Results of the commercial real estate market in Kiev in 2019: demand for offices is growing, rental rates in the mall have reached the ceiling
With increasing competition, the provision of Kiev with retail space came close to the cities of Eastern Europe
For the commercial real estate market in Kiev, 2019 was an active year. Demand for the most attractive premises grew, and with it rental rates. New facilities entered the market and quality supply grew. The portal “Capital Real Estate” 100realty.ua found out what are the main trends in the market over the past year.
Office real estate: increase in rates and offers
In 2019, the supply of office space in Kiev increased by 53 thousand 200 square meters. m. These data were voiced by analysts at Colliers International (Ukraine).
Among the new office centers that were built in 2019, experts named:
Maidan Plaza, on Independence Square, 2m (in the building of the House of Trade Unions) (8000 sq. M)
“Paladis”, on the street Sichovy Sagittarius, 23 (5600 sq. M)
“PALO ALTO” on the street Starokievskaya, 10 (4900 sq. M)
OB on the street Gogolevskaya, 22-24, (10000 sq. M)
BC “Amur Forum”, on the street Amurskaya, 6, (5700 sq. M)
BC Wave Tower, on Bandera Avenue, 9-V (19000 sq. M.).
Rental rates in 2019 in the most expensive segment amounted to $ 30 / sq. m / month.
Related article: What awaits commercial real estate in Kiev in 2020: expert forecast
“Rental rates show a slight increase in marginal rates between A and B class relative to the indicators in 2018. Given the shortage of high-quality office space, the vacant space of facilities with a good location and concept is quickly absorbed by the market, ”Colliers International experts say.
In 2019, the average vacancy rate in business centers in Kiev was 6.2%.
In Kiev and Ukraine as a whole, demand and supply for flexible offices and coworking is growing. Coworking and flexible offices account for about 62,000 square meters. m in Kiev. This is approximately 3.2% of the total supply of quality office space.
Market leaders IWG plc (Regus, Spaces), Platforma, Creative, States, Creative Quarter – occupy about 62% of the market. All mentioned market players have more than one location and are actively developing.
In addition, in May 2019, the Ukrainian Chasopys coworking network announced the creation of a joint company with the German rent24 coworking operator to expand business in Central and Eastern Europe. Over the next six months, 4 more major locations were announced for opening in Kiev: Platforma Fortuna (4500 sq. M.), Creative States of Arsenal (4130 sq. M.), Creative Quarter in Gulliver, Tower B (2800 sq. M.), Kooperativ (4000 sq. M).
Related article: What will happen to the prices of apartments and new buildings in Kiev in 2020: forecast from market experts
Retail Real Estate: Building Boom and Competitive Threats
Market for retail real estate in Kiev
The retail real estate market in Kiev is undergoing an active stage of development. New large facilities are being built in the capital and old ones are being reconstructed.
Related article: Results of 2019 on the real estate market of Kiev: the market is “stormy”, prices have changed significantly
According to the head of the Strategic Consulting Department of UTG Konstantin Oleinik, the following trends were observed in the retail real estate market of Kiev:
Growth of competitive threats. At various stages of implementation (construction, preparatory work, concept) in the capital and the nearest suburbs there are 44 projects with a total GLA = 1,460,156 sq. M. m – the number of shopping meters is constantly increasing;
Modernization / redevelopment / specialization / reconception – owners of several shopping centers (Caravan, Metrograd, Silver Breeze, InSilver, Lukyanovka Square, Gorodok, Magellan, Marmalade, Dream Town ») Have already begun comprehensive modernization, and some developers have planned large-scale changes.
Low real incomes and a decrease in RTO (especially in dollar terms) – annual growth in housing and communal services, family expenses (transportation, communications, education, medicine), inflation, low salaries and limited growth, loyalty to second-hand
The decrease in RTO per 1 square. m and profit margins of retailers by reducing household incomes, inflation, increasing competitive supply and, consequently, falling attendance
Reducing the number of networks of a national scale (Billa has rolled up a regional network, ProStore is absorbing COSMO, a number are searching for a buyer), product groups (furniture), entertainment operators (ice arenas, bowling alleys);
Selective position in the development plans of network retail operators, restrained forecasts for the foreseeable future, optimization of the assortment, format, size;
A gradual decrease in average daily attendance in shopping centers of the city due to the growth of competitive supply against the background of a conditionally constant / decreasing population and, accordingly, the redistribution of consumer flows between shopping facilities
