Gush Dan office occupancy rates continue climb

Despite the increase in skyscrapers in Gush Dan, office occupancy is still rising, with Tel Aviv at 94%, Ramat Gan 93%, and Herzliya 92%, according to a study by CBRE Israel.

“The office leasing market is enjoying economic growth, in particular in the field of hi-tech and technology,” said Jacky Mukmel, CBRE Israel chairman, at the 2019 Nadlan City Conference in Eilat, where 3,600 participants attended scores of panels, business meetings and dialogues.

Mukmel noted that in the first three quarters of 2019, there was a 6% increase in rents for offices in Tel Aviv, with rents peaking at NIS 102 per sq. m.

Herzliya saw rent as high as NIS 86 per sq. m., Ramat Gan NIS 82 NIS and in fourth place in 2019 , was Jerusalem, at NIS 67 per sq.m. per month.

CBRE’s study found that the average return for offices in this quarter was down to 6.75% compared to the average return in 2018, which was 7.2%.

Mukmel said that CBRE Israel found that in commercial real estate in the third quarter of 2019 there was a decline in retail leases, with more commercial centers expanding their entertainment and restaurant complexes, children’s play areas and cinemas.

As well, new brands from abroad continued to enter the local market, with Desigual, Foot Locker, Under Armor, Decathlon, Urban Outfitters, Daiso, Miniso and Anthropologie being some of the latest.

CBRE Israel expects this trend to continue in the year to come.