Office Space Remains Available in Kyiv

emerging europe ukraine

Read the Outlook on Ukraine special report


Alexander Nosachenko

About Alexander Nosachenko

Alexander Nosachenko has been Managing Director of Colliers International in Ukraine since 2006. He joined the organisation in 2001.Under his management it has become a leader in all major niches of commercial real estate and now comprises a strong team of high-level professionals in the sector. Alexander graduated from the National University of Economics majoring in International Economics in Kyiv, Ukraine and has Master’s degree in International Economics.

In 2016, the total stock of office space in Kyiv amounted to 1,783 square metres. The new supply was insignificant, a mere 38,000 square metres and was the market’s lowest increase since 2008. 2016 was characterised by an increase in the number of lease transactions in Grade A and B business centres.

Against the background of the stabilisation of the military conflict in the east of Ukraine and the absence of significant Ukrainian hryvnia exchange rate fluctuations, there was a gradual recovery in demand with an increasing number of companies that were willing to consider relocating to alternative premises. The renewals to relocations ratio, in the total transaction volume, is approximately 50/50. Many companies have relocated to higher quality offices, whilst remaining within the same rent budget or, in some cases, even achieving lower commercial rents. Renewal deals were signed with more favourable conditions for tenants.

The total vacancy level dropped from 17.5 per cent at the beginning of 2016, to 14.4 per cent by the end of the same year. In Grade A office buildings, vacancies dropped from 26.8 per cent to 19.8 per cent. Because of the high vacancy level, particularly in Grade A business centres, and the high level of competition between properties, landlords have offered more attractive conditions providing space that includes a basic fit-out or “turnkey” solution and some have extended free rental conditions (for up to one year). Tenants have increasingly insisted on either capping the currency fluctuation margin, to take exchange rate fluctuations into account, or the implementation of other mechanisms to control currency fluctuation risks.

Where lease terms are concerned, relocation deals were mostly signed for five years (there were a few examples of seven-ten year term transactions, but they are more of an exception than the market practice). New high-quality office spaces with extras such as modern engineering systems, excellent transport accessibility, sufficient parking space and large average area of floors are still in the favoured choices in office demand.

The demand for office space in 2016 came mainly from IT (41 per cent), pharmaceutical (21 per cent) and manufacturing companies (15 per cent). The IT sector retained the largest share in the demand structure. Similar to 2015, most of the users of high quality office space were international companies which accounted for approx. 76 per cent of the total up-take. The Ukrainian market is still promising for them and also looks promising to them taking into account the possible recovery predicted for the next few years. The prime headline rents in Grade A offices have remained unchanged since 2015, at $28 per square metre, per month.

One of the trends from 2016 was the active opening of co-working spaces. As a result of development in the information industries and an increasing number of independent experts, co-working centres have become an excellent alternative to conventional offices. The large number of such platforms also affected the decrease of vacancy levels. Overall, the demand for high-quality office spaces remains quite high. Provided that the economic situation in Ukraine remains potentially stable, the demand from Ukrainian companies is likely to grow, as well.

Taking into account economic instability and the lack of debt financing, the supply of new office space in Kyiv is limited. Provided that all the announced business centres are commissioned on time, new office supply will amount to approximately 65, 000 square metre s within the next two years. Making use of the market opportunities, multinational companies will continue to relocate to a higher quality offices, in an effort to improve their current conditions.

The declining vacancy trend for Grade A and B office centres will continue in 2017 and 2018. In the mid-term perspective, we expect that the Kyiv office market will follow a stage of gradual recovery.


The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.


Changes Are Needed in Ukraine’s Economy and Business to Catch up with CEE Growth

Good Prospects for Residential Development in Poland

Bouygues Immobilier Warsaw MIPIM

Changes Are Making Ukrainian Banking More Aligned with International Standards

Ukraine’s Talented Students Are Well Served by Its Diversified Business Relevant Education

ukraine IT

A Roadmap for Reform in Ukraine and a Promise of EU Support

Kyiv Is Safe and Has an Unrealised Potential for Business

Kiev city view panorama coloe and light background Ukraine

Ukraine Outsourcing’s Value is Now in its Technological Expertise and Reliability

Longstanding Early Investors Say Ukraine Offers Foreign Manufacturers Great Prospects

ukraine manufacturing

Maidan Three Years On—What Has Changed for Ukraine?

European Volatility Makes Economic Development Slower for Ukraine

Ljubljana Wants to Maintain its Green City Image

Ukrainian Start-up Projects Recognised in the International Market but Still More Investors Needed

Startup Diversity Teamwork Brainstorming Meeting Concept

Anti-corruption Efforts Are the Starting Point for Further Reforms

Falling into Old Ways in 2017? Ukraine’s Struggle for Functioning Economic Institutions

See the New Ukraine and Benefit From the Best by Partnering or Investing in IT

Engineer proceeding to data recovery from computer

‘Viking’ is Yet Another Way to Annoy Ukraine

Ukraine’s Tech Sector Is Booming but Needs Awareness and Confidence

ukraine tech emerging europe

Gdynia is Poland’s Leader in Quality Living

Western Ukraine Could Be an Entry Point into the Country

Slovakian HB Reavis Continues its Expansion Beyond CEE

Bratislava mipim hb reavis

Poznań is Becoming an Automotive, IT and BPO Hub

Night view of Poznan Old Market Square in western Poland. Panoramic montage from 5 HDR images

Lviv Is the Pearl and the Soul of Ukraine

The Eurovision Song Contest Is a Perfect Showcase for Ukraine’s Talent and Warmth

Past Troubles Belie the Opportunities for Investment

Naftogaz: A Good Start Has Slowed But Optimism Remains High

Closeup of pressure meter on natural gas pipeline with people on the background

Governmental Support is Vital to Fight Corruption

From a Small Family Firm to a Top 100 Global Outsourcing Company

Ukraine Is Offering Europe Unique Combat and Technological Experience

Lesson for Polish Cities – Are They Learning?

The Innovation District IT Park Will Help Lviv Become CEE’s IT Hub

IT park lviv ukraine

Steps to Stability Marred by a Failure to Attract FDI

Legal Reforms are Improving the Existing Problematic Situation in the Ukrainian Agro Market

ukraine agriculture

Protecting Intellectual Property to Encourage Business Confidence

Poland’s Business Experience Makes it a Good Neighbour to Ukraine

SMEs Should Play an Important Role in the Economy and Export Development

The Czech Republic and Poland Show Sustainable Growth Prospects for LaSalle

A Very Good Prospect for Future Biogas Development

The Stalled Conflict in Ukraine Will be Formalised

What Looks Good on the CEE Real Estate Market for 2017

Prague Aims to Become a Technology Start-up Capital

Ukraine Continues to Make Waves as an IT Outsourcing Destination

Start Making Connections for the Opportunities Ukraine is Currently Offering

Kharkiv region Ukraine - July 29 2016: Combine harvests wheat on a field in Kharkiv region Ukraine on July 29 2016

Opening up Modern Warsaw to Public Living

Ukraine and Canada: A History of Settlement and a Future for Investment

Military Operations in Ukraine Have Had Some Surprisingly Positive Side Effects for Modern Businesses

Night city reflection on the river in Donetsk. Ukraine

Ukraine Is Energy Independent in Some Sectors and Awaiting Change in Others

Ukraine’s Gas Industry Risks Stagnation Without Investment

Smaller CEE Cities are Becoming Attractive to BSS Investors

Ukrainian Agribusiness — a Jewel in a Crown

Wheat ukraine agriculture ebrd

‘Cosy’ Vilnius Offers a Vibrant Life/Work Mix for its Growing Population

Ukraine’s Reputation for Cheap Labour May Not Ring True in the Long-term

Katowice in Upper Silesia Is One of Europe’s Key Regions

History as Destiny? Institutional Erosion in Ukraine and Poland

Between the East and West, Geographically and Politically

Europe’s Breadbasket Offers Opportunities for Investment and Diversification

Tourism is the Driver Behind Montenegro’s Development

Montenegro Kotor Bay at Sunset. Long exposure photo.

The Human Factor is Boosting Ukraine’s Promising IT Export Sector

The Ukrainian Banking Sector Looks Set to Regenerate New Growth

Business Moving Forward with Cautious Optimism — Can Investors Win the Confidence Game?

Ukrainian Venture Investment Market Is Immature and Needs Growth

Tallinn is an e-City Working With its People to Also Be a Green City

tallinm estonia mipim

There Is a Move Towards Change in Ukraine

Denmark in Ukraine: Fostering a Better Business Climate for Both Sides

Ukraine’s Economy in 2017 — When Dreams of Growth Meet Geopolitical Reality

An Opportunity for CEE Realtors to Send a Positive Message to Investors

Sirin Software — A Ukrainian Firm Conquering Global Markets

Leszek Balcerowicz: Ukraine Can Learn from Poland’s Economic History

FocusEconomics: Predicting an Increase for the Ukrainian Economy

The Political Economy of Independent Ukraine: Late Starts, False Starts, and Last Chance?

Ukraine’s Pro-change Atmosphere Says “Welcome!”

lviv emerging europe

Ostrava Is Aiming at Innovative Sectors

Czech republic city Ostrava in winter sunset

The Dilemmas of Ukraine’s Economic Policy

Ukraine’s Government Declares Ambitious Privatisation Targets

Thinking Big; Working Hard; Delivering Value to Clients and Building Relationships

quartsoft emerging europe outsourcing

Warsaw is Becoming the Capital City of Central Europe

Warsaw Old Town Warsaw Poland during sunset.

Kraków Is Growing Into a Green and Liveable Working and Living Place

krakow emerging europe mipim

Kyiv’s Mayor Is Used to Fighting to Attract Attention and Interest

KIEV UKRAINE - SEPTEMBER 8 2016: The facade of Kievrada the City Council located in Khreshchatyk Avenue on September 8 in Kiev.

Gdańsk is One of the Few Polish Cities With a Growing Population

Danish companies Support and Assist Ukraine’s Economic Transition

President of Ukraine Petro Poroshenko and Prime Minister of the Kingdom of Denmark Lars Lokke Rasmussen during a meeting in Kiev Ukraine

Ukraine’s NIX Solutions Expands to Israel and Beyond

Ukraine’s Banking Sector Reconstruction Brings Asset Sales and Opportunities in Equal Measure

Gavel and Ukrainian hryvnias on a wooden table

Finalising the DCFTA is Expected to Bring Multiple Benefits to Ukraine

Energy Tariff Reform in Ukraine: Estimated Effects and Policy Options

Leave a Reply

Your email address will not be published. Required fields are marked *