Israel office market demand increased as talent search intensifies
The demand for office spaces near Savidor and Hashalom train stations in Tel Aviv, Israel has risen exponentially while supply is quickly decreasing.
According to a post by Guy Amosi, CEO and managing partner of real estate advisory firm Avison Young Israel, quality office space has become “almost as important as [a] company’s patents.”
Amosi explained that this is due to companies moving where the talent is, adding that the key location could lead to a company’s success.
The real estate expert said that rent rates today are higher for Class A office space, reaching NIS 170 ($53.25) per sq. m. However, vacancy rates remain low, only recording close to one per cent.
Research by commercial real estate consulting firm Cushman & Wakefield|Inter-Israel reflects similar trends. The company’s report for H1 2021 central Tel Aviv rental rates higher than their pre-pandemic levels after a 12% decrease in H2 2020
Meanwhile, the pipeline for prime Tel Aviv office space remains restricted. Amosi disclosed that approximately 35,000 square meters (sq.m.) are expected to be completed in 2022 and all of it is now pre-leased to tenants.
In 2023, Landmark Tower (100,000 sq. m.) and One Tower (50,000 sq. m.) will be ready and several large pre-leases have already been secured. Azrieli Spiral Tower (67,000 sq. m. offices) is scheduled for completion in 2026.
