Gross office space take-up in Ukraine in H1 2018 grew by 36% year-over-year, reaching some 80,000 square meters, according to a study of CBRE Ukraine consulting company (Kyiv).
“Taking into account the growing pace of economic recovery, we can expect a corresponding increase in demand from tenants. The office segment remains the most attractive in the commercial real estate market, so new requests for large-scale office space and a shortage of high-quality office buildings should accelerate the growth of the new speculative offer in the near future. Large office projects that are in the early stages of construction, an increase in speculative supply can be expected already in the next two or three years, and the quality and rental rates differentiation will continue,” Managing Partner of CBRE Ukraine Serhiy Serhiyenko said.
According to the study, the upward dynamics of business activity in the first six months of 2018 contributed to the growth of tenants’ demand for transactions to expand the already leased and new office space.
According to the company, the total rental activity in the first half of 2018 was approximately 101,000 square meters. In the structure of new transactions for the rental of office premises, 61% of the total volume of demand was for relocation deals, 29% for expansion deals, mostly represented by IT and telecommunications tenants, 9% by “moving with extension” type transactions, and 3% – rent by companies that first entered the market.
As the company reported, in the first half of the year the offer on the office market in Kyiv increased by 2,200 square meters, so the total supply remained virtually unchanged at 1.72 million square meters, and the new offer was presented by the office building as part of Unit City’s first stage.
According to CBRE Ukraine, the total area of quality premises in Kyiv at the stage of development at the end of the first half of the year was about 120,000 square meters, of which about 65,000 square meters is planned to be put into operation before the end of 2018.
As a result of a limited new offer and suspended rental activity, the average vacancy decreased by 5 p.p. from the beginning of the year, to 12% from 17%. Declared rental rates increased by 10-20%, while the highest effective rental rate remained stable at $23 per square meter a month.
