Key Trends in the Office Real Estate Market
Annual gross absorption totaled approximately 160,000 sq m (+26% y-o-y), driven by both forced relocations and organic leasing activity.
No new business centers were commissioned during 2025.
Around 70,000 sq m of office space was partially or significantly damaged by missile strikes, accounting for 3.4% of competitive office supply.
The vacancy rate declined to 18.5% (-3.4 p.p. since the beginning of the year), while the market remained tenant-oriented.
Effective rental rates for Class A shell-and-core offices remained stable at $14–18/sq m/month (excluding VAT and OPEX).
Approximately 27,000 sq m may come to market in 2026, although the likelihood of project delivery delays remains high.
Demand
During 2025, leasing activity in Kyiv’s office market strengthened despite ongoing market turbulence and elevated security risks. Annual gross absorption totaled around 160,000 sq m (+26% y-o-y), while total leasing activity reached 165,000 sq m, including a minor share of pre-lease transactions (3%) and lease renewals (2%). Despite improved overall market performance, demand dynamics remained uneven and were only partially supported by organic business growth. On the one hand, market activity persisted: some tenants relocated to higher-quality buildings amid attractive lease terms and, in some cases, selectively expanded. On the other hand, a significant share of transactions remained situational in nature. According to estimates, about 40% of gross absorption came from forced relocations from damaged properties following missile strikes, further highlighting the destabilized nature of the market.
Relocations, including forced moves, continued to dominate the transaction structure by type, accounting for 50% (+7 p.p. y-o-y). At the same time, the share of expansion-related deals increased to 17% (+5 p.p. y-o-y), indicating a gradual, albeit cautious, improvement in business sentiment among certain tenant groups.
Gross Absorption by Industry, 2025
Leasing demand remained concentrated in move-in-ready offices in high-quality business centers, with a predominance of deals in the 300–600 sq m range. This trend reflects the widespread hybrid work model, under which only around 30%–40% of employees are present in the office at the same time, prompting some companies to reduce their office footprint to around 50% of pre-war levels.
The IT, high-tech, and telecommunications sector retained its leading position, accounting for 26% of demand and the highest number of transactions (35), followed by banks and financial institutions (13%), manufacturing, industrial and energy companies (11%), coworking and flexible offices (8%), and the public sector and NGOs (7%). During 2025, the share of military-related tenants also continued to grow within the demand structure. However, more stable and long-term demand from such companies was primarily directed toward property acquisitions rather than leases, due to heightened security risks in the segment. Overall, despite rising demand volumes in 2025, market activity continued to be shaped largely by destabilization, while relative stability was driven more by tenant adaptability and forced decisions than by a full normalization of economic activity.
Leasing Activity by Transaction Type, 2018–2025
The data is based on publicly available information and market data collected by EXPANDIA and reflects only disclosed and identified transactions, which may not cover the full extent of market activity.
Supply
During 2025, no new business centers entered the market, reflecting the prolonged slowdown in development activity. At the same time, around 70,000 sq m of office space was partially damaged or destroyed by missile strikes, accounting for 3.4% of competitive office supply. As a result, total office stock decreased to 2.10 million sq m. This is a rare case of negative supply contraction caused by physical infrastructure losses, underscoring the vulnerability of real estate assets under ongoing wartime conditions. Most of the affected buildings sustained partial or substantial structural damage, and their restoration and return to the market are unlikely before the war ends.
Development activity is expected to remain subdued, with most planned projects either suspended or progressing slowly, as developers continue to postpone deliveries until more favorable conditions emerge. Approximately 27,000 sq m may be delivered by the end of 2026. However, given the current security risks, limited financing, and the low level of pre-lease activity, the probability of project delays remains high.
Vacancy and Rental Rates
The average vacancy rate declined to 18.5% (-3.6 p.p. since the beginning of the year), driven by both forced relocations and leasing activity, primarily from small and medium-sized companies that continued moving into higher-quality office space. Despite some stabilization during the year, tenant activity remained restrained and focused on space efficiency, keeping the market balance in favor of tenants.
Most vacant space was concentrated in newly completed buildings, some of which remained nearly entirely vacant, as well as in lower-quality properties, primarily located in submarkets bordering the CBD or outside it. Vacancy declined across all submarkets, with the most notable reduction recorded in the non-central submarket, where it fell to 14% (-7 p.p. since the beginning of the year). Vacancy in Class A properties declined to 18% (-5 p.p.), while Class B vacancy decreased by 3 p.p. to 19%, mainly due to forced relocations from damaged buildings.
The limited volume of future office supply and the high degree of uncertainty surrounding upcoming projects continue to support base rental levels for the best available space. Effective rental rates for Class A shell-and-core offices ranged between $14–18/sq m/month, while rates for fitted-out offices remained stable at $19–25/sq m/month.
Asking rental rates for Class A offices ranged from $16 to $27/sq m/month, while Class B offices were quoted at $8 to $18/sq m/month, depending on location and fit-out condition.
New Supply, Demand and Vacancy, 2025
Vacancy is calculated based on a sample covering 7,026 office buildings in Kyiv, which is regularly updated and takes into account the delivery of new competitive supply.
Source: EXPANDIA Research
The gap between the lower and upper end of rental rates depends on the individual characteristics of buildings, such as fit-out condition, asset location, occupancy level, and security risks. At the same time, even under the current challenging conditions, top-quality new projects demonstrate relative rental resilience compared to the rest of the market. Although leasing up new buildings during a period of constrained demand remains a major challenge, high-quality business centers with professional landlords have historically shown stronger performance, reaching occupancy levels of over 50% at market rental rates.
Rental Rate Dynamics, USD/sq m/month, Q4 2025
Outlook
The cautious optimism observed in the market during 2025 is expected to persist throughout the coming year. In the absence of significant macroeconomic or geopolitical changes, tenant behavior will likely remain cautious and focused on efficient use of space. Leasing decisions will continue to be driven by occupancy costs, while building quality, physical security, and the ability to ensure uninterrupted operations will remain key considerations. Demand is expected to be driven primarily by relocations, lease renewals, and selective expansion. At the same time, the growing prevalence of 3–5-year lease renewals indicates rising tenant confidence in the need to maintain a physical office presence, despite the clear trend toward space optimization.
Annual and New Office Supply Dynamics, 2025
On the supply side, development activity remains heavily constrained by security risks, limited financing, weak demand for new shell-and-core office space, and the near absence of pre-lease transactions. Around 27,000 sq m may come to market during 2026, although the likelihood of project delivery delays remains high.
At the same time, the growing prevalence of 3–5-year lease renewals indicates rising tenant confidence in the need to maintain a physical office presence, despite the clear trend toward space optimization.
The vacancy rate is expected to remain stable or continue to decline gradually, depending on the pace of absorption and any further potential losses of office infrastructure. Rental rates are likely to remain at current levels, with potential moderate growth for top-tier assets, especially fully fitted office premises. Overall, despite the high level of uncertainty, the market’s key indicators point to a gradual transition from shock-driven volatility to a fragile but more predictable equilibrium, supported by selective demand and limited supply.
