COVID-19 has significantly slowed down business activity in the office industry, and rental prices fell 2%-10% compared with the first quarter of 2020, a CBRE Israel study found. “After more than five years of rental prices for offices being on the rise and reaching a peak that put Tel Aviv in 15th place in the world in the cost of office rent, in the second quarter there has been a strong decline in prices,” CBRE Israel chairman Jacky Mukmel said in a press release. “The phenomenon stands out among the purchasing groups.” Bnei Brak and Petah Tikva were most significantly affected by the coronavirus 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 second half of 2020, the decline in office rents is expected to continue, following a decline in demand, and a lot of vacant office space as a result of firms moving many employees to work from home, to reduce costs as much as possible, especially office rents,” Mukmel said. In the second quarter, rents for offices in Tel Aviv decreased 6% from NIS 104 per square meter to NIS 97. In Ra'anana, rents declined 7% to NIS 56 per sq. m. In Herzliya, rents dropped 6% to NIS 80 per sq. m. Rents remained stable in Haifa at NIS 65 per sq. m.
