Why Is Investing in Aparthotels in Ukraine Increasingly Attractive?

By Yulia Bodnar, lead investment expert at Ribas Invest

Those existing real estate investors who used to do business in the eastern and southern regions currently prefer to place their funds in the western and central parts of Ukraine.

This is an option is for those who are looking to invest and make a profit in Ukraine rather than abroad. These investments contribute to job creation and tax payment, which further supports our economy.

Why Do Investors Choose Apartment Hotels?

There are a variety of options for investing in real estate. However, aparthotels are more than just an investment vehicle; they are both real estate and a turnkey business opportunity. In particular, below are several main reasons that market experts give for aparthotels.

• Managing company. Aparthotels have a distinct advantage over the regular housing stock in that investors do not need to maintain aparthotels. So it is a managing company that is responsible for managing all aspects from booking and repairing to advertising. This will save the investor’s time. In addition, the hotel operator's brand is usually highly influential in guests' choices. So people often choose properties of a particular brand because they just trust it.
• Guaranteed income. Public financial models are estimated by considering the average annual occupancy and room rates of previous years. As a result, companies guarantee a certain percentage of return, which is fixed in the contract.
• Commercial real estate. One more important advantage is that commercial properties are valued higher than residential ones. Commercial real estate, including aparthotels, is fully equipped and growing rapidly in value.
• Tourist location. Another important factor to consider is the tourist location, which is a key component to the success of a hotel property. In 2023-2024, the Carpathian region is still the major tourist destination in Ukraine.

Aparthotel Demand Pattern

The demand for real estate in the western part of the country has increased significantly compared to the period before February 24, 2022. This is due to the fact that before the full-scale war the demand was evenly distributed; people would invest in apartments with a view of the sea in Odesa or in the city center of Kyiv for further renting out. Today, the situation has changed because of the missile strikes and general market uncertainty.

In particular, the Carpathian region proved popular with investors at the beginning of the war owing to its proximity to the border, along with the environmental friendliness and relative safety of the region. Investors were not limited to buying only aparthotels but were also purchasing apartments in the cities in western Ukraine such as Ivano-Frankivsk, Lviv and Lutsk, where the demand for housing nearly doubled. This is indicative of trust in these locations and the overall investment attractiveness of the region.

What Affects Pricing?

The cost of apartments is driven by a number of external factors. One of these factors is supply on the market. Currently, the main focus of the guest is to have access to various infrastructure services.

Guests are no longer only interested in just houses or apartment buildings, but are also looking for a swimming pool, spa center, restaurant, and children's play area. Developers often state that that 50% of their projects are room stock and the other 50% are infrastructure facilities.

This suggests that guest satisfaction is already a challenge, even with comfortable living conditions. To make your guests feel amazed, you should provide a one-of-a-kind offering, such as well-developed and attractive infrastructure options and professional service.

Location is the second key factor to be considered. Your location should be accessible, preferably in the city center. Most developed infrastructure is found around popular tourist centers, such as Bukovel, which stands as the point of attraction and draws visitors to all the facilities located within the ski resort.

To read the rest, visit Ekonomichna Pravda.

Детальніше за посиланням про інвестиції в готельну нерухомість.

More details at the link about investments in hotel real estate.

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