The aggressor's invasion of Ukraine froze the real estate market in most Ukrainian cities, in order to overcome the negative consequences, many objects will be forced to carry out extreme reconstruction, Kostiantyn Oliynyk, the head of the UTG strategic consulting department, told Interfax-Ukraine.

"A number of previously commercially successful properties lost their positions in 2022, some of the new ones simply did not have time to gain popularity. They will be forced to carry out extreme reconstruction: complex redevelopment, reprofiling or a complete change in format," he said.

The expert recalled that from 2014 to 2021, active development and evolutionary development of retail real estate was observed in Ukraine. This was reflected in the increase in the scale of objects, the acquisition of new functions by them, the expansion of the range of involved operators (document service, medicine, sports clubs, coworking spaces).

According to him, the growth in the concentration and saturation level of retail space per 1,000 inhabitants in most regions of the country has equaled or even surpassed that of many cities in Europe. However, already during the coronavirus epidemic in 2020-2021, almost all shopping and entertainment centers noted a drop in attendance, and an increase in healthcare costs led to a reduction in spending on other groups of goods, an increase in loyalty to online shopping, and the rapid development of marketplaces. As a result, consumer behavior has changed, and the demand for entertainment operators (cafes and restaurants, fitness centers, cinemas, bowling alleys, shopping malls) has decreased. All this led to a drop in indicators and a decrease in the turnover of operators and incomes of facility owners (decrease in rental income, increase in the payback period).

"Against the background of the above negative factors, there was a redistribution of consumer flows between objects and an increase in vacancy in some of the least successful shopping and entertainment centers. At the same time, the existing surplus of retail space led to the need for forced modernization, reconceptualization or reconstruction of real estate," the expert noted.