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Property Investor Europe: Ukraine CRE is buyers market, scope for yield falls

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Nov. 25, 2012, 4:11 p.m. |

Commercial property investment in Ukraine remains a buyer’s market, and prime yields are still at high levels compared with other European countries.
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Commercial property investment in Ukraine remains a buyer’s market, and prime yields are still at high levels compared with other European countries despite compression this year, says realtor DTZ. Interest in quality income-generating office and retail is picking up.

In a new report it said prime net initial yields in the capital Kyiv should remain stable across all sectors, with potential for compression in 2013 after stabilising this year at 11% for prime, non-trophy offices. This compares with 13% in late 2011, and 13.5% for non-trophy retail. 

Compression in 1H12 mainly reflected increased buyer interest in income-generating office and retail in Kyiv, though prime net initial yields for logistics properties rose slightly in 3Q12 to 15%. Ukraine's biggest deal, in August, was the sale by AIM-listed Ukraine company KDD of Sky Towers offices to US group Cimbrorum, estimated at about $203m.

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