Since the beginning of the full-scale invasion, the business climate, population structure, and the very vision of the city’s future have undergone fundamental changes. How can we address all the new challenges and rebuild Odesa into a city that will continue to develop and prosper?

Market leaders — representatives of major construction companies — searched for answers to this question during the panel discussion “Investment Attractiveness of the Odesa Region” held as part of the Odesa Investment Congress.

Since legal support for real estate and construction projects is one of the key areas of activity of DE-JURE (as confirmed by its inclusion in the TOP-50 leading law firms in Ukraine), we could not overlook such an important event.

Combining the Incompatible: Which Projects Are Successful Today

The most effective and, at the same time, the most complex projects in the Odesa market today are those that combine different types of activities — for example, integrating residential and commercial real estate with medical facilities.

Such projects are the most innovative, reliable, and capable of generating stable income. One of the unique projects by SPATIUM Group is a five-star hotel combined with a maternity hospital.

As noted by SPATIUM Group CEO Oleksandr Seleznov, the Odesa market is significantly more attractive than the western Ukrainian market. Its investment advantage lies in the absence of outdated heavy industry, meaning nothing prevents the development of new projects, clusters, and the implementation of innovations. Odesa has enormous potential for a new start.

At the same time, real estate is a result of regional development. The tourist season lasts only 3–4 months, but what will Odesa do during the rest of the year? In particular, will property maintenance costs consume all the profits generated during the tourist season?

Therefore, investments should be balanced and diversified: not only in residential construction for tourist rentals but also in agriculture, education, IT, industry, and other sectors. Local residents should be interested in the sustainable development of the region.

Commercial Director of the ZARS holding company Liana Feshchuk noted that back in 1998 the London School of Economics considered Odesa as a city of campuses where science and education could be developed. Investors planned to build a campus near Zatoka, but for various reasons the project was not implemented at that time. However, the potential remains.

Co-founder of Harmony Development Oleh Cherbadzhi sees opportunities in the development of suburban construction. The company builds autonomous cottage communities in territorial communities, from which residents can reach the centre of Odesa or the sea within 15–20 minutes.

Thus, Odesa’s most successful developers are shaping how the city will be restored and developed. To achieve this, they meet, conduct brainstorming sessions and research, and plan development strategies for two generations ahead.

As noted by Well-Being Contech CEO Mark Kestelboim, developers, businesses, and active residents must jointly rethink the role of the city and develop a new business strategy to achieve sustainable development.

Wartime Risks

Despite the war, Odesa remains a vibrant city where people continue to live and visit for leisure. Therefore, developers continue their work while taking existing risks into account.

CEO of the construction company “Gefest” Vasilis Boumbouras noted that there is no business without risks. Before the war, the main risk was market unpredictability, while the beginning of the full-scale invasion introduced another factor — an unpredictable increase in construction costs. Most construction materials and components are purchased by developers abroad, which means inflation has become an additional challenge.

According to STIKON CEO Anatoliy Rahulin, the main difficulties are related to human resources. A developer needs to attract a sufficient number of qualified specialists to ensure a fast construction cycle. At the same time, people who have chosen to remain in the city and are selecting a reliable developer are focused not only on profitability but also want to be confident that the project will be fully completed.

Founder of Paritet Group Hennadiy Kaftya also highlighted challenges related to logistics, the cost of construction materials, global price increases, and power supply disruptions caused by massive attacks carried out by Russia. At the same time, he believes that Odesa should continue to attract investment because the city remains undervalued from an investment perspective.

In his opinion, Odesa needs to develop logistics (imports and exports), tourism, modern manufacturing, energy, and other sectors.

Summing up the discussion, Managing Partner of the law firm DE-JURE, attorney-at-law, PhD in Law Grygoriy Tripulskyi, noted that while foreign investors are waiting for the war to end, developers are selling real estate only slightly above cost, receiving minimal profits.

Foreign investors are being held back by uncertainty over whether construction projects will be completed. Many projects that began before the war have been put on hold, while other developers have continued working throughout this period. Therefore, investors want to understand what guarantees exist for project completion.

The state is taking certain steps — for example, the “єОселя” housing program is operating — however, there are still no state lending programs for developers that would allow them to complete construction projects and commission them. Currently, companies are completing projects using their own funds. If such a financing program were introduced, it would create a significant opportunity for investors.

Ukrainian investors prefer to cooperate with companies that have a strong reputation and successful project history, but they are concerned about legal uncertainty. A number of changes have also been introduced in this area to protect investors. In particular, new projects are registered in the real estate register as special property rights objects, which helps prevent double sales.

In any case, we recommend consulting a lawyer — DE-JURE has the experience and a team of specialists who can help resolve your specific legal issue.