CBRE Israel: Q3 rents continue to decline amid COVID-19

A study by CBRE Israel on the office and commercial industry in the third quarter of 2020 found that since the beginning of the coronavirus crisis, office rents have fallen by 4% to 11%, and rents in commercial areas have fallen by 5% to 13%.Jacky Mukmel, chairman of CBRE Israel, said: “After more than five years in which rental prices for offices have been on a steady upward trend, in the 3rd quarter of 2020, the downward trend in prices continues as a result of the pandemic. In Tel Aviv, rental prices for offices fell by 6% in the first nine months of 2020, and rental prices for shopping malls and commercial centers fell by 13%.”Bnei Brak and Petah Tikva were most significantly affected by the crisis, due to the large number of projects in the office industry, a high level of competition, and the activity of many purchasing groups in the industry.In the fourth quarter of 2020, the decrease in office rents is expected to continue, due to a decrease in demand, vacant office space and the transfer of many employees to work from home.“The office sector is experiencing a significant decline in activity that characterizes the summer period, but this year there is considerable uncertainty which has added to a slowdown and a sharp drop in prices, especially among users who are looking for subleases for their plots,” Mukmel explained.