The number of international companies and their representative offices represented in Ukraine, which are the main consumers of professional office real estate, continues to decrease. At the same time, a significant decrease in demand was demonstrated by companies that are called the “sacred cow” of the Ukrainian office segment and belong to the IT sector. Many of them have already planned to reduce or absorb less office space in the near future. Therefore, according to UTG analysts’ forecasts, before the end of hostilities in Ukraine, a further reduction in business activity will be observed in the office segment of commercial real estate against the background of low operating indicators of most tenant companies and significant savings of resources and rationalization of expenses.

Against this background, companies will move to more affordable office centers or optimize tenants’ expenses in the direction of reducing occupied space. In addition, some of the largest Ukrainian corporations will begin to transfer their employees from rented premises to their own administrative real estate, closing unclaimed representative office premises.

In particular, the following trends have emerged among tenants from the IT sector to date:

1. 41.28% of the personnel were evacuated either abroad or moved to the west of Ukraine. Specialists most often left such cities as Kyiv (reduction from 45% to 29%), Kharkiv (from 13% to 2%), Odesa (from 5% to 3%). At the same time, they moved to Lviv region (increase from 13% to 18%), or Ivano-Frankivsk and Zakarpattia regions.

2. Outside of Ukraine, the most popular countries for staff relocation were: Poland, employees of 22 companies moved there, Germany accepted employees of 10 companies, another 7 moved to Portugal and 6 to the Czech Republic, Spain and Turkey were also chosen for relocation.

3. At the same time, a number of Ukrainian companies completely stopped serving Russian clients or closed their offices in the aggressor country, which leads to a reduction in their income.

4.  Long-term lease contracts not concluded at the start of hostilities are put on hold for an indefinite period.

Considering all the trends, according to the experts of the UTG company, unfortunately, it is most likely that the lion’s share of IT employees will not return in the near future. At the same time, in addition to IT companies, the lion’s share of international financial institutions that left or significantly reduced their administrative staff in Ukraine after the World Economic Crisis in 2008 are among those who have not returned. The armed aggression of the Russian Federation in 2014-2015 also led to a mass exodus of office space tenants. And according to the results of 2022, the final withdrawal of corporations associated with the aggressor country from Ukraine is expected, which will lead to an even greater reduction of their international representation, in particular in Ukrainian office centers.

On the other hand, the international public’s loyalty to Ukraine will contribute to the emergence of new European organizations, enterprises, brands and will probably lead to a new boom in office real estate in the country’s major cities after the end of hostilities in the country.