Vacancy rate across Kyiv’s offices drops to 12% in 2017

Vacancy rate across Kyiv’s offices drops to 12% in 2017

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The vacancy rate in the office property segment in Kyiv decreased from 21% to 13% in 2017, while in the best office centers the vacancy rate does not exceed 10%.

“In 2017, the office property market in Kyiv was expanded with new stages of business centers of classes A and B with gross lettable area of 43,300 square meters,” NAI Ukraine said in a report, Interfax-Ukraine reports.

Head of the consulting department at NAI Ukraine Maryna Hurevych said at a press conference at Interfax-Ukraine on Tuesday that rent rates for offices slightly grew only for new leasers.

“There is no question of a global increase in rent rates. In 2018, this situation will continue: we will see a slight increase in the rates in the most high-quality facilities, as well as lower vacancy rates,” she said.

According to her, the largest demand for office space is created by IT companies (51%) and co-working platforms.

According to NAI Ukraine, currently there is another 375,360 square meters of new office space at different stages of construction, but large-scale commissioning of offices in 2018 is not expected.

“It is likely that the third stage of Astarta business center, Retroville business center, a business center in Zoolohychna Street and the second phase of the first stage of UNIT.City innovations park will be opened,” NAI Ukraine analysts said.

NAI Ukraine CEO Vitaliy Boiko said that the situation on the office property market is the best in the past seven years, although it is too early expect that western investors would arrive.

“Office property has been in recession for a long time, so most of the facilities are operated by banks, the facilities were created in chaotic periods of growth, and not enough attention was paid to the legal purity of the documents. The largest Western funds are not ready to make compromises, but as the projects of the banking system are cleared from the legal problems associated with the former owners, we will hear more and more often about transactions for the acquisition of office property by Western investors,” Boiko said.

NAI Ukraine was founded in 2016. It is a subsidiary of NAI Global, which is a leading global commercial real estate brokerage firm. NAI Global has more than 400 offices strategically located across North America, Latin America, Europe, Africa and Asia Pacific, with over 7,000 local market professionals.