Reduction of rental rates and reappearance of manual control

The UTG company has summarized the results of the first half of 2022 on the commercial real estate market of Ukraine. According to the analysis, in June, in comparison with February of the current year, there is a sharp decrease in rental rates and a reduction in the maximum contributions that tenants are willing to pay even in the quieter western regions of our country, where demand is currently maintained. This was announced by the company’s experts during a zoom conference which held at the end of June together with Commercial Property.

So, according to calculations now the payment for renting 1 m2 of a kiosk or a small-format store is about $70-250, in contrast to $110-420 in February. For restaurants and cafes, rates decreased from $ 6-35 to $ 1-15, for children’s entertainment centers from $ 10-1 to $ 6-1, the fee for cinemas decreased even more: from $ 2-12 to $ 4-1. Also, according to the observations of experts, the commercial real estate market for almost all commodity groups it became possible to rent premises considering only percentages of turnover with a minimum fixed payment.

Besides the rent decrease according to the UTG company estimates, during these difficult times management companies are returning to manual management and an individual approach to each tenant. First of all, this is due to the fact that even within the same city some stores trade well and demonstrate good indicators of financial sustainability, while other stores of the same chain cannot generate sufficient traffic and demonstrate low indicators of their work. The second important factor in changing the policy of management companies is the fact that part of the staff of large trade facilities in our country were mainly women, many of whom left abroad because of safety reasons. Therefore, we can now talk about the outflow of intellectual and the most qualified personnel who knew well the internal structure of the shopping center. Accordingly, there is a certain shortage of personnel in the market who understands well the structure of the trade margin for individual stores and can quickly and effectively negotiate with chains.