The first half of 2026 proved to be yet another test of resilience for the Ukrainian retail real estate market. The year began much weaker than expected – security risks compounded by unusually cold weather – but starting in May, the market began to recover, and some regional properties saw a one-third increase in sales volume.

Property Times, together with experts, analyzed the trends that shaped the first half of the year and what to expect by year-end. When broken down by SC format, according to data provided by Evgeniya Loktionova, director of UTG company, vacancy rates are gradually evening out across property types: in regional SCs, it stands at 14.6%; in district centers, 15.1%; and in specialty centers, 10.1%. As before, the lowest vacancy rate is found in neighborhood shopping centers – 6.5% – which is explained by their proximity to areas of concentrated population.

Key Trends of the First Half of the Year

Four years of full-scale war have structurally transformed the retail real estate market – not only in terms of metrics but also in the very logic of its development. According to Maxim Gavryushin, Chief Operating Officer of Budhouse Group, the industry has learned to respond to annual challenges: from damage and population displacement to security concerns, shelling, and shortages of energy and labor. But at the same time, long-term trends are taking shape, which the war merely modifies – accelerating some and slowing others.

The main one is the rapid growth of small-format projects. Of the nearly 70 new shopping centers that have already opened or will open in the next two years, 59 are small-format projects, primarily retail parks and convenience centers with an average area of about 9,000 square meters. The second consistent trend is a geographical shift in development toward the west: nearly 70% of new SCs planned for 2022–2027 will be located there.

Against this structural backdrop, the first half of 2026 was uneven. “The first quarter started much weaker than expected due to a combination of security risks and unusually cold weather, which forced both businesses and shoppers to focus primarily on basic needs,” says Olena Shvets, director of the retail space department at the Arricano Group of Companies. “At the same time, starting in May, we saw a steady recovery: sales at our shopping centers’ tenants grew by 20–35% in local currency compared to January, driven by grocery retail, fashion, sporting goods, and electronics.”

According to the expert, this confirms that Ukrainian consumer behavior is becoming increasingly rational: demand isn’t disappearing, but is constantly shifting over time depending on the level of uncertainty.

Rents and Vacancy Rates: Kyiv Holds Its Ground

The situation remains fairly stable in the capital’s shopping centers with a high-quality tenant mix. According to Olena Shvets, the recovery in sales in March–May created the conditions for revising certain commercial terms, although the changes were implemented cautiously. Vacancy rates at Arricano’s Kyiv properties remain minimal: the “Prospekt” SEC consistently operates at 100% occupancy, while at the “RaiON” SEC, the vacancy rate dropped from 5% to a technical 0.2% following the signing of a lease with a new anchor tenant – JYSK.

“According to data from the RWBI (Retail Well-Being Index) monitoring panel, the vacancy rate for retail space in Ukrainian SCs in the first half of 2026 stands at 3.3%, which is 0.4% higher than in the second half of 2025,” comments Maxim Gavryushin.

However, the expert points out that this figure reflects only signed lease agreements – a significant amount of space is legally occupied but is not actually being used by tenants due to the threat of war. When broken down by SC format, according to data provided by Evgeniya Loktionova, director of UTG company, vacancy rates are gradually evening out across different types of properties: in regional SCs, it stands at 14.6%; in district ones, 15.1%; and in specialty SCs, 10.1%. As before, the lowest vacancy rate is found in neighborhood shopping centers – 6.5% – which is explained by their proximity to areas of concentrated population. According to the expert, in Kyiv, the bulk of vacant space is currently concentrated in just four properties: Blockbuster Mall, “Marmalad,” Promenada Center, and “Atmosfera.”

Among the factors holding back a further reduction in vacant space, the expert cites the exit of Russian retailers from the market, the closure of international players such as IKEA, and a pause in the entry of new foreign brands.

It is telling that demand remains strong not only for small spaces – according to Arricano’s observations, retailers continue to open large-format stores as well, which demonstrates confidence in the market and a willingness to invest in brick-and-mortar retail despite all the risks.

According to data provided by Maxim Gavryushin, rental rates for liquid vacant spaces ranging from 50 to 250 square meters have remained virtually unchanged over the past six months: the weighted average rate for such spaces is $39 per square meter per month, excluding any temporary discounts.

Evgeniya Loktionova notes that the potential for rent increases is limited primarily by the need to minimize operating costs – including advertising, marketing, utility bills, electricity, water, heating, and air conditioning – as well as the need to maintain generators. Additional pressure comes from the decline in sales per square meter and retailers’ profit margins in recent years, increased competition, and a drop in average daily foot traffic and revenue at individual stores. All of this, according to the expert, is prompting tenants to minimize their own risks and shift them onto the developer – by setting a minimum rent and tying the lease to a percentage of sales or actual foot traffic at the retail property.

Regions: Resilience Amid Shelling and a Focus on the West

Regional markets are currently developing quite unevenly, and their performance depends largely on the security situation in a given city. But even in places where shelling is a daily occurrence, high-quality shopping centers are demonstrating remarkable resilience. For example, in Kryvyi Rih, sales at the “Soniachna Galereya” SEC rose by more than 30% in May compared to January, while at Zaporizhzhia’s CITY MALL, sales increased by nearly 25% in national currency. According to Olena Shvets, this proves that, with professional management and established visitor loyalty, modern shopping centers remain an important part of urban infrastructure even in frontline regions.

Looking at the geography of new developments, according to Budhouse Group, the top three regions by the number of new wartime projects for 2022–2027 are: Lviv Oblast (18 projects), Kyiv Oblast (12), and Zakarpattia Oblast (11).

Tenants are moving in faster than the shopping centers themselves are being built

Despite all the challenges, retailers are not halting their investments in brick-and-mortar stores. In the first half of 2026, 17 new retail outlets opened in Arricano shopping centers. In Kyiv, the “Prospekt” SEC welcomed new stores including Intersport (2,140 sq. m), Arena (174 sq. m), and E-ZOO (81 sq. m), while the “RaiON” SEC saw the opening of the Bravo Park children’s entertainment center, a Mon Cheri store, and the fashion retailer ANDI. In the regions, the most extensive renovation took place at “Soniachna Galereya” in Kryvyi Rih, where Intersport, Arber, Your Style, and several compact-format stores in the electronics, cosmetics, and accessories categories began operating, while the Zaporizhzhia CITY MALL welcomed a new jewelry retailer, “Sribna Kraina.”

“Today, retailers are prioritizing the quality of locations over the number of new openings, focusing their investments on properties with the highest foot traffic,” notes Olena Shvets.

As for the pace of new shopping centers coming online, the picture is somewhat more subdued. According to Budhouse Group, of the 20 SCs scheduled to open in 2026, only three had actually opened by mid-year – all small-format and all located in the western part of the country.

According to data cited by Expandia, a representative of CBRE in Ukraine and Moldova, in its research, in 2026, properties with an area of up to 20,000 square meters will account for the vast majority of new developments scheduled to enter the market in 2026, while large regional shopping centers remain few and far between.

Forecasts for the Second Half of the Year

Budhouse Group expects approximately 15 more shopping centers to open by the end of the year, with a total leasable area of about 350,000 square meters.

Overall, according to Expandia’s estimates, in 2026, more than 150,000 square meters of new small-scale neighborhood shopping centers and retail parks in suburban locations are slated to open in several regional centers of Ukraine, as well as in the Ivano-Frankivsk, Zakarpattia, Kyiv, and Lviv regions. Meanwhile, the total supply of new competitive retail space in regional cities is likely to grow by approximately 13.5% year-over-year, which would be the highest growth rate since 2014 and could exceed 400,000 square meters across 22 projects.

Arricano also sees the conditions for further retail activity: several high-profile retailers are already preparing to open stores in the company’s shopping centers, with details to be announced shortly. According to Olena Shvets, the news of the announced entry of the Polish retailer Pepco served as an additional signal to the market – further proof that Ukraine remains a promising destination for the development of modern retail.

“This fosters cautiously optimistic expectations regarding the future development of retail real estate, despite all the challenges,” concludes Olena Shvets.

The first half of the year showed that the Ukrainian retail real estate market is being forced to transition to a new development model. This model is based on compact retail formats, local demand, and the cautious expansion of international and Ukrainian retailers. Future trends will depend primarily on the security situation in the country.