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TURKEY - PROPIN, which provides office-oriented investment consultancy services in the commercial property sector, has published "Istanbul Office Market" report covering Q4 2022. According to the report, the number of owners applying the exceptions in the Turkish Lira Protection Law and renting offices in dollars increased; those who rent their offices in Turkish Lira (TL) have increased the figures constantly. While the average rent per square meter in Class A office buildings in the Central Business District (CBD) increased to 19.4 dollars, the vacancy rate in Class A office buildings decreased to 23.4%. In 2022, transactions were carried out in 267 thousand square meters of office space, and leasing and corporate purchases were made in approximately 83 thousand square meters of office space.
PROPIN, which provides boutique services in the field of real estate, has an important position in the ecosystem. Concentrating its expertise on the office market, PROPIN regularly informs its followers with its reports and research results. PROPIN publishes “office” focused reports quarterly every year. PROPIN's "Istanbul Office Market's Fourth Quarter 2022 Report" has been published. The report contains a lot of data from office rents to rentable office supply in Istanbul.
PROPIN Co-Founder Aydan Bozkurt, in his evaluation of the report, emphasized that the office ecosystem in Istanbul spent 2022 as a "owner's market". “Despite the economic fluctuations, a large number of lease transactions took place” Bozkurt said. “Qualified office building supplies decreased significantly. There was a remarkable increase in average rents due to the increase in demand and increasing inflation” she added.
Noting that some companies that switched to the hybrid working model have reduced their office space and moved to offices designed according to the new working order, Aydan Bozkurt told: “In addition, companies that grew after the pandemic rented additional spaces in their existing buildings. This volatility in the market has caused the execution time of transactions to be shortened considerably compared to previous years.”
Emphasizing that the owners of the offices, especially for Class A office spaces, have started to declare the list rent in US dollars, Bozkurt said: “The number of those renting offices in dollars has increased. The owners, who announced the list rental figures in Turkish Lira (TL), continuously increased the figures from month to month. The gap between the new rents demanded for the buildings and the rents paid by the existing users has clearly widened.”
Ebru Ersöz, Co-Founder of PROPIN, said that the increase in the average office rent at the end of 2022 attracted attention due to the increasing demand for offices and inflation. Pointing out that the average rent per square meter in Class A office buildings in the Central Business District (CBD) rose to $19.4 by the end of 2022, Ersöz stated: “The global pandemic has changed the working conditions. As a result, a general expectation prevailed in the market that offices would be vacant. Contrary to expectations, demand for Class A offices tended to rise throughout the year.” Ersöz added that the number of users who want to benefit from the "Need-Specific Project Development Consultancy" service offered by PROPIN has increased.
According to the data of PROPIN's Istanbul Office Market for Q4 2022, the vacancy rate for Class A office buildings in the CBD decreased to 23.4%, while this rate decreased to 14.8% in Out of CBD-Asia. Despite the post-pandemic effects, an increase was observed in office rental and corporate purchase demand in 2022. In 2022, the transaction took place in an office area of 267 thousand square meters. In 2022, as a result of the ongoing demand from the CBD, approximately 83 thousand square meters of office space were leased and corporate purchases were made.
The report also included office rental trends in some districts on the Anatolian Side. Accordingly, it has been observed that the current stock in Kartal and Maltepe districts is generally in very high-rise buildings with small floor areas. Despite this, it has been observed that users prefer offices with large floor areas and high efficiency.
According to the Istanbul Office Market report, the last 3 years have been stagnant in terms of office development. Despite the increase in office demand, no trend towards new office development was observed. On the other hand, it was stated that the contraction in office supply led large-scale office users to seek special projects on the land.
According to PROPIN's end-of-2022 calculations, it is predicted that the A-class office stock in the Istanbul Office Market will be approximately 7.6 million square meters by the end of 2025. An important part of this stock will be Istanbul Finance Center (IFC), the first phases of which are planned to be opened in 2023.
According to the report, the Istanbul Office Market, which turned in favor of office owners in 2022, will continue in this way for a while. While a general recession is expected in the election process, users who want to turn uncertainty into opportunity are expected to turn to new transactions.
Contact: Tülay Genç | [email protected] | +31 30 799 6022
