What happened and what to expect - analyst NAI Ukraine

Ukraine's economy in 2017, as in the previous year, showed stabilization with moderate growth on the main indicators. Fluctuations in the dollar exchange rate were moderate, and although the rate increased significantly by year-end, he remained within the limits laid down by the budget. Inflation for the year was 13.7% (approximately the level of 2013). This was during a press conference said the head of the consulting company NAI Ukraine Marina Gurevich.

In addition, in Ukraine, the continuing increase in average wages, which for the year increased by 10.4% and amounted to UAH 7332 country and 11643 UAH in the capital. The index of consumer sentiment for the year is estimated at the level of 62.3%, which is a record since 2013. These figures indicate that the recovery in consumer sentiment and prospects for further growth. Also demonstrated growth and retail turnover (+8%). Exports and imports grew in the first three quarters reached a performance of about 90% from 2016 as a whole. However, increasing the volume of capital investment in the economy and construction volumes. For the 3rd quarter of 2017, they exceeded the performance of 2016 by 14%.

The office market

Continued trends in 2016. In 2017, was introduced about 40 thousand sqm of new space. Thus, for the second consecutive year, the volume of new supply is quite low.
Now in various stages of construction are more than 300 thousand sqm of new office space, but not all of them will open in 2018-2019 gg Most active among the tenants themselves show the company's IT sector and business services. The situation with low enough range and a good level of demand has had its impact on market vacancy. If at the beginning of the year, it was at 20% by the end of the year it was 13%. And in the most high-quality facilities, the vacancy rate is much lower – up to 0%.
While the global increase in rental rates of the question, but in some of the most high-quality facilities to potential renters voiced rate is slightly higher than it was in previous years.

"The situation in office real estate was not so good for the past eight years. Such a small number of vacant premises in the market will definitely lead to a recovery of the real estate sector and today it attracts the attention of investors willing to buy existing businesses. Another problem is that not many existing businesses are for sale and office properties for too long been in a recession – as many as 7-8 years, so most of these objects are already in the hands of the Bank", - said the founder and CEO of NAI Ukraine, Vitaly Boyko.

The housing market

For the 3rd quarter of 2017, the commissioning of housing in Kyiv and Kyiv region amounted to more than 2 million sq. m. the Greatest number of square meters was introduced in the Goloseevsky district of the capital. In the structure of commissioned meters have increased their share of comfort-class. This suggests that, along with the building of new squares, more and more developers pay attention to non-price factors (such as infrastructure planning decisions, the overall organization of the RK, etc.) that allows them to translate their sites into a higher class. At the end of 2017 on the primary market were exposed to 197 buildings, which is 25% higher than 2016. And in the secondary market, the supply volume remained at about the level of 2016. The highest bid is observed in the segment of one-bedroom apartments. Also in the sentence structure slightly increased the number of two-bedroom apartments.

The highest number of transactions recorded traditionally in the economy segment of housing on a small scale due to the low purchasing power of the population. The hryvnia equivalent price of "primary" was stable throughout the year, with some seasonal fluctuations, and by the end of the year, they even increased in the range of 2%. The dollar price changes with the fluctuation of the dollar and the end of the year they decreased as the rate increased. On the secondary market prices have declined slightly (within 5%), which is due to both seasonal fluctuations and competitive pressure, which had a great offer in the primary market.

In 2018, the volume of housing construction is also expected at a high level. Prices will depend on demand, but it is predicted that he will remain at the level of 2017. Market competition will be displayed is not in the price and non-price competition for developers and greater attention will be paid to the quality of objects.

Hospitality market

There is an increasing number of tourists and business trips in Kiev and Ukraine as a whole, which has a positive impact on the hotel market.

Commissioned objects, construction of which was previously suspended at a high stage of readiness.

During the year, prices in foreign currency have been relatively stable, and in local currency were in line with the dollar. While the global increase in prices it is not, however, due to increased demand reduces the number of shares and discounts from hotels.

Continued growth in hotel occupancy rates, which for the year amounts to almost 45%. The indicator has been growing for the past couple years and already slightly behind the standard indicators of hotel occupancy (50-60%), which increases the yield of the room and improves the General condition of the market of hotel real estate.

In connection with the growth of trade turnover is growing and the activity of retailers, respectively, and logistic operators. Introduction of new space was the place, but mostly it was the facilities that were built and opened under specific tenants. Compared with the year 2016 we can talk about the growth of a new proposal. Introduced a new queue in the storage facilities that were built during the last years, but was never introduced. For 2018 projected wider growth proposals. About the opening of the new facilities say a number of large logistics facilities, but their discovery depends if they can find a tenant for their premises. The demand is growing. It is dominated by small lots, but due to the small amount of new supply – there is a deficit in high-quality large storage space. In this context, major retailers are forced to turn to buy storage facilities or to develop them or build their own. This situation affects the vacancy rate, which is markedly reduced. Rents are not yet rising, but in the future, while maintaining the above-mentioned trends can be observed a decrease in vacancy rates and low growth rates.

The commercial real estate market

At different stages of construction is nearly 1.3 million square feet of new space. With their opening offer in the market of a commercial real estate will increase in two times. Among the planned opening is sufficiently large objects, that tells about the growth and development of the market.

At a high level is maintained the activity of retailers. The growth of trade turnover and consumer sentiment allow them to expand their network and presence in different cities of Ukraine.
And in 2016 and 2017 was observed the entry of new brands that have not previously been presented. It is expected that this trend will continue in subsequent years. The vacancy rate in shopping centers in Kiev decreased by 4%. With the introduction of a large number of the areas she most likely will rise again, but fears that she will grow up to be very much unfounded because the new shopping center is likely to open with a fairly high occupancy rate.

Rental rates continued its growth, and in 2018, when opening new facilities, the best of them will maintain this trend.

"If 2015 was a year of difficulties, and 2016 were shaky the beginning of stabilization and uncertainty as to what will happen next, 2017 is the year of steady improvements. If the economic situation continues to be on the same plane, then soon our markets may become attractive for investors", - said Vitaly Boyko.

According to the materials: Poperty Times