Tendencies of the 1st quarter of 2008 have confirmed all expectations of the last year - the market of commercial real estate in Lviv is growing and rising in price stably. We were witnesses of presentation of the new business centres, hotels, numerous promising projects and land plots at the first three months of this year. A lot of work is conducted for realisation of the announced in 2007 trade and office centres: concrete mixers are plying in the city and building lasts even in the night somewhere.

Office segment

In the first quarter of this year only one new object has begun its operation - “Optima Plaza” business park (”B+” class, 6 285 sq.m.) at 7b Naukova St. Another object “Trade-office centre” of “Tekhnopark LZTA” CJSC (”B+” class, 3 125 sq.m.) at 72 Turhenyeva St. are also preparing to the official opening in the nearest months. Appearance of these objects has influenced the general picture of the Lviv market of commercial real estate considerably, especially the average index of the rent price for business centres of our city. Both commercial objects have found the majority of their leaseholders very fast.

Regarding the index of average rent price in Lviv business centres, its increase was for 3.9% (from $16.73/sq.m. in January to $17.39/sq.m. in March) in the first quarter of 2008. The most actively it was rising in the segment of “B” class - 7.4% ($21.13/sq.m. in January and $22.73 in March). Now 7 office and trade-office centres are presented in this class in Lviv. Rent price has increased only for 0.63% for a quarter in the segment of “C” class business centres (from $13.13/sq.m. in January to $13.23/sq.m. in March). Regarding the business centre of “A” class, there was no rise in rent price in the first quarter at all.

Up to the end of March, 2008 the situation of the market according to the BC classification was as follows:

“A” class - $33.42/sq.m. Only one business centre is presented.

“B” class - $22.7/sq.m. There are seven business centres, including newly introduced BC.

“C” class - $13.22/sq.m. Eleven business centres are presented.

Among other future projects, where office spaces are planned to be built and work has been already conducted in the first quarter, it should be mentioned the project of “Inter-City” trade-office centre (12 000 sq.m.) at Chornovola St., completion of building of office premises at “NTON” BC at Petrushevycha Sq. and at “Comfort” BC at 43 Sakharova St., and the project of “Dominant Plaza” business centre at Uhorska St.

Nonspecialized office premises

Significant rent price increase was observed also in nonspecialized office premises. This segment is expanding rapidly and shows very dramatic rise in price in the first quarter of 2008. Average rent price in the city has increased for 18% for the first three months of this year. In general the situation in the first quarter in the city was as follows:

• Halytskyy district - rent price has increased for 14% (from $20,50/sq.m. in January to $23,36/sq.m. in March);

• Lychakivskyy district - rent price has increased for 33% (from $14,89/sq.m. in January to $19,86/sq.m. in March);

• Frankivskyy district - rent price has increased for 27% (from $12,09/sq.m. in January to $15,35/sq.m. in March);

• Shevchenkivskyy district - rent price has increased for 6,3% (from $12,85/sq.m. in January to $13,67/sq.m. in March);

• Zaliznychnyy district - rent price has decreased for 8,3% (from $14,58/sq.m. in January to $13,38/sq.m. in March).

Nonspecialized trade premises

In the first quarter of 2008 the situation in the segment of nonspecialized trade premises was as follows:

• Halytskyy district - rent price was $40-200/sq.m.;

• Lychakivskyy district - rent price was $30-50/sq.m.;

• Frankivskyy district - rent price was $25-45/sq.m.;

• Shevchenkivskyy district - rent price was $25-30/sq.m.;

• Zaliznychnyy district - rent price was $25-35/sq.m.;

• Sykhiv district - rent price was $25-40/sq.m.

Hotel segment

The opening of “Eurohotel” hotel took place in the first quarter of 2008 at 6A, Tershakovtsiv St. There are 93 rooms in this hotel - 2 apartments of premium class, four deluxe suites, five semi-deluxe suites, six single rooms, and standard double rooms with single and double beds. Daily rate including breakfast for a single room is 400 UAH, a standard double room - 500 UAH, an improved double room - 650 UAH, a semi-deluxe suite - 850 UAH, a deluxe suite - 1 250 UAH, an apartment - 1650 UAH in this hotel.

In February the public hearings also took place in the Lviv City Council and they were dedicated to the project of a hotel complex for 40 apartments building in Lviv centre - at 7 Fredra St. and 10, Hertsena St. Its building area is 540.45 sq.m. and total area - 3,192.40 sq.m.

Moreover, 7 land plots are given for hotels building by the LCC, and 9 land plots now are in the process of the procedures following in order to be given for. On the mentioned 7 land plots four-star and three-star hotel complexes are planned to be built. In particular, it is the land plots in Lviv at Lypynskoho-Khmelnytskoho St., Lypynskoho-Linkolna St., 12 Stryyska-Zarytskykh St., Sulymy-Spokiyna St., Lypova Aleya-Stusa St., Starytskoho St. and 8 Shchyretska St.

In general, 24 permits for hotels buildings were issued for the last 6 months. At present 36 hotels are opened in the city. New hotels are expected to appear at 7 Fredra St., 65 Horodotska St., 108 Stryyska St., 9 Drukarska St., Chervonoyi Kalyny Av., 93 Lyubinska St., etc.

Investment projects

According to the Lviv City Council there are approximately 80 investment objects at the present moment in Lviv, which are going to be given into long-term lease by the LCC. The total area of these objects is towards 6 thou.sq.m. Generally in Lviv, 2.8 thousand leaseholders rent 320 thousand square metres of communal property.

Volodymyr Samusenko, Andriy Cherkhavyy

Marketing Department

“Tekhnopark LZTA” CJSC

city of Lviv