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2019 was the year in which the lowest average office rental rates in the last ten years were seen in Istanbul. Despite the falling prices, the office vacancy rate in Class A buildings in Beşiktaş, Levent and Maslak reached 32.7%, reaching the highest level of the last decade.

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ISTANBUL (TR) - The 2019 fourth-quarter results of the 2019 “Istanbul Office Market Overview” report, which has been regularly prepared by Propin Real Estate Investment Consultancy for 12 years, were announced. The report includes many details regarding changes in office stock, vacancy rates, average rental rates, realized transactions and volumes throughout Istanbul.

Office prices are at the lowest level in the last 10 years

According to the report, which includes the general evaluation of 2019; The square meter prices of Class A offices in the İş Central Business Area covering the Beşiktaş, Levent, Maslak line continued to decline by decreasing to $ 19.1. It is noteworthy that office rents decreased by 40% in the last 5 years with the decline in 2019. The vacancy rate of Class A offices in the Central Business Area covering the Beşiktaş, Levent and Maslak line climbed to the record level of the last 10 years with 32.7%.

Corporate purchases have declined

In Istanbul, in 2019, a total of 263 thousand square meters of office space was made for leasing and corporate purchasing. Despite the falling prices, the volume of transactions realized in 2019 increased by only 2% compared to the previous year. The volume of transactions carried out in Istanbul; It was 47% European Side and 53% Asian Side. The volume of corporate office purchases decreased significantly in 2019 compared to previous years. The ratio of corporate purchases to total volume, which was 11% in 2018, was calculated as 3% in 2019.

Ready-office trend continues

Propin Co-Founder Aydan Bozkurt stated that increasing interest in ready-made, virtual and shared offices that offer alternative solutions to changing user needs and said, “The number of service providers offering flexible leasing (ready / virtual / shared office) opportunities as an alternative solution to the needs of emerging technology and changing users is rapidly increasing. started. We have seen that office providers, mostly working as chains, made leases in different office areas of Istanbul with a remarkable increase compared to previous years. In the current market conditions, the flexible leasing structure of these office spaces was preferred by many companies compared to traditional leasing.”

Office stock has increased 3 times since 2008

In the report prepared by Propin, it was seen that the Class A office stock in Istanbul increased by 400 thousand square meters in 2019 and reached 6.3 million square meters. Class A office stock, which grew by 8% compared to the previous year, has tripled since 2008. Propin Co-Founder Ebru Ersöz, who stated that the office stock has experienced an increase below the expectations, said “We expected the total stock size to reach 6.8 million square meters at the end of 2019, and we completed the year 500 thousand square meters behind the forecasts. Developers' interest in office investments decreased, as the supply-demand balance deteriorated and the rents decreased. For this reason, while some of the projects' openings were postponed, some projects were shelved. We expect the Class A office stock in Istanbul to reach 8 million square meters in 2023 under current conditions.”

Tenants are looking for more qualified offices with more favorable commercial conditions

Stating that the advantageous leasing conditions brought in 2019 helped users who postponed to move to a new office, to look more boldly at the market, Aydan Bozkurt said, “The decline in office rents has already mobilized those who are already in rent. We anticipate that those who want to move to class A offices with lower rental prices will make rental and corporate purchases in the future. We expect that the falling list prices will support the demand and if there is no fluctuation in the current conditions, the rental transactions in the bargaining phase will be completed in the first half of 2020”.