News Article economy reconstruction report Ukraine war
by Property Forum | Report

After the beginning of the Russian invasion of Ukraine, real estate developers in Kyiv stopped working on construction sites and focused on defence processes. They handed over their equipment and materials for the construction of protective structures, created volunteer organizations, etc. By now, after the de-occupation of the settlements around the capital and the relative stabilization of the situation in Kyiv, some developers began to resume work on construction sites. Iryna Nastych summarised the situation in an article prepared by the Ukrainian Real Estate Club for Property Forum.

The rebuilding of Ukraine will be one of the key discussion topics of our upcoming European ESG Property Forum in Warsaw on June 1st.

According to the website, where the information on all new residential development is gathered, as of mid-May, out of 385 residential complexes in Kyiv, construction has resumed at 30 sites. Some developers say that they will keep their sites frozen until the end of martial law, some renew the work partially.

It is not yet possible to resume construction on all projects for a number of objective reasons, including not only the continuing threat of enemy missiles and airstrikes. One important reason why it is impossible to restore the full cycle of work at construction sites is the shortage of personnel, which became more tangible with the beginning of military aggression. A large part of the workers of construction companies is involved in the defence of the country.

The construction company "Intergal-Bud", one of the largest residential developers, reports that, according to rough estimates, almost half of the employees (and this includes general contractors, back office, etc.) help defend the country in one way or another - some as part of the armed forces of Ukraine or the military, and some by providing logistics needs as volunteers.

The press service of one of Kyiv's largest real estate developers "Kyivmiskbud" gave the following figures: "More than 60% of our employees, including the vice presidents of the company, are in the ranks of the Armed Forces and the Defense Forces. The rest of the staff is mainly engaged in volunteer work. This includes the purchase of bulletproof vests, unloaders, anti-tank hedgehogs for the AFU and Special Territorial Defense Forces, food for the Humanitarian Headquarters, and medical supplies for the Main Military Hospital.

At City One Development, almost all of the male manpower is involved in the war.

Another problem faced by Kyiv developers is the shortage of construction materials. Part of the resources have been transferred to defence needs - concrete blocks, rebar, etc. In addition, because of problems with logistics and production, it is difficult to purchase the necessary materials.

"Many Ukrainian manufacturers of materials have not worked since the end of February. Enterprises suffered as a result of military action, were under temporary occupation, and some stopped because of the lack of raw materials. Imported goods and materials are impossible to obtain due to the blockade of our ports," comments Maxim Grinchuk, head of the construction materials division of the national chain of metal centres, Vartis.

The expert says that after the mass launch of construction almost all positions of construction materials will become vulnerable due to high demand and shortage. The most tangible shortage will be felt in the segment of gypsum materials due to the lack of raw materials, which are produced in the Donetsk region, where the fighting is ongoing.

There will be a shortage of bricks because it takes gas or coal to make them. Glass, where much of the raw material was from the Russian federation. Many imported items will be in short supply. For example, hardware and fasteners, power tools and because of the blockade of Ukrainian ports. "Therefore, today we need to create new logistics routes with European manufacturers," Maxim Grinchuk emphasizes."Our company plans to adapt and improve its construction to the conditions in which we will have to work. Currently, we are looking for alternative materials and construction technologies. We are studying the Western market of materials and projects", says Kseniya Savchuk, Strategic Marketing Director of ODG DEVELOPMENT.

"If now to resume work at all construction sites in Ukraine and the capital region in particular, objectively, the available resources are not enough. It takes time to restore the industrial capacities of domestic manufacturers, which were damaged as a result of hostilities," summarises Anna Laevskaya, commercial director of the developer "Intergal-Bud".

Cover image: City One Development