Business news from Ukraine

VACANCY RATE OF SHOPPING AND ENTERTAINMENT CENTERS MANAGED IN UKRAINE BY ARRICANO (CYPRUS) IS 0.1%

An average vacancy rate across portfolio of shopping and entertainment centers in Ukraine managed by the Arricano Real Estate Plc (Cyprus) is 0.1% through January-June of 2019, according to the company’s report on London Stock Exchange (LSE). “In the first half of 2019, the average vacancy rate of shopping malls in Kyiv is 5.5%, and in our shopping malls, Kyiv inclusive, this rate is several times less. Going into the second half of the year, Arricano has recorded the lowest vacancy rates since 2012. I believe this is a result of the systematic work, innovative approaches and competent management in recent times,” said Arricano CEO Mykhailo Merkulov.
In particular, for the first half of 2019, Sun Gallery (Kryvyi Rih) and City Mall (Zaporizhzhia) recorded a 100% occupancy, whilst the RayON and Prospekt shopping malls (both located in Kyiv), recorded vacancy rate of 0.08% and 0.17% respectively.
Arricano is one of the leading real estate developers of shopping centres in Ukraine with European investments. It is listed on the AIM Market of the London Stock Exchange since 2013. Today Arricano Group owns and operates five completed shopping centers and 49,9% shareholding in Sky Mall and land for further three sites currently under development.

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VACANCY OF SHOPPING CENTERS IN KYIV FALLS TO 2.8% IN Q1

The share of vacant space on the shopping centers market in Kyiv in January-March 2019 fell by 0.2 percentage points, to 2.8%, according to a study of CBRE Ukraine (Kyiv). “Despite the commissioning of new facilities, the average vacancy rate decreased by 0.2 percentage points from the beginning of the year and amounted to 2.8% of vacant premises,” the company said in the study.
According to the company, in January-March this year, rents for the best retail premises increased 7-16% and ranged from $80-110 per sq. m. a month. At the same time for other retail premises, the rates remained unchanged, at around $42-60 per sq. m. a month.
The volume of retail turnover in Kyiv in January-February 2019 (the latest available data) increased 6.9%, with a slowdown in consumer price index growth from 8.8% in February to 8.6% in March.
During this period new brands entered the retail real estate market, including Decathlon in Retail Park Petrivka, Claudie Pierlot and Weill in the shopping center Gulliver and Missha in the shopping center Lavina Mall. A new supply of shopping centers was presented by the Oasis shopping center and the Smart Plaza Obolon shopping center, which led to an increase in the total supply by 2.1%, to 1.13 million sq.m.

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VACANCY OF KYIV’S OFFICES IS LESS THAN 5% IN 2018

The share of vacant space in the office real estate segment in Kyiv at the end of 2018 was less 5%, and rental rates are growing, Head of the Capital Markets and Land Parcel Transactions Department of Cushman & Wakefield Volodymyr Mysak said at the Ukrainian Center of Steel Construction conference.
“In Ukraine, there is a very interesting comparison between supply and demand. Kyiv has the smallest number of square meters per 1,000 inhabitants in terms of office space among European cities. That is, there is a huge potential for increasing office space,” the expert said.
The company also believes that the investment attractiveness of office real estate is increasing. “If one has previously massively invested in residential real estate, now they are returning to office real estate. That is, many investors are returning to this,” Mysak said.
According to Cushman & Wakefield, by the end of 2018, the vacancy rate of commercial real estate in Kyiv amounted to 4.9%, the total offer was 649 square meters per 1,000 inhabitants. At the same time, rental rates averaged $29 per square meter a month.
According to Mysak, the vacancy rate is also very low in the warehouse real estate market – about 3%, which causes an increase in rental rates.
The expert said that the amount of investment in commercial real estate in 2018 was a record for 10 years.
“In 2018, there was a lot of investment in the economy of Ukraine, in particular in commercial real estate. We actually reached a 10-year peak – more than $300 million was invested in commercial real estate. This shifted the cycle from the point, and this means investors are confident that the market is moving in a positive direction.”

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CBRE: AVERAGE VACANCY RATE OF RETAIL SPACE IN KYIV DOWN TO 5% IN 2017

The average vacancy rate of retail space in Kyiv by the end of 2017 decreased by 6 percentage points, to 5% from 11%, in the best shopping centers remained in the range of 0-2%, according to a study by CBRE Ukraine international consulting company (Kyiv).
According to its data, it’s worth expecting an increase in the vacancy of retail space in 2018.
“The general trend towards a reduction in vacancy is largely dependent on the timely completion of the announced projects, including the two large shopping centers River Mall (58,700 sq m of gross leased area) and Retroville (80,700 sq m). Despite the likelihood of delays in commissioning, the average vacancy in the market will increase if all of the announced volume is put in operation on time,” CBRE Ukraine Managing Partner Radomyr Tsurkan said.
At the same time, according to the company, rent rates in 2017 rose by 10-25%.
“Rent rates in the best trade centers remained relatively stable in the range of $60-86 per sq m a month, in other shopping centers fluctuated within $32-45 per sq m a month by the end of 2017,” the study says.
According to the company’s forecasts, rent rates for premises in the most popular shopping centers of the capital in 2018 will continue to grow, while in others it will not change significantly.

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