The share of vacant space in the market of shopping centers in Kyiv in the fourth quarter of 2018 for the first time in the last two years has stabilized at 3.7%, the press service of Jones Lang LaSalle (JLL) consulting company in Ukraine has said.
“The cessation of decline in the vacancy rate is due to the achievement of a temporary equilibrium in the market of shopping centers in Kyiv. After a significant increase in the first half of the year (by 20%) to almost the pre-crisis level of $1,140 per sq m a year, rental rates have also stabilized,” Yekateryna Vesna, the head of the retail space department at JLL (Ukraine), said.
According to the company, over the year the vacancy rate in the capital market decreased by 1.9 percentage points and amounted to 3.7%.
“At the same time, in comparison with other European capitals, rental rates in Kyiv remain relatively low: for example, the maximum rental rate in Warsaw is higher by 55%, in Prague by 80%. The relatively low cost of premises together with the growth of public purchasing power contributed to sustainable demand from international retailers in the Ukrainian market. This was also supported by the desire of lessors to increase the presence of well-known global brands in their facilities,” the expert said.
Depot Development Group from the Foxtrot Group (Kyiv), developing the Depo’t shopping centers chain in Ukraine, plans to expand the portfolio of retail property in Ukrainian regions via acquisition of finished facilities and building new ones, Foxtrot Group Head Valeriy Makovetsky has said.
“We have several construction projects and a number of projects for expanding/restyling existing facilities,” Makovetsky said in an exclusive interview with Interfax-Ukraine.
At the same time, he said that the group does not plan to build a shopping center in Kyiv, since this is a specific market “with a long and not very high return on invested capital.”
“We have another strategy: construction of commercial real estate in the regions of Ukraine. We are trying to acquire completed and, from our point of view, liquid, small facilities. Next year [2019] we have planned the construction of a good facility in the center of Chernihiv. We are currently developing a restyling project of our facility in Kryvy Rih. We are attaching a sports complex with a swimming pool for the Sportlife network. We are planning to reformat the shopping center in Zaporizhia, to expand our shopping center in the center of Kropyvnytsky. Maybe, we will take part as partners in one of the Kharkiv facilities,” Makovetsky said, describing the plans.
According to him, these will be small regional-scale shopping centers, the total area of each of them will be about 10,000-15,000 square meters.
As Makovetsky said, Depo’t shopping centers show good performance, so the issue of selling them is not on the agenda.
“This business demonstrates good efficiency. The facilities stably show profits. Rental rates this year have grown by about 30%. Therefore, we plan to develop this area of business and the issue of selling them is not on the agenda,” the head of the Foxtrot Group said.
