Prague-based Arcona Property Fund has broken new ground as the first Western real estate fund to acquire property in Ukraine since Russia’s 2022 invasion. The fund, which is building a CEE portfolio, has purchased a prime development site in central Kyiv for USD 2 million.
The 0.54-hectare plot, located 500 meters from Lvivska Square in Kyiv’s Shevchenkivskyi district, is slated for high-end residential development. The transaction with AIM London-listed Secure Property Investment and Development PLC (SPDI) was completed through a mix of cash and APF shares.
“Although the purchase of this site was part of a package deal agreed with SPDI in 2020, certain sale conditions had not been fulfilled before the Russian invasion occurred in February 2022,” said Guy Barker of APF’s managing board. This obviously required us to reassess both the acquisition in principle and the pricing level initially agreed.” Having monitored the military, political and economic developments, Barker said they felt confident enough in the future of Ukraine to proceed with the deal.
The fund plans to either sell the site to a developer or form a joint venture with a local partner after securing planning permissions. Local firms Vasil Kisil, WTS, and Nexia DK provided legal and valuation services for the deal.
In the Czech Republic, Arcona Capital is negotiating with local, Czech and European public institutions to create a new financial structure for the development of 260 affordable homes in Uvaly, just to the east of Prague. If successful, and Arcona manages to work out a solution with the Ministry of Regional Development and the EBRD, it could serve as a model for private investors to follow.
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