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Growing like a weed. Amount of new offices in 2021 grew by 17% compared to 2020

Rental rates remain stable in the Q2—3. Photo: Shutterstock

Rental rates remain stable in the Q2—3. Photo: Shutterstock

In the Q3 of 2021, the new supply of office space in Kyiv amounted to about 104,000 m2 GLA, and that is similar to the annual rate of 2019 and is 17% higher than the annual rate of 2020.

According to a new Cushman & Wakefield’s report from, during the Q1—3 of 2021, the new supply of office properties reached 194,000 m2, while another 32,000 m2 in Kyiv are under construction and are planned for completion by the end of the year.

In particular, according to the company, the list of the main office real estate facilities taken into use in the capital in the Q3 of 2021 include:

  • business centre (BC) MAG.NETT (phase 1) in the city center (the total area is 24,552 m2);
  • BC Eleven (phase 2) on the eastern bank of the Dnipro (22,473 m2);
  • BC on Olenivska Street, 23, Podil (21,023 m2);
  • BC on M. Bazhana Avenue on the eastern bank of the Dnipro (15,555 m2.);
  • BC on Spaska Street, 26/14, Podil (11,320 m2);
  • UNIT.City Innovation Park (phase 5) on the western bank of the Dnipro (7,952 m2);
  • BC on B. Khmelnytskyi Street, 9 in the central business district (2,040 m2).
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Despite the significant supply of the office properties, the primary vacancy rate in the sector fluctuated between 13-14% during 9 months of the year and reached 13.8% at the end of September.

The demand from tenants in the Q3 remained relatively high, and the take-up reached approximately 57,800 m2. In the first three quarters of 2021, the take-up in the sector reached about 143,000 m2, which is similar to the figure for the first three quarters of 2019, but twice as much as the figure for the first nine months of 2020.

The net absorption, negative in 2020, reached almost 129,000 m2 in the first three quarters of 2021 (76,000 m2 of them accounted for the Q3 of 2021), and that testifies to the positive dynamics of the market.

The company’s analysts attribute the market stabilization and the improvement of business expectations to an increase in the total amount of sales of manufactured products, an increase in investments in the construction industry, and a positive outlook for further growth of the enterprises.

Despite the widespread opinion about the rising inflation, the heads of the financial institutions interviewed by the National Bank of Ukraine in the Q3 of 2021 expect further strengthening of the hryvnia.

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According to the research, despite the decrease in rental costs in all classes of office real estate in Kyiv since March 2020, different real estate properties on the market demonstrate different figures of rental rates.

Although in the Q1, rental rates for office premises of the highest quality in Kyiv increased slightly, up to $27 per square meter per month (excluding VAT and utility bills), they remained stable in the Q2 and Q3.

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