Online Shopping Up, Warehouses Full, Office Vacancy 11%

Online Shopping Up, Warehouses Full, Office Vacancy 11%

By James Brooke, UBN

🔵 During the pandemic year, online shopping increased by 26% and shopping mall rents softened. Despite these conditions 20 new malls are expected to open across Ukraine by the end of next year. This will add a total of 1.8 million square meters of leasable area, reported the Kyiv Post. This year, Kyiv is to see the openings of Ocean Mall with 100,000 square meters and Blockbuster Phase 3, with 55,000 square meters. Next year, if construction plans hold up, five new malls are to open in Kyiv, adding 173,000 square meters of retail space.

 

🔵 The e-commerce boom pushed Kyiv warehouse vacancy rates down from 30% to 2%, according to a new report by Cushman & Wakefield, the real estate consultancy. Although 85,000 square meters of new space were commissioned last year, rates have increased to $5.5 per square meter. “It is not enough to satisfy existing occupier demand,” said the report. This year, an additional 60,000 square meters are pipeline for 2021.

🔵 Kyiv’s office vacancy rate doubled last year, to 11%, the highest level since 2014. In turn, rents fell by 10 to 20%, reported the Kyiv Post. Faced with uncertainty in the pandemic year, CBRE Ukraine said that developers offered only 125,000 square meters of new office space — half the initial plan. This year, Cushman & Wakefield has predicted that 160,000 square meters in new office space will come on the market in Kyiv. Total current supply is 2 million square meters.

🔵 Rents are softening during the April lockdown, with discounts up to 30% expected, said Yuri Pita, President of the Association of Realtors of Ukraine, (Interfax-Ukraine). Assuming the coronavirus pandemic ebbs in May, rents will stabilize. However, he adds: “In the face of accelerating inflation, the cost of rent can increase by an average of 5-7%.”

🔵 With the EU closed to Ukrainian tourists, local beach and rural retreat hotels may enjoy another boom this summer. Vodafone has reported that analytics of cell phone users showed a 30% yoy increase last summer at Ukrainian beach resorts. On the Azov, one hamlet, Bilosarayska Kosa, about 20 kilometers west of Mariupol, saw a 177% yoy increase. Last summer, while Kyiv hotels saw occupancy rates fall to 23%, seven countryside hotels reported revenue increases, reports the Ukrainian Hotel and Resort Association. More recently, during the December-January holidays, Carpathian mountain resort hotels enjoyed almost 100% occupancies, Artur Lupashko, founder of Ribas Hotels Group, told Interfax-Ukraine.

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