In the first half of 2023 concluded lease deals for 69 thousand square meters of offices in Kiev, which is 51% more than the same period of 2022, follows from the research of CBRE.
“These are not the volumes we saw before the war. But tenants have increased their activity in the market on the background of attractive discounts and the opportunity to improve the quality of their offices,” said Anastasia Kachan, Senior Office Real Estate Consultant at CBRE, at the conference “Ukrainian Real Estate Market Analytics: first half of 2023”.
According to her, most of the tenant categories have reduced activity in 2022-2023. – FMCG, business services, wholesale, medicine. At the same time, there is an increase in inquiries from public sector companies and non-government public organizations. Before the war, these tenants gave up to 5% of lease transactions, now they have almost 30%. As for the IT sector, it managed to keep its leading positions, last year its share decreased from 45% to 32%, now it is about 47%.
New supply is insignificant: in the first half of the year the office real estate market was replenished with only 13 thousand square meters, which is 86% less than the volume of new supply in the first half of 2022.
“Now only the objects started before the war are being completed, and this situation is likely to last for quite a long time, given the vacancy rate,” Kachan said.
As of the end of Q1 2023, 26.4% (+0.4% vs. the beginning of 2023) are vacant. At the same time vacancy in Class B office centers decreased from 29.2% to 28%, in Class A increased from 22.3% to 24%.
The expert explained the growth of vacancy in class A primarily by a significant amount of new supply of class A at the end of last year.
The effective prime rate has stabilized at $21/sq. m/month.
As for the timing of contracts, Kachan noted the willingness of businesses to plan for the medium term in a war-torn environment.
“Last year, contracts were more often renegotiated for three to six months with the expectation that the war would end soon. In 2023, the terms are fixed “until the end of wartime,” where the “war rate” is prescribed and there is an agreement that after the war it will be revised to reflect market conditions,” Kachan said.
In the spring, CBRE conducted a survey of companies’ plans for their offices. Most of them, 56%, intend to keep the volumes, some are negotiating more favorable lease terms, some are doing nothing. 13% reported that they will partially reduce the office, 12% are considering moving to a co-working space, 12% are closing/canceling the office, 4% are thinking about sub-tenants, 3% want to move to a cheaper office.
At the same time, actual office attendance ranges from 15-20% to 50+%, depending on the business model.
Factors in choosing a new office remain unchanged. Top requirements: equipped bomb shelter, distance from critical infrastructure, energy autonomy.
“Given the uncertainty of energy supply during the 2023 heating season, we anticipate an increase in fall/winter attendance,” Kachan reported.
Headquartered in Los Angeles, CA, CBRE is the world’s largest commercial real estate advisory and investment company, with revenues of $30.8 billion in 2022, according to Fortune, a Fortune 500 list of the world’s largest companies.
Shares of CBRE Group Inc. are traded on the New York Stock Exchange.
CBRE’s Ukrainian office was opened in January 2008 and is part of the company’s affiliated network.
An elevator with a total capacity of 24,000 tons of simultaneous storage is under construction in Cherkassy region, the press service of the contracting company Lubnymash LLC reported.
“Silos with a total capacity of 5,500 tons each and a diameter of 22 meters, having roof panels with GreenCoat® polymer coating from SSAB (RUUKKI), providing protection against corrosion for 50 years, are almost completely installed,” the contractor wrote on Facebook.
According to his information, the installation of one of the operational storage silos with a diameter of 5.5 meters and a capacity of 300 tons has already been completed. The second one is in the queue.
In addition, the installation of shaft type grain dryer U13-SSH50M2T with a capacity of 50 tons per hour (with removal of moisture from wheat from 20% to 14%), with full external insulation of the shaft on the alternative heat generator GRECO group has been completed.
Work has begun on transport equipment with a capacity of 100 tons per hour, in particular, 13 galvanized chain conveyors with a total length of 180 meters and 5 galvanized bucket-type belt elevators with a total height of 97 meters are being installed.
According to the company’s website, PE Lubnymash is a Ukrainian manufacturer and supplier of equipment for transportation, storage, processing of grain, grain products and other materials. The company sells its products under the Lubnymash and Lubnymash brands.
The company’s plant in the Poltava region has its own foundry, forging and painting facilities, two assembly shops, a mechanical shop, tool, welding and assembly and blanking areas, warehouses of materials and finished products.
According to the Unified State Register of Legal Entities and Individual Entrepreneurs, the ultimate beneficiary of the company PE Lubnymash is Maria Kudryk.
The Taiwanese government will allocate $2.5 million to Kiev for the construction of a bridge to Obolonsky Island in the capital, according to the website of the Ministry of Foreign Affairs of Taiwan.
According to the press release, earlier $1 million for the construction of the bridge was sent to Kiev by the Metropolis of Greater Paris. Taiwan, along with other countries, supports the reconstruction of Ukraine and emphasizes the importance of solidarity and cooperation of the democratic community during the Russian-Ukrainian war, noted in the message.
As reported with reference to Obolonska Regional State Administration, Kiev received about UAH 20 million from the Metropolis of Greater Paris to complete the construction of a pedestrian bridge on Obolonsky Island.
The pedestrian bridge on Obolonsky Island is being built since 2020 at the expense of patrons. According to the project, the bridge will rest on four supports, two of which are located in the strait. The width of the pedestrian facility is 4 meters, length – 164 meters.
By the beginning of 2023, three bridge supports were installed and materials were purchased. With the funds provided by the Metropolis of Greater Paris, it was planned to complete the installation of the fourth bridge abutment, purchase and install the auxiliary and partially purlin structures, and purchase steel structures.
Source: https://en.mofa.gov.tw/News_Content.aspx?n=1328&sms=273&s=115105
The number of houses, construction of which was started in the United States in June, decreased by 8% compared to the previous month and amounted to 1.434 million in terms of annual rates, according to the report of the Ministry of Commerce of the country.
According to the revised data, in May the number of new buildings amounted to 1.559 million, not 1.631 million, as previously announced.
Experts had forecast the figure to fall to 1.48 million from the previously announced May level, according to Trading Economics.
Construction of single-family homes fell 7% last month to 935,000. In the case of multifamily (including apartments and condominiums), a more volatile segment of the market, the number of new construction fell 11.6% to 482,000.
The number of building permits for new homes issued in the U.S. in June fell 3.7% to 1.44 million at an annualized pace from a revised 1.496 million a month earlier.
Analysts had expected the number of permits to fall to 1.49 million from the previously announced May figure of 1.491 million.
Agricultural Corporation Krupets (Rivne region), which owns one of the largest farms for the production and sale of chicken eggs in the western region of the country, is completing the construction of a poultry farm, where it will grow 400 thousand laying hens with the prospect of further export of products to the EU.
The head of Rivne Regional Military Administration (OVA) Vitaliy Koval emphasized that by investing in new projects and supporting the “economic front”, the agro-corporation gives a very important message to all those involved in business – not to stop despite the challenges of wartime.
The report on the OBA website specifies that the construction site of more than 6 hectares is located on the site of a former abandoned farm in the village of Sytnoye, Dubensky district. The works are performed by the local construction company “Renome-Eurobud”. The launch of the enterprise is scheduled for November 2023. The poultry farm is planned to be certified according to European standards for further export of products to the EU.
More than 20 high-paying jobs will be created at the poultry farm. It is expected that it will annually transfer about UAH 3 mln of taxes to the local Krupets community.
Agrocorporation “Krupets” operates with a land bank of 7 thousand hectares, specializing in growing crops, production of chicken eggs, broiler meat, mixed fodder, drying and storage of grain.
The structure of the agricultural corporation includes elevator and drying complexes for simultaneous storage of 60 thousand tons of grain, feed and oil extraction plants, soybean processing line, four poultry complexes.
The enterprises of Krupets agro-corporation (Poultry Farm Krupets, Krupets Feed Mill) are one of the largest farms for production and realization of edible chicken eggs in the Western region of Ukraine.
Share of new buildings, in which construction was resumed, by regions of Ukraine
Source: Open4Business.com.ua and experts.news
