Rental Rates: Where in Ukraine Is It Most Profitable to Lease Land?
5 August 14:05
ANALYSIS FROM 
The land market in Ukraine has already established itself as a fully-fledged economic institution. And land on this market can not only be bought and sold—as evidenced by the more than 500,000 purchase and sale agreements concluded over the past five years—but it has also been possible to lease land in Ukraine for many years. Leasing has been and remains the foundation of land relations. "Komersant Ukrainian" investigated what makes it unique.
Since July 1, 2021—the day Ukrainian citizens gained the right to freely buy and sell land plots—a total of more than 1,154,000 hectares of land has been the subject of purchase and sale agreements. In contrast, the total area of agricultural land in Ukraine is measured in tens of millions of hectares. And it is precisely this vast territory that is governed by lease agreements.
Between Buying and Leasing
According to experts’ estimates, one-third of Ukrainian land is owned by the state or local municipalities. The majority of agricultural land—about two-thirds—belongs to private owners. This is the land they acquired as a result of land privatization. Agricultural holdings and farmers compete for all of these land resources, trying to buy them, but more often than not, to lease them.
Pavlo Martyshev, deputy director of KSE Agrocenter, explains why there are often reasons to prefer leasing land over purchasing it.
“Land is in high demand right now. That’s why we’re seeing growth in both the sales market and the leasing market. Leasing is simply more convenient. In the long term, it may not be as economically advantageous for agricultural enterprises. But when it comes to land consolidation, for example, leasing is more convenient because the buying and selling process is quite lengthy and more complicated. Leasing, on the other hand, makes it easier to consolidate a field. In other words, different land-share holders can be within the same field, and, accordingly, it’s easier to negotiate with them and lease the land than to buy shares. Besides, a land-share holder might not have other options if, for example, their share is located somewhere in the middle of the field. In that case, no one else will offer to lease it from them. This forces land-share owners, so to speak, to adapt and meet farmers halfway. And this allows them to run their farms,” the expert notes.
On the other hand, many land-share owners do not want to sell their land but prefer to lease it out. And there is a reason for this stance as well. Viktor Goncharenko, president of the Association of Farmers and Private Landowners of Ukraine, explains:
“Many people want to secure their future, because money is here today but gone tomorrow. Land, however, is a reliable asset, an investment, and a dependable resource that yields a return every year. For example, tenants currently pay about 10,000 hryvnias per hectare in rent. For a sensible person, that’s not bad. If someone has the resources, the strength, and the desire, they can work the land on their own. Perhaps their children will show an interest and work their own land, providing for their family’s livelihood. The vast majority of people understand this and are afraid to sell off their land. That’s why most of our land is leased,” the farmer notes.
Viktor Goncharenko also emphasizes that buying land requires significant funds, which farmers often simply do not have.
“You know, it would probably be better for a farmer if he owned this land. That would likely provide greater confidence that the land will remain his and allow him to plan better for the future. But leasing is still more acceptable today, because the cost of leasing is spread out over time, whereas buying land requires practically everything at once,” explains the president of the Association of Farmers and Private Landowners of Ukraine.
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Price Matters
The Law of Ukraine “On Land Lease” stipulates that the amount of rent for land is determined exclusively by the parties to the contract. However, for state- or municipally-owned land, the Tax Code sets certain restrictions on rent: the amount is calculated as a percentage of the land plot’s normative monetary valuation. For privately owned land, however, there are no restrictions, and the parties to the agreement may agree on any rent amount. This amount may depend on many factors: ranging from the landlord’s preferences, the tenant’s financial capacity, the level of competition, and rental rates in a specific region, among others. The rent amount is also influenced by the condition of the land, its fertility, the size of the plot, and regional characteristics.
The Center for Food and Land Use Research at the Kyiv School of Economics (KSE Agrocenter), to mark the 5th anniversary of the opening of the agricultural land market, prepared an analytical report examining the market for leasing state-owned and municipally-owned land. Transactions in this market take place through an electronic auction system organized by the state-owned enterprise “Prozorro.Sales.” As a result, more than 237,000 hectares of state- and municipally-owned land have already been leased. Price trends for leased state- and municipally-owned land indicate steady price growth: from an initial 6,500–7,000 UAH/ha in December 2022 to 12,300 UAH/ha in May 2026.
The most expensive lease rates, based on the average figure for the entire duration of the auctions, are in Poltava (15,800 UAH/ha), Vinnytsia (15,400 UAH/ha), Ternopil (13,800 UAH/ha), Kirovohrad (13,000 UAH/ha), and Kyiv (12,200 UAH/ha) regions.
“The highest lease rates are recorded in central Ukraine. This is Ukraine’s corn belt—stretching from Poltava to Vinnytsia regions,” explains Pavlo Martyshev, deputy head of the KSE Agrocenter and co-author of the study.
A distinctive feature of the market for leasing state- and municipally-owned land is the availability of larger, consolidated plots. According to Pavlo Martyshev, it is precisely these large plots that are in the highest demand, which drives up lease rates.
“For plots of 100 hectares—ideally—the average price is twice as high as for a plot of just a few hectares. There is also demand for homogeneous plots—in terms of quality and soil type. This, again, applies to Central Ukraine—the Poltava, Cherkasy, Vinnytsia, and Khmelnytskyi regions. This is because there are regions where soil types often vary significantly. Take, for example, Chernihiv Oblast—it has very fertile chernozems, but there are also sandy and loamy soils. Or Rivne Oblast. It’s also not particularly favorable for such large-scale agricultural production because the soils there are heterogeneous. Another important factor is the climate. This is because climatic zones are currently shifting northward. And, as they say, anywhere south of Kremenchuk may already face moisture-related issues. And another factor is logistics. In other words, roughly speaking, even if the land is good but it’s in the Chernihiv or Sumy regions, it’s a long way to travel from there to the ports,” the expert notes.
Arable land is in the highest demand at auctions, accounting for 74.9% of the contracts signed and 81.8% of the total area of leased plots; pastures account for 10.9% of deals (8.9% of the area), and hayfields account for 6.5% of deals (5.2% of the area).
Researchers at the KSE Agrocenter also point out another peculiarity: the geography of auction lease bids does not align with trends in the buy-sell market. For example, the regions that are the absolute leaders in terms of land sale prices — Ivano-Frankivsk (139,000 UAH/ha) and Lviv (123,400 UAH/ha) regions — show relatively moderate results in terms of lease prices.
Another observation by the researchers: data from 2026 indicate a gradual recovery in demand for agricultural land leases in the southern and eastern regions compared to the 2022–2025 period. The highest lease rates in 2026 were recorded in Poltava (20.7 thousand UAH/ha), Ternopil (19.5 thousand UAH/ha), Zaporizhzhia (18.5 thousand UAH/ha), Kharkiv (17,200 UAH/ha), Vinnytsia (17,200 UAH/ha), and Ivano-Frankivsk (16,900 UAH/ha) regions. The fact that current rates in 2026 significantly exceed historical averages indicates increasingly intense competition for available land, even in regions near the front lines.
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