Odesa Apartments yielding 14% returns in a War Zone

A unique arbitrage exists between depressed asset prices and resilient rental demand in Ukraine’s primary coastal city.

Arcade on Deribasovskaya street Odesa

18th Century Italianate architecture in Odesa's UNESCO-listed Old Town

Odesa's Arcadia Plaza Beach - Sea Water Swimming Pool

Odesa Opera House

Potemkin Steps in the evening sun connecting the Old Town to Odesa port

Odesa Port and ferries to Turkey, Bulgaria, Romania and trade to the Mediterranean

While institutional capital waits for a formal peace treaty, private investors are quietly capturing 14% yields in Odesa - real estate returns that haven't been seen in Europe for decades.

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Odesa has long been a popular holiday destination, offering a famously beautiful 18th century old town, fresh air, sports, beaches and a thriving restaurant scene. Well known among vacationers from Eastern Europe, Western travellers discovered this gem on the Black Sea between 2017 and 2022 as budget flights from Europe added Odesa’s modern airport to their busiest routes. 

Then came Russia’s war of aggression in 2022, asset prices crashed and remain depressed - often 40-50% below historic highs in certain sectors. Yet rental demand and accompanying income yields have surged despite the risks. What are the drivers behind this?

• Internal Displacement: Ukrainians displaced from the East and South have relocated to Odesa, seeking functional infrastructure and quality of life. 

• Domestic tourism has replaced international travel. With borders restricted, 30 million Ukrainians are holidaying at home. 

• High-spec, secure apartments command daily rents that rival pre-war levels

  
  

Premium apartments in Arcadia typically command €60–€90/night off-season and €90–€130/night during peak summer months.

Both residents and foreign buyers can legally purchase residential property in Odesa, with prices starting from around €55k for smaller units near the sea.

According to LUN and Airbnb listing data, Arcadia apartments typically achieve 60–65% annual occupancy.

The risks are clear, with near-daily air attacks from Russia. But many inside Ukraine are investing anyway.

Here is a recent real example from one of our clients: 

Net ROI Calculation:

• Acquisition (Arcadia 50m²): €62,500

• Renovation/Furnishing: €15,000

• Gross Annual Income (61% Occupancy @ €69 ADR*): €15,360

• Yield: 19.8% (Gross), Net 13-15% after management and utility fees. 

*Conservative Blended Year-Round ADR taking into account deep winter discounts.

These returns from single unit residential are unheard of in stabilized European markets. A 14% Net Yield in a major European coastal city is excellent—for context, most Western European capitals struggle to hit 4-5% Net.

Market	Asset Type	Typical Gross Yield	Net Yield	Features
Odesa – Arcadia	New Build High-Rise	~20%	13–15%	Short-term rentals near beach/nightlife
Odesa – Old Town	Heritage Renovated	~16%	11–13%	Luxury historical apartments
Athens	City Centre Apartments	5–6%	3–4%	Strong tourism demand
Lisbon	Historic District	4–5%	3–4%	Airbnb restrictions increasing
Barcelona	City Centre	3–4%	2–3%	Strict STR regulations
Paris	Prime Residential	~3%	2–2.5%	High asset prices compress yields
London	Prime Central	~3%	2–3%	Very high entry prices

The Two Areas to focus on: 

1. Old Town: 

The UNESCO-protected centre is for investors prepared to carry out renovations. More time and effort is required than new-build properties by the beach, but returns for heritage buildings often outperform over the medium term.

• The Asset: High-ceilinged, 19th-century apartments in the "Golden Triangle" near the Opera House, Primorsky Boulevard and Potemkin steps.

• The Strategy: Buy-to-let. There is a chronic shortage of "Western-standard" luxury rentals in historic buildings.

• The Upside: Scarcity. They aren't building any more 1880s Italianate facades. When the reconstruction boom hits, these assets will lead the capital appreciation curve, particularly for international tourism returning after the war.

• UNESCO Status: International reconstruction funds from Italy and Japan are already financing the €75M+ restoration of the Transfiguration Cathedral and Fine Arts Museum. 

  
  

2. Arcadia: 

This is a sub-market of sea views, glass & steel towers, restaurants and nightlife. The superclubs and beaches are nearby, and the majority of tourists stay here. 

You can buy discounted off-plan for new buildings, though construction has naturally been limited since 2022. Minor renovations can be necessary for buildings constructed more than 10 years ago. Common areas are usually in good shape, with parking and easy beach access.

• New-build towers with panoramic Black Sea views.

• Units in buildings with autonomous power (generators), 24/7 security and certified N-standard shelters command a 15-25% rental premium.

• Liquidity. Arcadia is the most liquid residential sub-market in Odesa. It appeals to the younger, mobile demographic and digital nomads who value infrastructure, underground parking and modern facilities.

  
  

Residential Property Prices per sqm Odesa vs Major European Cities

Residential Gross Residential Yields - Odesa vs Major European Cities

Prices & Capital Appreciation

• As of H1 2025, Odesa recorded the highest price increase in Ukraine's primary market at 19%, outstripping even Lviv and Kyiv (LUN).

• Average 1-bedroom apartments across all of Odesa now trade at €47,500 (up 25% YoY). Investors are currently buying at a ~30% discount relative to historic highs

District	Asset Type	Entry Price (per m²)	YoY Growth	Typical 1-Bed Total
Old Town	Heritage (Renovated)	€1,450 – €1,600	+24%	€85,000 - €110,000
Arcadia	New Build High-Rise	€1,130 – €1,280	+19%	€55,000 - €75,000

Future demand drivers:

Tourism hasn't gone away; it has localized. With borders closed to military-age men and no flights outside the country, Odesa is Ukraine’s primary summer vacation spot and the rental market is strong. Other popular tourist areas in occupied Crimea and Kherson are no longer an option. 

Odesa, a 5 hour drive south of Kyiv, is the only route to the sea for Ukraine’s massive annual export of agricultural products, metals, oil and other resources. It is also the last coastal holiday option left for a country of 30 million. 

Tourism via budget flights from Europe will restart soon after a peace agreement, and RyanAir have already begun negotiations with Lviv, Kyiv and Odesa airport authorities.

14% yields in Odesa - Risk Mitigation

The Old Town occasionally suffers damage from attacks on the nearby port infrastructure. Drones have impacted high-rise buildings in Arcadia. How to manage that risk?:

1. Energy Autonomy: Invest in buildings with independent heat & power, with bomb shelters in the basement or nearby. Similar to Israel, new constructions will often have independent safe-rooms.

2. War Risk Insurance: Programs like the MIGA (World Bank) and new local government initiatives are providing frameworks to protect physical assets. However this insurance market is very much in its early stage and will reduce income yields. 

3. Ground and lower floors are safer from air attack than high-rise. 

   
   

Currency Risks

Rental agreements and asset prices are often informally denominated in euros or dollars, although transactions and taxation are conducted in Ukrainian hryvnia. The hryvnia has steadily depreciated since 2022, and investors should only convert sufficient cash to complete the purchase and pay notary, brokerage fees and state fees.  

Renovation Cost Inflation

Also worth bearing in mind is the current inflation in renovation costs, while still very low compared to European standards, are increasing due to the difficulty in finding skilled labour due to the war. Materials costs have risen sharply too, especially for imported goods. 

Legal Complexity: 

For a foreign investor navigating purchase, renovation and management of properties can be a challenge: Local bank accounts, repatriation of funds, tax treaties etc are often the biggest hurdle. Ukrainian notaries oversee property transactions, and the cadastral registration and title transfer process is generally straightforward. However working with an experienced bi-lingual advisor in Odesa able to guide you through legal issues is recommended. 

Exit Strategy

After the war as Ukraine moves towards EU integration, affordable credit will offer investors a way to take their equity off the table via a mortgage on their apartment. Asset values and rents will grow accordingly.

Liquidity in Arcadia is high, but the Old Town less so. If an early exit is a priority, beach-side will find local buyers sooner than old-town, if the renovation is well-executed and price is realistic.

How long will the opportunity last?

Odesa is a large city of 1 million, and over the last 4 years there has been relatively little damage to residential areas in Arcadia and the Old Town. Low asset prices will remain for the duration of the war.

Comparative Analysis: Post-War & EU Integration Booms

Odesa is tracking a path established by other Eastern European cities.

The Post-Conflict Surge: Dubrovnik, Croatia (1995–2005)

After the siege of UNESCO-listed Dubrovnik during the Balkan wars of the 90s, property prices were initially suppressed.

• Between the peace agreement in 1995 and EU accession in 2005, prices in the Old Town rose almost 5x from €800/m² to over €3,500/m².

• UNESCO status acted as a "Quality Seal," de-risking the city for Western European buyers and institutional funds.

EU convergence: Warsaw & Krakow (2004–2014)

• Warsaw: Post-EU accession, residential prices grew by an average of 30% annually between 2004 and 2007 (ECB data). Prices for the Old Town saw the fastest appreciation.

• Krakow (UNESCO): Tourism surged to 14.7 million visitors by 2024. Property in the historic centre transitioned to high-yield commercial / short-term rental assets, now contributing 8% to the city's GDP.

The Bottom Line

Odesa is the only city in Europe where you can buy UNESCO-protected heritage or prime Mediterranean-style residential assets for under €1,500/m² while generating high double-digit yields. The risk is a daily reality, but the potential returns are backed by fundamental scarcity, an international conservation effort, and an inevitable post-war reconstruction boom.

When the war eventually ends prices will grow very quickly. For foreign investors seeking high yields and willing to carry out renovations and tolerate risk, the returns in Odesa are unparalleled anywhere else in Europe.

Staunton Partners is the only broker based in Odesa focused on foreign investors. As a British-Ukrainian company, our bi-lingual team will assist at every stage; From property search to purchase, renovation and rental.

Investing in Ukraine is an investment in the future of Europe. Contact us today.