Many international investors—particularly those from the Arab Gulf—continue to view Ukraine as too risky for serious investment. With war still making global headlines, even the mention of Ukraine is enough to deter interest. But this perception doesn’t match the actual on-the-ground risks in key regions of the country—especially in the West. At the same time, Southern Spain, a region that has recently faced devastating floods and carries a high probability of future natural disasters, is witnessing an investment boom. This contrast reveals a deeper truth: in the modern world, it’s time to rethink how we assess and price risk.
Western Ukraine: Low Direct Risk, High Opportunity
Ukraine is a vast country—larger than France—and its western regions, particularly Lviv, Ivano-Frankivsk, Chernivtsi, and Zakarpattia, are hundreds of kilometers from the frontlines. These areas have become a hub for internally relocated businesses and a safe zone for residents escaping higher-risk regions. While no part of the country is entirely risk-free during wartime, the actual impact of military strikes in the West is extremely low.
Take Lviv region as an example. Only a few hundred out of hundreds of thousands of buildings in the region were hit by strikes. There are no exact figures for that but this fact positions the region as a relatively stable location for investment in sectors like residential development, tourism, logistics, and light manufacturing. For land buyers, this means that the physical risk of asset damage is statistically negligible, and certainly lower than what headlines suggest.
Moreover, local developers are not just talking about the future—they’re building it. Some projects in the region now exceed $1 billion in value, including ski resorts, logistics hubs, and residential complexes. Quietly but steadily, both mostly Ukrainian and some foreign capital is flowing into these projects. What’s more, this is happening with land and real estate prices that are still among the lowest in Europe.
Southern Spain: Beauty, Booming Investment—and Flood Risk
By contrast, Southern Spain—particularly the regions of Andalusia and the Mediterranean coast—is currently experiencing an investment surge. Billions of euros are pouring into real estate, tourism, infrastructure, and renewable energy. Projects such as the €8 billion green hydrogen initiative in Huelva, being carried out by Moeve, a global integrated Energy company owned by the UAE’s Mubadala and the US’ Carlyle Group, or the €150 million metro expansion in Málaga, financed by the loan of the European Investment Bank, are examples of how bullish the investment climate is.
Yet these regions face a very real and scientifically confirmed natural risk: floods. In October 2024, Southern and Eastern Spain experienced one of the most destructive flash floods in modern European history, causing over 230 deaths, billions in damage, and significant disruption to infrastructure. Different researchers estimate the typical return period for a flood as 10 years, which probability is being annually increased due to the growing frequency of climate disasters going along with the rising global temperatures. Based on those, the estimated annual probability of a major flood in the region is between 5 and 10%, especially given the increasing frequency of extreme weather events in the Mediterranean basin.
While air strikes and floods are very different in nature, their impact on assets can be strikingly similar. A direct missile strike may damage one or a few buildings. A flood, however, can devastate entire neighborhoods or industrial zones, affecting hundreds of properties in a matter of hours. And yet, despite this risk—and its clear statistical recurrence—Southern Spain continues to attract investment with almost no hesitation.
Rewriting the Investor Playbook
The comparison raises a fundamental question: why is a >1% statistical risk in Ukraine seen as prohibitive, while a 5–10% annual risk in Spain is accepted as part of the investment landscape? The answer lies in perception, not probability.
Military action risk feels uncontrollable and emotionally charged, while natural disaster risk—though often more probable and equally damaging—is considered a manageable part of doing business. But this logic is flawed. Smart investors must look beyond fear-driven perceptions and evaluate objective, localized data. Western Ukraine, with its minimal direct impact from the conflict, abundance of talent, institutional reform momentum, and strategic EU support, offers a compelling case for early investment. Meanwhile, Southern Spain’s booming market thrives despite much higher physical asset risk.
A New Definition of Risk—and Reward
In a world of climate volatility, geopolitical shifts, and evolving global markets, the way we define “risky” versus “safe” needs to change. Areas once seen as stable now face unpredictable threats—from wildfires in California and floods in Europe to political upheaval in long-assumed safe havens. At the same time, so-called high-risk markets like Ukraine are maturing, stabilizing regionally, and offering exceptional upside for those with vision.
The bottom line is this: investors who adapt their perception of risk earlier will capture the best opportunities. Western Ukraine may not be in the headlines for mega-deals yet—but those who understand the real picture are already moving. The combination of low-cost entry, low statistical physical risk, and long-term economic upside makes the region a prime target for forward-thinking investors.
As Southern Spain continues to boom despite its known environmental risks, Western Ukraine waits for its perception to catch up with its potential. The question is: who will be ahead of the curve—and who will arrive too late?
