Kyiv

Supply & Demand
Total modern retail stock in Kyiv was estimated at around 1,001,400 sq m in November 2011, or 359 sq m of modern retail stock per 1,000 inhabitants (based on official demographics statistics). This figure reflects a significant undersupply of retail space in the Ukrainian capital, particularly when considering the official versus unofficial population imbalance and grey incomes. Approximately 71% of the total modern retail stock in Kyiv, or around 720,800 sq m (GLA), has been formed by multi-tenant retail centres and shopping malls. Big box retail developments account for the remaining 29% of
total retail stock in the city. Such formats as retail parks and fashion outlets are yet to be delivered in the city. Around 75,080 sq m (GLA) of new retail supply was delivered in Kyiv in the first three quarters of 2011, comprised of the second phase of ‘Dream Town’ in Obolon, the hypermarket Novus on Brovarskyi Avenue, as well as four neighbourhood retail centres: ‘inSilver’ on Sribnokilska Street, ‘Kvadrat’ on Onore de Balzaka Street, ‘Livoberezhnyi’ on Maryny Raskovoyi Street and ‘Victorio’ on Lvivska Square. The 25,000 sq m ‘Mega-City’ (phase 1) is the only sizeable retail development scheduled for completion in the fourth quarter of 2011 in Kyiv. Quality of the scheme is generally sub-standard, with individual retail units offered for sale.
DTZ projects that delivery of the scheme is likely to be delayed until 2012. Though new retail supply during 2011 has been rather low in Kyiv, the years 2012 and 2013 are likely to see significant augmentation in new delivery in the sector. As of November 2011, there were over 345,000 sq m (GLA) under construction in Kyiv with delivery scheduled in between 2012 and 2013. These include the first phase of ‘Ocean Plaza’ developed by UDP and KAN Development, ‘Gulliver’ by Tri O, the extension ‘Domosfera’ by DeVision, ‘RayON’ by Arricano Development, ‘Marmalade’ by VKF ‘Mava’, ‘Silver Breeze’ by Svitland Limited, ‘Fashion Factory’ by Aladdin Group, and the retail and leisure centre known as ‘Aquapark’ by Vilna Ukrayina.
The first fashion outlet development in Ukraine, ‘Kiev E95 Outlet Centre’ (phase 1), is also scheduled for completion in late 2012. In 2012-2013 new retail supply in the Ukrainian capital may amount to around 316,900 sq m (GLA), an increase on
current retail stock of almost 32%. Being the capital city of Ukraine, Kyiv remains the most attractive destination for all retailers operating and considering entry into the country. Due to increased demand, the availability of premises in high street locations and successful retail centres in Kyiv has been very scarce.

Rents
In the first three quarters of 2011 average monthly rents in Kyiv retail schemes remained generally stable at around $70-90 per sq m for premises of 100-300 sq m, reaching highs of $160-200 per sq m per month in the most soughtafter retail properties in the city. Since the second quarter of 2010, strengthened demand for high street premises in Kyiv led to an upward correction of base rental rates for this category of real estate. The first half of 2011 witnessed further upward pressure on prime high street rents in Kyiv. As of November 2011, average high street retail rents in Kyiv were registered amounting to $180-230 per sq m per month, with asking rents randomly reaching the highs of $350-400 per sq m per month.