The active development of the IT industry has affected the situation in other business sectors. A new and increasing number of companies create a steady demand for the office real estate segment, changing the market trends. Managing Director of the consulting company Colliers International, Alexander Nosachenko, shared his vision of the prospects for this real estate sector.

The factors that influence the changes in the office real estate segment

In the first quarters of 2018, there was a certain stagnation of new proposals for office space in Kiev. This led to an increase in rental rates. According to Alexander Nosachenko, the dynamics have not changed in the second half of the year. Only economic processes could drastically affect the segment during this period, but in this case, everything was rather passive. At the moment, tenants show a high interest in office real estate of any class. Demand in this segment is higher than for retail space, which is a steady trend for the Ukrainian market. Offers for office space in Kiev come from both domestic and international companies. The second is characterized by the conclusion of long-term contracts. The share of international companies for several years in a row is more than 60% of office space rental. This is due to the policies of such corporations, which outline the vector of development and presence in the marketfor 3-5 years ahead. The commercial real estate segment is different from the office one. Here, any fluctuations are immediatelynoticeable. Around 95% of the companies represented in shopping centers are Ukrainian.

In most cases, they are franchises and are financially limited in case of losses. In order to predict the development of the office real estate segment in Kiev, it is necessary to take into account the plans and long-term stay of international companies in our market. When evaluating the feasibility of development in a particular country, large corporations rely on the analysis of the local market and its neighbors. If large markets in one region show a positive trend, then less significant ones such as Ukraine, do not drastically affect the company’s overall financial position. If a small market turns out to be unprofitable, but still represents value, the corporation analyzes the annual indicators and economic factors of a given country in order to change the policy for the next period or several years in advance. For the Ukrainian segment of office real estate and the country as a whole, it’s beneficial that international companies don’t go away. They are definitely ready to be present on the market, but they vary the dynamics of development. As proof, one can cite a stable demand for office space and the conclusion by corporations of long-term lease agreements for 3-5 years. This ensures that the company will be on the market for at least the given time period.

Impact of the development of the IT industry on the office real estate segment

According to forecasts of one of the development companies, the trend of growth of the IT industry will continue over the next 10 years. This business sector is already actively developing in major cities of the country, making up a significant percentage of office space tenants. The IT Ukraine Association and BRDO conducted a study of the field of information technology. According to its results, this direction takes second place in Ukraine in the export of services. The industry share is 20%. This allows you to make an optimistic forecast for the development of the IT-industry, as well as for the office real estate segment.