The pre-war period – the warehouse logistics market (the total area of all warehouses in the country) does not exceed 3,000,000 (three million) square meters.

Wartime – the warehouse logistics market (the total area of all warehouses in the country) does not exceed 2,000,000 square meters.

The growth potential is 3 times, taking into account the needs of warehouse space for 2024 – 6,000,000 sq.m.

In recent years, there has been a shortage of modern high-quality class A warehouses and specialized hubs in our country.

Therefore, in our country, warehouse logistics is a rather promising direction of investment.

How are things going on the warehouse logistics market?

In the process of research, Pro-Consulting specialists:

comprehensively analyzed the goals and defined the tasks of warehouse logistics;
identified and described the main trends of the capacity of this market, the basic trends of its development;
calculated the shares of warehouses by category and their distribution by region;
comprehensively analyzed the structures that are consumers of the considered services, interested in using warehouse real estate (regardless of their areas of activity);
formulated a forecast for the development of this market segment for the next few years;
performed a comprehensive analysis of factors affecting the development of the warehouse logistics market at present and in the medium term.

The detailing of the topic took place taking into account the main operators of Ukraine operating in this market segment, with an emphasis on the main advantages and services provided by each of them, analysis of the financial condition, logistics of the warehouses they own. A matrix was worked out in terms of the main clients, including potential ones.

Top cities of Ukraine by the volume of the warehouse logistics market

As of 2019, the warehouse logistics market (the total area of all warehouses in the country) does not exceed 3,000,000 (three million) square meters. At the same time, they are distributed rather unevenly:

the maximum amount is located in the Kyiv region. 23.4% is located here;
in second place – Cherkassy, with an indicator of 7.6%;
on the third – Kharkiv (7.0%).

The vast majority of the premises are reconstructed facilities of former industrial enterprises built back in the USSR.

Market operators operating in this service segment, promptly responding to the growing solvent demand from potential tenants, strive to expand the available space in every possible way.

However, the efforts being made in this direction are clearly insufficient. A simple example. According to the results of 2018, the vacancy rate of warehouse space fell to 2.8%. This is directly due to the overall increase in trade by 14% in the country, compared to the same indicator in 2017.

In the first half of 2019, we were not lucky enough to increase the total amount of warehouse space (in the warehouses of all groups) by only 300,000 sq.m.

The main consumers of warehouse logistics services are:

• companies that are direct producers;
• retailers;
• distributors.

Moreover, retail remains the clear leader of demand in this market segment, accounting for approximately 63%.

The second place was shared by representatives of the pharmaceutical and medical industry, 3PL operators. Almost 95% of the existing warehouses are leased by these two groups.

The analysis of the manufacturing sector indicates that the leading enterprises with a significant margin here are engaged in the production of food products, tobacco products, various beverages, clothing and textiles.

Lviv region has an additional bonus due to its geographical proximity to Poland, one of Ukraine’s important business partners.

Prospects for the development of warehouse logistics are determined by the steadily low vacancy rate of free warehouse space, with the growth of demand for warehouse logistics, which allows us to predict the actual loading of warehouses under construction in the shortest possible time. Potential customers primarily include distributors, manufacturers, and retailers.

The natural expected reaction of companies that own warehouses in such conditions is an increase in rent (the estimated upper bar of its increase can reach 20%). This significantly shortens the payback period of new warehouses currently being built. They especially belong to groups A and B+.

Prospective areas of the warehouse logistics market in Ukraine have maximum investment attractiveness

Warehouse complexes belong to commercial real estate. Investing in the construction and modernization of new warehouses is considered by many potential investors as a venture operation. This is explained by the following links: changes in the estimated profitability of the object depend on a number of hard-to-forecast external factors.

These can include the general trends of economic recovery after the recession of the pandemic, changes in national legislation, and corruption risks.

In a recent interview, Yaroslav Okrayets (CBRE Ukraine), who heads the capital markets department, noted that the main indicators of interest to investors include profitability, which is determined by the ratio of net income (per year) that the lease brings to the amount of invested investments , capitalization rate, net operating income.

Before the outbreak of the COVID-19 epidemic, at the beginning of 2020, the rate of return for warehouses of group A was about 13%.

For primary investments, according to Volodymyr Mysak (Cushman & Wakefield), who heads the company’s capital market department, in 2021 the compositions of groups A (any) and B+ are recommended. This direction promises interesting opportunities and has significant potential.

The average payback of the composition of group A, with the right location, in Ukraine is 8-10 years.

Company LLC “AKVA-LUX, VINNTYSA” provides services in the construction of class A and A+ warehouses

• use of energy-efficient equipment, heat pumps, etc.;
• use of heat/cold preservation technologies in industrial and warehouse premises;
• use of solar energy, thanks to the large area of the roof – the warehouse building can be autonomous;