The number of incoming foreign investments in Ukraine's industrial parks has significantly decreased, and foreign interest has now dwindled to a few inquiries (no more than 10 per year), reported Valeriy Kyrylko, CEO of the Industrial Parks of Ukraine group of companies.

"Even before the full-scale war, there were not many, but there were four operating industrial parks and seven residents, three of them with foreign capital, while now there are 15 operating parks, about 30 residents, and no foreign ones. All foreign investors interested in parks are no more than 10% of the structure of industrial park residents' investments," Kyrylko told Interfax-Ukraine.

He recalled that the three foreign capital residents before the war were the Eurocar plant in Zakarpattia region, completed in 2018; the Plank Electrotechnic outlet plant, launched in 2020 in the Bila Tserkva industrial park; and the HEAD Group ski factory, which has now frozen the project in the Winter Sport industrial park in Vinnytsia.

"There are many reasons for the absence of foreign investors: the war, the lack of mass practice of insurance against war risks, broken logistics chains, local corruption, weak legal and legislative protection of foreign investments, and so on. However, global practice in industrial parks development is primarily aimed at attracting foreign investors and participants," Kyrylko said.

He mentioned that foreigners currently showing the most interest in industrial parks and monitoring the market are manufacturers of building materials.

"For instance, Turkish and Austrian companies that produce reinforced concrete structures or metal frameworks are genuinely interested. Recently, Koreans visited an industrial park in Bucha and submitted two requests for reinforced concrete and sandwich panel factories. Foreigners understand in advance that they need to build factories, and it is profitable for them because sooner or later Ukraine will rebuild, and they will already have building materials and factories by then," Kyrylko said.

He also noted that there is already the first example of insurance against war risks – the Multilateral Investment Guarantee Agency (MIGA) of the World Bank insured the M10 Lviv Industrial Park project for $9.2 million.

Regarding the structure of Ukrainian investors in industrial parks, Kyrylko pointed out that these investments have a dual nature: the first is a classic investor investing in real estate development and then receiving income from rent or sales; the second is when an enterprise becomes an investor, entering the park and building its factory at its own expense.

"If there is a confirmed participant in the industrial park, finding investments for constructing facilities is not a problem, for example, from international funds. The U.S. investment fund Chicago Atlantic Trident, represented in Ukraine by Serhiy Tsyvkach, is ready to invest from $5 million to $50 million in one facility," Kyrylko said.

He also reminded that the state allocated funds (UAH 1 billion in 2024) to industrial parks' participants for connecting to power grids because such costs are high and non-refundable.

"On average, it takes UAH 100-120 million to set up networks for a 30-hectare park if the park is somewhere in the field, so the state stepped in," the expert said.

In addition, he mentioned that the volume of Ukrainian private investments has increased because many other investment opportunities, including real estate, have closed.

"Industrial real estate, although low-yielding, is stable because if a factory enters and invests in equipment at EUR 1,500 per square meters, it stays for 5-10-15 years. Thus, stability is an advantage. The only downside is the return rate, but it is also acceptable because it has the shortest payback period in Europe, starting from 12 years, whereas we have 8-10," the expert said.

As an example of investment opportunities in construction, he mentioned the possibility of purchasing prefabricated factories from European manufacturers.

"The new Astron factory in Slovakia for producing prefabricated factories is included in the Slovak export program that is, by buying a prefabricated plant of European quality from them, you can get a loan from Slovakia at 2-3% per annum in euros. Therefore, if there is a confirmed resident in the industrial park, finding investments in construction is not a problem at all, no matter who says otherwise," Kyrylko said.

As reported, at present, 86 parks have been entered into the Register of Industrial Parks of Ukraine, including 18 in the current year.

Not a single park has been registered in Kharkiv, Kherson, Zaporizhia, Kirovohrad and Mykolaiv regions, and the largest number of them (15) is registered in Lviv region.

The Industrial Parks of Ukraine Group of Companies has been developing concepts and registering industrial parks for five years, now the company is working on the 44th concept, with its help 20 industrial parks have been registered.