Nine more shopping centers are expected to open in 2021-2022 in Kyiv with a total rental area of 267,000 square meters, according to the Ukrainian Trade Guild (UTG), a real estate consulting firm.
According to Konstantin Oliynyk, head of strategic consulting at UTG, these nine new shopping centers will be newer, fresher, and more attractive than the existing ones.
They will provide “new conceptual solutions, modern architecture, increased comfort of stay for visitors, motorists, new formats of department stores,” Oliynyk said in an email to the Kyiv Post.
In a statement on the UTG website, Oliynyk wrote that the shopping mall market is saturated in Kyiv, which is spurring the development. But with too many malls, rental prices, already taking a hit during the pandemic, are likely to decrease even further.
As of April 1, there were as many as 268 malls in Ukraine, mostly in Kyiv, with the most popular to be Lavina Mall, Epicenter K and Ocean Plaza, the Kyiv Post previously reported.
Due to closures and a continuous increase in supply, vacancy rates for retail space increased from 6.5% to 11% in Kyiv in 2020 during the pandemic.
As a result, at the end of 2020, asking monthly rents in prime shopping centers of Kyiv ranged between $55-$77 per square meter versus $85-$115 per square meter the year before, according to CBRE Ukraine, a real estate firm.
But shopping malls are very popular in Ukraine, and in turn, very profitable investments for developers.
Despite the rapid growth of e-commerce in Ukraine, 92% of total retail sales in 2020 in Ukraine came from physical stores, according to Euromonitor, a market research firm.
And Sergiy Sergiyenko, managing partner of CBRE Ukraine, says that shopping malls provide more than a shopping function in Ukraine.
According to him, there are no quality public outdoor spaces in Ukraine like there are in the U.S. So anytime the weather gets unpleasant, there is nowhere to go but to a mall for hanging out, window-shopping, or for trying on clothes.
Serhiy Pashkovsky, director for Southern and Eastern Europe, Central Asia 4Service Group (global research holding), says that among the main places visited by Ukrainians, shopping malls are in the lead.
Which explains why shopping malls are so profitable here.
Ocean Plaza, one of the capital’s biggest shopping malls with over 70,000 square meters of the gross leasable area, generates at least $1.75 million a month at a rate of $20-$25 a month per square meter.
Last year investor and retail tycoon Vagif Aliyev earned $61 million from Ocean Mall, Mandarin Plaza, Lavina Mall and Blockbuster Mall combined, according to Forbes Ukraine.
Viktor Polishchuk, the owner of the Gulliver shopping mall located in central Kyiv, made $70 million in the same year.
Despite their popularity among citizens and developers alike, CBRE estimates that if these properties in the pipeline are delivered as announced, the abundant new supply is unlikely to push prices back up to pre-pandemic levels.
The new shopping centers planned to open in 2021-2022:
Hit Mall, 134/1 Victory Avenue (2021);
Respublika Park, Ring Road, 1a (2021);
BalticSky, Baltic Lane, 23 / Sklyarenko (2021);
Olympic Park, st. Bazhana, metro Boryspilska (2021);
Novus, Gun / Machine Building (2021/2022);
Megamarket, street Hlubochytska (2021/2022);
“Lukyanivka”, street Degtyarivska, 7 (2021/2022);
Shopping center on Malishka, street Malyshka / Bratislava (2021/2022);
Metropolis (reconstruction), Malinowski, 12 (2022).
