2018 was a busy year for the real estate market of the capital of Ukraine. There is a persistence of growth trends that occurred in 2017. JLL has published a research result that reveals a complete picture of the state of the segment and allows us to make a forecast for 2019. It continues to show the high activity of the office real estate market in Kiev, one of the reasons for it was the decrease in commissioned business centers.
Like the previous few years, the leading position in the office market belongs to companies that are engaged in computer technology.
According to JLL analysis, in the last quarter of last year, the number of transactions with companies in the IT sector amounted to 53%, and over the year — 35%. The current situation, according to experts, is natural, since this trend continues for five years. The distribution of demand in the real estate market will be observed in 2019.
According to JLL expert Alexandra Globina, in early 2014, the vector of demand in Kiev changed. Information technology companies are actively interested in renting office space. At the same time, there was a decline in demand in the manufacturing sector.
In two years, IT companies have increased the number of successful transactions in the Kiev office real estate market to 200,000 sq. M. m, which is the maximum for this segment.
Despite the fact that overall business activity increased, there was a decline in the entry of business centers. Over the past year, 47,000 square meters. m. increased the number of proposals for office real estate in the capital. During the same period, one class A building, Astarta Business Center (phase 3), was put into operation among business centers.
Among the class B introduced 6 buildings:
● Unit City (B2 and B3 buildings);
● Lagoda, phase 3;
● BC, located on the street. Gaidar, 54;
● BC on the street. Vladimirskaya, 101;
● IFC Silver Breeze, where part of the building was reconstructed for office space.
Almost all areas in these buildings were occupied even before their entry, which did not satisfy market demand.
According to analysts, throughout 2018, the volume of unoccupied office space has steadily declined. By the fourth quarter, it was 7.6%, which is almost 2 times lower than it was in 2017. Then the share of free office space remained at the level of 13.3%.
According to JLL analyst UlianaMarchenko, the active growth in demand in the office real estate market in Kiev, combined with the lack of vacant space, caused an increase in monthly rental rates. The maximum cost of class A office block is $ 30 per sq. M. m per month (excluding VAT and operating expenses), having risen by $ 2 over the year. In the class B base,the rental rate for the month stopped at around $ 24 per square meter. m., which is $ 7 more than in early 2018. According to analysts, the growth trend will continue in 2019, an increase in the value of 3-6% is expected.