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Rental rates for warehouses in Lviv grow by 30-50% since start of war – Alterra Group
KYIV. April 29 (Interfax-Ukraine) – The increased demand for warehouse real estate in the west of Ukraine has led to an increase in rental rates in Lviv by 30-50% compared to the pre-war period, Dmytro Kovalchuk, co-owner of Alterra Group, has said.
"Since the middle of March, there has been simply a crazy demand for warehouse and industrial premises, everyone wants to move their business to the west of Ukraine. The market quickly reacted, and rates for warehouses in Lviv, both high-quality and not very high, increased by 30-50%," he said during an online meeting of the URE Club devoted to commercial real estate during the war on Thursday.
According to him, due to the lack of suitable premises directly in Lviv, companies are considering the entire Lviv region, as well as Ivano-Frankivsk and Ternopil, as a priority. In addition, due to changes in supply chains, the demand for warehouse real estate in Chernivtsi has also increased.
Kovalchuk said that today, there is an urgent need for built-to-suit warehouses in western Ukraine.
"There is a huge unmet demand, and the situation partially echoes with housing for internally displaced persons, where the main factor is speed. We are considering changing construction processes to learn how to build projects not in a year and a half, but in six or seven months," he said.
At the same time, the entrepreneur noted the interest of local authorities in realizing the potential of the western regions in the current situation.
"We are trying to build a dialogue to understand what exactly we need from the authorities and amalgamated territorial communities to respond quickly and help people transfer their business," he said.
According to Kovalchuk, Alterra Group moved employees to Lviv before the start of a full-scale invasion, thanks to which it was able to quickly resume construction. Thus, since the beginning of the full-scale war, the company has concluded four transactions for the sale of warehouse space, eight lease agreements for facilities with an area of 600-3,500 square meters.
He said that several of the company’s warehouse facilities were hit by shelling, but none were completely destroyed. At the same time, 40% of the tenants of the premises are fully working, only 10% have vacated the premises. At the same time, tenants of facilities located near infrastructure or military facilities are gradually vacating them due to the threat of shelling, Kovalchuk added.
"We have one facility in the temporarily occupied territory. The situation there is very difficult. Representatives of the so-called "new" authorities come to the tenants and demand to pay them rent and utility bills. The situation is critical. The tenants do not know how to work with it. We are constantly in consultations with them," he said.
In March, the company provided a 90-100% discount on rent, but already in May it expects to receive about 70% of rental payments, the co-owner of Alterra Group said.
Alterra Group is engaged in complex maintenance of commercial real estate, development and consulting. The company’s portfolio includes 36 facilities with a total area of 137,500 square meters.