UKRAINE RETAIL MARKET RESEARCH & FORECAST REPORT| 2018 2 | Ukraine| 2018 | Colliers| International SUMMARY The Ukrainian retail real estate Therefore, the total leased area of Retail marketRetail overview market still remains the most SCs/SECs in Kiev has increased by attractive segment of commercial 5,3% compared to the beginning of property in terms of development. It the year. is proved by the unprecedented The vacancy rate has dropped by volume of new supply scheduled for 1.8% compared to 2017. completion in 2019-2020. More than 650 000 m² GLA are under construction. SUPPLY At the end of 2018 the total supply of . Nyvky (GLA: ~15 000 m²). high quality space in Kiev amounted Currently, among the main shopping to 1 314 000 m². centers scheduled for opening in As it was supposed, in 2018 the 2019 are: following facilities were . River Mall commissioned: (GLA: ~55 000 m²); . Smart Plaza . RETROVILLE (GLA: ~15 000 m²); (GLA: ~79 000 m²); . Retail Park Petrivka . Bloc kbuster Mall (GLA: ~12 000 m²); (GLA: ~157 000 m²); . Rive Gauche, 1 phase . OASIS (GLA: ~ 13 200 m²). (GLA: ~20 300 m²); . Smart Plaza Obolon . Good Life (GLA: ~7 500 m²); (GLA: ~10 000 m²). INDICATORS DEMAND Consumer demand Tenant demand According to the State Statistics In 2018 the active demand for retail Service of Ukraine, the real incomes space in Kiev from tenants was of the population (adjusted for observed. As usual, fashion inflation) for Q2 2018 have grown by operators were actively expanding 9.8% compared to Q2 of the previous their presence. year. The following new operators worth According to GfK Ukraine, the mentioning: H&M, Koton, DeFacto, Consumer Sentiment Index in Zara Home, All Saints, Penny Black, December 2018 grew by 2.4 points, Livly, Hugo, Polo Ralph Lauren, Tru compared to index of November Trussardi, Laurel, Trollbeads, XTI, 2018 while in the past year it grew by Usupso, Ted Baker, Jo Malone, 1.9 points, amounting to 62.2 p. Killian, Emporio Armani and others. VACANCY & RENTAL RATES At the end of 2018 prime headline shopping venue) for 100-200 m² rent for 100-200 m² units in Kyiv’s units remained $ 83/m²/month. most popular shopping centers The total vacancy rate in Kyiv increased and amounted to SCs/SECs reached 3.8%, having $75/m²/month. The prime headline dropped by 1.8 points compared with rate for Khreschatik St. (Kyiv’s main the end of 2017. 4 TOTAL SHOPPING CENTER | Ukraine| STOCK IN KYIV, ths. m² 2018 Colliers International | Retail marketRetail overview CONSUMERS’ SENTIMENT INDEX* Source: GfK Ukraine ** Value below 100 indicates that negative consumer sentiment dominates in Ukraine RENTAL RATES Source: Colliers International 5 marketRetail overview 2018 | Ukraine| VACANCY | Colliers| International NEW BRANDS ENTERED THE MARKET IN 2018 Source: Colliers International 6 | Ukraine| 2018 | Colliers| International Retail marketRetail overview FORECAST About 650 000 m² of new retail space New supply in the market should be in SCs/SECs are scheduled for accompanied by increasing of completion in 2019-2020, which may purchasing power, otherwise, there increase the current supply of retail will be an excess of supply over space in Kiev by 48%. Many demand, which will entail decreasing scheduled projects are in progress, of the tenants’ income level as a which confirms once again the result decreasing of rental rates. attractiveness of retail segment for The commissioning of new facilities developers, but the increase of will increase competition among vacancy rates of retail spaces should SECs, as well as the distribution of be expected, which may, in its turn, visitors’ flows. At the same time, result the decrease of rental rates. probably the commissioning of some Considering the volume of supply of projects will be postponed as it was the retail space in Kiev, which is before. 446 m² per 1000 inhabitants and Among brands announced to be significantly less than in most launched in 2019 are: IKEA, European cities, it is assumed that Decathlon, Calvin Klein (first phase), the market is able to take up all The North Face. Supposed that other projects declared for commissioning. brands that did not operate on the But it is necessary to admit that the market before will replenish this list, income level in Kyiv is lower than in provided that political and economic other European cities. If all scheduled situation in the country remains projects will be commissioned in stable. declared terms, it may have a negative impact, first of all, on small facilities with an outdated concept and unprofessional management. 7 marketRetail overview 2018 | Ukraine| MAJOR COMPLETED AND PIPELINED RETAIL PROJECTS, KYIV | Colliers| International Year of № Name Аddress GBA, m² GLA, m² commissioning Major completed Shopping centers 1 Poliarnyi 2 Mayorova St. 12 400 8 600 2012, 2013 2004, 2006, 2 Karavan 12 Luhova St. 57 600 45 300 2008 3 Dream Town 1b Obolonskyi Ave. 167 000 90 000 2009 4 Metropolis 12 Malynovskoho St. 30 000 15 000 2004 Central Department 5 2 B. Khmelnytskoho St. 38 780 23 500 1961, 2016 Store(TSUM) 6 Gorodok (phase 1-2) 23 Moskovskyi Ave. 45 000 33 000 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 8 Year of | Ukraine| № Name Аddress GBA, m² GLA, m² commissioning 2018 13 Promenada Park 4 Velyka Kiltseva St. 60 000 43 000 2009 Kvadrat on | Colliers| International 14 29 Hnata Yury St. 15 000 11 800 2003 Borshchahivka 15 Bolshevik 6 Hetmana St. 90 000 40 000 2006 Arkadia on 16 154 Borshchahivska St. 27 000 15 800 2007 Borshchahivska 17 Europort 15а Lukashevycha St. 13 000 6 000 2003 Retail marketRetail overview 18 Ukraina 3 Peremohy Ave. 38 000 24 000 2003 19 Globus (phase 1) Maidan Nezalezhnosti 16 500 9 000 2001 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 Arkadia on 34 33 Dniprovska Naberezhna 33 000 18 400 2008 Dniprovska Nab. 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 Marmelad 38 154 Borshchahivska St. – 23 350 2013 (phase 1) 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 / 42 Silver Breeze 22 000 16 000 2013 Tychyny 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 9 marketRetail overview 2018 | Ukraine| Year of № Name Аddress GBA, m² GLA, m² commissioning 48 Novus 7G Zdolbunivska St. 19 830 13 560 2015 49 New Way A. Verbytskoho St. 20 700 17 000 2016 | Colliers| International 50 Lavina Mall 6 Berkovetska St. 170 280 127 500 2016 51 Academ City 16 Ak. Palladina St. 11 000 8 000 2017 52 Good Life 6 Ioanns Paulus St. 10 000 7 500 2018 Rive Gauche 53 17 Zdolbunivska St. 30 000 20 300 2018 (phase 1) 54 Retail Park Petrivka 15 Bandery Ave. 12 000 12 000 2018 55 Smart Plaza 24-26 Peremohy Ave. 25 000 15 000 2018 58 Shcherbakovskogo 56 Nyvky 19 100 15 000 2018 (Shcherbakova) St. Major Shopping centers due to complete in 2019-2020* № Name Аddress GBA, m² GLA, m² 1 River Mall 10-14 Dniprovska Naberezhna 140 000 55 000 2 RETROVILLE Pravdy Ave. 116 000 79 000 3 Blockbuster Mall Bandery Ave. 245 000 157 000 Smart Plaza 4 21 Tymoshenka St. 16 000 10 000 (Obolon) intersection of Obolonsky 5 Oasis Prospect and Heroes of the 14 500 13 200 Dnieper St. 6 Sky Mall (phase 3) 2 Henerala Vatutina Ave. 51 450 37 100 Rive Gauche 7 17 Zbolbunivska St. 120 000 56 700 (phase 2) 8 Ocean Mall Lybidska Square 150 000 100 000 9 Respublika 1 Kiltseva St. 298 000 135 000 *Expected that opening of some of the buildings will be postponed. Source: Colliers International FOR MORE INFORMATION COLLIERS INTERNATIONAL EXPERTS Igor Zabolotskyi [email protected] Tetiana.Markovska [email protected] Gulliver Bussiness Center 1-A Sportyvna Square 01001 Kyiv Ukraine The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has Tel.