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How did the war transform the demand for retail space, which retail real estate formats turned out to be the most promising and why should Polish retailers invest in Ukraine now.
Despite the ongoing war, Ukraine's retail real estate market continues to demonstrate resilience and adaptability.The number of stores operated by national chains is growing, retailers are transforming their formats, and developers are opting for more compact and economically flexible solutions. In this interview, Andriy Lototskyi, CEO of Retail & Development Advisor (RDA)—one of the largest consulting firms in Ukraine in the retail and commercial real estate sectors—talks about key market trends, opportunities for Polish companies, and why now is the best time to invest in Ukraine.
– How has the retail real estate market in Ukraine changed under the pressure of the full-scale war? What key trends and processes can you highlight?
– The full-scale war triggered significant migration of both the population and businesses to western Ukraine. As a result, cities like Kyiv, Lviv, Uzhhorod, and other towns in western Ukraine have seen population growth of 20% to 80%. Accordingly, retailers have also reoriented toward safer regions.
Overall, retail trade continues to grow despite the wartime challenges. As of April 2025, the number of stores run by national chains reached 23,500, compared to 17,500 in December 2021, just before the war began.
At the same time, due to the lack of professional retail space, there is high demand for quality commercial properties. To reduce risk and speed up return on investment, developers are focusing on smaller district shopping centers, malls, and retail parks ranging from 4,000 to 30,000 square meters.
– Which regions of Ukraine are currently the most active in terms of retail development?
– Kyiv remains the most active region due to the concentration of national and international retailer offices and the city’s high purchasing power. Attention is also growing in central regions like Vinnytsia and Cherkasy. Western regions—Lviv, Uzhhorod, Mukachevo, Ivano-Frankivsk, and Chernivtsi—are particularly dynamic.
Among RDA’s active projects scheduled for completion between 2025 and 2029, three are located in Kyiv and its region, one in the south, two in central Ukraine, and twelve in the western regions.
– Can you tell us more about these projects? Which ones do you consider the most promising?
– All of them are promising. Time will tell how successful they will be. In my view, one of the most anticipated projects is the “Ukraina” Shopping Mall in Uzhhorod, slated to open in early 2026. It will feature a modern cinema, a large supermarket, a children’s entertainment center, top international and national brands, and a food court with a viewing terrace.
In the next 2–3 years, Uzhhorod will see more high-end projects, such as Riverville Mall and Residents Mall. Additionally, several retail parks and new malls will be launched in western cities like Lviv, Chernivtsi, and Ivano-Frankivsk, which continue to grow rapidly.
– How has consumer behavior changed, and how does that impact retail development?
– Over three years of war, consumer structure has shifted. A large portion of the premium segment has left Ukraine, while middle- and low-income consumers have mostly relocated to safer cities in central and western Ukraine.
Naturally, the population growth in these regions has led to increased demand—especially in food retail and among fast-fashion players offering affordable, trendy clothing.
– Which retail formats are currently the most promising in Ukraine and why?
– Major cities are already saturated with large regional shopping malls. In smaller towns, there’s often a lack of professional retail real estate.
Investors are reluctant to fund large-scale projects due to long payback periods and war-related risks. Instead, they prefer building small-scale malls in densely populated residential areas or developing standalone retail parks in high-traffic locations. Typically, retail park investments are 40% lower than those in classic malls, making them even more attractive. As a result, this segment is growing fast.
This year, retail parks account for 40% of RDA’s commercial real estate projects, compared to just 10% last year. This reflects a broader European trend that is now relevant to Ukraine.
– How have tenant requirements for commercial space changed? What do they focus on most?
– The supply-demand balance in Ukraine’s retail leasing market remains relatively stable. While tenant requirements haven’t changed drastically, some shifts have occurred.
Some retailers have revised their formats—either optimizing and downsizing or expanding into new markets and adapting to evolving consumer behavior. Tenants now prefer spaces with at least basic interior finishing. However, due to limited investment resources, most developers continue to offer shell & core spaces, requiring compromise.
This includes options like gradually increasing rent after a store opens or linking rent to turnover. Terms vary depending on demand: if several tenants are interested in the same space, the terms are usually stricter. Overall, however, most property owners today are open to constructive negotiations with tenants.
– What potential do you see for Polish companies in the Ukrainian retail and real estate markets?
– Polish retail, like European retail in general, tends to be more systematic and structured compared to Ukrainian retail. This makes Polish companies more predictable and reliable—an advantage when entering the Ukrainian market.
We’re already seeing examples of successful foreign retailers operating in Ukraine, including Polish brands like LPP Group, CCC, Half Price, and others. However, foreign brands shouldn’t be overconfident. Ukrainian retail has strengths too—especially in its speed, decision-making flexibility, and incredible adaptability, which often allows them to outperform international competitors in certain areas.
Ukrainian developers tend to prefer partners with clear business models, stable financials, and recognizable brands—all of which describe Polish companies. Their presence stimulates local brands to improve their formats, products, and services. Right now, we’re seeing a healthy synergy: on one hand, local products are in demand, boosting Ukrainian brands; on the other, international players meet the need for quality, structure, and variety. The result is a competitive environment that benefits the end consumer.
– Is your company involved in joint Ukrainian-Polish projects? If so, please tell us more.
– Yes, we actively work with Polish partners in Ukraine. We’re also in talks with several retailers from Poland and other European countries that are interested in entering the Ukrainian market.
These projects are still in preparation, so we can’t share details yet. But we are optimistic and look forward to launching large-scale initiatives not only in Ukraine and Poland but also across the EU.
– What advice would you give Polish developers and retailers considering Ukraine as a potential investment market?
– We understand the hesitation of many foreign companies due to the uncertain security situation. But as we say in Ukraine: “Fear has big eyes,” meaning threats often seem bigger than they are.
That’s why we always encourage partners to come see the market for themselves—visit trade exhibitions, connect with the Ukrainian Retail Association, meet key players, and talk with top management at the leading companies. At RDA, we’ll gladly arrange such visits, provide support, and share market analytics. In our view, now is the perfect time to enter Ukraine: many high-quality locations are still available, and terms are more flexible than ever. While some companies wait for more predictability, others are already laying the foundation for future dominance in the market. In the end, those who act—wisely, but decisively—will come out ahead.
