Vacancy of shopping and entertainment centers in Kiev decreased from 16.3% in 2023 to 15.2% at the end of the first half of 2024, said the head of legal consulting department of UTG Konstantin Oleynik.
“At the end of last year, about 21.4% of space was de facto vacant, due to the closure of foreign department stores (IKEA, Inditex, H&M and others). The actual vacancy rate was 16.3%. Thanks to the opening of most foreign operators, the vacancy gap with actually closed stores has narrowed,” he said.
According to UTG research, the vacancy rate is higher in regional (18.4%) and district (17%) shopping centers, lower in specialized (9.8%) and district (7%) shopping centers.
The expert noted the trend of decreasing effective demand of the population. The growth of household expenditures on housing and utilities services and CP payment continues (at the end of 2023 this category was 18.8% and with the growth of electricity tariffs there is further growth), health care (4.7%), transportation (4.8%), communication (4.3%), education (3.6%). Cumulatively, these categories drain 36.1% from the family budget. Food and alcohol accumulate 43.4% of expenditures. The share of retail network (clothing and footwear, electronics, household goods, cafes and restaurants, entertainment, other goods) in the structure of expenditures is only 16.0% per family ($73.4 or 2,684.5 UAH per month). Inflation and rapid price growth lead to a reduction in individual savings (about 4.4% in 2023).
In general, general savings and cost rationalization are recorded, for the mall market this entails a decrease in attendance and adjustment of rental rates. Compared to pre-war rates, rates for some product groups have halved or more.
“Food supermarkets have become one of the few operators able to generate sustainable footfall and pay moderately high rental rates ($10-20/sq. m in August 2024), while most department stores, entertainment (cinemas, DDCs), fitness centers are aiming for a minimum fixed payment (around $1/sqm) with an additional RTO (fixed payments of $2 to $12/sqm prevailed before the war), shifting the risk to the developer,” Oleynik reported.
According to UTG research, taking into account the current income level of the population, solvent demand is able to ensure successful functioning for 2 million 313 thousand sq. m. in the capital, and in the second quarter of 2024 there were already 2 million 457 thousand sq. m. in operation.
Competition continues to intensify: large shopping centers with a total area of 250 thousand square meters are declared for opening in 2024-2025. Among them are Ocean Mall (GLA 110 thousand sq. m), Lukiyanivka (47 thousand sq. m), White Lines shopping mall (28 thousand sq. m), New Ray (34.5 thousand sq. m), April Mall (36.5 thousand sq. m), BalticSky (20 thousand sq. m). There is a possibility that most of the announced openings may be postponed to a later period.
According to Oleinik’s estimation, the commissioning of the declared projects will bring about a surplus of retail space and gradual redistribution of consumer flows between objects, vacancy growth and downward correction of rental rates. At the existing level of incomes and expenditures of the population, the vacancy rate may reach 17% in 2025.
UTG was established in 2001. It has developed more than 1300 real estate concepts. During the years of work with the company’s participation 4.7 million square meters of commercial space in Ukraine have been leased out.
KYIV, REAL ESTATE, UTG, Vacancy Shopping and Entertainment Center
The trends of the real estate market in the first half of 2024 were analyzed by Oleksandr Nasikovsky, Managing Partner of DIM Group of Companies.
The number of sales transactions in the first half of 2024 is gradually increasing compared to the same period in 2023. But it all depends on the readiness of the object and its class.
Currently, the majority of buyers of apartments in the primary market are those who buy housing for themselves. These are people who associate their future with Ukraine, with Kyiv. In this case, it makes no sense to postpone this step, because developers are now offering good conditions and trying to keep prices down. Most of these people lived and planned to buy housing in the capital even before the war.
There are also IDPs among the buyers, but their share has not increased significantly. They have more stressful circumstances, a longer period of adaptation, and need more time to take this step. In addition, some of them are considering the western regions of Ukraine for purchasing housing.
While in 2023, there were few investment transactions for the purchase of real estate for resale or lease, in 2024 we are already seeing a gradual recovery in investor interest as the real estate market is gradually recovering.
For new clients, realizing the difficult decision they are facing today, we are developing special programs for the purchase of housing: we offer installment plans for a long period (up to 5 years), reduce the down payment, offer to pay part of the funds before the completion of construction, and the rest within three years after.
We can state that the cost per m2 of primary real estate will continue to grow. This is due not only to the future growth in demand for new housing, but also to the rise in the cost of building materials, energy, and related resources required for the construction of houses.
Yes, there is pent-up demand and it has a cumulative effect. Ukrainians still have a need for new housing, but not everyone is ready to invest in real estate in the capital. People are hindered by understandable fears, lack of stability and confidence in the future due to the war. But as soon as we win, people will return to solving the housing issue, because it is still relevant.
Internal migration within the country will also have an impact. Some people will stay and build their future in Kyiv.
Investors will be interested in the future growth of the cost per square meter. After the Victory, this process will start quite quickly.
The cost of apartments in high-quality facilities will increase. This is due not only to the future growth in demand for new housing, but also to the rise in the cost of building materials, energy, logistics, and related components required for the construction of houses. So far, we have been able to balance, but over time, these factors will take their toll and prices will go up.
Over the past year, there has been a revival – the average rate of investment transactions in the Kyiv and regional markets is 15-20% due to liquid complex projects of developers who have not lost confidence during a full-scale war.
At the same time, the return of investors and the purchase of real estate for investment purposes are heavily influenced by the geopolitical situation, news, reports, and forecasts from the front line and shelling of cities.
For their own lives, people choose the comfort segment. The average cost per m2 in comfort-class new buildings is USD 1200-1500.
Investors are interested in the business segment, but only in projects with a cool concept, unique location and minimal competition.
For example, in the business class complex OLEGIV Podil by DIM, we see a very stable demand from investors who are interested in the location of the ancient Podil, the architecture, and our updated project concept in the art boutiqe format.
The usual format of business-class residential buildings at a cost of $2000-$3000 m2 is not popular among investors. In most cases, these are new buildings located in the Pecherskyi, Shevchenkivskyi, and Holosiivskyi districts. Today, there are a large number of apartments from owners on the secondary market who, for various reasons, get rid of them, sometimes giving a big discount, which creates a lot of competition with the primary market for developers.
Last year, investors did not even consider the premium segment for investment.
Now we can state the interest in premium real estate – the more expensive and unique the project, the more people buy it for early investment.
The closed pre-sale of the premium project The One by DIM exceeded all our expectations, and since the beginning of the year we have sold almost 30% of the apartments. This suggests that people are ready to invest even at the excavation stage in high-quality conceptual projects with innovative engineering solutions. Investors value exclusivity and are looking for investment opportunities. By the way, The One has the highest share of investment transactions, because for buyers of premium real estate it is definitely not the main place of residence, but rather 3-5-10 apartments that are bought for investment purposes.
The most popular apartments for investors are 1-2 bedroom apartments up to 60 m2. We have almost 70% of requests for these apartments, which indicates the interest of investors. However, I would like to note that we are talking about our unique location, where there will be no other similar projects.
In general, the share of investment transactions in DIM before the war was 50%.
Now the demand for apartments as an investment is quite restrained and amounts to 20%. People buy them mostly to save money from depreciation and to make money on resale in the future. There is also a small share of transactions for the purpose of renting out real estate.
The main criterion for an investment buyer is to find an object with the highest yield and minimum risks. The biggest risk of investing in residential real estate remains the risk of unfinished construction. Therefore, you need to pay attention to:
– real, not nominal, construction dynamics,
– the number of m2 commissioned during the war
– the developer’s plans in the long term: whether the company plans new projects, improves existing ones, monitors and implements new trends
– the developer’s publicity and fresh and relevant publications in the media, social networks, and website. Their presence indicates that the developer has long-term plans.
– sales pace. If sales are very slow and the discounts are suspiciously attractive, study the information about the property and the developer more carefully.
High investor interest is also demonstrated by high-quality suburban eco-clusters with a recreational component and a wide range of their own infrastructure.
For example, more than 20% of transactions in Park Lake City are made for investment purposes.
We would like to add that in difficult times, DIM, as a system developer with a quality product, always meets the buyer halfway. For example, we now have many financial instruments in place: an installment program of up to 5 years with a down payment of 20%; a program where the first year there are fixed minimum payments from $300 to $600 per month, depending on the selected apartment size; a program with flexible payment terms – the buyer makes a down payment of 30% before the completion of construction, and pays the remaining amount within two years after the object is ready; a trade-in program – you can exchange any property you own for a new one.
The number of registration actions in the field of state registration of rights to real estate in the first quarter of 2024 by 38%, and in the field of business – by 23%, said the head of the Office of counteraction to raiding of the Ministry of Justice Viktor Dubovik.
“Starting from 2020, I am of the opinion that the number of registration actions is one of the important indicators of economic activity in the state. Because the majority of registration actions are revenues to the budget in the form of administrative fees, the emergence of new rights and obligations of citizens and businesses, as well as the presence of demand for the services of notaries and state registrars,” his words are quoted on the website of the Ministry of Justice.
Dubovik specified that for the first three months of 2024 was made 2 million 605.73 thousand registration actions on the real estate and 263.48 thousand – on business, while for the same period in 2023 – respectively 1 million 887.60 thousand and 214.26 thousand.
At the same time, according to his data, the number of complaints received by the Office in the field of real estate increased even more significantly – up to 699 from 290 in the first quarter of last year, while in the business sector the situation, on the contrary, improved: the number of complaints decreased to 115 from 119.
Poland is becoming an increasingly popular destination for real estate investment among foreigners. This is due to economic stability, a growing real estate market and attractive prices. In this article, we will look at the peculiarities of buying and selling real estate in three key Polish cities: Wroclaw, Krakow and Warsaw.
Wroclaw: The city of a thousand bridges
Buying real estate in Wroclaw
Wroclaw, with its rich history and cultural heritage, is one of the most attractive cities for investment. Buying real estate in Wroclaw offers a variety from historic buildings in the city center to modern apartments in new residential complexes.
– Prices: The average price per square meter in Wroclaw ranges from 7000 to 11000 PLN, depending on the neighborhood and the condition of the property.
– Buying process: The process begins with selecting a suitable property, checking its legal purity and finalizing the transaction through a notary.
Additional costs such as purchase tax (2%) and notary fees should also be taken into account.
Real estate for sale in Wroclaw
Selling real estate in Wrocław can be profitable, especially if the property is located in a prestigious area or has unique characteristics.
Preparation for sale: It is important to properly prepare the property for sale by making the necessary repairs and putting it in an attractive condition.
Marketing: Effective marketing, including professional photos and advertising on popular platforms, can significantly speed up the sale process.
Krakow: The cultural capital of Poland
Buying real estate in Krakow
Krakow is known for its old town and universities, which makes it attractive for students and tourists. Buying real estate in Krakow can be a great investment for both living and renting.
– Prices: The average price per square meter in Krakow is between 8000 and 12000 PLN.
– Buying process: Buying real estate in Krakow requires a thorough check of the documents and the legal purity of the property. Notary fees and purchase tax should also be taken into account.
Selling real estate in Krakow
Selling real estate in Krakow can be particularly lucrative due to the constant demand from students and tourists.
– Preparing for the sale: Before putting a property up for sale, it is important to assess the market value and, if necessary, improve the condition of the property.
– Marketing: Placing ads on popular websites, using social media and professional photography will help attract more potential buyers.
Warsaw: The capital and economic center of Poland
Buying real estate in Warsaw
Warsaw, as the capital of Poland, attracts investors from all over the world. Many international companies have their headquarters here, which makes the real estate market very active.
– Prices: The average price per square meter in Warsaw varies from 9000 to 15000 PLN.
– Buying process: Buying real estate in Warsaw requires attention to detail and legal aspects. It is recommended to use the services of professional realtors and lawyers.
Selling real estate in Warsaw
Selling real estate in Warsaw can be very profitable, especially in central areas and areas with good infrastructure.
Preparation for sale: High-quality preparation of the property, including renovation and decoration, will help to increase its attractiveness.
– Marketing: The use of various marketing channels, including online platforms and social media, will help to reach a wide audience.
Conclusion.
Buying and selling real estate in Wroclaw, Krakow, and Warsaw has its own peculiarities, but in all cases it is important to take into account legal aspects, market trends, and effective marketing strategies. Whether you are looking for a home for yourself or an investment, Poland offers many opportunities for successful real estate transactions.
Land plots are being bought even more than in 2021
Ukrainians began to buy and sell land and real estate more actively in the first quarter of 2024, according to the Unified Register of Notarial Forms of the Ministry of Justice. Over 185,000 land alienation agreements were registered during this period. This is 36.4% more than before the full-scale invasion. And alienations of other real estate increased by 55% – but this is still less than in 2021.
In 2024, Ukrainians are more likely to sell or transfer land to other ownership. In particular, 185 thousand land alienation agreements were drawn up by notaries in the first quarter of 2024. This is 56% more than in the same period last year: then notaries certified almost 119 thousand such forms.
The number of such agreements is already a third higher than before the start of the full-scale war. Back then, in 2021, more than 136 thousand land alienation agreements were formalized.
At the same time, the number of alienations of real estate other than land has increased by one and a half times this year. Thus, in the first quarter of this year, notaries certified more than 181 thousand such forms. For comparison, in the same period last year, there were almost 117 thousand such transactions.
However, this is still 16% less than before the full-scale campaign began: just over 216 thousand forms were used for land alienation.
It should be noted that one notarial act does not always require only one notarial form. Accordingly, the number of actions is approximate and is compared to previous years.
It should be reminded that the total number of notarial forms used last year increased by 2.6 million) , but still remains lower than before the outbreak of full-scale war.
