Facebook Pixel

Back to the office: What business centers to open and how the workspace to change in 2022

Office rental prices in Kyiv in 2022 and office real estate trends. Photo; Pixabay

Office rental prices in Kyiv in 2022 and office real estate trends. Photo; Pixabay

In 2022, offices in Kyiv will become even greener and more "socialized". Technical fit-out and extensive infrastructure nearby will be important.

Changing space or relocating to a business park

The vast majority of tenant companies in the capital are slowly returning to a defined format of working in the office keeping significant fragments of remote working. This is no longer a traditional office activity, therefore, workplace sharing is increasingly seen as an option for organizing space in combination with the ability to work remotely.

The main focus of the office real estate market development in Ukraine will be the space transformation. Alexander Nosachenko, Managing Director of Colliers Ukraine, told The Page in a commentary that this is primarily about changing layouts (expanding areas and changing configurations) and optimizing space through hot desking—the organization of office space providing for the shared use of the desktops.

Quote"Important trends are landscaping and installing open space units; increasing meeting space; creating socialization zones for employees; equipping conference rooms for online meetings," said Nosachenko.

According to the expert, back in 2021, in the case of a relocation, some companies began to pay more attention to premises with the finished technical interior due to a significant increase in prices for repair work and materials.

Also, the regular migration of top tenants to higher quality business centers continues, which in turn result in the reconception or reconstruction of the office centers that are less consistent with new trends and modern requirements in the long term.

Quote"The segment will move towards creating business parks with an extensive infrastructure: a combination of office buildings with shopping areas, sports complexes, and recreation zones. Good examples of such facilities are Unit.City and NUVO business parks," Nosachenko noted.

Another trend in the office real estate market is the development of BC concepts in accordance with the requirements of green certification. It involves the competent use of water resources and energy efficiency:

  • automatic lighting control, renewable energy sources;
  • resource efficiency and use of safer building materials;
  • waste sorting.

Occupying large areas in the best business centers in the city, coworking spaces are beginning to compete with office rental companies.

In what Kyiv districts new offices are to appear

According to the company UTG, the number of international companies represented in Ukraine and their representative offices (the main consumers of professional office real estate) continues to decline in dynamics in 2022.

By absorbing more than 50% of all office space, the IT sector has become the leading driving force behind the development of the Ukrainian office market and has revived almost all mothballed, frozen and postponed projects.

The outdated shopping centers, hotel complexes, enterprises, and factories were transformed into offices (Kooperator hotel, Slavutych, Zorianyi cinema, Silver Breeze and inSilver shopping centers, M. Voronin Factory, Arsenal and ElectroPryladPostach factories, etc.).

screenshot-11.jpg

In addition, the following new office centers are announced for opening in the Kyiv market in 2022:

  • BC class B, Konstiantynivska Str., 75, with an area of 8,500 sq. m.
  • Multi-purpose complex (2 stage) class A, Korolenkivska Str., 4-6, with a total area of 60,000 sq. m.
  • Multi-purpose complex (MPC) A—Station with an area of 8,840 sq. m near the Arsenalna metro station. Class B+.
  • MPC ARSENAL PLAZA (class A), Hrushevskoho Str., 36-40, with an area of 30,000 sq. m.
  • BC Grand Step (2 stage) with an area of 29,200 sq. m, Dashavska Str. Class B+
  • Office center, Zhylianska Str., with a size of 25,000 sq. m class C.
  • BC Nobel (class B) with an area of 27,535 sq. m., Lybidska metro station.
  • BC (class A) with an area of 33380 sq. m, Kanalna Str.

Based on the developers’ current plans, the construction activity in the office real estate market in Kyiv will be quite high. In general, according to experts from Colliers Ukraine, approximately 234,000 sq. m are planned for commissioning in 2022. These facilities are likely to be commissioned with a low vacancy rate, given the growing demand for quality premises among tenants.

Rental rates and vacancy: Forecasts

The shocks related to the pandemic and quarantine restrictions have already passed: in 2020, rental rates fell from $30 to $26 per sq.m. per month (excluding VAT, maintenance and utility payments), and in 2021 they increased to $27 per sq.m. However, as Cushman & Wakefield’s study shows, the requested rental rates for the best office space located in the central business district of Kyiv were in the range of $25—35 per sq.m. per month.

The experts from Colliers Ukraine do not predict a drop in rental rates as well. In general, the level of rental rates will depend on the vacancy rate that shows a moderate decline. By the end of the Q3 of 2021, the total vacancy rate was 9.5%—0.5% less than in the same period last year.

screenshot-10.jpg

Nevertheless, the real future dynamics of vacancy and rental rates will depend on the actual volume of the office space new supply in the short and medium term, the further developments around the COVID-19 pandemic, as well as the general economic and political situation in Ukraine.

Comments

All News