Over 6 weeks on from Russia’s invasion of Ukraine, the war still rages on.
Whilst Ukrainian forces have driven back Russian forces throughout the north of Ukraine and held positions across the country, the recent discovery of likely war crimes having been committed by Russian forces in various liberated towns and villages have further strengthened the resolve of the free world to support Ukraine.
We took time to speak with Nick Cotton, Managing Director of Cushman & Wakefield Ukraine to hear his observations as to how these terrible events have impacted the commercial real estate market and, what he expects as the hostilities are brought to an end.
There was much talk of an impending full-scale invasion during December 21’ though till late February. What steps if any did Cushman & Wakefield and, your clients take?
It should be appreciated that Ukraine has been in a state of conflict with Russia at least since 2014 when Russia illegally annexed Crimea and, fed a war of destabilization in Eastern Ukraine through the supply of mercenaries and, provision of weapons to support an insurgency war. Each year, Russia and Belarus have held joint military operations inside Belarus so, there was something of a sense of déjà vu when tensions again rose this winter.
Having said this, US and UK government warnings were this time far more strong in their warning of an impending invasion and, for that reason Cushman & Wakefield took some initial precautionary steps such as updating staff contact / emergency contact lists, replicating off site data storage sites etc. Beyond those actions, we in Cushman & Wakefield until the early morning on 24 February continued normal operations amid increasingly positive dynamics of the real estate markets in Ukraine, which we witnessed during the recent several years.
As for clients, we continued to see, right up to the day before invasion transactions closing in the occupational markets as well as on investments and, development sites. Many domestic developers continued throughout the winter to commence new and proceed with existing developments. By and large, it was simply business as normal.
Since the full-scale invasion of Russia, how has the Ukrainian market reacted and how have Cushman & Wakefield Ukraine changed its operations to deal with the situation?
It is fair to say that a vast majority of projects in Ukraine have been paused by clients. This is particularly on the transactional side of the business (sales, leases) in Kyiv and other cities in eastern and southern parts of the country.
Having said this, our office advisory and brokerage team have relocated to the western city of Lviv where, they continue to support our clients in a combination of ways including sourcing temporary office space in Central Europe, assisting with lease acquisitions in Western Ukraine and, in seeking rent abatement terms in much of the rest of Ukraine. We continue to offer service and support to all of our clients in all other aspects of all of other our business service lines including retail, logistics, capital markets, research & development consultancy and, valuation however, this is very much on a remote basis either from within Ukraine or, where staff have temporarily relocated, Europe.
How have Cushman & Wakefield Ukraine managed its staffing situation? Do you intend to recommence full operations?
First of all I would emphasize that it is my intention and, the intention of all at Cushman & Wakefield that a return to the full-service provision will be implemented in Ukraine as soon as conditions allow.
Most of our team remain in Ukraine either in Kyiv or, Western Ukraine. Whilst most are involved in some way in supporting Ukraine’s humanitarian and defence efforts they continue to provide support to our clients as required. Many of our team, particularly women with children have evacuated Ukraine for safety. Cushman & Wakefield Global have been extremely supportive in finding these staff temporary work and accommodation throughout Europe and even Scandinavia. We now have members of our team working temporarily in Cushman & Wakefield offices in Stockholm, Brussels, Warsaw, Berlin and shortly in Prague and Budapest. This has enabled these staff to secure not only accommodation and income security for themselves and their families but, will also enable them to develop their skills further so that they can bring these back to Ukraine once full business operations are recommenced.
Have Cushman & Wakefield Global assisted in any other ways? What is their position on the war?
Yes, in addition to finding temporary roles and accommodation for internationally displaced people Cushman & Wakefield Global have made available to all Ukrainian staff funds from their Global Emergency Assistance Fund. At both the local office and personal level many of our international team have provided accommodation and other means of support to our Ukrainian colleagues and their families.
Cushman & Wakefield Global have been very clear as to their position on the war. They have completely divested from all operations in Russia and, the office there is now listed as ‘Permanently Closed’. Cushman & Wakefield as a brand is no longer represented in Russia. Meanwhile, every effort is being made to support our ongoing operations in Ukraine.
When do you expect full commercial operations to recommence in Ukraine?
It is simply not possible at this point in time to say when full-scale operations will resume as this will depend entirely upon when large-scale military action abates and some form of lasting ceasefire is agreed upon. Whilst we anticipate that following the cessation of military aggression by Russia there will be many tens of billions of dollars in international aid, this will be very much directed quite rightly at social and critical infrastructure such as schools, hospitals, housing, roads, bridges airports and ports all of which have been targeted by Russia. In my opinion, there will be something of a time lag before there is the trickle-down effect of this spending to economic activity and, likely some time before a sufficient degree of confidence returns to the commercial real estate markets.
As such, we will remain responsive to the demands of the market and, as and when conditions allow will prioritize re-establishing operations with our team still based in Ukraine before then attracting back our team who are temporarily now working in Cushman’s offices internationally. Obviously, the decisions we will take collectively by the team, taking into account the needs of the market and the individual needs and wishes of our employees.
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