Ukrainian office real estate market during the war of 2022

Ukrainian office real estate market during the war of 2022

According to Colliers Ukraine research, office occupancy in Kyiv has decreased to 83%, while office market saturation is growing in Lviv

In 2022, the Kyiv office real estate market entered a crisis cycle. The vacancy of professional office centers (A and B class) in Kyiv has increased to 17%, and negotiations to renegotiate the lease terms have intensified. At the same time, active construction of new office premises continues in Lviv.

The Kyiv office real estate market is in crisis. In 2022, office real estate development slowed down, but did not stop. In Kyiv, 52,000 sq. m - the second stage of the Gradient business center and building B6 in Unit.City. In 2021, 155,000 sq. m of office space.

During the great war in Kyiv, high-quality office space with repairs and the ability to change the terms and cost of rent are in demand. Important factors for tenants are the presence of an equipped shelter, uninterrupted Internet and power supply, the study notes.

Tenants and landlords have intensified negotiations on revising the conditions for the period of martial law in Ukraine. Rental rates have decreased by 10-15% compared to the beginning of 2022.

The overall market vacancy rate in Kyiv has increased from 11.5% in 2021 to 17% as of early December 2022. The last time this figure was in 2015.
Not a single business center was commissioned in Lviv in 2022, but construction did not stop. About 90,000 sq. m of office space are under construction with the prospect of commissioning within the next few years. At the same time, 140,000 sq. m of office space.

Lviv is located far from the war zone. As a result, many companies have moved their offices here. In particular, Yalantis, Genesis, Ciklum. This affected the local office market.

“In professional office centers in Lviv with refurbished premises, the overall vacancy rate is up to 10%,” according to a Colliers study. At the same time, the vacancy rate in business centers with premises in the shell&core state ("for finishing") exceeds 50%.

Compared to 2020, the level of declared rental rates in Lviv decreased by 10-15% and by the end of 2022 amounted to $13-17 per sq. m. m per month. But the real ones are even lower, due to discounts and other preferential conditions provided by the owners of business centers to tenants.

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