“The number of international companies and their representative offices represented in Ukraine may decrease from 624 in February to 137 by the end of 2022” Kostyantyn Oliynyk (head of the UTG Strategic Consulting Department) told to the Interfax-Ukraine agency.

“International companies and their representative offices are the main consumers of professional office real estate. The lion’s share of international financial companies that left Ukraine after the 2008 crisis never returned. The armed aggression of the Russian Federation led to a mass outflow of Russian companies in 2014-2015. According to the results of 2022 the final withdrawal of corporations related to Russia is expected” Oliynyk explained.

At the same time, the expert is confident that the international public’s loyalty to Ukraine will contribute to the emergence of new European organizations, enterprises, and brands, which can become a positive factor in the development of office real estate in the country’s major cities after the end of hostilities in the country.

Separately Oliynyk noted the factor of IT companies. More than 4,000 companies including global giants are represented in Ukraine, and an average number of employees growing by 15-20% annually. According to the expert, more than 50% of office premises are occupied by these companies. “The IT segment became the leading driving force of the development of the office market of Ukraine in 2016-2021, provoking an unprecedented increase in activity and a huge demand increase. Almost all mothballed/frozen/postponed projects were revived, outdated shopping centers, hotels, factories were transformed into office towers” Oliynyk said.

However, the start of hostilities caused a significant exodus of computer specialists. According to the expert’s estimates, about 41.28% of the personnel were evacuated abroad or to safer Ukraine regions.

“Specialists most often left Kyiv (reduction from 45% to 29%), Kharkiv (from 13% to 2%), Odesa (from 5% to 3%). The most popular countries for relocation were Poland (employees of 22 companies moved), Germany (10 companies), Portugal (seven companies), the Czech Republic (six companies), Spain and Turkey. In Ukraine the Lviv region became the leader where 18% of domestic specialists are now concentrated compared to 13% before the war. Ivano-Frankivsk and Transcarpathia regions are also popular” Oliynyk said.

The expert assumes that a significant part of employees in this field will not return to the country in the near future. “In addition, a number of Ukrainian companies have completely stopped serving Russian clients, which will lead to a reduction in the amount of income. Therefore, in the near future a reduction in the absorption of office space by the IT industry is expected” Oliynyk said.

The UTG company was established in 2001. It developed more than 1,300 concepts of real estate objects. During the years of work, 4.7 million square meters of commercial space were leased with the participation of the company in Ukraine.

Source: Interfax