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15:56 PM Sunday, March 26, 2017
Real Estate
​Lviv to Triple High End Offices by 2020
Sasha Kharchenko
Tech companies push demand; vacancy rate less than half Kyiv
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LVIV — Highlighting Lviv’s role as the economic locomotive for Western Ukraine, construction projects are underway to triple high end office space here by 2020.

“By 2020, Lviv will triple Class A and B office space,” predicted Oksana Gordynska, a real estate manager here.

New tech companies have driven Lviv office vacancy rate down to 8.4 percent, less than half the 19.4 percent rate in Kyiv, according to Jones Lang Lasalle, the real estate consultancy. Some of the new companies are startups. Some have moved across the country from war torn Donetsk, 1,300 km to the east.

New companies have filled up city’s only two Class A buildings: ‘Rius,’ with 5,000 square meters, which opened in the city center in 2014; and ‘Optima Plaza,’ with 13,000 square meters, which opened in 2016 in the southern part of the city.

“The city has only about 0.17 square meters for each resident while this index is 0.5 sq m in Kyiv, with a population of 2.8 million,” Alexandra Globina, JLL’s Head of Office in Ukraine, said referring to Class A office space for this city of 723,000 inhabitants

The new projects are to triple the existing 18,000 square meters.

Low Rents, Strong Demand

Demand, rather than high rents, drive the new construction. Even with a low vacancy rate, office rents are about one third the level of Kyiv.

“In the third quarter of 2016, an average rental rate was $8-9 per square meter,” said Globina of JLL.

Over the last two years, Lviv office vacancy rate has dropped from 11% to 8.4%.

“This is largely due to IT companies moving in and gobbling up space,” Globina said.

One-fifth of over Ukraine’s IT specialists currently work in Lviv, about 20,000 people. IT generates $300 million in revenue, or almost 2.7% Lviv’s GDP.

In coming weeks, construction starts on one office center which is planned exclusively for IT companies, providing offices to 500 workers.


For comments and news tips, please email UBJ Western Ukraine Correspondent Oleksandra Kharchenko at sasha.kharchenko@theubj.com

Photos: In 2014, ‘Legenda Class’ a new office-shopping center opened here. Among the tenants is VimpelCom, the Amsterdam-based mobile phone company. It is in the process of hiring 900 workers for a regional service center. (Credit: Oleksandra Kharchenko)

Posted Jan. 18, 2017

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