Office Real Estate market in Kyiv Ukraine

During the period from April to June 2021, the office real estate market in Kiev remained active. Both large international, Ukrainian companies and small start-ups rented offices of 200 - 1500 m2.

The main reason for tenants to move from one business center to another is the lack of loyalty of the lessor or more attractive conditions in the new facility. After the pandemic, when supply began to exceed demand, rental rates fell slightly.
New vacant office premises have appeared both in new business centers and in existing ones, in which the tenant companies have left new good repairs, sometimes even new furniture. Such turnkey options of office space are most attractive for moving and optimizing leased space and office maintenance costs.
Among the new business centers put into operation in Kiev, one can highlight the Sigma business center at 6, Vatslav Havel Street. The main advantages of this business center are its high-level technical characteristics. Effective floor layouts, plenty of natural light, well-developed infrastructure inside the business center, loyalty and customer focus, attractive rental rates.

Rental rates in class A business centers are $ 19 - $ 27 per m2 per month + VAT. Operating costs in a class A business center - 5 - 8 dollars per m2 per month + VAT.
Rental rates in class B business centers are $ 10 - $ 18 per m2 per month + VAT. Operating costs in a class B business center - $ 5 per m2 per month + VAT.

During the pandemic in spring 2020 and today, many experts in the office real estate market noted a decrease in activity among potential tenants, as well as changes in requests.

If before the pandemic, for example, the company was looking for an office for rent with an area of 1,000 - 1,200 m2, then after the onset of the pandemic and the revision of the work schedule by the management of the companies and due to the limitation of the number of people simultaneously present in the office, the same company began to consider offices with an area of 500 - 600 m2.

Many large companies that managed to conclude long-term lease agreements in professional business centers before the pandemic are now forced to sublease a third, and sometimes even half of their office space in order to optimize rental and office maintenance costs. It is pleasant to note that landlords, owners of business centers in Kiev are willing to meet such wishes of their tenants and even help to sublease office space, despite the fact that they themselves have vacant office premises and they could somehow hinder or primarily advertise and promote their direct premises. This further underscores the fact that true partnerships emerge during tough times for businesses. This is appreciated and taken into account in the long-term perspective of cooperation.

In general, the rent rates in the office real estate market in Kiev were not decreased critically. From the beginning of the pandemic to the present day, there has been a slightly greater loyalty in pricing for new tenants on the part of landlords, for example, discounts for the first 12-18 months of rent, willingness to perform basic repairs, cosmetic repairs, etc.

In March 2021, rent rates for renovated office premises in Kiev in class A business centers ranged from $ 22 - $ 30 / m2 + VAT, in class B business centers - $ 10 - $ 15 / m2 + VAT.

The activity among potential tenants for office space of about 2,000 m2 is also quite high. As the landlord of one of these renovated and open-plan premises notes, despite the lockdown, the number of viewings, site visits in March was astonishingly high, and the office was signed for lease within two weeks from the moment it was put on the market, which pleases developers, consultants and market participants.

Recently, there has been a tendency to rent flexible serviced offices by large companies of 50-300 employees.
As agents-consultants in the office real estate sector, we often have to work with objections, introduce potential tenants from scratch to this office format, and provide successful examples of other companies.
However, the result is worth it. The tenant receives a turnkey office space with all the necessary package of services for effective business management, which allows him to focus on work, avoid the operational routine, and save on office maintenance.
One of the most valuable points is also the ability to optimize rents, which can change as the company grows.
Since in a classic office, the company has to overpay for space that is not used, but rented with a reserve and taking into account development plans.
In flexible offices, companies pay rent in proportion to their growth, while having all the necessary infrastructure for the comfortable work of a team of any size.
Even many state-owned companies, historically accustomed to being in stand-alone offices with cabinet layouts and parquet floors, increasingly choose serviced offices, realizing all their advantages.
Of course, this does not mean that classic offices will sink into oblivion :)
The point is that the differentiation of offers and new formats in the office real estate market has become better perceived.
The terms "coworking" and "flexible office" are gradually becoming understood by a wider range of tenants. And it pleases.