Vacancy of office space in Kyiv in 2014 to rise by 10%, say experts
Kyiv, November 21 (Interfax-Ukraine) – The rise in the vacancy of office space in Kyiv in 2014 could reach 10% due to the continued unfavorable situation on the market, the head of the department for strategic consulting at UTG (Kyiv), Viktor Oborsky, has said.
"We're expecting the vacancy in this segment of real estate to increase by 5-7%, in some cases perhaps by 10%, and this is a realistic scenario. The adjusting of rental rates towards reduction by 10% [is possible]," he said at a press conference at Interfax-Ukraine in Kyiv.
According to the UTG, vacancy on the office market in Kyiv by the end of September 2013 for A class premises was 26%, and for B class offices - 17.3%. The rent rates for one square meter, excluding VAT and operating expenses, were $25-40 and $15-32 respectively.
Oborsky said that such an unfavorable forecast regarding the development of the office market in the coming year was based on the possible oversaturation of the Kyiv office market in connection with the commissioning of about 12 business centers in the capital in 2013-2014, on the background of lower demand for office rental.
"We do not observe business activity and the development of large and medium-sized entrepreneurship, which are the major consumers of high quality office space, and, as a result, aggravating the situation, we see the withdrawal of foreign companies of the financial sector, which were the main consumers of office space, from the market of Ukraine," Oborsky said.