By the end of 2025, it is expected to put into operation some 160,000 square meters of new logistics space and the restoration of about 120,000 square meters affected by shelling in 2022 in the capital region, CBRE Ukraine managing partner Radomyr Tsurkan said during the architectural and construction business forum "Restoration of the country. Change strategy for architects, developers and builders."

"In 2023-2025, about 160,000 square meters of new warehouse space is expected to be put into operation. Approximately 71% of the new supply will be represented by projects that are built for the owners' own needs (owner-occupied). Thus, the speculative market expects only about 40,000 square meters of new space for rent. In addition, by the end of 2025, the market expects the restoration of almost 100,000 square meters of warehouse space affected by shelling in 2022," he said.

Tsurkan recalled that the war provoked an unprecedented crisis in the logistics segment of Ukraine and the world. The closure of ports in Odesa led to the introduction of "dry supply chains" related to land and rail transportation, which shifted demand to the western regions of Ukraine. Amid new situational demand in areas such as Lviv and Uzhgorod, where the main route for international transportation - the M-06 highway passes, the need for high-quality warehouse space has become especially acute.

Nevertheless, the capital region managed to maintain the status of the main logistics hub, which allows transporting goods throughout Ukraine - to the south, east and north. Immediately after the de-occupation of Kyiv region, companies began to return back to Kyiv. Among the tenants, realtors (51%), logistics operators and humanitarian missions (35%) and pharmaceutical companies (14%) prevailed.

However, the destruction of almost 22% of the total warehouse supply in Kyiv region by missile hits caused unprecedented damage to the market.

"Given that space shortages have been particularly acute in recent years, the decline in the overall supply of warehouses in the future will continue to put pressure on deferred and post-war demand. Rental activity in the first quarter of 2023 amounted to about 27,000 square meters, which is 48% more than in the same period of pre-war 2021," Tsurkan said.

At the same time, according to a CBRE study, rental rates have not changed since the beginning of the year ($4.5-4.1/square meter/month in A class), and vacancy has decreased from 4% to 2%.

"The shortage of new speculative supply is likely to persist in the medium term, as uncertainty about the duration of the war, the shortage of construction materials and labor migration affect the long-term decisions of developers," Tsurkan said.

Headquartered in Los Angeles, the USA, CBRE is the world's largest commercial real estate consulting and investment company with $30.8 billion in revenue in 2022. According to Fortune, it is included in the list of the world's 500 largest companies.

Shares of CBRE Group Inc. traded on the New York Stock Exchange.

The Ukrainian office of CBRE was opened in January 2008 and is part of the company's affiliated network.