Office towers outside Tel Aviv struggle to find tenants

One workplace tower on the outskirts of Tel Aviv within the northern enterprise district of Bnei Brak, displays the present workplace market crunch, which is affecting primarily workplaces outdoors the high-demand areas ofcentral Tel Aviv.

Park tower, which is being constructed by Amot Investments and Allied Actual Property (50%-50%), reverse the Ayalon Mall in Ramat Gan and close to Ramat HaHayal in Tel Aviv, has 100,000 sq. meters of area. The tower has 45 flooring of workplaces above three business flooring.

The business area has already been leased to tenants and the shops have already opened. In line with Amot’s monetary report, the workplace tower will obtain an occupancy kind within the fourth quarter of 2025. Nevertheless, to date, no leases have been formally closed within the tower. Market sources affirm that superior negotiations are underway for big areas within the constructing, with a number of corporations from numerous fields, however no leases have been signed.

Market brokers estimate that the troublesome scenario of the brand new tower stems from a problematic mixture of an unattractive location, along with extra provide of workplace area, a slowdown within the tech sector that’s decreasing demand, and public transport that has not but caught up with the tempo of development of latest initiatives. All of this makes leasing out a constructing like Amot and Allied’s notably difficult.

The cities stuffed with half-empty towers

Whereas workplace occupancy charges stay excessive and secure in core areas reminiscent of Tel Aviv, the Ramat Gan Diamond Change district, and Herzliya Pituah, workplace developments within the second circle of the Tel aviv metropolitan area proceed to wrestle to seek out tenants. Cities like Bnei Brak, Holon, and Rishon LeZion undergo from an oversupply of initiatives, and the result’s that new towers stand half-empty, regardless of large investments in planning, development, and advertising.

One of many essential components in selecting the placement of workplace area is the place it is going to be best to rent workers. In line with Yoram Kaner, who has been concerned in business actual property brokerage for many years, “The reply often factors to the ‘Scooter Sq.’ in central Tel Aviv, or areas instantly adjoining to it, such because the Ramat Gan Diamond Change district. Then again, extra distant areas, even when they provide new area and reasonably priced costs, have issue breaking the barrier of accessibility and employment attractiveness.”

In Bnei Brak, distance meets a big provide of workplace towers. Kaner stresses that along with the surplus provide and the decline in demand, the placement of the constructing makes it troublesome to lease it, “In an space that’s neither meat nor milk – neither Bnei Brak nor Tel Aviv.” He explains that the world suffers from visitors difficulties, and that is truly one of many essential concerns of workplace tenants. “Actually, this can be a widespread downside within the space, with the workplace buildings in Ramat HaHayal, not distant, additionally affected by a decline in demand for the same purpose.”

Amot is conscious of the weak demand within the workplace market. In its second quarter monetary report, the corporate estimated that the pattern will proceed during which “The brand new areas within the core markets will proceed to be nearly absolutely occupied, whereas in secondary markets reminiscent of Petah Tikva, Bnei Brak, and Holon, there’s nonetheless some issue in leasing properties and holding rents as much as the speed of inflation.”

Actual property consulting agency Colliers Israel CEO Sarit Itzhakov additionally notes that “The tower in query is positioned in an space that’s perceived as much less enticing. It’s positioned subsequent to Dan Design, and all the space caters to furnishings, house design, development and ceramics shops, and has not but developed into an workplace space.”

Transport issue: Sooner or later, the Inexperienced Line will run close by

However regardless of the problematic location, Itzhakov is optimistic concerning the future. “This is among the most spectacular buildings within the space, and regardless of the transport difficulties, the constructing is 5 minutes from the railway station.” The sunshine rail’s Inexperienced Line may also run close by in a couple of years.

Yitzhakov provides that there’s already some restoration in demand for workplaces in Tel Aviv’s second ring. In line with knowledge from Colliers’ analysis division, the occupancy fee in Tel Aviv is at present 98%, within the Ramat Gan Diamond Change district 94%, Ramat HaChayal 90%, Bnei Brak 87% and Kiryat Aryeh (Petah Tikva) 83%. In her evaluation, the restoration pattern within the workplace market is predicted to proceed, partly as a result of the truth that an increasing number of employers are selecting to require workers to work from the workplace.

Revealed by Globes, Israel enterprise information – en.globes.co.il – on September 18, 2025.

© Copyright of Globes Writer Itonut (1983) Ltd., 2025.