Kyiv’s main avenue, Khreshchatyk Street, is expected to become one of the world’s most expensive streets next year according to figures released last week by the Colliers International real estate consulting company. The annual rent of retail trade spaces on Khreshchatyk is currently up to USD 6,600 per square metre, which already allows Kyiv’s main street to compete with Vienna.
Prices are soaring – just one year ago, a typical monthly rent was USD 450 per square metre. This year prices have increased 40% up to USD 620 per month. Market analysts say that the trend will continue and predict that the rent price will increase by another 30% by the end of the year. Colliers International said that in 2009 the annual monthly rent could reach USD 1,200 per square metre n Khreshchatyk.
Paris, Moscow, New York, Kyiv
According to Colliers International’s estimates, the world’s most expensive street is Fifth Avenue in New York, where annual rents reach more than USD 18,000 per square meter. Avenue des Champs-Elysees in Paris and Tverskaya Street in Moscow follow, with Champs-Elysees currently thought to be just USD 10 per square metre more expensive than Tverskaya.
Central streets of other European cities are left far behind by the market leaders. A few yards from London’s Bond Street, the rent is much cheaper – USD 11,700 annually per square metre in Oxford Street. Central streets in Dublin and Hong Kong are even cheaper – at USD 8,000 to USD 11,000 annually. Retail space on St. Petersburg’s Nevskiy Prospect Avenue running just under USD 8,000 per square metre per year.
Khreshchatyk joins premier league
Kyiv’s Khreshchatyk is now set to join this list of exclusive addresses, with analysts attributing its high price to the lack of high-quality spaces. “Unfortunately, the local market is a market with a deficit of spaces, which is typical for developing markets,” press quoted Colliers International manager Yuriy Nartov as saying.
This shortage has been compounded by the fact that new buildings cannot be built on Khreshchatyk, while demand continues to grow exponentially. Demand for retail space in Khreshchatyk is huge because no single street in Kyiv can come close to matching Khreshchatyk in terms of pedestrian traffic or prestige. Lessors are ready to overpay or even run at a loss in order to establish a boutique shop in the heart of the city centre. “Many use their retail outlets in Khreshchatyk as flagship stores – a kind of image statement aimed at making a good show of their trademark in the very heart of the Ukrainian capital,” says Anton Rudenko of the Realty Market agency.
The only way is up
Analysts predict that retail demand will dominate supply for the next three or four years, with the most dramatic supply deficit in Kyiv’s city centre. “There are just a few streets in Kyiv which can be described as trade corridors, while the highest volume of pedestrian traffic is restricted Khreshchatyk, the Bessarabska Market area and Velyka Vasylkivska Street. “International trade operators and brands which have recently entered the Ukrainian market have fuelled increased competition to open flagship shops on the country’s main street. As a result the owners of these lucrative spots are evidently trying to make hay while the sun shines,” comments Oleksandr Romanyshyn of DEOL Partners. “We forecast further growth of rental rates on Khreshchatyk and nearby streets with the rents getting closer and closer to the highest levels of the main streets in the world’s largest cities.”
