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Rental Analysis of the Office Market in Istanbul |
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Sunday, 17 February 2008 15:00 |
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Maslak, Esentepe, Sisli, Mecidiyekoy, Levent and Ataturk Airport area in the European part and Umraniye, Kozyatagi, Altunizade and Kavacik areas in the Asian part of Istanbul are Istanbul’s major neighborhoods where office  buildings are located. All these neighborhoods are home to properties that has seen substantial increases in rental income over the past 3 years, some increasing over %100 between 2005 and 2007.
The average rent for Class A office buildings on the route passing through Sisli – Esentepe and Zincirlikuyu used to be $11.50 back in 2005. Now, the average rent for the same properties increased to $24.50 per square meter per month within the past three years. Between 2005 and 2007, the average rent income for Class A office space increased approximately 40% in Levent, %59 in Maslak, %43 in Taksim, %44 in Etiler and %84 in the Yesilkoy airport area. Class B office space within the same time period showed an increase of %60 in Levent, %41 in Maslak, %64 in Etiler and %90 in the area surrounding the Yesilkoy Ataturk Airport. The best performing area in the Asian part is Kavacik, with an increase of %78 for Class A buildings and %62 for Class B buildings for the same period. Many developers in Istanbul have focused residential projects over the past years due to stronger demand and higher yields. Following the privatizations, mergers and acquisitions in 2004 and increasing entrance of foreign corporations into the Istanbul market raised immensely the demand for quality office space in Istanbul. However, the supply of office space including the properties in construction was not able to satisfy the demand. The rental rates per sqm are likely to go up until $40.00 - $42.00 before there is a balance between the income potential for residential and Class A office properties. This current imbalance may also result in change of plans for the developers to invest in office buildings instead of residential properties on plots they already secured in these regions. | | 2005 | 2007 | | | Region | Class A Offices | Class A Offices | Change | | Levent | $ 17.50 | $ 24.50 | 40% | | Maslak | $ 11.50 | $ 18.30 | 59% | | Sisli - Zincirlikuyu | $ 11.30 | $ 24.50 | 117% | | Kavacik | $ 9.40 | $ 16.70 | 78% | | Kozyatagi | $ 12.80 | $ 18.20 | 42% | | Altunizade | $ 13.40 | $ 18.70 | 40% | | Taksim - Besiktas | $ 16.40 | $ 23.50 | 43% | | Etiler | $ 16.50 | $ 23.80 | 44% | | Airport Area | $ 7.80 | $ 14.40 | 85% |
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Last Updated ( Sunday, 17 February 2008 15:42 )
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