The main tendencies in the market of Kyiv real estate in March-April 2007.

 Socmart Company has carried out a marketing research of office area market of Kyiv. In the coarse of the work more than 60 office centers have been studied (classes A, B+, B-/C; both, long functional and those which are partly put into operation or are at the stage of building or design). Some of the main tendencies in the market of office areas in Kyiv:

1. In spite of classification of business centers developed for Ukraine, one can observe a lot of vague points anyway. And this allows business centers to overvalue their class in order to get a higher rent rate from their tenants.  For example, in our opinion, there is not a completed office building in Kyiv which measures up class A fully. Maximally close to this level approached such office centers as: Mandaryn Plaza, Dominant, Arena City (true, these business centers can boast one of the important criteria, namely developed internal infrastructure, primarily thanks to shopping-entertaining parts of Mandarin Plaza and Arena City), Millennium (if not speaking about problems of BC owners with tenants), Regus (however it is integral to Horizon Tower), Podil Plaza (but specialists argue till now is it possible to consider its location as CBD, and business centers of class A can locate only in a central business district after all), Europe Plaza (can not correspond to class A because of its car park). Supposedly, only newly opened Parus corresponds to class A fully. Such business centers as Iceberg, Leonardo, Illins’kyy, Renaissance, Panorama, the business center in 1 Dniprovs’kiy Uzviz street, Lvivs’ka brama pretend to this high level as well, but it is disputable, we would consider them as В+ class because of some obvious discrepancies, - the buildings are reconstructions instead of new ones, insufficient infrastructures, they are not located in a central district, but in a neighbouring one and so on. One can observe similar situation with the business centers which are between classes В and С by their characteristics.

2. Demand continues to exceed offer, especially the demand for business centers of high classes. Tenants make deals with recently opened office buildings quite quickly, some of them (Renaissance, for example) have already been filled completely. Business center owners prefer to make contracts with tenants for long terms - 1, 3, 5 years. Comparatively long since opened business centers are in strong demand as well, namely Kyiv, Donbass, Baroque, Khreshchatyk Plaza, New Tehnology BC, Saksagans’kiy BC, Cubic and many others. Their tenants are not changed for years.

3. There is a tendency to build BC not only in the central or neighbouring zone, but in the distant zone too. Business centers of A and B classes built in last decade are mostly situated in central business districts or in neighbouring districts (excluding BC in 6a Rudenko street and Platinum in Aladdin, and some reconstructed projects about Petrivka), now more and more office buildings appear on the outskirts. For example, BC Vynogradar, BC Feofaniya, the second line of BC in 6a Rudenko street, ROC Darnyts’kiy, business park Alacor, BC in Kharkivs’ke highway (in the end), ShOC in Stolychne highway and many other.

4. More and more business centers are only a part of a complex (residential, shopping, storage, hotel). Among completed complexes we can give some examples, namely Panorama (a residential-office complex), Mandaryn Plaza (a shopping-office complex), Arena City (a shopping-office complex), Botanic Tower (a residential-office complex), Diplomat hall (a multi-functional complex), East-West (an office-store complex) and so on. During nearest years some new office centers are planned to be open, namely residential-office complex Hammer Center (in RC Seasons (Vremena goda)), office-hotel complex Toronto Kyiv, office-store complex Alacor, residential-shopping-office Mirax Plaza, residential-office Pokrovs’kiy Posad and many other. Multi-functional complexes increasingly appear, where a modern person has the opportunity to live, work, relax and go shopping.
The author: SocMart
The source: http://www.socmart.com.ua

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