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Office Market Kyiv Overview: Commercial Property Markets Overview Ukraine | Autumn 2008 | DTZ
Office property markets have continued to develop in the major regional cities of Ukraine, particularly in Donetsk, Dnipropetrovsk, Kharkiv, Odesa and Lviv. The highest activity in the sector however is still focused in Kyiv. Demand for offices remains very strong, and in the first half of 2008 around 90,000 sq m of space was absorbed. Due to shortage of quality office space on the market and high demand, pre-lets have been common. Following the trend established during the previous periods, the number of office transactions exceeding 1,000 sq m has increased in 2008.
A number of centrally located office buildings are now available at rents of between US$65-90 sq m per month. In the first half of 2008 transacting monthly rental levels for prime space in Kyiv stood at around US$70-80 sq m per month. DTZ forecasts that in 2008 and 2009 overall market rents will remain subject to upward pressure and may increase by further 10-15%.
In Kyiv, ceteris paribus, prime rents are expected to remain comparatively high through to 2012, this being when large volumes of additional space are anticipated to be delivered to the market.
Retail Market Overview: Commercial Property Markets Overview Ukraine | Autumn 2008 | DTZ

Despite the recognised high potential of Ukraine and strengthening demand for retail space, the retail property market throughout the country remains undeveloped by western standards in terms of its saturation and format of existing schemes.
As of July 2008, the total modern retail stock in Kyiv was estimated at over 558,000 sq m, or approximately 200 sq m of modern retail stock per 1,000 inhabitants (based on the official demographics statistics). This figure includes all major retail developments in the city of or over 5,000 sq m gross lettable area, and reflects a significant undersupply of retail space in the Ukrainian capital, particularly when considering the official versus unofficial population imbalance.
In terms of quality in Kyiv and other major cities of Ukraine, the existing retail stock is mostly formed by first generation retail developments built by local companies with a lack of true end-destination retail schemes. Such formats as retail parks and factory outlets are not present in the country yet.
Due to strong demand and deficit of quality stock, the retail rents have been subject to upward pressure in the successful retail centres in Kyiv and Ukraine in general. In the short to medium term, demand for quality retail space in the major regional cities in Ukraine is further expected to exceed supply with retail rents remaining high compared to those registered in other comparable cities in the CEE region.
Mistral Capital will participate in Expo Real: Mistral Capital will participate in Expo Real the International Commercial Property Exposition in Munich – Germany from 6 October till 8 October 2008. Expo Real is confirming its position as one of the most "must-attend" venues in the international real estate sector. The trade show stands for business networking across the world in projects, investments and finance. In 2007 Expo Real attracted more than 1,800 exhibitors from 43 countries and about 24,000 visitors from 77 countries.
The goal of Mistral Capital is to present international investor new, original sight on investing in Ukraine with its advantages and high profits. This year`s participants from around the world will receive a complete presentation of Kiev’s Real Estate market with available possibilities for investment and development, plus a comprehensive view of the investor risk securing and management.
Visit our expose at Expo Real from 6 October till 8 October 2008, hall B3 stand 430.
Top emerging markets: Ukraine is the second largest economy amongst the former Soviet States, the Ukraine has a predicted sustained GDP growth of 5% per annum through to 2010.
Ukrainian property in some areas is now priced higher than Warsaw and Amsterdam. Great potential for property investors for some time to come.
Look at Kiev for investment potential, as it has a growing expatriate community, and an increasing demand created for high standard builds in the capital. Prices have been driven up by demand. Supply to meet demand has not been sufficient, indicating that there is still room for investment.
Watch out for: Levels of corruption are high so a competent solicitor is essential. Taxes are also moderate to high. Gross rental income stands at 15% while leasing a property is subject to 20% VAT.
Mixed-use real estate in demand: May 29 2008, Kyiv Post: Alina Pastukhova
As Kyivans’ salaries grow, the demand for quality apartments is increasing and development companies are responding by building mixed-use real estate complexes that combine residential and commercial space in compact communities.
Among the biggest mixed-use development projects under construction is Holosiyevo, a 219,000 square-meter project at 13 Holosiyevska Street being developed by Miskzhytlobud, a private Ukrainian construction company.
“This segment of real estate is only starting to develop in Ukraine,” said Volodymyr Danylenko, the lead marketing specialist at the Ukrainian Trade Guild real estate consulting firm. “Quality mixed-use complexes don’t fully exist in Kyiv yet, but enough projects of this type are planned, which proves their increasing popularity and availability to developers.” Mixed-use real estate allows various property types, usually residential, office, hotel, retail and entertainment, to be integrated into a single community development. This type of real estate development is the most prospective for the Kyiv market because customers are demanding homes that are close to work, as well as retail stores and services that are convenient for their day-to-day lives, Danylenko said.
Among the biggest of Miskzhytlobud’s projects, Holosiyevo will include 20¬ to 25¬ story residential buildings consisting of 1,565 apartments, a school and kindergarten, a business center, retail stores and parking. The company plans to finish construction by the end of 2008.
“All mixed¬-use real estate complexes in Kyiv are similar to each other, including offices, banks and pharmacies on the first floor, and residential buildings starting from the second or third floor,” said Yulia Levtchuk, executive manager of the Arcom development company. As the demand for residential real estate in mixed-¬used complexes increases, the prices for apartments in such complexes will also grow, said Denys Kostrazhevskiy, the president of Miskzhytlobud.
“Mixed-¬use real estate is especially in demand in bedroom communities which are far from the city center, where trade and entertainment infrastructure is better developed,” said Kateryna Starunska, De Vision’s public relations manager.
Other factors drawing interest in developing mixed-¬use projects include the possibility of combining various functions that allow using the land plots efficiently by saving resources, producing a high yield and decreasing financial risks. Residential apartments within the complexes make the return on investment period shorter. Yet developers still have many problems to tackle and are finding it difficult to design efficient parking zones and plan how different zones should be situated, including how to connect to utility and communication lines.