Rental rates in the market of commercial space as part of residential complexes in Ukraine have almost reached the pre-war level, but only in hryvnia equivalent, market experts say.
“Rental rates in 2022 sagged by 30-40%, but since the middle of 2023 a gradual stabilization began. Today the rates are close to pre-war indicators, especially in densely populated areas,” Ramil Mehdiyev, CEO of the development company ENSO, told Interfax-Ukraine.
According to him, the company maintains flexibility of conditions for tenants. For example, there is a possibility of lease with the right to buy out the premises, individual approach to the payment schedule in the first months of business, in particular, the introduction of rent “vacations” for the first months.
Mehdiyev noted that the company reserves 20-30% of commercial space for further management or lease to fill the LCD with necessary services. For the rest of the premises there may be restrictions fixed in the contract, for example, a ban on opening nightclubs, pawnshops or establishments with harmful emissions.
A similar approach is practiced by KAN Development, its press service reported. Thus, the developer leases a certain share of premises to ensure the availability of key services – medical services, pharmacies, grocery stores. Agreements also fix restrictions for types of business, for example, a ban on noisy activities.
More recently, lease agreements are also often supplemented with special clauses that regulate relationships not during power outages or reimbursement of alternative energy costs, said Avalon Chief Operating Officer Jaroslaw Wozniak.
In general, rental rates for commercial lots in the residential complexes depend significantly on the specific object, its location, traffic and functionality, said commercial director of Intergal-Bud Anna Laevskaya. According to her, “Intergal-Bud” leaves in its own rental fund premises with a payback period of up to 12 years.
“In residential complexes with high occupancy the price may be even higher, because the flow of people and cars there is very large,” she explained.
About 50% of commercial premises in Perfect Group’s residential complexes remain in the developer’s ownership, said Alexey Koval, the company’s project manager. At the same time the share may vary depending on a particular residential complex and its location.
He emphasized that although now there are no “anti-crisis” discounts, which were offered to tenants at the beginning of the full-scale invasion, the developer still provides loyal rates for the first year of rent with a gradual increase in subsequent years, which is fixed in the contract.
According to Alexander Gorlach, founder of TKN-Consulting, rental rates were as high as 70% of pre-war levels at the end of 2024.
“In fact, rates have now almost recovered in hryvnia, but not in currency. However, commercial real estate in newly settled residential complexes is the most predictable investment. As of the end of 2024 the rates at some landlords were up to 70% of pre-war rates”, – he commented to the agency ‘Interfax-Ukraine’.
According to him, now the rates for commercial premises in the LCD are 800-1.5 thousand UAH/sq. m/month for the most popular format – premises up to 60 sq. m. with active traffic. Premises with inconvenient layout, stairs, low traffic are rented cheaper, for 200-500 UAH/sq. m/month.
The expert noted that today the most active solvent tenants are pharmacy chains and food direction (cafes, pizzerias, etc.), which choose lots with the area of 40-50 square meters. m.
At the same time, some development companies, in particular Alliance Novobud, do not lease commercial premises, but sell them completely.
“We do not lease commercial premises, but sell them. The owners of the space make their own decision on what exactly to do. Usually they study the already available business infrastructure, weigh their possibilities, studying supply and demand,” said Irina Mikhaleva, CMO of Alliance Novobud.
