Dmytro Hruba, Attorney at Law, Ilyashev & Partners Law Firm

After the war ends, Ukraine will become one of the largest construction sites in the world. This will be driven both by the need to restore destroyed infrastructure and new construction. The scale of destruction to housing stock, industrial facilities, transport, energy and other infrastructure will generate substantial demand for private capital. At the same time, post-war reconstruction will not be limited to restoring damaged buildings, but will involve the comprehensive modernization of cities, the development of advanced logistics solutions reflecting new conditions and challenges, a significant transformation of the energy sector, and the creation of modern industrial parks. Particular attention should also be given to the continued development of the defense industry. This will require both newly constructed facilities and existing capacity expansion.

For foreign investors, the Ukrainian real estate market may combine significant potential for asset appreciation with opportunities to participate in major reconstruction projects. However, investment decisions will require substantially more in-depth legal analysis than "routine" real estate acquisitions in stable European jurisdictions.

Key considerations for investors should include not only the price of the property and its projected return, but also the legal status of the land plot, the chain of title, existing encumbrances, urban planning conditions and restrictions, the availability of war-risk insurance, and the possibility of obtaining effective judicial protection in the event of dispute, among other matters.

Why Real Estate May Become One of the Key Sectors of Post-War Reconstruction

Post-war demand for real estate is expected to develop simultaneously in several areas.

First, the housing stock will require substantial reconstruction. This will involve not only the reconstruction of damaged buildings but also the construction of new housing. This issue is particularly significant given the large number of internally displaced persons for whom access to housing remains and will continue to be a pressing concern.

Second, demand for commercial real estate is expected to increase. Post-war economic recovery will create demand for offices, retail and warehouse complexes, manufacturing facilities, service infrastructure, and other types of commercial property.

Third, logistics for real estate will become particularly critical. Changes in transportation routes, development along Ukraine’s western border, Ukraine’s integration into European transport networks, and the reorientation of exports may stimulate the construction of logistics centers, warehouses, industrial parks, and multimodal terminals.

Another key area is the redevelopment of industrial sites and, of course, MilTech. This will continue to develop as an ecosystem of distinct strategic importance. Some outdated industrial zones may be redeveloped into modern industrial parks, technology clusters, or mixed-use complexes.

It should also be noted that the European Union has already established substantial financial instruments designed to attract private capital to Ukraine’s reconstruction. The Ukraine Investment Framework, which forms part of the Ukraine Facility, provides guarantee mechanisms and blended financing aimed at mobilizing public and private investment for Ukraine’s reconstruction, modernization, and economic integration with the EU.

Legal Framework for Foreign Investment: General Openness Subject to Specific Restrictions

Ukrainian law generally allows foreign capital. Foreign investors may invest by acquiring real estate, establishing Ukrainian legal entities, acquiring equity interests in existing companies, participating in joint ventures, and through other structures.

Legislation governing foreign investment establishes the general principles for foreign investment protection and defines the principal forms by which such investments may be made.

Foreign individuals and legal entities may acquire ownership of most types of real estate, including land, without involving a Ukrainian partner.

However, agricultural land's legal regime is considerably more complex. The most serious restriction is that foreign nationals and foreign legal entities are currently not permitted to acquire agricultural land through owning. Whether this opportunity will become available in the future remains uncertain, as opening the agricultural land market to foreigners requires a referendum.

It should also be noted that the acquisition of a building or structure in Ukraine does not always automatically provide the investor with ownership rights or even land-use rights to the underlying land plot. In certain cases, additional legal formalities will be required to establish rights to the land after real estate acquisition.

Legal Due Diligence: How to Verify Title

As a general rule, before acquiring any real estate or land, it is critically important to conduct comprehensive and detailed legal due diligence on both the asset and the seller.

The principal sources of information for such due diligence may include:

Documents relating to the seller's land and real estate;

The State Register of Proprietary Rights to Immovable Property, which can be used to verify the owner and identify attachments, prohibitions, and encumbrances. It is advisable to review not only the current information contained in the register but also detailed historical information concerning the property;

Information from the State Land Cadastre, which can provide additional information concerning the land plot, including its boundaries, designated purposes, permitted use, restrictions on use, and other relevant matters;

The Unified State Register of Court Decisions, which can be used to identify both pending and completed litigation relating to land plots or real estate;

Verification of other information and review of additional sources depending on the circumstances of the particular transaction. These may include information from the territorial community register, the urban planning cadastre, local urban planning documentation, and historical information concerning land plots and real estate that is unavailable electronically in the State Register of Proprietary Rights, has not been digitized, and exists only in paper form.

Ilyashev & Partners Law Firm's extensive experience demonstrates that comprehensive legal due diligence of both the property and the seller should not be overlooked. Inadequate due diligence carries significant risks of losing the asset. When conducting such reviews, we consistently identify relevant risks and assess their severity. We also provide recommendations on how those risks can be mitigated where possible.

Given the prolonged hostilities, sufficient attention should also be paid to assessing the technical condition of the prospective investment. This will make it possible to identify any damage, its nature and extent, and whether and how it can be remedied, including through reconstruction. Damage to a building may affect not only its market value but also the legal and financial structure of a future project.

Principal Market Entry Models for Foreign Investors

The choice of a particular investment structure will largely depend on the type of asset, the amount of investment, the tax structure, and the planned exit strategy.

The principal models include:

Acquisition of real estate into ownership;

Acquisition of rights to land for the development of real estate;

Acquisition of equity interests in a company that owns the real estate;

A joint venture with a Ukrainian partner, among others.

The choice of a particular model depends on a range of factors and specific circumstances of each project.

For example, direct acquisition is a relatively straightforward model for an investor purchasing a completed property. This could be an office building, warehouse, hotel, or residential complex.

Its advantages include a relatively simple structure, a high degree of legal certainty, and the purchaser’s subsequent direct control of the asset.

At the same time, a direct acquisition is generally more expensive and may increase the overall tax burden associated with the transaction. In addition, the property may not fully meet the requirements of the future project. It may require reconstruction, refurbishment, or other modifications, ultimately affecting the project budget.

By contrast, acquiring a land plot into ownership (or obtaining land-use rights) for real estate construction requires both a significant investment of time and relevant experience. Moreover, a thorough legal due diligence of the land plot and future development possibilities is required.

When structuring such investments, we always recommend conducting a separate and thorough review and analysis of the following matters:

The legal status of the land plot;

Its designated purpose;

The form of title or other rights to the land;

The terms of use and other contractual conditions;

Development possibilities, including urban planning conditions and restrictions applicable in the area where the land plot is located;

The existence of easements and other encumbrances or restrictions;

Risks associated with termination of land-use rights or revision of land-use rights terms.

The acquisition of equity interests, in addition to the matters outlined above, requires a detailed analysis of the historical and current activities of the target company, since all obligations and liabilities of the acquired company will become the responsibility of its new owner.

A joint venture may be appropriate where a Ukrainian partner owns the relevant land plot, has development experience, maintains a local team, or has access to the necessary infrastructure.

However, a joint project also requires, among other things, a detailed and carefully drafted shareholders’ or corporate agreement setting out mechanisms for management, control, profit distribution, dispute resolution, exit from the project, and other relevant matters.

War Risks and Risk-Mitigation Mechanisms

Even after the war's formal end, security risks may remain one of the key factors influencing investment decisions.

For major projects, traditional commercial insurance may be insufficient. International political- and war-risk insurance mechanisms, guarantees from international financial institutions, government support programs, and mechanisms for allocating risk among investors, the state, and international partners will therefore be incredibly vital.

In 2026, during the Ukraine Recovery Conference in Gdańsk, the creation of a new mechanism for political-risk insurance and the mobilization of additional private capital for investment projects in Ukraine was announced with the participation of the U.S. International Development Finance Corporation (DFC) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group.

In this context, it is always important for an investor to determine not just whether insurance is available, but also the precise scope and terms of the insurance coverage, including:

Which events qualify as insured events;

Whether war-related damage is covered;

Whether political risks are included;

Whether expropriation is covered;

Whether the policy protects against restrictions on funds transfer;

Which exclusions apply;

The procedure for submitting and processing claims.

Investment Protection and Dispute Resolution

It should be noted that real estate disputes have historically been, and continue to be, common in Ukraine. The most typical disputes involve the performance of sale and purchase or lease agreements, claims seeking to invalidate such agreements or recover property, and disputes concerning development and construction legality. In the agricultural sector, disputes with lessors concerning lease agreements are common.

Investors should therefore understand in advance the mechanisms available to protect their rights. In this regard, disputes concerning rights to real estate in Ukraine are governed by Ukrainian law and adjudicated by Ukrainian national courts. Such disputes cannot be arbitrated internationally. By contrast, corporate disputes or construction-related disputes that do not directly concern rights to real estate, but may indirectly involve issues of control over real estate or similar matters, may, subject to certain conditions, be referred to international commercial arbitration.

Post-War Real Estate Investment Outlook

Ukraine’s post-war real estate market will have significant investment potential. Housing reconstruction, urban modernization, logistics development, new industrial capacity, and Ukraine’s integration into the European economic area may generate substantial demand for private capital.

At the same time, successful investment requires a comprehensive approach. Foreign investors will need to assess not only the market value of a property, but also land rights, title history, war-related damage consequences, urban planning status, tax structure, risk insurance availability, and investment protection mechanisms.

For international investors, post-war Ukraine will be more than a reconstruction market. It may become a market for creating another generation of real estate – more modern, energy-efficient, technologically advanced, and integrated into the European economic area.

Ilyashev & Partners is one of Ukraine’s leading law firms advising foreign investors, international companies, investment funds, developers and private clients on real estate investment, property transactions, land acquisition and construction projects in Ukraine.

The firm’s Real Estate & Construction and Land Law teams have extensive experience advising international clients on the acquisition, sale, lease and development of real estate and land in Ukraine. Our lawyers provide comprehensive legal support for real estate investments, including transaction structuring, legal due diligence, title and land rights verification, acquisition of property and land use rights, construction and development matters, permits, regulatory compliance and real estate disputes.

Ilyashev & Partners regularly assists foreign companies and private investors buying or investing in real estate in Ukraine. The team conducts legal due diligence of commercial, industrial and residential properties and land plots, verifies ownership and title history, identifies encumbrances and litigation risks, analyses zoning and permitted land use, and advises on the most appropriate legal structure for real estate acquisitions and investment projects.

A particular focus of the firm’s practice is supporting foreign investment in Ukrainian real estate and land, including commercial and industrial properties, logistics facilities, development projects and investment opportunities related to Ukraine’s reconstruction. The team combines real estate, land, construction, corporate, tax, dispute resolution and regulatory expertise to help international investors structure transactions, protect their investments and manage legal risks throughout the entire investment lifecycle.

To learn more about insolvency, restructuring and debt recovery in Ukraine, please visit the Ilyashev & Partners website or contact Dmytro Hruba directly.