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News Release


The Office Vacancy Rate in Kiev is Among the Highest in Europe

Kiev, 27 December, 2013 – Jones Lang LaSalle’ experts have done a new research on the quality office market in Kiev. According to Jones Lang LaSalle, the current office market in Kiev is estimated at approx. 1.65m sq m of total space, including 118,600 sq m delivered in 2013, which turned to be the lowest result for the last five years.

During 2013, two new Class A objects (Merks Business Centre, phase II, with the GLA of 15,500 sq m, Senator Business Centre with GLA of 47,000 sq m) as well as three Class B objects (SP Hall Business Centre, with the GLA of 23,000 sq m, Silver Breeze Business Centre, with the GLA of 28,600 sq m, and Vector Business Centre, with the GLA of 4,500 sq m) entered the market. These business centers were brought to the market during the first three quarters of 2013, while in Q4, traditionally the most active period of the year, no new projects were commissioned.

As a result, the volume of completion in 2013 is expected to be 25% lower compare to the average annual level seen in 2011-2012 in Kiev, which is close to 160-165,000 sq m of quality office space.

Even smaller amount of new office space is expected to enter the market in 2014. According to Jones Lang LaSalle preliminary estimates, in 2014 the office market is going to increase by only 108,000 sq m. Among the largest projects announced for the next year are IQ Business Centre (Class A, 25,900 sq m) and Sigma Business Centre (Class B, 18,000 sq m).

Quality office supply dynamics in Kiev
 Quality office supply dynamics in Kiev_30122013.png
Source: Jones Lang LaSalle

Alexandra Globina, Head of Tenant Representation, Jones Lang LaSalle in Ukraine, comments: “The decreasing pace of the office construction in Kiev observing today is associated with the large amount of vacant premises in existing objects. As of late 2013, the average office vacancy rate in Kiev is about 18.7% which is one of the highest levels seen in Europe compare for example to 13.5% in Moscow, 6.9% in Paris and 6.1% in London. The most of lease deals occur in Class B, which, combined with the higher vacancy rates seen in Class A, caused a gap between vacancy rates in different classes.”
Office vacancy rate dynamics in Kiev
Office vacancy rate dynamics in Kiev_30122013.png
Source: Jones Lang LaSalle
European office vacancy rates
European office vacancy rates_30122013.png
Source: Jones Lang LaSalle
Meanwhile, in terms of office rents, Kiev is not among the European leaders. “Office rents remain stable, with the maximum rents of USD420 per sq m per year. The highest prime rents in Europe are currently in London (USD1,735/sq m/year), Moscow (USD1,150/sq m/year) and Geneva (USD1,080/sq m/year). In Kiev, base rates depend heavily on the location: the average of USD340-370/sq m/year in the city center, USD280-320/sq m/per year in the Podil business district, with the lowest rates of USD190-210/sq m/ year in the Left Bank. We don’t expect any increase in rents in 2014 because of the high competition among business centers and high level of vacancy rates." – Alexandra Globina added.
European office prime rents
European office prime rents_30122013.png
Source: Jones Lang LaSalle
On the demand side, the key players for Kiev offices are manufacturing companies (44% of the market, most of which are pharmaceutical companies), IT companies (25%), as well as banks and financial companies (17%).
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 242 million square meters and completed $63 billion in sales, acquisitions and finance transactions in 2012. Its investment management business, LaSalle Investment Management, has $46.7 billion of real estate assets under management.
In Russia and CIS Jones Lang LaSalle have offices in Moscow, St. Petersburg and Kiev. Jones Lang LaSalle, Russia was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 and 2013 at the Commercial Real Estate Awards, Moscow and Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg. For further information, please visit