In 2025, the office rental market in Kyiv continues to demonstrate a trend of decreasing rental rates, which was observed last year. According to the latest data, the commercial real estate market in Kyiv continues to experience a decline in demand for office space rental, which caused a decrease in prices.

Reasons for decreasing rental rates

Among the main factors influencing the decrease in rental rates, analysts highlight an increase in the burden on tenants due to the rise in energy prices and the increase in the cost of utility bills. Thus, in August 2024, the rent of class "A" office space decreased by 10%, reaching the lowest level in the last 10 years. The increase in building maintenance costs, including due to the need for generators and loss of electricity during alarms, significantly affected the economy of tenants.

Rental rates by office class

According to analysts, in February 2025, the average rental rates in Kyiv for class "A" office space were $17.2 per square meter, for class "B" - $11.7, and for class "C" - $9.3 (excluding VAT, OPEX and other costs). These rates reflect the continuation of the trend towards cheaper rents against the background of declining demand for office space.

Vacancy of offices in business centers in Kyiv

The vacancy rate of office space in Kyiv at the beginning of 2025 also shows significant changes. The average vacancy rate in class "A" business centers was 28.6%, for class "B" this figure is 21.5%, and for class "C" - 14.6%. This indicates that a significant part of the office space does not find tenants, which, in turn, reduces demand in the market.

Changes in Tenant Behavior

One of the main trends in the rental market is a change in tenant behavior. There is a reduction in space, companies moving to areas remote from the center and employees moving to remote work. Many Ukrainian corporations were forced to transfer staff from rented premises to their own offices, which allows them to reduce rental costs and provide greater flexibility in work.

Impact of war and pandemic on the rental market

The COVID-19 pandemic and the war in Ukraine significantly changed the office rental market. After a period of rapid development of IT companies and increased demand for office space until 2019, the events of 2020-2021 led to a decrease in demand for rental due to the transfer of staff to remote work. The war also became a catalyst for a massive outflow of international companies from Ukraine and a decrease in activity in the rental market. The difficulties associated with power outages, lack of stability and a decrease in the income of most companies have made office leasing less attractive.

Outlook

Despite the negative trends, the Ukrainian office real estate market has the potential to recover. However, in the coming years, we can expect low demand for office space leasing due to general economic difficulties and changes in the working formats of companies. The continuation of the practice of remote work, as well as the adaptation of companies to new conditions, may contribute to a shift in demand towards smaller and cheaper offices.