The Ukrainian retail market is showing resilience despite objective negative factors (unstable consumer demand, declining purchasing power) and is gradually approaching 2021 levels. In the first half of 2024, the market saw both negative and positive trends. Among the first, CBRE Ukraine analysts mention a drop in the consumer confidence index. According to a study by Info Sapiens, as of the end of June 2024, this indicator in Ukraine decreased by 8 points, reaching 64.5. Iryna Nastych summarised the situation in an article prepared by the Ukrainian Real Estate Club for Property Forum.
Among the positive trends, Anna Koryagina, CEO of Nhood Ukraine, Director of Tenant Representation at Nhood Holding, notes the transformation of Ukrainian retail. "I would like to note not only the active development of Ukrainian brands that are increasingly entering the offline space, but also significant qualitative changes and the development of new more premium formats (opening of Vsi.Svoi in a new format in Respublika shopping mall, the flagship Vovk store in Blockbuster Mall, opening of several Eva Beaty stores with additional services and unique experiences for visitors, rebranding of the Cabanchi.com brand, etc.
Undoubtedly, one of the most important trends and markers of market recovery was the return of Spanish retailer Inditex to Ukraine, which opened stores in Kyiv and Lviv. It is expected that the next important step will be the return of the Swedish retailer IKEA.
Analysts of NAI Ukraine cite the following indicators:
- Decrease in vacancy rate to 7.9% - the return of international groups reduced the vacancy rate, but a "healthy" vacancy rate in the shopping malls and the absence of IKEA "keep" the facilities from the "0" vacancy rate. As for the vacancy rate in shopping malls in the west of the country, it was significantly close to "0", as internal migration and people returning home created demand and retailers responded to it with their presence.
- The supply in Kyiv is 1.7 million square meters.
- The retail trade volume (2023 figure) is equal to $49.7 billion.
As of the end of the first half of 2024, no new shopping centers were commissioned in the market, which kept the total volume of competitive supply of retail space at about 1.59 million sq m, CBRE Ukraine analysts say. No new shopping centers are expected to be commissioned in Kyiv by the end of 2024. Similarly, no shopping centers were commissioned in other regions of Ukraine. However, the trend towards the opening or plans for the potential commissioning of small regional shopping centers in safer regions of the country continues. "The lack of development is directly related to rising construction and operating costs, increased security risks, power outages, shortage of skilled labor and limited access to debt financing," the analysts explain.
