Fixed rental rates in Ukrainian shopping centers have reached stable levels, however, the majority of tenants intend to pay a percentage of turnover to reduce their own risks, UTG reported.

“Today, in January 2024, almost all tenants refuse to pay fixed payments. They are trying as much as possible to transfer all payments to deductions from a percentage of turnover, to transfer risks to the developer as much as possible. If the developer is able to launch a high-quality shopping center and ensure good traffic, then he will receive good payments from the tenant,” said the head of the UTG legal consulting department, Kostiantyn Oliynyk, at a press conference at the Interfax-Ukraine agency on Thursday.

According to him, for all categories of tenants of the shopping center, the maximum rental rates are significantly lower than in the pre-war period, in some cases the difference is 100% or more. So, for kiosks of up to 10 sq m maximum rates are $250/sq m per month (excluding VAT and operating payments) versus $420 in February 2022, for restaurants and cafes – $15/sq m per month versus $35, for children's entertainment centers - $6/sq m per month against $10, cinemas – $4/sq m per month against $12, clothing stores – $18-30/sq m per month versus $37-68, electronics stores – $8/sq m per month against $18, grocery supermarkets – $12/sq m per month versus $30.

“Food, alcohol, tobacco take about 45% out of the family budget, so today the supermarket is the operator that generates almost half of the funds in the turnover in retail trade. That is why food supermarkets are almost the only player capable of generating the predicted turnover and paying quite high rental rates,” the expert said.

According to the expert, rental rates for commercial real estate in 2024 will be influenced by the city’s proximity to the battle line and development activity.

“In cities where there is high competition and a lot of properties, the market will change. Most likely, obsolete properties will lose their performance, forcing them to carry out extreme renovations. At the same time, high-quality properties will attract buyers. Rates will not rise significantly and won't decrease too - they have practically nowhere to decrease. Despite the fact that food supermarkets generate high turnover, they still pay $10-20, just like twenty years ago," he explained.