The Missing Middle: When will Foreign Capital return to Ukraine's Commercial Real Estate market?

Market data as of August 2026.

If you look at the Ukrainian real estate landscape today, there is a striking gap in financing.

At one end of the spectrum, you have individual investors buying single-unit residential flats in cities like Odesa or Lviv, chasing rental income at entry prices well below 2021 levels. 

On the opposite end, you have sovereign-level investors like the U.S. International Development Finance Corporation (DFC), and the European government banks EBRD and EIB, backing major real estate projects in logistics and infrastructure.  

In between those two extremes—where mid-market Private Equity Real Estate (PERE) funds and traditional commercial Foreign Direct Investment (FDI) usually sit—there is almost complete radio silence. The middle of the market is transacting, but it is transacting almost entirely in domestic hands.

To understand why the commercial gap exists, it helps to look at where foreign commercial capital went historically, how it left, where sovereign-tier figures are placing their bets now, and how current property yields actually stack up.

1. The Legacy Wave (2008–2015): Mid-Market FDI Before the Freeze

The majority of traditional commercial real estate FDI into Ukraine took place between 2008 and 2015. These were conventional property funds and developers buying land, offices and shopping centres. Almost all of them have since exited, and—crucially—most sold to Ukrainian buyers rather than to other foreign funds.

• London & Regional (L+R): The UK investment firm founded by the Livingstone brothers, with upwards of £9bn in assets under management, holds Podil Plaza in Kyiv—a mixed-use commercial and residential complex in the historic Podil district, owned and leased directly by L+R. It remains one of their few legacy positions still on the books rather than sold down.

• Meyer Bergman (now MARK): The London-based private equity real estate manager made its first-ever acquisition in Ukraine in May 2008: the Aladdin shopping centre in Kyiv, bought at a 12% yield, providing around 10,600 sqm of retail space across roughly 120–128 units. Aladdin traced the full arc of the foreign mid-market cycle. Meyer Bergman brought in crisis management within months of purchase, when tenants could not pay full rents through the 2008/9 crash. It then held the asset for a decade before selling to UCPIH Ltd, part of Dragon Capital a local investment bank.

• Multi Corporation: The Dutch developer built Forum Lviv, its first Ukrainian shopping centre, opening September 2015 with approximately 35,000 sqm of leasable area and 120 stores on Pid Dubom Street in central Lviv. Multi partnered with two Ukrainian real estate groups, Galereja Centre and Bud House Group, and the construction was financed by the EBRD and UniCredit—a structure that is close to the template a returning mid-market fund would need today. Multi still owns it.

• SPDI (Secure Property Development & Investment): A Cyprus-headquartered, AIM-listed property vehicle that spent years land-banking strategic residential and logistics plots across Kyiv, Odesa and Zaporizhzhia. SPDI's NAV per share fell from 15.0p at end-2021 to 9.0p at end-2022, swinging to a pre-tax loss of €1.3m, and the company has been unwinding its Ukrainian investments since 2020.

The Arcona transaction: a restart for Commercial Real Estate in Ukraine?

In February 2025—not 2023, as is sometimes reported—Dutch, Euronext-listed Arcona Property Fund (APF) completed the acquisition of the Kiyanovskiy Residence from SPDI. This is thought to be the first real estate acquisition by a Western private fund in Ukraine since the February 2022 invasion.

The specifics matter, because the scale is the story:

• Asset: a 0.54-hectare freehold and leasehold development site on Kyianovski Lane, Shevchenkivskyi district, roughly 500m from Lvivska Square, suitable for high-end residential development.

• Consideration: USD 2m total nominal— $1.2m in cash plus $800,000 in APF shares, struck against a net asset value of €11.16 per share (68,782 shares issued to SPDI).

• Context: the purchase completed a six-asset programme originally agreed between APF and SPDI back in 2020, covering properties in Bulgaria, Romania and Ukraine. Certain sale conditions had not been satisfied before the full-scale invasion, which is why it sat unclosed for nearly five years.

• What did not happen: the parties agreed that APF would not proceed with a further SPDI-owned site at Rozhny, some 43km north-east of Kyiv on the Kharkiv road, for technical reasons. SPDI's Ukrainian exit is therefore not fully complete.

A $2m land parcel, two-thirds cash, closing a package agreed before the war, is the high-water mark for Western private fund acquisition in Ukraine over four years. That is the size of the gap.

2. The Sovereign & Strategic Tier: Tech Capital and State Infrastructure

While institutional PERE funds wait on the sidelines, strategic and sovereign-tier capital is flowing into high-conviction plays.

Eric Schmidt and the Dragon Capital portfolio

In late May and early June 2026, changes appeared in Ukrainian corporate registers showing that former Google CEO Eric Schmidt and his wife Wendy had become co-owners of a slice of Dragon Capital's commercial real estate portfolio. Forbes Ukraine broke the story on 8 June 2026.

The structure and contents:

• The couple each hold 36% in seven companies within the group.

• The transaction was executed through New Ukraine PE Holding Limited, a Cyprus-based holding company that owns the relevant Ukrainian assets.

• The portfolio spans three asset classes: the Eurasia and Prime business centres (offices), the Piramida shopping and business centre (retail), and the East Gate Logistic complex (industrial).

• Forbes estimates the stake at $55m–$70m. Dragon Capital retains operational management of all the properties.

• Their co-shareholders include the family fund of Dragon CEO Tomas Fiala, alongside investors Anton Schreider and Maksym Klimov.

• Underlying performance: Eurasia Business Centre’s revenue alone rose 24% in 2025, to UAH 194m ($4.6m).

There is a neat symmetry worth drawing out. Dragon Capital is the counterparty on both ends of this story. It bought Aladdin from Meyer Bergman in 2018 and Sky Park in Vinnytsia around the same period, mopping up assets as the foreign mid-market withdrew. Eight years later significant foreign capital has come back into Ukrainian commercial real estate by buying into Dragon Capital itself, a local group who understand the potential growth of Ukraine and maintained their conviction in asset price recovery. 

Schmidt's real estate position sits alongside a broader Ukraine exposure. He is among the principal backers of D3 (Dare to Defend Democracy), the defence-tech fund launched in 2023 that began at $10m and has since grown past $30m, providing $125,000 initial cheques and investing in roughly 16 companies across drones, AI, electronic warfare and cybersecurity—most of them Ukrainian. D3 received $5m from Denmark's EIFO in July 2025 and has been expanding into the EU. Schmidt's own drone venture, Perennial Autonomy, produces the Merops interceptor and Hornet attack platforms now in Ukrainian and, since May 2026, US military use.

State infrastructure and energy resilience

At the macro level, capital is similarly bypassing traditional real estate in favour of critical state infrastructure:

• Naftogaz / US EXIM. At the Ukraine Recovery Conference in Gdańsk (URC 2026), Naftogaz Group and the US Export-Import Bank signed an agreement to develop a financing mechanism of up to $300m. It is a framework, not a drawn credit line: the mechanism provides for direct lending to US suppliers and contractors so Naftogaz Group companies can procure American equipment, works and services to restore oil and gas infrastructure destroyed by Russian strikes. The document was prepared over six months and finalised during PM Yuliia Svyrydenko's Washington visit and talks with EXIM President John Jovanovic, who also discussed a broader energy modernisation programme worth more than $1bn. It was one of 12 agreements Naftogaz signed at URC 2026.

• EBRD. The bank signed over €500m (~$571m) in new Ukrainian financing at URC 2026, taking its total wartime support past €10.5bn. Note the composition, because it is not primarily generation: €303m went to eight Ukrainian banks, enabling around €845m of new lending to Ukrainian borrowers, part of a wider financial-sector programme expected to mobilise up to €2.2bn. Energy commitments included a €90m loan to Ukrenergo for substation reconstruction, €15m to Kharkiv and €12m to Rivne for distributed heat and power. The renewables push runs through a separate vehicle—RAMP-UP, a price stabilisation mechanism developed with the World Bank, which received letters of intent for €45m from Germany and €10m from Norway on top of existing EU, Dutch and Swiss support, and is expected to underpin 1 GW of new capacity and potentially mobilise €1.5bn.

M10 Lviv Industrial Park

There is also a useful case study around the M10 Lviv Industrial Park. The first phase is being leased to Aurora, while EBRD's total investment in the project has reached $24.5m and MIGA (World Bank) has provided a 10-year guarantee covering $9.2m of investment against physical-destruction/control risks.

This is not a new acquisition, but evidence that foreign institutional capital may willing to invest post-war when the project has:

• strong logistics fundamentals;

• a credible Ukrainian sponsor;

• an international tenant;

• DFI financing;

• explicit war-risk mitigation.

3. Wartime Special Situations: Infrastructure and Paper Over Property

Where you do see foreign capital moving today, it is in hard infrastructure, logistics bottlenecks and financial debt—not in buildings.

Cross-border logistics: HHLA Eurobridge Batiovo

The clearest example is the Eurobridge Intermodal Terminal at Batiovo (Batyovo) in Zakarpattia, on the Hungarian and Slovak border. In June 2025, German port and rail operator Hamburger Hafen und Logistik AG (HHLA) agreed to acquire 60% of Eurobridge Intermodal Terminal LLC, with the Antimonopoly Committee of Ukraine clearing the transaction in August 2025 (approval extended to acquisition of 100%). The terminal operates as HHLA Eurobridge Batiovo, a joint venture with Ukrainian investment company Fortior Capital LLC, developed alongside HHLA's rail subsidiary METRANS.

The operational detail:

• Total investment exceeded UAH 120m (~$2.9m)—a figure worth reading in dollars, because it underlines how small even the flagship deals are.

• The site sits at the junction of 1,520mm broad-gauge and 1,435mm standard-gauge track, making it a transfer point between Ukrainian and EU rail networks.

• First-phase capacity is around 100,000 twenty foot containers (TEU) per year, handling grain and general cargo, with further expansion planned. Container operations were scheduled from Q4 2025; the modernised terminal was launched publicly in early 2026, announced by Deputy Head of the Office of the President Viktor Mykyta.

• The conversion is substantive: a bulk cargo terminal rebuilt into an intermodal container hub.

Two framing caveats. First, HHLA is not opportunistic new money—CEO Angela Titzrath has noted the company has been active in Ukraine for over 20 years, and it already operates HHLA Container Terminal Odessa and rail operator UIC. This is an incumbent strategic operator deepening, not a fund arriving. 

Second, on Fortior Capital: it was launched in 2019 by the current senior advisor to President Zelensky and former Minister for Strategic Industries Oleksandr Kamyshin together with Mykola (Nikolay) Nesterenko. Nesterenko has been managing partner since January 2020 and is the ultimate beneficiary of the venture funds behind the terminal. He built his career at Ukrainian energy, steel and mining giant SCM with board roles at Lemtrans and PortInvest before moving to Fortior. 

The counter-example: DP World exits TIS

Strategic operators move both ways. DP World acquired 51% of the TIS container terminal at Pivdennyi Port in 2020—at the time one of the most notable entries by a global port operator into Ukraine. In March 2026, DP World sold that stake back to its Ukrainian partners, and market sources and corporate registers indicate the 51% was subsequently transferred to an entity linked to Mediterranean Shipping Company (MSC).

Context: Ukrainian container throughput rose from 129,900 TEU in 2024 to 215,700 TEU in 2025, and Ukrainian seaports handled 42.4m tonnes of cargo in H1 2026. DP World left a growing market. Any thesis about foreign capital returning has to account for a major operator understandably choosing to divest during wartime..

Capital markets and distressed debt

Foreign special situations desks are taking Ukrainian exposure through paper rather than bricks. The dominant name is VR Capital Group, the distressed and event-driven US manager led by Richard Deitz, which has built a position in Ukrainian bonds substantial enough to give it real influence over the restructuring of companies central to the war effort—Ukrzaliznytsia, Naftogaz, and Ukrenergo, which has been in restructuring talks since its 2024 default.

The GDP warrant restructuring shows the mechanics. Talks reopened in late November 2025 over roughly $3.2bn of GDP-linked securities, with a creditor group led by New York based Aurelius Capital Management and VR Capital entering limited negotiations under NDA. Ukraine initially offered $60 in cash plus Type C bonds with a notional value of $1,260 per $1,000 of warrant value, maturing in three equal instalments in 2030–2032 at coupons stepping from 2.5% to 6%. The committee countered at up to $150 cash and $1,400 notional, with maturities pulled forward a year and coupons of 5% then 7.75%. A deal was reached in December 2025, converting the warrants into new Step-Up C notes due 2032—with bondholders subsequently pressing for improved terms into 2026.

That is where opportunistic institutional money is; It is not yet considering illiquid Ukrainian property no matter how high yields may be.

4. The Middle Exists—it is dominated by local investors

Mid-market commercial real estate in Ukraine is moving, and volumes are rising:

• Office transaction volume rose 2.5x in 2025, to $87m.

• Shopping centre investment rose 35%, to $81m.

Those are recognisably mid-market numbers. The point is not that the segment is dead—it is that the buyers are Ukrainian. Domestic groups with local balance sheets, local risk tolerance and existing management platforms are clearing the deals that a Warsaw- or London-based PERE fund cannot underwrite because it cannot get war-risk insurance, cannot satisfy an LP advisory committee on dividend repatriation, and cannot price a terminal value.

Occupancy data supports the same read. Shopping centre vacancy across Ukraine stood at 3.3% in H1 2026—though that reflects signed leases only, and a meaningful share of nominally occupied space is not physically in use because of war-related risk. Tenants are there. Foreign owners are not.

More perspective is needed here, albeit for a wartime economy; Actual numbers are tiny for a country of 30+ million people. For comparison Poland's 2025 office investment transaction volume reached approximately €1.76 billion (+8% year-on-year) according to Knight Frank, while total leasing take-up surpassed 1.56 million m² nationwide.

Poland’s two decade economic miracle has seen it firmly on the map for institutional real estate investors since 2004, and the office market there is almost 20 times the size of Ukraine’s. 

Ukraine’s commercial real estate market has a long way to go from a very low base!

Sector Breakdown: Yields & Operational Reality

For investors evaluating commercial assets actually moving in the market, the yield curve reflects physical risk, energy autonomy and location above all else.

Asset Class	Estimated Cap Rate / Yield	Primary Geography	Key Demand Drivers & Operational Notes
Logistics & Warehousing	11% – 13%	Lviv, Zakarpattia, Right-Bank Kyiv	Lowest risk. Driven by EU cross-border trade. Kyiv-region vacancy fell to 3.5% in 2025 despite a decade-high delivery year, with H1 2025 at ~3.0%—in line with pre-war levels. Prime dry warehouse rent is stable at $5.30/sqm/month (ex-VAT, ex-OPEX); hryvnia asking rents rose ~9% to UAH 200–250/sqm. Cold storage prime is $9.10/sqm/month (UAH 390–440). New competitive supply in 2026 is forecast at ~90,000 sqm, 58% below 2025. 3PL operators drove 56% of leasing, wholesale/retail 39%.
Retail Parks & Convenience	12% – 14%	Regional western hubs (Ivano-Frankivsk, Vinnytsia, Lviv)	Medium risk. Capital has shifted from megamalls toward small-format neighbourhood strips (5k–10k sqm) anchored by grocery. National shopping centre vacancy 3.3% (H1 2026, signed-lease basis). District centres show the most resilient footfall at ~670 visitors per 1,000 sqm GLA per day, versus ~522 in community centres and ~315 in regional malls.
Prime Office (Class A)	11% – 14% on leased stock	Kyiv (Pechersk, Podil, Shevchenkivskyi)	High risk/drag. Kyiv competitive supply ~2.10m sqm and falling as strikes remove stock; vacancy ~18%. Class A asking rents $16–27/sqm/month, Class B $8–18 (ex-VAT, ex-OPEX). Nominal yields look attractive—a recent 16-lot Kyiv portfolio was marketed at 11–14% on leased space.  Entry from $450,000, average lot ~$1.47m—but net yields are eroded by capex for energy autonomy: generators, dual fibre, shelters. No new business centre was commissioned in Kyiv in 2025; ~27,000 sqm may enter in 2026, plus Capital Towers (~40,000 sqm). Lviv is the clear second market, with vacancy down to ~25% and rents of $7–15/sqm.

The Bottom Line

There is no active foreign mid-market in Ukrainian commercial real estate.

The market is shaped by a three-way division. Private retail buyers hold the low end with apartment yields averaging 8% nationally. Sovereign institutions, DFIs and mega-tech figures like Eric Schmidt take macro strategic stakes—typically by buying into domestic platforms rather than assets directly. And the genuine mid-market— a relatively trivial $87m of office trades, $81m of shopping centre investment in 2025—clears domestically, into Ukrainian hands.

Foreign strategic operators are present but selective, and moving in both directions: HHLA deepened at Batiovo on a UAH 120m ticket; DP World sold out of TIS in March 2026. Agile foreign capital is expressing its Ukraine view through sovereign paper and distressed debt—VR Capital and Aurelius across the GDP warrant restructuring and state-company defaults—rather than through property.

For mid-market private equity real estate funds, the constraint is not conviction or pricing. It is war-risk insurance, dividend repatriation certainty and systemic liquidity. Until those three exist, the middle stays a waiting game, and Ukrainian buyers keep making the deals.

Staunton Partners publishes an annual Ukraine commercial real estate report — transaction volumes, cap rates by asset class and city, vacancy & rent movement, plus the deals that actually closed rather than the ones announced. It goes to a short list of funds, family offices and operators evaluating the market. Ask to be added.

Staunton Partners support Ukrainian veterans via the ComeBackAlive Foundation.