Distributors of imported goods may be interested in the preferential lease of state warehouses, while for grocery retail such an offer is economically unviable, according to Oleksandr Bondarenko, CEO of the Bureau of Investment Programs.
He expressed this opinion to the Interfax-Ukraine agency, commenting on the instructions given by Prime Minister of Ukraine Serhiy Koretskyi to the Ministry of Economy, the Asset Recovery and Management Agency (ARMA), and the State Property Fund of Ukraine (SPFU) to prepare a list of state warehouse space for major retailers and logistics companies affected by russian attacks.
According to an Interfax-Ukraine source, this involves approximately 190,000 sq. m of warehouse premises in Khmelnytskyi, Ivano-Frankivsk, Rivne, and Chernivtsi regions, which will be offered to affected businesses for a symbolic rent of 1 UAH.
Bondarenko described this initiative as a "gesture of symbolic support."
"We all know what condition state-owned assets are in, both at ARMA and the State Property Fund. Outdated equipment, premises in poor condition, typically mostly Class D (the lowest quality – IF-U). Out of 190,000 sq. m, half at best will be suitable for retrofitting, while around 500,000 sq. m of logistics space has been destroyed by bombing this year. So, in the best-case scenario, the state's offer covers one-fifth of the need. But the main point is that warehouses and logistics terminals are needed where the consumers are," noted the CEO of the Bureau of Investment Programs.
He emphasized that these proposals will be ineffective for grocery retail, as delivering "five pallets to each store in the capital or Dnipro from Chernivtsi region is economically unviable"; the key requirement for such logistics real estate is proximity within 50 km of the main consumer.
"Relocating logistics hubs is viable as an option for creating intermediate warehouses for retailers and distributors of imported products. But then again, they have high standards for facility quality, auxiliary equipment, power capacity, utilities, etc. This will require substantial additional investment and time," the expert explained.