Average investment in Ukrainian resort real estate up to $150,000-200,000
The average investment in resort real estate projects has increased in two years from $80,000-100,000 to $150,000-200,000 per unit, partner of Apartel resorts Yevhen Kudriavchenko said in an interview with Interfax-Ukraine.
"The cost of an investment meter is constantly increasing. Our initial projects were simpler, and the market was less demanding, so the cost of a square meter with repairs and furniture was within $2,500-$3,500. In other words, the average unit cost in 2022-2023 was between $80,000 and $100,000. Today, most projects on the market are more complicated and expensive… Generally, we see a market trend of launching large projects, such as Escape City, Glacier, and GORO. As a result, the price of a square meter for such large-scale projects has increased. At the start, it was $4,400-$4,500; by the end of the project, it will be $6,000-$7,000. Thus, the average check for one lot has shifted from $80,000-$100,000 to $150,000-$200,000," said Kudriavchenko.
He reported that today, the declared profitability in investment resort real estate is 10-15%.
"Let's be honest, a more realistic figure is about 7%. As for payments, few players keep detailed statistics yet. In addition to us, five or six other companies make regular payments for which data can be collected, while other projects are still under construction. The general trend is as follows: subsequent projects will demonstrate lower profitability [6-8%], because they become more expensive at the start, but investments in them will be more reliable due to strong infrastructure," he noted.
The Apartel resorts portfolio currently has three operating projects: Apartel Shayan (commissioned in 2020, 60 rooms), Apartel Uzhhorod (commissioned in 2022, 60 rooms), and Apartel Skhidnytsya (commissioned in 2024, 280 rooms).
"In the first year of operation of a large resort [in Skhidnytsya], we managed to provide investors with a return of 10-12% per annum, and we hope that next year we will be able to increase this figure. However, only time will tell whether all 80 hotels that are making similar promises today will be able to fulfill them," he said.
According to Apartel resorts analytics, based on open data, in Ukraine, as of 2024, the opening of more than 30 projects was announced: from small complexes to large-scale hotels with hundreds of rooms.
"In fact, only seven or eight have opened. In most projects, construction is delayed by 6-12 months, and this is the main factor holding back sales of apart-hotels. Potential investors have the funds, but are not ready to invest further until they see the fulfillment of previous promises. Therefore, I believe that the market is currently in a downturn. At the same time, if most projects open and demonstrate good financial results in 2025-2026, we will see a second boom," he noted.