exporeal.net - INTERNATIONAL MARKETS



	The Business Center Leonardo in the centre of Kiev, a renovated property, which was enlarged by a new development and now has over around 27,000 square metres of class A office spaces and small share of retail space. After its completion, the Irish Quinn Group bought the property in 2006.
	The Topic at EXPO REAL 2007 Tuesday, 9 October 2007 INVESTMENT LOCATIONS FORUM Hall B3 4.00 pm – 4.50 pm Real Estate Investors Guide: Ukraine For detailed information on the programme click here

Positive long-term outlook

Overall, experts, such as Nick Cotton, Managing Director at DTZ, consider the commercial real estate investment market in the Ukraine very attractive mainly for longterm investments.

According to DTZ, there has been a strong trend with office users towards expansion in the past several months. The reasons for this are the very fast growth of the companies and the positive economic outlook, as well as the fact that many in the Ukraine no longer just maintain a representative office, but are establishing autonomous companies there.

This growing demand will lead to stabilised top rents for office space in the short and mid term, as long as vacancy rates remain at their current low level. This is not expected to change, at least not in 2007. In retail, the demand in Kiev will be higher, in the midterm, than supply. Thus, rents in mainly modern and highly frequented shopping centres will not budge. Generally, retail in the Ukraine will continue to grow and, thus, the market for retail property. The large regional centreswill outperform the capital in developments.

Interesting for long-term investors

Experts agree that the presence of international and Russian project developers and investors will continue to grow, according to forecasts and developments in the Ukrainian real estate market. The investment market will also continue to develop, since the Ukraine is becoming interesting not just for speculative investors, but also for long-term investors. However, the “yield compression” that can be observed in all Eastern European countries will continue to grow in the Ukraine, and returns will continue to shrink.

Because of the high demand and high rents, mostly large-scale office projects will be started in the near future. At the same time, the average rent space per contract will increase. It is already apparent that the number of leasing transactions with space between 4,000 and 5,000 square metres is growing because of the general economic growth and a subsequent expansion of company activities.

In retail, the number of represented brands in the market will continue to grow and franchise concepts in the Ukraine will continue to develop. However, retail space will be increasingly developed in the future as a part of mixed-use complexes and on former industrial grounds in Kiev.