolitical and Economic Factors (Official Source: bank.gov.ua)
The commercial real estate sector in Ukraine remains heavily influenced by ongoing geopolitical and economic factors, particularly in the context of the country’s continued response to the full-scale invasion by the Russian Federation. As of 2025, the sector faces a combination of challenges and adaptive strategies resulting from these circumstances.
Geopolitical instability has led to significant disruptions in the commercial property market, especially in eastern and southern regions. Occupation, destruction of assets, and uncertainty regarding future territorial control have depressed investment activity and delayed new project launches. In contrast, western and central regions have seen some increase in demand for logistics, warehousing, and office space, as businesses reallocate operations to safer areas. According to National Bank of Ukraine, the banking sector continues to support viable commercial real estate projects, especially those contributing to economic resilience and reconstruction.
Economic factors, including high inflation, currency volatility, and elevated interest rates, have increased the cost of capital and limited access to long-term financing for commercial real estate developers. The National Bank of Ukraine has maintained a cautious monetary policy, with the key policy rate set at 13.5% as of April 2024, to anchor inflation expectations and stabilize the hryvnia (National Bank of Ukraine). This environment restricts speculative development and prioritizes projects with secure pre-leasing or government-backed guarantees.
Compliance and legal frameworks have evolved rapidly in response to wartime realities. The government has introduced temporary rules to expedite construction permitting and property registration for critical infrastructure and reconstruction projects. However, property rights enforcement remains complicated in areas of active or recent conflict, with some court proceedings postponed or relocated, affecting transaction certainty (National Bank of Ukraine).
Key statistics reflect these dynamics: as of early 2025, commercial real estate transaction volumes remain below pre-war levels, with the largest segmental recovery observed in logistics and warehousing. Vacancy rates in Kyiv office and retail segments have stabilized, but new supply is limited due to risk-averse financing and material shortages.
The outlook for commercial real estate in Ukraine is cautiously optimistic for the next several years, contingent on security improvements and the scale of international reconstruction assistance. The sector is expected to play a crucial role in economic recovery, with particular growth potential in logistics, light industrial, and resilient office formats. Continued monetary stabilization and regulatory adaptation will be vital to restoring confidence and attracting investment.
Sustainability, ESG, and Green Building Initiatives (Official Source: minregion.gov.ua)
Sustainability, ESG (Environmental, Social, and Governance) principles, and green building initiatives are increasingly shaping the commercial real estate sector in Ukraine, driven by both regulatory developments and shifting market expectations. In 2025, the integration of sustainable practices is not only a response to global environmental concerns but also a compliance priority for local developers and investors.
The Ministry for Communities, Territories and Infrastructure Development of Ukraine (Ministry for Communities, Territories and Infrastructure Development of Ukraine) plays a pivotal role in setting the regulatory framework for sustainable construction. The ministry has advanced the implementation of updated building codes (DBN) that embed energy efficiency and environmental performance criteria for commercial properties. Amendments to DBN V.2.2-3:2014 and DBN B.2.6-31:2021, for instance, focus on energy-saving technologies, thermal modernization, and requirements for the use of renewable energy sources in commercial buildings.
In parallel, Ukraine’s commitment to European integration and alignment with EU directives, such as the Energy Performance of Buildings Directive (EPBD), has accelerated the adoption of ESG standards in real estate. The government has introduced measures to encourage green certification (such as BREEAM and LEED), and major commercial projects—especially in Kyiv and regional centers—are increasingly seeking such credentials to attract international tenants and financing.
Key statistics underscore the growing market interest in sustainability. According to Ministry for Communities, Territories and Infrastructure Development of Ukraine data, the number of new commercial developments applying for energy efficiency certification doubled between 2022 and 2024. Furthermore, over 30% of newly commissioned office buildings in major cities now incorporate green building elements or pursue recognized international certification.
Compliance is expected to intensify in the coming years. By 2025 and beyond, commercial real estate owners are subject to mandatory energy audits and reporting, as well as stricter requirements for waste management and water use in line with national and EU environmental strategies. The Ministry has outlined a roadmap for full digitalization of building permit procedures, which includes ESG compliance checks as part of the documentation review.
Looking ahead, sustainability will remain a key determinant of commercial property value and marketability in Ukraine. Regulatory pressure, increasing investor scrutiny, and the operational cost benefits of energy-efficient buildings all point toward continued momentum for green initiatives. The government’s ongoing efforts, in collaboration with international partners, are expected to further align Ukraine’s commercial real estate sector with best ESG practices and support the country’s broader climate commitments.
Risks, Challenges, and Mitigation Strategies in 2025–2030
The commercial real estate sector in Ukraine is poised to navigate a landscape marked by significant risks and challenges from 2025 through 2030, alongside emerging opportunities for mitigation and adaptation. Key risks stem from geopolitical instability, regulatory changes, and economic volatility, each with complex implications for investors and operators.
- Geopolitical and Security Risks: The ongoing conflict and territorial uncertainties in Ukraine create heightened risks for property damage, business interruption, and investor confidence. The unpredictability of military developments and their impact on key commercial hubs, especially in the east and south, remains a primary concern. The Ukrainian government, in collaboration with international partners, continues to develop legal mechanisms for compensation and insurance of war-related property losses, but comprehensive solutions are still in progress (Cabinet of Ministers of Ukraine).
- Legal and Regulatory Compliance: The evolving legal framework, including ongoing harmonization with European Union standards, poses compliance challenges for both domestic and foreign entities. Recent reforms in land law and property registration aim to increase transparency and investor protection, yet the risk of inconsistent enforcement and bureaucratic delays persists (Ministry of Justice of Ukraine).
- Economic and Financial Risks: High inflation rates, fluctuating currency values, and constrained access to financing remain critical obstacles. The National Bank of Ukraine continues to implement monetary stabilization policies and attract foreign investment, but macroeconomic uncertainty is likely to affect commercial real estate valuations and rental yields through 2030 (National Bank of Ukraine).
- Market Supply and Demand Dynamics: The war-induced destruction of infrastructure and displacement of population have led to changing demand patterns, especially in office and retail segments. Reconstruction and modernization initiatives are expected to drive demand for logistics, industrial, and mixed-use properties, but regional disparities and overhang from damaged assets will remain a challenge (Ukrainian Recovery Conference).
Mitigation Strategies: To address these risks, stakeholders are prioritizing insurance for war-related losses, legal due diligence, public-private partnerships, and the adoption of digital property registries to enhance transparency. Engagement with international financial institutions and the use of risk-sharing instruments are also gaining traction as means to stabilize the sector and attract long-term investment.
Future Outlook: Scenarios and Expert Recommendations for 2025–2030
The commercial real estate sector in Ukraine faces a complex set of scenarios as the country navigates ongoing geopolitical instability, a dynamic regulatory framework, and shifting investor sentiment. Looking to 2025–2030, the sector’s outlook is shaped by the interplay between reconstruction imperatives and long-term modernization trends.
Key legislative advances, such as amendments to the Land Code and laws on urban planning, were enacted to streamline property registration and construction permitting, aiming to attract foreign investment and improve transparency. The recent adoption of the Law “On Urban Planning Activity” and related regulations is expected to strengthen compliance standards, clarify zoning procedures, and reduce corruption risks in land allocation and permitting processes. These reforms are designed to align Ukrainian practices with EU standards, anticipating Ukraine’s aspirations for EU integration and access to broader investment pools (Verkhovna Rada of Ukraine).
Despite the ongoing conflict, 2024 saw a modest but tangible recovery in commercial leasing activity in western and central regions, with office and logistics assets leading the rebound. Vacancy rates in Kyiv stabilized at 20–25% as of late 2024, while prime logistics assets in Lviv and Ternopil regions experienced growing demand, driven by nearshoring and supply chain realignment (Ministry for Communities, Territories and Infrastructure Development of Ukraine). The government’s “Recovery Plan” prioritizes infrastructure and commercial reconstruction, with over 3,200 damaged or destroyed non-residential buildings targeted for rebuilding or modernization by 2030 (Recovery Portal, Cabinet of Ministers of Ukraine).
Several compliance priorities will shape the sector’s evolution. Enhanced anti-money laundering (AML) obligations, expanded beneficial ownership disclosure, and environmental impact assessment (EIA) requirements are being phased in as part of harmonization with EU directives (National Anti-Corruption Bureau of Ukraine). Market participants are advised to adopt robust KYC and compliance frameworks, rigorously document ownership chains, and conduct full EIAs for new projects.
- Scenario 1: Rapid stabilization and EU accession accelerate FDI inflows, with major institutional investors re-entering the market by 2027–2028, focused on logistics, data centers, and business parks.
- Scenario 2: Prolonged instability slows recovery, with growth concentrated in western regions and a continued focus on adaptive reuse and smaller-scale developments.
Experts recommend that investors and developers prioritize resilient asset types (e.g., logistics, flexible office, and industrial parks), maintain strict legal and compliance due diligence, and monitor ongoing regulatory shifts. Engagement with government-backed reconstruction programs and public-private partnerships will be essential for capturing emerging opportunities in Ukraine’s evolving commercial real estate landscape.
