24.05.2017 12:17
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rauThe maximum rental rates reached $815/sq.m./year, and the vacancy rate decreased by 2.4% – to 9.7%.
The company JLL presented regular research of the Kiev commercial real estate market. The maximum rental rates increased in Kiev shopping centers in the I quarter, 2017 by 4.5% and amounted to $815/ sq. m./year (excluding VAT and operating expenses), according to JLL data. At the same time, individual arrangements to fix the dollar exchange rate, which were observed in 2014-2016, almost completely gave way to new lease contracts indicating the market rental rate in foreign currency.
According to JLL, the rental rates are rising after the consumer market recovery, after an increasing in the retailers activity, both Ukrainian and international, as well as a decrease in vacant premises in shopping centers with zero objects entry.
“In the first quarter there was an increase in demand from local retailers and the foreign trade operators activity restoration, that, together with the new input lack, led to a decrease in the vacant space share. Among the year beginning events, it is worth noting the opening of the Polish shoe brand CCC first store in Kiev and the first in country single-brand store of the sports shoes and clothes Saucony American brand, – commented Marianna Ignatieva, an analyst at JLL (Ukraine). – The development continues as Ukrainian mono- and multi-brand fashion stores, for example, Jasmine, Vovk, Marsee’s, so foreign Ravin Jeans, Betty Barclay, Rinascimento, Springfield, LTB, LC Waikiki and others.”
The vacancy square share decreased in high-quality Kiev shopping centers in the first quarter 2017 by 2.4 p.p., reaching 9.7%. The data decreasing was observed in all Kiev districts, with the exception of Darnitskiy and Desnyanskiy districts, and the greatest decreasing occurred in the Svyatoshinsky district as the SEC Lavina Mall gradual filling results, which was introduced in late 2016.
New shopping centers were not opened in January-March 2017 in Kiev. By the year end, it is expected to three shopping complexes input with a 48,000 sq.m. total leasable square: SC Smart Plaza (15,000 sq. m.), SEC Rive Gauche, Phase 1 (22,000 sq. m.), “Retail Park Petrovka”, Phase 2 (11,000 sq. m.).
“The quality retail space lack and the retail development plans resumption have enabled for existing projects to reduce vacancy, qualitatively improve the tenants pool, replacing those that demonstrated low turnover, and raise the average rental rate. Today shopping centers owners are paying increasing attention to control over retailers’ turnover, comparing the rental rate with real sales”, – said Ekaterina Vesna, the JLL retail space department head (Ukraine). – At the same time, new contracts with retail gallery tenants are signed in recently opened objects with a fixed rate increase in the first two-three years, the so-called step-up-rent. During this time, shopping centers fill available free space, reach the predictable attendance, which as a result leads to an increase in tenants turnover.”
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