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Office Rentals in Kiev (Commercial Real Estate)

Rent Office in Kiev

If you are thinking about opening an office in Kiev we will be glad to guide you through this process. Office space in Kiev is available in abundance but it is important to understand intricacies of the Ukrainian legal system and taxation laws prior to making a commitment to one space or the other. Please contact us today and we will help you find the ideal office space for your company in Kiev. 

 

Average Office Prices in Kiev (updated October 2016)

 

Office size

70-100m2

150-200m2

250-300m2

Staff size

5-10 persons

10-15 persons

15-25 persons

 

 

 

Class B centrally locate office

 (no thrills, decent, clean, non furnished)

Monthly Rent in USD$

$1500

$2500

$4000

Monthly Utilities (including common areas)

$200

$350

$500

Weekly Cleaning / Supplies

$150

$250

$400

Monthly total:

$1850

$3100

$4900

 

 

 

 

 

Class A centrally locate office

(excellent entrance, top notch common areas, high end renovation, non furnished)

Monthly Rent in USD$

$2300

$4000

$6000

Monthly Utilities (including common areas)

$500

$1000

$1500

Twice a week  Cleaning / Supplies

$200

$350

$500

Monthly total:

$3000

$5350

$8000

 

 

 

 

Lease terms

The typical lease of an office space in Kiev is structured for the duration of 1 to 3 years or more. The rent amount is tied to a dollar denomination and is adjusted annually for inflation. The break clauses are typically embedded in the contract with the minimum two month early termination notice by either side being mandatory, as well as a one month penalty for early termination.  

Commercial real estate zoning vs. Residential real estate zoning

All real estate in Ukraine is zoned for either commercial use or residential use. Residential zoning, however, does not prevent one from leasing it and using it for an office. There are tax and legal implications however which arise from the zoning laws. They are listed below:

Residential real estate zoning (used for office space):

  • Is not tax-deductible (meaning you can’t expense the rent out but if you do not derive any profit from your Ukrainian operations that’s not a major obstacle – for example IT development centers)
  • Is not acceptable for legal entity which is required to pay VAT
  • The cost of residential real estate per m2 is usually about 20-30% lower than commercial real estate equivalent.
  • The cost of utilities is significantly lower vs. commercial real estate zoning.

Commercial real estate zoning (used for office space):

  • Is tax deductible and can be used for legal entity (which requires a VAT certification) registration
  • The cost is usually higher and pending on the owner of the space your company may be required to pay VAT on top of cost per m2.
  • The cost of utilities is not subsidized thus are significantly higher than residential rates

Office centers vs. Stand-Alone Offices

Office centers in Kiev have sprung up all over the downtown area and its surroundings. There are also a variety of Soviet era buildings which have been privatized and converted to a modern business centers with repulsively ugly facades.  Alongside the office centers there is a significant availability of variety of office spaces located on the first two/three floors of residential buildings. The most significant difference between the two is outlined below:

Office centers (all of which are zoned for commercial real estate use):

  • Are typically more expensive and the overall cost consists of the following elements
    • Basic cost per m2
    • Maintenance fees per m2 (security, fire alarm, maintenance, common areas cleaning)
    • VAT payment per m2
    • Utilities fees based on actual usage billed at commercial zoning rates.
    • Attached parking fee per space leased
    • Have maintenance companies in charge of the building upkeep and maintenance, thus there is usually on call staff available to resolve any issues you might encounter
    • Provide for a modern layout with a mix of open space / cabinet system in place

Stand-alone offices:

  • Are typically less expensive and are priced as follows:
    • Basic cost per m2
    • City maintenance fees (insignificant in most cases)
    • Utilities fees based on actual usage and billed at commercial or residential zoning rates
    • Free onsite parking
    • The owner is in charge of upkeep and maintenance
    • The interior is typically designed as an office with cabinet system. Open space layout is very rare.

Open-space layout vs. cabinet system

Due to historical and cultural reasons, most office space in Kiev is designed rather poorly offering a cabinet system layout which is outdated and results not only in wasted space but also in poor teamwork. When you are considering and weighing your options in regards to the office selection, please bear in mind that most landlords are open to negotiations and are inclined to redesign the layout in favor of a stable long-term tenant. If you are looking at a brand new office center the owners will usually be willing to design the leased spaces based on client specifications. If you are considering an office with a completed finish you can always negotiate on the layout and have the owner correct some deficiencies which do not suite your needs.