The peak of personnel reductions and optimization is over, so businesses are looking for ways to save by changing office locations. The office real estate market of the capital of Ukraine has almost recovered, to the level of 68% of the areas that were used before the large-scale invasion of Russia. However, there have been significant changes that can be called structural – the expansion is minimal, and the optimization of expenses is a trend, according to the consulting research of the UTG company.

Companies have reached the peak of staff reduction – they are also saving on offices

According to a market analysis by consulting company UTG, most businesses have reached the limit of reducing staff to optimize costs. That is why we focused our search for cost optimization on the search for less respectable but efficient office premises. Also, many companies are reviewing the terms of the lease and have tried to find optimal ways to maintain the office.

“The annual rate of gross absorption reached approximately 91,000 sq.m, which is four times more compared to 2022, but still remains 32% below the pre-war level of 2021,” – the  consulting company reports.

Most of the deals involve moving to new premises

By type of agreement, most of the agreements related to moving – 55% or renewing the terms of existing lease agreements – 17%. Expansion of office space is minimal – only 6% of contracts.