• 2016-07-20

Kiev office rental market in 2016

Terms of realization about 75% claimed to be commissioned in 2016. The projects in the office market in Kyiv postponed for a later time, in connection with which the previous figure forecast the introduction of new high quality offices for the current year revised downward by 1.8 times. The slowdown is due to the construction of the general economic situation in the country, lack of debt financing of commercial real estate, as well as the current high vacancy rate in the market.

On the other hand, stabilization of the exchange rate in the second quarter 2016 and an increase in the activity of local companies positively affected the commercial real estate market in Kyiv. First of all it will appear on the stabilization of the highest rental rates in the office and retail segments, as well as on reducing the vacancy rate in the commercial segment and growth of net absorption in the office. The size of the maximum rental rates for office real estate market in Kyiv in April-June 2016 remained unchanged at $ 29 per 1 sq. m / month., which corresponds to the figure of January-March 2016.
By the end of 2016, the office market in Kyiv because of the excess of the absorption capacity of the input vacancy rate will decline slightly. In April-June 2016 as a result of matching volume of new high-quality office space in Kyiv and the net absorption of vacancy in the business centers in Kyiv has not changed much. In the second quarter 2016 vacancy rate in business centers class "A" rose by 1.6 percentage points compared with the first quarter of this year -up to 39.8%. The decline in vacancy rates in the metropolitan office premises of Class "B" in the April-June 2016 compared to January-March 2016 amounted to 0.5 percentage points - Up to 23.5%. This slight increase in vacancy rates in business centers Class "B" in Kyiv in the second quarter this year, seen on the left bank, reduced - in other submarkets.
Further dynamics of rental rates in the office market in Kyiv will directly depend on the social, economic and political events and conditions in Ukraine.
Restoring growth of the Ukrainian market of office real estate is expected after the 2017 period.