ANALYSIS OF THE ELASTICITY OF DEMAND AND SUPPLY ON THE LOGISTICS REAL ESTATE MARKET OF UKRAINE DURING THE WAR

Abstract

The article is dedicated to studying the changes that occurred in supply and demand in the logistics real estate market of Ukraine under the influence of military operations. This article is aimed to investigation the impact of the war on the logistics real estate market of Ukraine, in particular changes in the demand and supply of warehouse space depending on the region of Ukraine, the migration of business to safer regions, the development of logistics hubs for humanitarian aid, and the prospects for the development of this sector. The relevance of the article is due to the fact that in wartime the logistics industry of Ukraine plays a critically important role in supporting the country, ensuring the delivery of humanitarian aid, essential goods and the evacuation of the population. The article examines the scale of destruction and damage to warehouse facilities. At the start of the full-scale invasion, demand for warehouse space plummeted due to falling sales, declining business profitability, land occupation, and infrastructure destruction. As a result, tenants reduced their rental costs. In response to the threat, businesses moved their facilities to safer regions, which led to increased demand for warehouses in western regions such as Lviv, Ternopil, Ivano-Frankivsk, Zakarpattia, and Volyn. This led to a shortage of warehouses in these regions and increased rental rates. The opening of new warehouses was due not only to the migration of business but also to the closure of sea and air routes, the danger of railways and roads near the front. Warehouses near the western border and a joint warehouse in Poland were opened for the rapid delivery of humanitarian aid. The Lviv logistics real estate market has demonstrated development prospects due to its favorable location, favorable business environment, and support from local authorities. The Lviv region, in particular, has become an important logistics hub. The supply of warehouse space in the central and eastern regions decreased, while in the western regions, there was a shortage due to increased demand. The article analyzes how rental prices and the vacancy level of warehouse space in different regions of the country changed before and after the invasion of the Russian Federation. Special attention was paid to the Kyiv and Western regions, where significant fluctuations in vacancy were observed. Despite the war and destruction, demand for logistics real estate remains high, and Kyiv continues to play a key role as the country's logistics hub. In the future, the demand for modern logistics centers is predicted to increase with the economy's recovery and after Ukraine's victory. Based on statistical data, the elasticity index of the supply of logistics services was calculated, and the most significant factors affecting elasticity were outlined.