Results of the 4th quarter of 2017 in the office real estate market in Kiev

07.02.2018 00:30
Articles about real estate | Results of the 4th quarter of 2017 in the office real estate market in Kiev The fourth quarter of 2017 for the office real estate market was characterized by lower vacancy rates and higher rental rates.  Record low vacancy rate

According to Cushman & Wakefield in Ukraine, the Kiev market showed a record low for the past 9 years the vacancy rate - about 9% at the end of December 2017. For comparison, at the end of 2016 this indicator was at the level of 15.6%.

Related article: When and which increases the demand for real estate?

This situation is due to increased demand from tenants with a small amount of new space commissioning - last year the office real estate market in Kiev increased by 43,000 sq. M. m (GLA). At the same time, the total area of ​​office premises leased in Kiev is estimated by Cushman & Wakefield experts at 205,000 sq. M. m, which is 16% and 18% more than in 2016 and 2015, respectively. For the 4th quarter of 2017, 44% of the total annual leasing area is accounted for.

The annual indicator of net absorption reached 161,000 square meters. m (GLA) of which almost 83,000 sq. m. m falls on the 4th quarter of 2017.

According to experts, the new offer of office space in 2018 may reach 85,000 square meters. m (GLA).

Rates and prospects for new construction

The existing demand for quality offices with low developer activity provoked an increase in rental rates, the level of which in Q4 2017 reached $ 27 per sq. M. m per month (without VAT and operating costs).

"We expect that in 2018 the dynamics of rental demand in the office real estate segment in Kiev will remain positive, which, coupled with the low activity of developers and the further reduction in vacancy, will lead to a rise in the cost of renting high-quality office space in the city, especially in the Central Business District and directly adjacent to it's locations. And this, in turn, will increase the financial feasibility of new office construction and attract investors to the segment, "comments Marta Kostyuk, head of the analytical and consulting department for real estate development at Cushman & Wakefield in Ukrian.

Sale and purchase transactions

According to Cushman & Wakefield, the total amount of secondary investment in the office real estate market in Kiev amounted to approximately $ 89 million. Among key investment deals in 2017 - the acquisition of business centers "Prime" and "Eurasia" Dragon Capital Investments Limited.

Experts predict that in 2018 the total amount of secondary investment in the office real estate market in Kiev could exceed $ 130 million.

Rates of profitability of office real estate objects continue to decline, at the end of last year they reached 12.25%.

Earlier it was reported that the movement on Obolon and Vinogradar will be unloaded by the end of the year.

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Content tags: Property Kiev Articles
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