Oct 18, 2011
UKRAINE
OFFICE MARKET RE ESEARCH REPORT
Q3 2011
Accelerating success.
RESEARCH REPORT | Q3 2011 | UKRAINE | OFFICE M MARKET
Office Mar rket
SUPPLY
TOTAL STOCK, NEW SUPPLY, TAKE-UP CHANGE 2006 9M2011 New supply of class A and B office space amounted to around 50,000 m2 in Q3 2011. s Three business centers were commissioned. These were Premium Center BC (GLA ~ 38,000 m2), BC on B Baggovutivska str. (GLA ~ 3,700 m2), and Shchekavitskiy BC (GLA ~ 8,600 m2). Thus, the total office stock in Kyiv reached approx. 1,280,000 m2. Currently, there are about 240,000 m2 GLA of office space under active construction to be commissioned in 2012-2013. The most significant among them are Gulliver (former n Continental') BC (GLA ~ 48,000 m2), 101 Tower BC (GLA ~ 45,000 m2), and TorontoKiev BC (GLA ~ 36,0 m2). 000
DEMAND
The total office spa take-up reached about 40,000 m2 in Q3 2011. This significant ace demand was mostly driven by companies from the IT, electronics, and pharmaceutical y y p , , p sectors. 5 largest office transactions in Q3 2011
Occupier
Source: Colliers International
Business sector Manufacturing Pharmaceutical IT Pharmaceutical IT
GLA, m2 2,590 2,000 1,800 1,400 800
Address 7, Krutyi uzviz 120, Kazachya 12, Amosova 12, Amosova 13, Pimonenko
Metinvest Pro-pharma
TAKE UP, TAKE-UP, DISTRIBUTION BY BUSINESS SECTOR
IBM Pfizer Itera
Source: Colliers International
The share of foreign companies in the structure of total take-up in Q3 constituted 65%, n which is in line wit take-up distribution in previous periods. Domestic companies, th correspondingly, com mprised 35% in take-up of Q3 2011. The share of purch hase transactions by end users in the total take-up amounted for 32%, corresponding the share of lease transactions 68%. gly, The largest share of total take-up - 42% - is accountable for class B office space, 36% f class A office space and the least popular is class C 22% of total take-up. e,
RENTS AND VACANC CY
Source: Colliers International
At the end of Q3 201 vacancy rate is around 13.5%. Rental rates remain stable. 11
TAKE-UP, DISTRIBUTION BY ORIGIN
TAKE-UP, DISTRIBU UTION BY TYPE OF TRANSAC CTION
TAKE-UP, DISTRIBUTION BY CLASS OF BUILDING
Source: Colliers International
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RESEARCH REPORT | Q3 2011 | UKRAINE | OFFICE M MARKET
COLLIERS RESEARCH
512 offices in 61 countries on 6 continents
United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117 · $1.5 billion in annual revenue · 978.6 million square feet under management · Over 12,500 professionals
Colliers Research S Services Group is recognised as a knowledge leader in the commercial real estate industry, providing clients with valuable market intelligence to cisions. Colliers International research analysts provide multi-level support business dec support across all pro operty types, ranging from data collection to comprehensive market analysis. Across the CEE-SEE-Russia region of EMEA, Colliers researchers regularly collect and update data on key re estate metrics, set to consistent definitions. This information is eal constantly managed u using databases enabling staff to readily produce analysis on key databases, regional markets inclu uding supply, demand, absorption, pricing and transaction data on capital markets and t the office, industrial and retail sector. In most CEE-SEE-Russian markets, the office d definitions used are consistent with those set out by the CEE Research Forum an umbrella group, of which Colliers is a founding member e established to ensure consistent research methodologies are used, bringing greater transparency and re eliability to the analysis of real estate markets in the region. Definitions of the key metrics used in our regular reports are highlighted below.
UKRAINE Colliers International Leonardo Business Center 19-21 Bohdana Khmelnytskoho Street Kyiv 01030 Ukraine
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KEY METRIC DEFINITIONS
· Prime Headline Ca apital Value (derived): This is a calculation of market value derived
from the annual prim headline rent divided by the prime (net initial) yield. me
· Prime Net Initial Y Yield: The yield an investor is prepared to pay to buy a Grade A
building, fully-let to high quality tenants at an open market rental value in a prime o location. Lease term should be commensurate with the market. As a calculation Net ms Initial Yield = first ye ears' net income/purchase price (prior to deducting fees and taxes)
+38 044 499 0000 +38 044 499 0009
· Prime Headline R Rent: Represents the top open-market tier of rent that could be
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
expected for a unit o standard size commensurate with demand, of the highest quality of and specification in the best location in the market at the survey date. This should reflect the level at which relevant transactions are being completed at the time but y need not be exactly identical to any of them, particularly if deal flow is very limited or made up of unusua one-off deals. If there are no relevant transactions during the al survey period the q period, quoted figure will be more hypothetical based on expert opinion of hypothetical, market conditions, b the same criteria on building size and specification will apply. but
· Prime Net Effective Rent: Prime Net Effective Rent is the lowest rent payable, based
f on a calculation of the Prime Headline Rent, less the monetary equivalent of the highest of either the rent-free period or fit-out contribution available at the time of the e survey date.
· Average Headline Rent: Average Headline Rent represents the average open-market
tier of rent that co ould be expected for a unit of standard size commensurate with demand, based on a blend of Grade A & B space across a range of locations in the y market at the survey date.
· Total Competitive Stock: Includes the gross leasable floor space in all A and B class
buildings.
· Space Under Activ Construction: Represents the total amount of gross leasable ve
floor space of prope p p perties where construction has commenced on a new development p or in existing prope erties where a major refurbishment/renovation is ongoing at the survey date.
· Space Under Con nstruction Inactive: Represents the total amount of gross
leasable floor spac of properties where construction had started/where a major ce refurbishment/renov vation was ongoing, but activity has since stopped for a period of 3 months or longer.
· Vacant Space: The total gross leasable floor space in existing properties that meet e
the Competitive S Stock definition, which is physically vacant and being actively marketed at the surv date. Space should be available for immediate occupation. vey
3 | COLLIERS INTERNATIONAL
