Demand and Supply
According to a new report from Cushman & Wakefield in H1 2021, occupier demand improved with take-up estimated at around 85,200 sq m, which is similar to the figure of H1 2019, but three times higher than the figure of H1 2020. Notably, about 45% of all take-up was formed by pre-leases in H1 2021. Net absorption, which was negative in 2020, in H1 2021 reached almost 53,000 sq m, indicating positive market dynamics.
According to Cushman & Wakefield in H1 2021, new office supply in Kyiv amounted to around 90,000 sq m GLA, which is similar to the annual figure for 2020. Approximately 80% of the figure was delivered in Q1 2021, being comprised of a number of office buildings, delivery of which was postponed during several years. As of July 2021, the estimated 170,000 sq m GLA of new office space was under construction in Kyiv and scheduled for completion by the year-end.
Vacancy and Rents
Due to the impact of COVID-19, economic slowdown and significant new office supply, at the end of 2020 primary vacancy reached 11.7%.
During Q1 2021 vacancy further increased to 13.8%, having slightly softened to 13.2% in Q2 2021.
According to Cushman & Wakefield since March 2020, the downward correction in occupational costs was witnessed across all office property classes in Kyiv, but still various properties were demonstrating differing rental performance. In Q1 2021, prime rents in the sector slightly increased, reaching USD 27 per sq m per month (net of VAT, service charge and utility payments), and remained stable during Q2 2021.