The aggressor’s invasion of the territory of our country continues to have a negative impact on the state of commercial real estate. According to the experts of the UTG company, the cumulative effect of negative factors leads to a sharp increase in vacancy in shopping centers to 19.4%. An increase in free space in regional format facilities is especially noticeable, where the vacancy rate reached 26.7% as of November this year. This indicator is slightly lower in district format facilities and is 18.9%. But the lack of large-format department stores and a significant number of Russian brands in the composition of district shopping centers played into the hands of these shopping centers in the past and led to a significantly lower vacancy rate of 7.3%. While in large-format facilities, in the medium term, it is possible to predict the probability of continuing serious difficulties (lack of anchors, department stores, entertainment operators) when filling. Which in turn will trigger a new round of reformatting/transformation of galleries in most objects or even make the need for reconceptualization or renovation inevitable.

In general, according to UTG analysts, commercial real estate in wartime Ukraine is characterized by:

• The total exit of Russian chains and the lack of a sufficient number of alternative Ukrainian or international department stores on the vacated space;
• Closure of international operators – “Inditex”, “H&M”, “IKEA”, “M&S”/”GAP” before the end of hostilities;
• The negative impact of the consequences of the coronavirus and the general limited range of anchors was reinforced by military actions – adrenaline/family/interactive entertainment, cinemas, DRC, large-format fitness centers are practically not functioning;
• Relocation of national chain stores to safe regions, attempts to expand local (domestic) chains from the east of the country to the western and central regions. This process is often associated with the need to adapt the format to reduced store areas due to low vacancy in “quiet” regions and the lack of alternative sites;
• Optimizing trade networks and the number of operating stores – focusing only on profitable sites, closing unprofitable ones;
• Slowing down the expansion up to the complete stop of new investments in a number of regions of Ukraine;
• The demand for street-retail stores (due to the coronavirus epidemic and security during hostilities), which have been gradually losing positions over the past few years;
• A change in the consumer portrait in the regions (well-to-do residents have left, migrants have arrived), which often causes a discrepancy between the presented brands and the income of the population.