Roksolana Pyrtko: Lviv’s office market is oversupplied and seeking balance

After a sharp increase in demand in 2022, Lviv is now facing the opposite problem – an oversupply of office space and a decline in leasing activity. There is more space than needed, while tenants have reduced their activity. IT companies, which previously generated the bulk of demand, have switched to hybrid work formats and started renting smaller offices. At the same time, new business centres built with high expectations remain partially vacant. As a result, the vacancy rate exceeds 30%, putting pressure on rental rates and forcing landlords to offer additional incentives.

“Demand from IT companies has dropped significantly, and today the vacancy rate in Lviv is even higher than in Kyiv. Large deals have almost disappeared, while the market is sustained by smaller spaces of 100–300 m²,” explains Roksolana Pyrtko, commercial real estate expert and head of the “Roksolana” shopping centre and “Spartak” entertainment complex in Lviv.

Pyrtko adds that her own properties clearly show the contrast: “At Spartak, around 20% of the space remains vacant, and we were forced to halt the second stage of construction until the end of martial law. Meanwhile, at Roksolana the vacancy rate is only 10%. We managed to maintain stability thanks to investments in generators and autonomous systems.”

Despite some positive examples, the market remains unstable. “Occupancy is affected by cuts in the IT sector, mobilization activity, and a decline in foreign contracts. This makes the market vulnerable, even despite internal investments,” shares Roksolana Pyrtko.

The expert forecasts that in 2025 rental rates will remain relatively stable, but the main demand will continue to come from the small and medium-sized office segment. “A full recovery of business activity will only be possible after the war ends and the economy stabilizes,” Roksolana Pyrtko concludes.