Ukraine March, 2018 2017 Year-End Review
Office Supply
Summary The main office buildings delivered to the market in 2017 were: In 2017 the total office supply in Kyiv amounted to Astarta BC (1st phase) at 58 Yaroslavska St. 1 823 000 m². The new supply grew only by ~ 40 000 (GLA ~ 15 000 m²); m². During the year, new phases were commissioned Astarta BC (2nd phase) at 58 Yaroslavska St. in already existing business centers: the first two (GLA ~ 13 000 m²); phases of Astarta Business Center (15 000 m²), Unit Business Park at 8 Simyi Khokhlovikh St. (GLA ~ 4 000 m²); Forum West Side (8 000 m²), and phase 1 of UNIT Forum West Side at 6 Teligy St. Innovation Park City (4 000 m²). (GLA ~ 8 000 m²).
The commissioning of new office space was activated In 2017 the total office supply in Kyiv amounted to in the second half of 2017, which indicates a lack of 1 823 000 m²*. developer interest. Provided that all business centers scheduled for completion in Compared to 2016, in 2017 the vacancy rate dropped 2018-2019 are commissioned on time, 71 000 m² of new office by 6.8%. The steep decline was primarily caused by space will enter the market in the next 2 years. the growing demand for office space combined with the lack of new supply of Grade A and B business Total Office stock, Kiev, ths. m² centers.
In 2017 the gross take-up of office space in Kyiv reached approximately 170 000 m²*, a 13.3% growth compared to 150 000 m² in 2016.
The total vacancy rate** dropped from 14.4% at the beginning of 2017 tо 7.6% at the end of the year. At the same time, there was a trend towards stabilization of rental rates: the prime headline rent remained at $28/m2/month, while the average rental rates in Grades A and B settled at $16/m²/month.
In 2017 the demand for office space was mostly
driven by IT companies.
Source: Colliers International * Includes all classified office buildings with GLA exceeding 5,000 m² that are ready for lease. State institutions are not included. ** The vacancy estimate does not include business centres that are officially commissioned (according to the documents), but are not suitable for occupation due to ongoing construction works
2 Year-End Review | 2017 | Ukraine | Colliers International
Take-up, ths. m² Demand
In 2017 the gross take-up of office space in Kyiv reached 170 000 m², a 13,3% growth compared to 150 000 m² in 2016.
The renewal to relocation ratio was approximately 50:50, which means that, compared to the previous year, a larger number of companies decided to move to a new office. The main reasons behind this trend are the economic and political stabilization, and tenants’ desire to improve the quality of their offices while rental rates remain relatively low.
The demand for high quality office space mainly Source: Colliers International came from IT companies (36%), professional services (18%), and manufacturing (12%). Co-working spaces are becoming increasingly common, with IT Demand Structure companies and start-ups as their target clients.
According to the market analysis, in 2017 27%* of all lease agreements were signed for 1000-2000 m² lots.
Following the general trends of the previous year, the demand for quality office space came primarily from international companies, which accounted for 78% of the total transaction volume.
Overall, the demand structure remained relatively unchanged. If economic stabilization continues, an increase in demand coming from Ukrainian companies may be expected.
Source: Colliers International
Vacancy and rental rates Vacancy and rents The total vacancy rate* dropped from 14.4% at the beginning of 2017 to 7.6% at the end of the year.
The vacancy rate in Grade A dropped by 10% from 19.8% to 8.8%.
Low construction and commissioning rates of Grade A and B business centers is the main reason for such steep decline.
*Selective data used
Source: Colliers International
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The main business centers (Grades A and B) Vacancy, % scheduled to enter the market in 2018 are: Astarta BC (3rd phase) at 58 Yaroslavska St. (GLA ~ 9 000 m²); Unit Business Park, at 8 Simyi Khokhlovikh St. (GLA of sections scheduled for commissioning is ~ 20 000 m²); BC Podil Heritage at 28 Verhniy Val St. (GLA ~ 3 000 m²); Office building at 101 Volodymyrska St. (GLA ~ 5 000 m²); Office building at 1 Sagaidachnogo St. (GLA ~ 8 000 m²); BC Forum Amursky at 6 Amurska St. (GLA ~ 9 000 m²); Europassage BC at 54 Gaidara St. (GLA ~ 12 000 m²). Source: Colliers International The prime headline rent remained unchanged at $28/m²/month. The average rental rates in Grades A Average base rent by grade and B settled at $16/m²/month. In 2017 rental rates ranged as follows: Grade А: $16-28/ m²/month Grade B: $10-17/m²/month Grade С: $6-11/²/month
Forecast 2018
71 000 m² of new office space are expected to enter the market in 2018-2019, provided that all buildings scheduled for completion are commissioned on time.
A slight growth of rental rates in grades A and B is expected.
The vacancy rate will drop even further as the number of new projects under construction remains insignificant, while the construction cycle is three Source: Colliers International years on average.
2018 will remain favorable for both tenants and investors, as it will still possible to find high quality office buildings with favorable rental rates and prices.
In the present situation, it would be reasonable to boost developers’ activity in the office real estate market.
In addition to the IT sector, in 2018, demand may be generated by e-commerce companies, major local companies and agro sector.
Multinational companies will continue to move to high-quality office premises on compatible or more favorable commercial terms, using the new opportunities offered by the market.
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Major Completed and Pipelined Business Centers, Kiev, GLA over 7 000 m²
Year of Gross leasable area № Property Аddress completion (GLA), m² 1 Citygate BC 1 Magnytogorska St. 2019-2020 45 000 2 Astarta BC 58 Yaroslavska St. 2017-2018 35 000 3 Unit BC 8 the Khokhlov family St. 2017-2018 34 000 4 Forum West Side BC 6 Teligy St. 2017-2018 8 000 5 Europassage BC 54 Gaidara St. 2017-2018 12 000 6 Forum Amursky BC Amurskaya St. 2017-2018 9 000 7 Sigma BC 6 V. Havela (Lepse), Blvd. 2015 19 500 8 BC at Holosiivskyi Ave. 132 Holosiivskyi Ave. 2015 15 000 9 BC at Dorohozhytska St. 8 Dorohozhytska St. 2015 8 000 10 IRVA BC (phase 3) 10/14, Radischeva St. 2016 8 000 13/15 Bolsunovska 11 IQ BC 2014 32 100 (Strutinskogo) St. 12 Forum Victoria Park BC (phase 1) 7 Ohtyrskyi 2014 14 400 13 Domino BC 51 Nyzhnii Val St. 2014 9 000 14 Volna BC 36 Konovaltsa (Shchorsa) St. 2014 27 000 15 Podol Prestige BC 27-29 Nyzhnii Val St. 2014 13 000 16 Silver Breeze BC 1v Pavla Tychyny Ave. 2013 26 000 17 SP Hall BC 28а Bandery Ave. 2013 22 000 18 MERX-2 BC (phase 2) 15 Leiptsyzka St. 2013 15 400 19 Europe BC 101/103 Stolychne Highway 2012 20 000 20 Crystal BC 175-177 Kharkivske Highway 2012 10 000 21 Forum Victoria Park BC (phase 1) 7 Okhtyrskyi Lane 2012 7 000
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Year of Gross leasable area № Property Аddress completion (GLA), m² 22 Premium Center BC (phase 1) 6 Lepse Blvd. 2011 38 000 23 Rialto BC 18 Novokostiantynivska St. 2011 15 500 24 Shchekavytskyi BC 23-25 Frunze St. 2011 10 300 25 BC at 19 Druzhby Narodiv Blvd. 19 Druzhby Narodiv Blvd. 2011 8 000 26 HPBC II (phase 2) 12 Amosova St. 2010 18 300 27 Forum Kinetic BC 12 Lyvarska St. 2010 9 900 28 Eleven BC (phase 1) 11 Solomianska St. 2010 9 500 29 Flora Park BC 8 Tankova St. 2010 8 300 30 Cosmopolite BC 6 V. Hetmana St. 2010 8 600 31 Tsaksky BC 13 Staronavodnytska St. 2010 14 000 32 Protasov BC 2/1 M. Hrynchenka St. 2009 22 700 33 HPBC II (phase 1) 12 Amosova St. 2009 16 000 34 Irva BC (phase 2) 10/14 Radyshcheva St. 2009 11 300 35 Prague BC 6 V. Sosiury St. 2009 8 500 36 Vremena Goda BC 16 Kudriashova St. 2009 7 100 37 Illinskyi BC (3 phases) 8 Illinska St 2005, 2007, 2008 37 100 38 Palladium Plaza BC 172 Antonovycha St. 2008 16 000 39 BC at Fizkultury St. 28 Fizkultury St. 2008 11 000 40 Vector BC 10h Starokyivska St. 2008 16 000 41 Granit BC 8b Raisy Okipnoi St. 2008 12 600 42 Mikom Palace BC 27 Dehtiarivska St. 2008 10 000 43 OB at 5 Zoolohichna St. 5 Zoolohichna St. 2008 9 200 44 BC at 6 M. Dontsia St. 6 M. Dontsia St. 2008 7 000 45 Karavan BC 12 Luhova St. 2008 7 000 46 BC at 4 Verkhnii Val St. 4 Verkhnii Val St. 2007 13 800 47 Faringeit BC 30v Fizkultury St. 2007 10 600 48 Komod BC 1 Lunacharskoho St. 2007 12 800 49 Grand Step BC 24d Polieva St. 2007 9 500 50 BC at 68 Verkhnii Val St. 68 Verkhnii Val St. 2007 7 500 51 BC at 92-94 Dmytriivska St. 92-94 Dmytriivska St. 2007 8 000 52 Tri Zhelaniya BC (3 phases) 14а Bazhana Ave. 2006 18 000 53 HPBC 4 M. Hrynchenka St. 2006 16 000 54 OB at 26 Lesi Ukrainky Blvd. 26 Lesi Ukrainky Blvd. 2006 13 000 55 BC at 54/19 Avtozavodska St. 54/19 Avtozavodska St. 2006 12 000 56 Itera BC 42/44 Pochainynska St. 2006 10 000 57 FIM Center BC 17 Liniina St. 2005 8 000 58 Forum Park Plaza BC 7-9 Bandery Ave. 2005 32 000 59 Irva BC (phase 1) 10/14 Radyshcheva St. 2005 11 000 60 BC at 1 Dniprovskyi descent 1 Dniprovskyi descent 2005 8 000 61 BC at 23 Haharina Ave. 23 Haharina Ave. 2005 7 000 62 Inkom BC 31/33 Smolenska St. 2004 12 700 63 Stand BC 14 Vasylkivska St 2003 10 000 64 OB at 18/7 Kutuzova St. 18/7 Kutuzova St. 2003 7 200 65 Cubic Center BC (phase 1) 3 Sholudenko St. 2003 7 000 66 Forum Business City BC 13 M. Pymonenka St. 2002 23 000 67 Podil Plaza BC 19 H. Skovorody St. 2000 19 800 68 Kontraktovyi BC 2a Kostiantynivska St. 2000 8 000 69 Artem BC 4 Hlybochytska St. 1997 9 900 70 OB at 1 Sagaydachnogo St. 1 Sagaydachnogo St. 2018 8 000
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Major Completed and Pipelined Business Centers, Central Business District (CBD), Kyiv, GLA over 7,000 m²
Gross leasable area № Property Аddress Year of completion (GLA), m² 1 OB at 101 Volodymyrska 101 Volodymyrska 2018 5 000
2 Dynasty BC 46 Antonovycha St. 2015 8 900 2 Moskovska St. / 32-34/2 3 Senator BC 2014 40 000 Riznytska St.
4 BC at Velyka Vasylkivska St. 98 Velyka Vasylkivska St. 2014 9 000 5 Gulliver BC 1 Sportyvna Sq. 2013 70 000 6 101 Tower BC 57 Lva Tolstoho St. 2012 43 000
7 Toronto BC 100 Velyka Vasylkivska St. 2012 36 000 8 BC at 70 Saksahanskoho St. 70 Saksahanskoho St. 2011 9 600 9 Capital Hall BC 31 Zhylianska St. 2009 7 000
19/21 Bohdana 10 Leonardo BC (phase 2) 2008 18 200 Khmelnytskoho St. 11 Prime BC 48/50 Zhylianska St. 2008 9 500
12 Maxim BC 33v Antonovycha St. 2008 8 700 13 Renome BC 5 Dymytrova St. 2008 8 500 14 Parus BC 2 Mechnykova St. 2007 47 000
15 Eurasia BC 75 Zhylianska St. 2007 27 900 16 Renaissance BC 24 Vorovskoho St. 2006 15 000 17 OB at 5 Velyka Vasylkivska St. 5 Velyka Vasylkivska St. 2006 8 000
Tarasa Shevchenka Blvd. / 18 Europe Plaza BC (1-2 phases) 2005-2006 36 000 Saksahanskoho St. 17/52 Bohdana Khmelnytskoho 19 Leonardo BC (phase 1) 2005 14 000 St. 20 Botanic Towers BC 119/121 Saksahanskoho St. 2005 7 000 21 Panorama BC 20 Velyka Zhytomyrska St. 2004 7 100
22 Olimpiiskyi BC 72 Velyka Vasylkivska St. 2003 11 700 23 NTBC (1 phase) 43 Zhylianska St. 2003 7 100 24 Horizon Tower BC 42/44 Shovkovychna St. 1999 15 000
25 OB at Pushkinska St. 42/4 Pushkinska St. 1996 7 000 26 IOHC BC 9/2 Velyka Vasylkivska St. 1992 10 000
Source: Colliers International BC – business centre, ОB – office building
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Retail Supply
Summary In 2017, the new offer of retail premises in Kiev was about 8 000 m², which is significantly different from the indicator of 2016 – 168 000 m² and is a record low for the As of the end of 2017, the total supply of qualitative retail last 10 years. This is due to the fact that the timing of premises in Kiev was about 1.244 million m². commissioning of a number of facilities announced for the opening in 2017 were moved to later. There remains a positive dynamics of retail turnover growth in most retailers. At the most successful retailers, As in the second half of 2016, throughout the year 2017 the figures for 2017 reached and exceeded the figures for there was an increased demand for premises from tenants. 2013 in terms of currency. At the same time, this trend was observed against the background of a fundamentally low new proposal. Within As of the end of 2017, the highest rental rates in the 100- a year, only Academ City was opened from the declared 200 m² section in the most successful shopping centers in objects (GLA 8 000 thousand m²). Kiev were $ 72 / m² / month. Rent rates for the best premises on the Khreshchatyk street - the main shopping The total supply of quality retail space in Kiev at the end street of the capital, remained at $ 83 / m² / month. of 2017 was about 1 244 million m².
The vacancy rate as of the end of 2017 was almost halved Total Shopping Centre Stock in Kyiv, ths. m² compared to the previous 2016 year and amounted to 5.6%. At the same time, in the best qualitative shopping mall the vacancy rate is zero.
The provision of retail space in the capital at the end of the year was about 423 m² per 1 000 inhabitants. Changes from the previous year are insignificant (2016 - 419 m² per 1 000 inhabitants).
According to developers, in 2018-2019 a record increase in the number of new offers in the market of retail real estate in Kiev is expected. At various stages of implementation is about 705 000 m², which is more than half of the entire existing supply.
Source: Colliers International
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Сonsumer demand Consumers Sentiment Index*, 2017 Against the background of relatively stable economic and political situation in the country, there was a positive dynamics of consumer activity.
According to the State Statistics of Ukraine, by the results of 2017 the real retail turnover in Ukraine amounted more than 650 billion hryvnia, which is more on 8.2% than the turnover of January-October last year in comparable prices.
According to GFK Ukraine, in December 2017 the Consumer Sentiment Index decreased by 2 points compared to November 2017, but in annualized basis it grew by 3.2 amounting 60.3p.
Source: GfK Ukraine ** Value below 100 indicates that negative consumer Tenant Demand sentiment dominates in Ukraine
In 2017 are increase in demand for retail space in Kyiv
from tenants with various trade profiles signed in foreign currency with small adjustments.
Several big launches H&M, IKEA, Koton, DeFacto,
Zara Home, Decathlon announced the opening of their stores in Ukraine in 2018 .
Major fashion operators replenish their portfolio with previously unknown brands, in particular those in the "medium +" segment.
In 2017 brands are announced to launch in the nearest future, including: Scotch&Soda, Liu Jo, Saucony, Falconeri, Super Dry, Under Armour, Van Laack, Baldessarini, Okaidi, Wycon, Cole Haan, Hanro, Hatley, Miniso, Tous, Hugo Boss, Gerry Weber, Replay, Lee Cooper, Golden Point and etc.
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Vacancy and Rental Rates Prime Rents
Due to an increase in demand for retail space in quality facilities, most of the contracts were signed in foreign currency with small adjustments (currency vacation, annual rate restrictions, etc.).
In 2017 there was a slight increase in rental rates, and the tenant market gradually moved to the landlord's market. However, only the best objects of the city of Kyiv could afford to dictate the conditions, which preferred the most famous and promising brands.
The above indicates that international retailers are interested in the Ukrainian market. Despite the seemingly unfavorable situation in the country and relatively low official income level of the population, tenants adapt to the new realities, looking positively towards development, and increasing their presence in the market. Source: Colliers International
On the negative side, large international brands tend to insist on discounts and concessions, explaining this by high risks of doing business in Ukraine. Vacancy, %
In 2017, the prime headline rate for 100-200 m² units in Kyiv’s most popular shopping centers was on average $72/m²/month, a 10.5% growth compared to 2016 year. The prime headline rate for Khreschatik St. – Kyiv’s main shopping venue – averaged at $83/m²/month.
Forecast
According to developers, in 2018-2019, new supply of retail space in Kyiv is expected to increase significantly. Approximately 735 000 m² are currently under construction. It is therefore expected that opening of some of the buildings will be postponed. During the 2017 there was an increased demand for quality premises from tenants. Source: Colliers International
Among the actual projects planned for the opening in 2018-2019, there are exclusive projects of Colliers International (Ukraine): SEC River Mall (GLA ~55 000 m²) and SEC RETROVILLE
(GLA ~80 700 m²), which are in the active stage of construction.
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The following shopping centers are scheduled for opening in 2018-2019 :
Blockbuster Mall (GLA ~142 000 m²); Good Life (GLA ~ 7 500 m²);
Oasis (GLA ~13 200 m²); Ocean Mall (GLA ~100 000 m²); Rive Gauche (phase 1) (GLA ~20 100 m²); Rive Gauche (phase 2) (GLA ~50 100 m²); Respublika (GLA ~135 000 m²); Smart Plaza (GLA ~15 100 m²); Smart Plaza Obolon (GLA ~12 000 m²);
Sky Mall (phase 3) (GLA ~37 100 m²); Аprel (phase 2) (GLA ~30 000 m²); Аuchan Retail Park Petrovka (GLA ~11 000 m²);
Despite the recent positive changes in retail market, country and economic risks are still actual. The main problems for Kyiv retail real estate market remain the unstable economic situation with a risk of deterioration, the exchange rate permanent fluctuations, a high level of corruption, as well as military actions on the territory of Eastern Ukraine.
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Major Completed and Pipeline Retail Projects, Kiev
Year of № Name Аddress GBA, m² GLA, m² commissioning Major Completed Shopping Centers 1 Poliarnyi 2 Mayorova St. 12 400 8 600 2012, 2013 2 Karavan 12 Luhova St. 57 600 45 300 2004, 2006, 2008 3 Dream Town 1b Obolonskyi Ave. 167 000 90 000 2009 4 Metropolis 12 Malynovskoho St. 30 000 15 000 2004 5 Central Department 2 B. Khmelnytskoho St. 38 780 23 500 1961, 2016 6 Store(TSUM)Gorodok (phase 1-2) 23 Moskovskyi Ave. 12 000 22 000 2003, 2016 7 Makros 16b Moskovskyi Ave. 12 000 8 500 2004 8 Plazma 12 Moskovskyi Ave. 30 000 8 800 2006 9 Blockbuster 34v Moskovskyi Ave. 33 000 26 800 2008 10 Promenada Center 18 Ovrutska St. 20 000 15 000 2004 11 Kvadrat on Lukianivka 1 Melnykova St. 9 000 6 200 2002 12 4Room 6 Velyka Kiltseva St. 40 000 21 000 2009 13 Promenada Park 4 Velyka Kiltseva St. 60 000 43 000 2009 14 Kvadrat on Borshchahivka 29 Hnata Yury St. 15 000 11 800 2003 15 Bolshevik 6 Hetmana St. 90 000 40 000 2006 16 Arkadia on Borshchahivska 154 Borshchahivska St. 27 000 15 800 2007 17 Europort 15а Lukashevycha St. 13 000 6 000 2003 18 Ukraina 3 Peremohy Ave. 38 000 24 000 2003 19 Globus (phase 1) Maidan Nezalezhnosti 16 500 9 000 2001
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Year of № Project Name Аddress GBA, m² GLA, m² completion 20 Globus (phase 2-3) Maidan Nezalezhnosti 16 000 9 600 2002 21 Mandarin Plaza 4 Baseina St. 18 100 7 500 2003 22 Metrograd Velyka Vasylkivska St. 18 000 10 000 2001 23 Ocean Plaza 176 Antonovycha St. 154 000 72 200 2012 24 Araks 110 Velyka Kiltseva 30 000 27 000 2009 25 Magelan 13b Hlushkova Ave. 28 000 22 400 2004 26 Domosphera 101 Stolychne Highway 30 500 22 300 2009 27 RayON 4 Lavrukhina St. 66 000 24 000 2012 28 Global UA 2а Balzaka St. 9 000 7 500 2006 29 Sky Mall 2 Henerala Vatutina Ave. 97 000 67 000 2007 30 Kvadrat on Perova 36 Perova Blvd. 40 700 19 100 2008 31 Komod 4 Lunacharskoho St. 14 000 10 000 2007 32 Dytiachyi Svit 3 Malyshko St. 20 000 11 700 1980 33 Darnytsia 1 Myru Ave. 12 000 6 000 2008 34 Arkadia on Dniprovska Nab. 33 Dniprovska Naberezhna 33 000 18 400 2008 35 InSilver 3 Sribnokilska St. 12 800 10 000 2011 36 Aladdin 3а Hryshka St. 16 000 10 200 2004 37 Piramida 4а Mishuhi St. 16 000 12 000 2004 38 Marmelad (phase 1) 154 Borshchahivska St. – 23 350 2013 39 Gulliver 1 Sportyvna Sq. 63 000 45 000 2013 Khodosivka village, 40 Manufactura 25 000 15 000 2013 Novoobukhivkse Highway 41 Art Mall 37 Zabolotnoho St. 50 000 35 500 2013 Dniprovska Naberezhna / Tychyny 42 Silver Breeze 22 000 16 000 2013 St. 43 Atmosfera 103 Stolychne Highway 38 000 30 000 2014 Chervonotkatska St./ 44 Prospekt 75 000 41 400 2014 Chervonohvardiiska St. 45 Aprel 19a Lesia Kurbasa Ave. 6 900 5 800 2014 46 Doma Center 40 Budivelnykiv St. 10 000 8 000 2014 47 Epicentr 20D Poliarna St. 105 000 70 000 2014 48 Novus 7G Zdolbunivska St. 19 830 13 560 2015 49 New Way A. Verbytskoho St. 20 700 17 000 2016 50 Lavina Mall 6 Berkovetska St. 170 280 127 500 2016 51 Academ City 16 Ak. Palladina St. 11 000 8 000 2017 Major Shopping Centers due to Complete in 2018-2020 * № Project Name Аddress GBA, m² GLA, m² 1 River Mall 10-14 Dniprovska Naberezhna 140 000 55 000 2 RETROVILLE Pravdy Ave. 116 000 80 700 3 Ocean Mall Lybidska Square 150 000 100 000 4 Smart Plaza (Obolon) 21, Tymoshenka St. 16 000 12 000 5 Blockbuster Mall Bandery Ave. 245 000 142 000 6 Respublika 1 Velyka Kiltseva St. 298 000 135 000 7 Sky Mall (3rd phase) 2 Henerala Vatutina Ave. 51 450 37 100 8 Smart Plaza 24-26 Peremohy Ave. 25 000 15 100 9 Rive Gauche (1 phase) Zbolbunivska St./ Dragomanova St 30 000 20 100 10 Rive Gauche (2 phase) Zbolbunivska St./ Dragomanova St. 120 000 51 900 11 Retail Park (Petrivka) 15A, Stepana Bandery Ave. 12 000 11 000 12 Good Life Pecersky district 10 000 7 500 19 A, L.Kurbasa Ave. 13 Aprel(2 phase) 30 000 24 000
intersection of Obolonsky Prospect 14 Oasis 14 500 13 200 and Heroes of the Dnieper St. Total 1 257 950 704 600
* There is a probability that some shopping centres will be phased and completion of several shopping centres will be postponed to a later date. **In case of resolving the issue of property rights
Source: Colliers International
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Hotel market Supply
Summary
Some of the main points regarding Kyiv Hotel market in 2017 Kyiv hotel market consists of approximately 100 hotels that are worth noting are as follows: of different categories with a total room stock of about Park Inn by Radisson Troyitska 4* located at 10,000 rooms, which accommodate on average 1 million 55, V. Vasylkivska St. has been commissioned. The visitors per year. hotel has 199 rooms and is managed by Rezidor Hotel Group. As of the end of December 2017 , there are ~ 29 4-5 star hotels in Kiev, ~ 37 hotels - 3 star category and about 31 As a result of the rebranding of the hotel "Kosmopolit" hotels - 2-1 stars. The 3 stars - about 40% of the total on Vadim Getman St. , Accor Hotels Group has opened rooms stock . However, it should be noted that among the first hotel under the Mercure brand in Kiev - the ~ 60 medium-price hotels (4 stars, 3 stars and 2 Mercure Kyiv Congress. stars), less than half are really high-quality hotels built in accordance the European classification of this By the end of December 2017 hotel market in Kiev category. comprised of approximately 100 hotels of different categories with the total hotel room stock of approximately 10 000 rooms. Total Hotel Room Supply, Kyiv, pcs
In the rest of hotels only a slight gradual increase in operating performance is observed.
Very few hotels are being commissioned; most of the projects are frozen including hotels of the middle price segment.
There is however a consistent interest in the management of hotel projects in Ukraine coming from international hotel operators.
Source: Colliers International
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Hotel Room offer by category ADR
In 2017, the average asking price of the room (not including VAT) increased a bit in UAH , but in euro - remained on the same level as of 2016 in euros due to increase of EURO/UAH exchange rate.
According to the results of 2017, occupancy rates increased by an average of about 5% compared to 2016 due to increase in tourists’ number visiting Kyiv and expected to grow within the neхt 3-5 years.
The occupancy rate hotels managed by professional operators in Kyiv in the 4* and 5* category in 2017 was at 45-50%, the category 3* hotels had the occupancy rate at the level of ~ 55-60%. However, there are successful hotels in the market of Kyiv with occupancy rate up to 65%.
Based on the results of the year, the average cost of the Source: Colliers International sold room per day (ADR) for high-quality hotels managed by professional operators was: in hotels of category 5 * was € 210- € 440; in hotels of category 4 * - € 80- € 260; At the moment, Kyiv has 11 hotels of high and middle in hotels of category 3 * - € 30- € 100. price segments managed by international hotel operators.
In the first quarter of 2018, 2 medium-price hotels - Aloft Average Price for “Standart” room, Kyiv, run by Sheraton Hotels & Resorts (312 rooms), as well as the Ibis Hotel (350 rooms) are open. Riviera Boutique Hotel is scheduled for opening after reconstruction for the first half of 2018. The opening of the CITYHOTEL hotel (additional building) is announced at the end of 2018 (the opening date is postponed from 2016).
Demand
According to the State Border Service of Ukraine in 2017, the number of foreign tourists in Kiev increased by 29%, compared to the result of last year, amounted to 2.3 million people. EUR/night According to the development strategy of Kiev until 2025, the total number of tourists should reach 2.6 million Source: Colliers International people. By 2025 the tourist flow is expected to increase by 13% compared to 2017. Most tourists come from Europe (52.6%), Asia (32.5%), and America (8.2%).
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Forecast 2018
The presumably stable political situation in the country and positive trends in the economy slightly boosted the tourist flow to Ukraine.
Hotels Sheraton Kyiv Olympiysky and Renaissance Kyiv Hotel are currently under construction. Their commissioning has already been repeatedly postponed.
Further improvement of operating performance is forecasted, provided there are no negative political and economic changes in the country. Do not expect rapid growth due to the release of three large quality hotels in the middle price segment of Park Inn by Radisson Troyitska, Ibis and Aloft Kyiv. The market will take time to absorb the number fund more than 1000 numbers.
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The main registered hotels and announced projects of hotels real estate, Kiev
№ Name Аddress Numbers of rooms Category 1 InterContinental Kyiv 2a, Velyka Zhytomyrska St. 272 5 2 Hyatt Regency Kiev 5, Tarasovoi St. 234 5 3 Premier Palace Hotel 5-7/29, Shevchenka Blvd. 288 5 4 Opera Hotel 53, B. Khmelnytskoho St. 137 5 5 Fairmont Grand Hotel Kyiv 1а, Naberezhno- 258 5 6 Hilton Kiev 8Khreshatytska-30, T. Shevchenko St. Blvd. 262 5 7 Radisson Blu Hotel, Kiev 22, Yaroslaviv Val St. 255 4 8 Radisson Blu Hotel, Podil 17-19, Bratska St. 164 4 9 Holiday Inn Kiev 100, Chervonoarmiiska St. 208 4 10 Cityhotel 34a, B. Khmelnytskoho St. 86 4 11 Alfavito 35d, Predlavianska St. 229 4 12 11 Mirrors 34a, B. Khmelnytskoho St. 49 4 13 Podol Plaza Hotel 7a, Kostiantynivska St. 57 4 14 Ramada Encore Kyiv 103, Stolychne Shose 264 4 15 «President Hotel» 12, Hospitalna St. 374 4 16 «Natsionalnyi» 5, Lypska St. 75 4 17 «Kiev» 26/1, Hrushevskoho St. 157 4 18 City Park Hotel Kiev 20A, Vorovskoho St. 23 4 19 Visak 17, Obolonska Naberezhna St. 43 4 20 Mercure Kyiv Congress (Cosmopolite) 6, Hetmana St. 160 4 21 Chervona Kalyna 7, Henerala Vatutina St. 32 4
17 Year-End Review | 2017 | Ukraine | Colliers International
№ Name Аddress Numbers of rooms Category 22 Staro 34, Konstiantynivska St. 35 4 23 Vozdvyzhenskyi 60ab, Vozdvyzhenska St. 26 4 24 Park Hotel Holosievo 87, Holosiivskyi Av. 53 4 25 City Holiday Resort & Spa 5, V. Kiltseva 62 4 26 Ukraina 4, Instytutska St. 368 4 27 Kozatskyi Stan 18 km Boryspilskoho Shose 58 4 28 Kreshchatyk 14, Kreshchatyk St. 130 4 29 Royal Olympic Hotel 12, Hospitalna St. 65 3 30 Royal Hotel De Paris (De luxe) 5, V. Vasylkivska St. 29 3 31 Royal City Hotel 13a, Dmytrievska St. 20 3 32 Amarant Hotel 71d, Konstantynivska St. 46 3 33 Royal Grand Hotel 31/27, B. Khmelnytskoho 44 3 34 Ambassador Plaza 5/1, M. Hrechko St. 44 3 35 Bontiak Hotel 5/24, Iryninska St. 35 3 36 «Bratyslava» 1, Malyshko St. 337 3 37 Premier Hotel Lybid 1, Peremohy Sq. 273 3 38 «Turyst» 2, R. Okypnoi St. 377 3 39 «Dnipro» 1/2, Khreschatyk St. 186 3 40 Domus Hotel 19, Yaroslavska St. 30 3 41 Pushcha Congress Hotel 20, N. Yunkerovycha St. 169 3 42 Adria 2, R. Okypnoi St. 63 3 43 «Gintama» 9, Tryohsviatytelska St, 23 3 44 Premier Hotel Rus 4, Hospitalna St. 451 3 45 Air City Hotel 32, Molodohvardiyska St. 118 3 46 «Myslyvskyi Dvir» 50, Slavhorodska St. 28 3 47 «Оberih» 25/16, Chervonozorianyi Av. 58 3 48 Ibis Kiev City Center 25, Shevchenko Blvd. 212 3 49 Nyvky Plaza 5, M. Hrechko St. 23 3 50 7 Days 4, Heroiv Kosmosu St. 38 3 51 Express Hotel 38/40, Shevchenko Blvd. 143 3 52 «Bakkara» 1, Venetsyanskyi Ireland 182 3 Naberezhno Khreschatytska 53 «Bohdan Khmelnytskyi» 30 3 St. 54 West Park Hotel 24G, Pushkina St. 27 3 55 «Salut» 11b, I. Mazepy St. 88 3 56 «Мyr» 70, Holosiivskyi 138 3 57 Raziotel Yamska 52, Yamska St. 78 3 58 Vita Park Borysfen 5, Park Druzhby Narodiv St. 64 3 59 «Cooperator» 53/80, Saksahanskoho St. 92 3 60 «Druzhba» 5, Druzhby Narodiv Av. 55 3 61 Kiev 365 1, Mala Okruzhna St. 63 3 62 Nyvky Plaza 5, M. Hrechko St. 23 3 63 Impressa 21, Sahaidachnoho St. 18 3 64 Park Inn Radisson 55 A, V.Vasylkivska 196 3 65 Dzherelo Observatorna 17 3 66 Ekateryna Velikaya 51/1 Vyzhhorodska St. 20 3
Major Hotels due to Complete in 2018-2019, Kyiv 1 Aloft 17 , Esplanadnaya St. 312 4 2 Ibis 2 6, Polzunova, St 350 3 3 Riviera Boutique Hotel* 15, Sahaidachnoho St. 67 4 4 City Hotel (2 очередь) 56b, B. Khmelnytskoho St. 50 4
* Hotels on reconstrucrion * According to developers and operators
Source: Colliers International
18 Year-End Review | 2017 | Ukraine | Colliers International
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