Commercial facilities

Experts told about the office real estate market in Kyiv

office real estate market in Kyiv

Office real estate market in Kyiv came to life thanks to IT-companies

In the IV quarter of 2018, firms engaged in information technology, purchased or rented 53% of all office real estate in Kyiv. During the reporting period, the share of transactions with IT firms in the total office real estate market of Ukraine reached 35%. Experts note that this trend will continue in the future.

It is interesting that since 2014 the structure of demand for office space (rent and purchase) changed. Every year productionists gave way to IT specialists. Thanks to the activities of firms in the information technology sector, the total volume of transactions in commercial real estate affected 200 thousand square meters, bought or rented. This is the maximum value for the office market of Kyiv in the history of its existence.

Meanwhile, such activity did not coincide with the opening of new business centers: in 2018, only a few of them were put into operation. While 6 open B class premises (Unit City Business Center) are repurposed industrial objects. All new buildings at the time of their opening were completely occupied, this indicates an acute shortage of premises in new business centers.

Office real estate market in Kyiv shows an acute shortage of premises

The vacancy rate was declining during 2018 and by December was 7.8%. At the same time, the working spaces in BC with the least developed infrastructure and remote from transport interchanges remained unoccupied. For comparison – by the end of 2017, 13% of offices were empty.

The experts noted that the lack of working space led to an increase in rental rates for all classes of premises. The maximum rate in A class BC in 2018 was $30 per month (excluding VAT). B Class premises costed $ 24 to the tenant (which is $ 7 more than at the beginning of the year). Experts estimate a further increase in the cost of rent in 2019 against the background of the fact that large developer do not announce large-scale projects for the opening of new office real estate.

At the same time, the market of working premises in Moscow and the region decreased by 13%. At the end of 2018, the volume of new transactions decreased to 890 thousand square meters. The reasons for the fall of the market are the lack of offers in the central regions of the capital.

In total, the market of new offers amounted to 128 thousand square meters. The vacancy rate for A, B and C class was 9%.

The average rental rate was 18 thousand rubles per square meter per year. The growth of this indicator for the reporting year exceeded 3%. At the same time, the fee per square meter in the premises of A class increased by 7%, and in B class, on the contrary, fell by two percent.