The limited volume of gross absorption led to an increase in the level of vacant space by 3.5 percentage points (p.p.), to 21.2% over the third quarter of 2022 compared to the previous quarter, the press service of CBRE Ukraine told Interfax-Ukraine.
At the same time, as follows from a review of office real estate by CBRE Ukraine, in July-September the trend of the two previous quarters of limited rental activity continued. In the third quarter, this figure was only 12,000 square meters, which is 80% less than at the beginning of the year. Most of the transactions involved the extension or renegotiation of contracts and the reduction of existing office space.
“Subleasing is becoming more and more common, with tenants willing to sublease parts of their offices to optimize rent or operating costs due to low occupancy rates. Depending on the terms of the lease, subleasing is most often the solution if leases cannot be terminated. However, the volume of sublease agreements concluded remains low due to limited rental activity in the market,” Diana Kvitchuk, Head of Marketing and Research at CBRE Ukraine, is quoted in the message.
Net absorption has remained negative for three quarters in a row – over the third quarter, it is minus 74,000 square meters.
Analysts at CBRE Ukraine estimate that negative net absorption is likely to persist until the end of 2022, but is expected to slow down towards the end of the year.
In the third quarter, not a single new business center was put on the market, so the total supply of offices in Kyiv did not change and amounted to about 2.11 million square meters. About 23,500 square meters are planned for commissioning by the end of the year – in Unit.City B15 and Unit.City B6.
Low market activity led to rate cuts. The prime rental rate has decreased on average by 8-10%, from $25 to $22-23 per square meter/month since the beginning of the year. Rental rates in class A ranged from $18 to $26 (less by 7% of lower limit), in class B – from $7 to $17 (less by 22% of lower limit and less by 15% of upper limit).
“Requested rental rates are not indicative now, since the actual or effective terms of the agreements are often significantly lower than the declared ones and the difference can be from minus 20% to minus 50% of the declared ones,” Kvitchuk said.
In order to maintain occupancy and income streams, landlords continue to provide discounts, special lease terms or incentives, up to “free” rent, to attract new tenants or keep existing tenants looking to move, she said.
The United Nations Development Programme (UNDP), with the support of the EU, purchased and donated 14 automatic external defibrillators to healthcare facilities in the regions of Ukraine.
According to a UNDP press release, medical facilities in Sumy, Chernihiv, Kamianske (Dnipropetrovsk region), Voznesensk (Mykolaiv region), Nova Vodolaha, Pervomaisk and Lozova (Kharkiv region) received medical equipment.
With the financial support from the European Union, UNDP also provided specialized training to more than a hundred medical workers on using the life-saving devices.
“In response to new challenges, the EU provides the necessary tools to help people survive and recover from injuries. In particular, we want to direct our support to those areas where needs are greatest and increasing daily,” Frederik Coene, Head of Cooperation at the EU Delegation to Ukraine, said.
A defibrillator is a small device that plays an important role in saving the lives of people who have had a heart attack.
The United Nations Recovery and Peacebuilding Programme (UN RPP) is being implemented by four United Nations agencies: the United Nations Development Programme (UNDP), the UN Entity for Gender Equality and the Empowerment of Women (UN Women), the United Nations Population Fund (UNFPA) and the Food and Agriculture Organisation of the United Nations (FAO). Eleven international partners support the Programme: the European Union (EU), the European Investment Bank (EIB), the U.S. Embassy in Ukraine, and the governments of Canada, Denmark, Germany, Japan, the Netherlands, Poland, Sweden and Switzerland.
The Ministry of Education and Science recommends that schools create flexible schedules for the educational process that will correlate with power outage schedules, First Deputy Minister Andriy Vitrenko said.
“As for secondary education applicants, we advise teaching staff to create flexible schedules for the educational process, which will correlate with the schedules of power cuts in a particular educational institution. That’s the only solution that exists today,” he said at a briefing on Tuesday.
According to him, such recommendations also apply to other levels of education in the country.
Vitrenko noted that with this approach it is possible to use both synchronous and asynchronous training.
In addition, the department is working on various mechanisms to implement the possibility for children, when they have electricity, to download on their gadgets benchmark lessons for study.
The State Agency of Forest Resources of Ukraine will create an atlas of forest roads of Ukraine, a pilot project of mapping of transport infrastructure of individual forestries in the Carpathian region will soon be implemented.
As Yuriy Bolohovets, the Head of Department informed, the development of atlas is necessary because the existing forest road maps are outdated and not always correspond to reality, so it is not possible to drive on many of the roads marked on them.
“To date, it has been decided to create “Atlas of forest roads of Ukraine” in the future. In the nearest future a pilot project of transport development of a separate forestry will be realized. All existing forest roads, which can be used by a forest car, will be mapped and a network of routes for forest roads construction in the future will be designed,” – the Head of Department wrote in Facebook on Tuesday.
He also reminded that the inventory process of forest transportation network was initiated by the State Forestry Agency 11 years ago, when they issued an order on the introduction of geographic information systems for registration and inventory of forest roads. However, this system accounted mainly for newly constructed roads.
Bolokhovets noted that Ukraine’s need for the construction of new roads is estimated at thousands of kilometers per year, while in fact hundreds of kilometers of roads are built and repaired annually.
“In recent years, maintenance and construction of new roads has been carried out mainly at the expense of forestry enterprises, based on the financial status of each of them. Therefore, the volume of new roads leaves much to be desired. For example, 240 kilometers of forest roads were built, repaired and reconstructed in 2020. In 2021, 131 km of roadbed was built and 161 km of roadbed was arranged. Construction this year continues, but the volume is also small. The need is much more, “- summed up the head of the State Forestry Agency.
The majority of stock indices of the largest countries in Western Europe are down at the beginning of trading as investors are evaluating companies’ quarterly reports.
In addition, bidders are waiting for news from the U.S., where the midterm elections in Congress will be held on Tuesday and the latest data on inflation will be published on Thursday, according to Trading Economics.
The Stoxx Europe 600 composite index of the region’s largest companies was down 0.22% at 417.41 points by 10:25 a.m. A day earlier it hit a seven-week high.
Germany’s DAX indicator fell 0.1% from market opening, Britain’s FTSE 100, France’s CAC 40 and Italy’s FTSE MIB – 0.5%, Spain’s IBEX 35 – 0.4%.
Retail sales in Britain rose 1.2% in October compared with the same month last year, according to the British Retail Consortium (BRC). The pace of growth slowed from a 1.8 percent rise in September as consumers continued to struggle with rising costs of living.
BRC head Helen Dickinson notes that Britons are struggling to make ends meet, especially as mortgage payments rise. Paul Martin, head of retail at KPMG, also noted that the increase in retail sales in October was due to higher prices and “does not reflect the true picture of falling volumes, although consumers are buying fewer items in-store.”
Persimmon’s stock price plunged 8 percent after the British construction company said it expects sales to fall in 2023. They are the fall leader among Stoxx 600 components.
German chemical and pharmaceutical concern Bayer AG boosted its net profit 6.4 times in the third quarter, confirming its financial outlook for the full year 2022. Nevertheless, the profit was worse than market forecasts, and stock quotes of the company decreased by 0.8%.
Volvo Car stock price is down 0.3%. The Swedish carmaker said it will sell China’s Geely Automobile its 33% stake in their joint venture that makes Aurobay powertrains.
Renault’s value fell 4.3 percent. The French carmaker announced its intention to increase operating profitability by spinning off its electric car business into a separate company.
At the same time, the stock price of Associated British Foods Plc is up 3.4%. The retailer announced the launch of a £500 million ($576 million) buyback program for its shares, as well as a dividend increase.
The value of Pandora jumped 6.3%. The chain of jewelry stores increased its net income in the third quarter to 734 million Danish kroner ($99 million) from 635 million kroner in the same period a year earlier while revenues rose 11% to 5.26 billion kroner. The company also reaffirmed its key financials forecast for the full year.
Pandora shares show the highest growth rate among the companies included in the Stoxx 600 calculation.
Oil prices increased on Tuesday on the news about the growth of number of coronavirus in China.
January futures on Brent crude oil on London’s ICE Futures Exchange fell by $0.96 (0.98%) to $96.96 per barrel by 12:51 pm (EET).
By the same time quotations of futures on WTI for December dropped by $1.19 (1.30%) to $90.60 per barrel in electronic trading on the New York Mercantile Exchange (NYMEX).
The day before Brent price went down by 0.7% and WTI, by 0.9%.
On Monday over 7 thousand new cases of COVID-19 were registered in China, which is the maximum in 6 months. In this regard, Beijing confirmed that it intends to continue mass testing and introduction of lockdowns to curb the spread of the coronavirus.
Oil demand in China, the world’s largest fuel importer, is one of the key factors influencing oil market dynamics.
“The market believes that if China opens its economy, it will sharply reduce the oil surplus in the market and put upward pressure on futures,” said Price Futures Group analyst Phil Flynn.
In addition, traders expect a partial embargo on Russian oil supplies to Europe, imposed in response to Russia’s continued full-scale war against Ukraine, to take effect soon. “Many expect the battle for free barrels to begin in December, especially in the eurozone,” said Bob Yager of Mizuho.
