---
title: "Warehouses instead of apartments: how Ukrainian investors are changing strategy amid rising construction costs"
description: "Ukrainian investors are massively reorienting from residential property to small warehouses. Despite rising construction costs, dollar-denominated rent ensures a return of 8–11% per annum. A shortage of bank loans is forcing investors to pool resources to build large logistics facilities. 🏭💰📉"
date: 2026-07-07T09:08:00.000Z
lang: en
url: https://xab.info/en/posts/warehouses-instead-of-apartments-how-ukrainian-investors-are-changing-strategy-amid-rising-construction-costs
tags: []
publisher: "XAB.info"
---

# Warehouses instead of apartments: how Ukrainian investors are changing strategy amid rising construction costs

![Handing over warehouse keys: Ukrainian investors change strategy amid rising construction costs](https://xab.info/media/2026/07/07/sklady-vmesto-kvartir-kak-ukrainskie-investory-menyayut-strategiyu/sklady-vmesto-kvartir-kak-ukrainskie-investory-menyayut-strategiyu-1.webp)

The Ukrainian investment market is undergoing a significant transformation. Despite ongoing military risks and a substantial increase in construction costs, private investors are shifting their priorities. Instead of traditional residential property, more capital is flowing into the segment of small-scale warehousing.

### Inflation and rising returns

The economic situation in the country directly affects construction costs. According to the State Statistics Service, during the first four months of 2026, prices for construction and installation works in the non-residential segment rose by 16.5%. However, contrary to expectations, this has not led to a decline in interest in commercial real estate.

Gennady Hrynenko, Director of Alterra Group, explains that the return model for warehouse ownership remains stable: tenants are forced to pass on rising costs to rental rates. As a result, the average return on projects in this segment is 8–11% per annum in dollars.

### Competition with bonds

Warehouse real estate is becoming a serious competitor to OVGZ (internal government bonds). Although medium- and long-term hryvnia OVGZ offer a nominal return of 15–16% per annum, the real dollar return remains unstable due to exchange rate risks. At the same time, warehouse real estate with dollar-denominated rental rates offers protection against inflation and the potential for the asset's value to grow.

Anna Anisimova, Commercial Director of GDS, emphasizes that long-term lease agreements (averaging five years with a minimum non-termination period of one year) make such investments attractive to conservative investors.

### New formats and lower entry barriers

The behavior of small private investors is changing: the focus is shifting from rental apartments to small-scale warehousing formats. These are small facilities on the territories of garage cooperatives, non-permanent buildings, and barns within residential complexes. The key advantage here is a significantly lower entry threshold compared to residential real estate.

Developers of cottage settlements are also responding to demand by incorporating small warehouse blocks on their territories for the needs of residents and small businesses. This indicates that demand for "last-mile" logistics is penetrating even residential formats.

### Financing shortage and crowdfunding

The development of logistics real estate in Europe traditionally relies on bank project financing, which is acutely lacking in Ukraine. According to Alexander Bondarenko, CEO of the Investment Programs Bureau, the Ukrainian economy is under-credit: the ratio of lending to GDP is only 11%, whereas in Poland it is 35%.

As a result, only 3 million sq. m of warehouse real estate has been built in Ukraine over the last six years, which is ten times less than in neighboring Poland. Under these conditions, the financing of some projects falls on the shoulders of small retail investors.

"We already see several such projects on the Zhytomyr highway... they are attracting $20–30 thousand from small retail investors to build large logistics projects worth $15–20 million as a sort of community," notes Bondarenko. Thus, the shortage of bank capital is stimulating the emergence of new models of collective investment in logistics.