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Costlier than Kyiv. Why Lviv has the highest rental rates in SECs in Ukraine

Photo: eurobuildcee.com

Photo: eurobuildcee.com

Despite the sky-high rental rates, Lviv has a queue for years to come for high-quality retail spaces.

In Q3 of 2021, rental rates for commercial real estate were the highest in Lviv among other regional centers of Ukraine. In terms of this figure, the city has overtaken not only the capital, but also the million-plus cities.

According to the website OLX Real Estate, the average rental price for retail space during this period amounted to 17,000 UAH per 1 m² in Lviv, 14,750 UAH per 1 m² in Kyiv, and in Dnipro—14,025 UAH per 1 m².

However, the experts associate high rates in Lviv, first of all, with a shortage of modern retail space. In Kyiv, for example, the vacancy rate in shopping centers is about 10-11%. The indicator was reflected in The opening in 2020 of a large facility (the SEC Retroville) impacted this figure, and in November the SEC Respublika Park will also be launched.

Lviv, according to Andriy Borysov, the Chairperson of the regional branch of the Association of Real Estate Specialists (Realtors) of Ukraine (ARESU), has not commissioned a single large shopping and entertainment center in recent years. The next phase of the opening of such facilities is scheduled for 2022-2024.

Quote"There are three complete cycle SECs with an entertainment component in Lviv today—Victoria Gardens, King Cross Leopolis on the outskirts of the city, and Forum Lviv—in the very center. But according to the ARESU estimates, the city is underutilized by such high-quality retail spaces by 40%, that is, it can swallow two more SECs. Accordingly, people who are willing to pay more have been waiting in line for new retail spaces for years. After all, these are promoted profitable places with large areas, parking lots, and a major flow of people," the expert points out.

The second reason why retailers are striving to get into the modern commercial space is comprehensive specialization.

Quote"I have clients who are shoe manufacturers with 10 years of experience. They ask for space next to other shoe manufacturers. Everyone is pleased with such a neighborhood—a whole wing of shoe stores. Comfy and Foxtrot can also be nearby. And this is not perceived by tenants as competition in one SEC—because it increases the flow of people," Borysov explains.

In addition, it fosters the demand for high-quality retail spaces and positive demographic dynamics: 15,000 new residents officially come to the city to live annually. This is despite the fact that Lviv is visited by hundreds of thousands of tourists, the expert emphasizes.

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