Lviv

Supply & Demand
Lviv is an important economic, cultural, academic and transportation centre of Ukraine with total official population of over 760 thousand inhabitants. It is the largest city in western Ukraine and, its historic and architectural heritage makes it a popular tourist destination. Lviv was also selected to host matches of EURO 2012 Football Championship together with Kyiv, Donetsk and Kharkiv, as well as four Polish cities. The retail market in Lviv remains very immature and is still strongly influenced by the existing covered market ‘Pivdennyi’. Total modern retail stock in Lviv was estimated at over 296,500 sq m in November 2011, or 272 sq m of modern retail stock per 1,000 inhabitants. The year 2011 will not see delivery of any new retail scheme in Lviv. DTZ projects that total retail stock in the city will remain stable until mid-late 2013, when the retail
and leisure centre ‘Forum Lviv’ is scheduled for delivery by Multi Development. The modern retail stock in Lviv has been dominated by multi-tenant retail centres and shopping malls, which account for almost 73% of total stock in the sector. Big box retail developments, comprised of the DIY-stores Epicentre and Nova Liniya, and two outlets Metro Cash&Carry, account for the remaining 27% of total retail stock. There are no retail parks or fashion outlets in Lviv. The 52,700 sq m (GLA) retail and leisure centre King Cross Leopolis is the largest and most notable retail scheme in Lviv, which was developed by King Cross Leopolis in partnership with the local firm Comfort Invest in phases in 2008 and 2010. The scheme is anchored by Auchan and Praktiker, and its opening triggered numerous new market entries in Lviv, including IMAX, Inditex Group, Marks&Spencer, Mothercare and many others. High street retailing is well-developed in Lviv due to the
urban structure of the city and high tourist flows in its central part. DTZ believes that the highest potential for retailers in Lviv exists in low, lower middle and middle price segments. Demand remains considerable for quality retail space both in high street locations and retail centres in the city, the latter remaining in particularly scarce supply.

Rents
In Lviv high street retail rents are higher than average rents in multi-tenant retail centres, mostly due to the urban structure of the city with many tourist attractions in its central part, developed nature of street retailing, shopping habits of local inhabitants and high tourist flows, as well as lack of quality retail schemes in the non-central areas of the city. Prime high street retail rents in Lviv amount to $85-100 per sq m per month, with the highest rents typically achieved for quality retail premises located along Tarasa Shevchenka and Svobody Avenues, and on Rynok Square. In the multi-tenant retail centres in Lviv, prime net monthly retail rents vary in the range of $60-80 per sq m for standard units of area 100-300 sq m.