The office sector records a record median with price increases almost throughout the country.
In Tel Aviv, office prices increased by an average of 22.4% in Class A, according to a survey by the "Newmark Natam" company, which reviews summary data of the yielding real estate market for the first half of 2022, from which it appears that before the moderation of the other months due to the increase in inflation and interest rates in the markets, the market The main assessment in NTM is that despite the cooling of the market in recent months, we will not see any significant declines in the office sector in the next half-year.
"We see high-tech companies that took large areas at the height of the success of the high-tech industry thanks to expansion, raising capital or employees, and now the company is not meeting its growth forecasts, due to the slowdown of the last few months resulting from the cooling of the market," says
Or Ben Zvi Klein, VP of services The real estate company "Newmark natam", which issued the report.
"But the companies do not return areas to the property owners, but work to sublease the areas they are not currently using, this is based on the assumption that the slowdown in the industry and markets will not last long."
Tel Aviv's office market is on fire!
Price increases of 37% in rents in Yigal Alon
If at the end of 2021 Tel Aviv was characterized by high but stable rental prices that reached up to about 120 NIS per square meter on average in the first half of 2022 - the average price per square meter in office rents in Tel Aviv jumped to 146 NIS per square meter - an increase of 22.4%. The hottest areas in Tel Aviv are the Yigal Alon axis which registers an increase of over 37% with an average of 190 NIS per square meter in the first half of 2022 compared to a price of 138 NIS per square meter in the previous half.
In the Menachem Begin area, prices rose from 144 NIS per square meter to 171 NIS per square meter - a 30% increase in rental prices!
All other areas also recorded increases, among them - central Tel Aviv, the court and also Ramat Hay'il after a period in which the area suffered price decreases.
The Sharon region - high demand in the Ra'anana and Kfar Saba regions thanks to the construction of modern towers
According to the NTM report, in the area of Kfar Saba, Ra'anana South and Hod Hasharon - new projects are currently being built with a total area of thousands of square meters, which have relatively high occupancy rates before receiving the occupancy form. Rental prices maintain stability compared to the previous median and stand at about 81 NIS per square meter on average and the occupancy rates are high, standing at over 97%.
The Herzliya Pituach area also continued to strengthen and presents the highest level of occupancy in Sharon with 99.5%, while the average rental prices rose slightly and stands at NIS 100 per square meter.
Red in the eyes - the Stock Exchange and Bnei Brak are getting stronger thanks to the anticipation of the activation of the red line and the departure of high-tech companies from the center of Tel Aviv to them
The Stock Exchange area, which was affected by the demand and shortage of office space in Tel Aviv in the previous median, continued to show an increase according to the report in the occupancy rate and the requested rents and the average now stands at 99.65% in the occupancy rate and NIS 128.75 per square meter in rents - an increase of 23.5% from the previous median in rents The rents were NIS 104 per square meter on average.
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