I wrote a number of relatively optimistic articles on the Kyiv real estate investment market earlier this year (here & here) and was quite enthusiastic about the high yields.
I’ve been monitoring a real estate investment fund in Kyiv for a while as its positioning is quite unique in Europe. It claims it can reach gross yields of 18% without the use of leverage, by buying in a market that is down 75% from peak.
A Kyiv real estate focused investment fund
The Kiev Real Estate Recovery (KRER) investment fund is managed by a Canadian, John Suggitt, who has been active in Ukrainian private equity and real estate for 20 years.
Does 18% gross yields sound too good to be true? Or is it simply an undiscovered investment gem targeting a niche market in Europe?
Watch the discussion John and I have to form your own opinion. I asked many of the questions that needed to be asked, and dug into the numbers.
– Why Ukraine?
– Why a Real Estate investment in Ukraine?
– Why a Real Estate investment in Kyiv?
– A major catalyst: the mortgage market
– Impact of Covid on the real estate investment market in Kyiv
– Legal pitfalls when investing in real estate in Kyiv, Ukraine
– Case study 1 with yield calculation
– Key risk: the Ukrainian Hryvnia
– Case study 2 with yield calculation
– Case study 3 with yield calculation and Kiev Real Estate Recovery Fund 2 (KRER 2)
– Which auditor & fund structure
– Dividends of 10%
– Amounts raised
– Skin in the game
Watch the conversation John & I have here on investing in Kyiv real estate. Feel free to leave a comment and subscribe to the Youtube channel.
You can also sign up to John’s free Ukrainian real estate market updates here.
This is what I do at The Wandering Investor
I travel around the world, and find unique internationalization and diversification options.
To a World of Opportunities,
The Wandering Investor
UPDATE March 2021: I did a market visit in Ukraine and met John in person: Highest Real Estate yields in Europe – Ukraine – $1250 per m2 with 19% yields in Kyiv
Other articles on Ukraine:
- An ambiguous case – is now the time to invest in Ukraine?
- Is a real estate investment in Kiev, Ukraine, attractive?
- Highest Real Estate yields in Europe – Ukraine – $1250 per m2 with 19% yields in Kyiv
Available services in Ukraine:
- An Independent Real Estate Buyer’s Agent and Renovation Manager in Kyiv
- Real Estate Lawyer in Kyiv, Ukraine
- How to obtain Residency in Ukraine
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
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*a consulting session is a discussion about your portfolio and objectives. It does not constitute legal, financial, tax or investment advice.
Dear Maurice, office sector now seems to be a better investment than residential (it is also more easily to find a reliable customer to rent it to), but could it be that office shortage is simply due to their still high price? I mean, I have seen in Kiev a lot of new tall buildings that are told to be quite empty due to their high rental cost.
I would also like to know Your opinion about RE outside Kiev, especially in Western Ucraine. I have been there this year and found a very nice environment. Lviv for example is becoming to lead the IT sector (a real economy one) and not only, which has increased direct contacts with foreign customers. Prices are quite affordable (about 1000$/sqm in Lviv, 600 in Ivano Frankivsk and so on). Could it be a long term more safe investment than Kiev market, or at least an alternative?
Thank You for interesting articles. Have a nice day!
Hello Sergio,
Thanks for your comment. In terms of the office market, I don’t know. Feel free to contact John directly if you are interested.
Concerning Lviv, yes you can buy apartments for $1000 per m2 outside the city center, same as in Kyiv. The beautiful historical center is as expensive as the center of Kyiv. The reason is that a lot of Ukrainian money went there because Lviv is deemed less likely to have massive civil unrest or war. However, the capital Kyiv, if things don’t take a bad turn, has much more upside in my opinion.
Lviv has less than 800,000 people, and Kyiv about 4 million.
I see Lviv as safer if you are worried about unrest, but the yields are lower, and there is less potential for price appreciation.
As for Ivano Frankvisk, lovely little town (go there in Summer, they have a cool festival), but why invest in a tier 3 city when tier 1 (Kyiv) and tier 2 (Lviv) cities are on sale?
Happy investing!
straightforward, clear and logical comment, thanks a lot!
The Kyiv market is 10x more liquid than Lviv.
100%