Office Rents In Istanbul Have Seen The Bottom Of The Last 10 Years
ISTANBUL OFFICE RENTS HAVE SEEN THE BOTTOM OF THE LAST 10 YEARS
The office market in Istanbul is sounding the alarm. The vacancy rate in central business areas exceeded 30 percent, while Istanbul rentals fell 43 percent, the lowest level in 10 years.
- The fourth quarter of 2020 issue of the “Istanbul Office Market Overview” report, prepared by TurkishClassified.com was published. According to the report, which examined 12 office districts, office rents in Istanbul during the 10-year period covering the period 2011-2020 saw a historic dollar-based dip while the 2021 Istanbul commercial market stands uncertain.
- The average rent for Class A office buildings in areas such as Maslak, Besiktas, Etiler, Levent, Zincirlikuyu, Esentepe and Gayrettepe, defined as central business areas, fell by 43 percent. The monthly rent per square meter, which rose to $32.9 in the said period, fell to $15.8 by the end of 2020. In this decline, the rapid rise of the dollar against the Turkish lira in the last two years was also effective. The decline between the first quarter of 2020 and the last quarter was 14 percent, according to the report.
- Apart from the central business area on the European side, the monthly rent of square meters in Class A office buildings in the region covering Kagithane, Güneşli, Sefaköy, Yenibosna, Ataköy decreased from $ 19.9 to $ 10.4. On the Anatolian side, office buildings outside the central business area such as Kozyatagi, Umraniye, Ataşehir, Kavacık and Maltepe saw rents falling to $ 11.5, the lowest level in the last 10 years.
ISTANBUL VACANCY RATES PAST 30 PER CENT
In the Istanbul office market, the vacancy rate in Class A buildings in the regions known as the central business area was 30.8 percent, and the vacancy rate in Class B buildings was 17.3 percent. In areas outside the CBD, the vacancy rate averaged 22 percent. In 2020, the trading volume in the office market also contracted by 30 percent.
TURKEY MARKET GROWTH REMAINS AT 2 PER CENT
The rapid spread of the COVID-19 virus, which emerged at the end of 2019 and returned to a global pandemic in the first quarter of 2020, has profoundly affected the office market, as have many sectors. Restrictions imposed, elements such as companies that turn to work from home, have led to changes in the demand for offices.
As a result, the acceleration of the slowdown in Turkey office supply, which has already been delayed by project openings, has increased with recent developments. At the end of 2020, it was determined that the existing stock reached the level of 6 million 500 square meters as a result of the increased supply of about 200 thousand square meters in the Istanbul office market. Accordingly, growth in 2020 was 2 percent.