The Kyiv’s coworking market will expand by 20,000 square meters at the end of 2021.
The press service of CBRE Ukraine told Interfax-Ukraine, referring to a study, three new coworking spaces with a total area of 3,700 thousand square meters were opened in Kyiv during January-June 2021. In the second half of the year four more spaces with a total area of 17,600 square meters are expected to open.
By the end of 2021, the Creative Quarter is expected to open at 139, Velyka Vasylkivska Street (8,000 square meters), Regus in the LUWR business center (3,600 square meters), GNRTR Lounge & Offices (3,000 square meters) and Creative States of Arsenal (3,000 square meters) will be expanded.
The Ukrainian coworking and flexible office market is returning to pre-quarantine levels, the average occupancy rate of locations is 75%, according to a study by CBRE Ukraine and the Ukrainian Coworking Association.
According to its data, the pre-quarantine occupancy rates were 80-90%, while in May-August 2020 they decreased to 50-60%. With the introduction of adaptive quarantine, many large companies have revised their rental strategy towards coworking, after which the demand for flexible offices has shifted to recovery.
“The share of large companies in the structure of users of coworking spaces and flexible offices is growing. Now it is at the level of 11%, but there is a tendency to growth in demand for services from corporate clients. The main share is medium-sized businesses, namely 35%. Small businesses and start-ups account for about 20%, respectively,” the study says.
It is also noted that over the past year, the trends in planning solutions have changed on the market: the demand for open space offices has decreased by 50% and in the structure of space occupies on average only 10% of the location. At the same time, the profitability of individual offices, which occupy up to 55% of the premises, has significantly increased, the report says.
According to a survey of members of the Coworking Association, the majority of respondents use technological solutions to improve customer experience. Thus, 78% of coworking spaces use their own mobile applications for effective interaction between residents and management, and more than half use software to automate business processes and manage locations.
The coronavirus pandemic as a whole has accelerated the transformation of the office market and increased rental interest. As of August 2021, the total supply of coworking spaces in Kyiv amounted to 96,000 square meters, or 4.9% of the total volume of high-quality office space. At the same time, the new supply is steadily increasing, including due to scaling in the regions.
National University Kyiv-Mohyla Academy (NaUKMA) together with Bureau of Investment Programs (BIP) NGO are planning to create a technology park in an educational building located at 2/4, Glazunov Street for UAH 50 million with the participation of an investor. “According to our preliminary estimates, about UAH 50 million of investment is required to restore the building and infrastructure for a modern technology park. After restoration, the territory can accommodate about 40 resident companies and coworking spaces for students,” Director of BIP Oleksandr Bondarenko said.
The project will allow the university to earn money, as well as employ students, create IT products, and entrepreneurs will be able to gain access to a scientific base and innovative products and services.
The return on investment in such a project is seven of eight years due to rental payments from residents and additional services provided by the technology park’s management team, Bondarenko said.
To create a technology park, it is planned to use the educational building located at 2/4, Glazunov Street with an area of 1,700 square meters. However, alternative premises are also being considered.
The project participants signed a partnership memorandum for the development of the technology park.
“Next steps are project evaluation, concept development, and search for investors,” NaUKMA said in the press release.
The Bureau of Investment Programs (BIP) is a non-governmental organization that unites public partnerships and private investors for the construction of infrastructure facilities, attracting investment and creating a safe environment for investors in the Ukrainian market.
Creative States coworking space launches its own franchise in early 2021, founder of the Creative States network Ilia Kenigshtein has said. “We decided to launch our own franchise at Creative States. This is a venture project, we’ll see if it works or not, and we will make an estimate. We are launching the franchise early next year, the same Franch is preparing it for us, headed by Roman Kyrylovych, who made the franchise for Rozetka, Smartass and many other cool projects,” Kenigshtein wrote on his Facebook page.
According to him, the franchise is focused on the regions of Ukraine and beyond, except for Kyiv and Dnipro – cities where Creative States operates. At the same time, the company reserves the right to refuse cooperation if the selected location is not suitable for the network model.
Creative States plans to engage in location selection, design, construction and launch of a turnkey partner facility. In addition, the company will help partners attract tenants, including network clients.
“Our common goal with the franchisee is to ensure that the location comes out in aggregate not less than 28-30% of EBITDA in the annual range. More is better. This is good money, especially in the context of the commercial real estate segment,” added Kenigshtein.
He did not name the amount required to enter the project, specifying that it would not be the lowest, but promised to announce the conditions in the near future.
As reported, the Creative States of Arsenal co-working space in Kyiv was opened in May 2020. The object is located in the territory of the Arsenal plant at 8 Moskovska Street in Kyiv. Its total area is 4,100 square meters. The space is designed for 700 residents, includes 130 offices and 60 co-working seats.
The Creative States network also includes locations in the capital’s Senator and Gulliver business centers. It is also planned to open a co-working space in Dnipro, as well as to enter the European market.