How more office space can lead to greater employment

CBRE ISRAEL chairman Jacky Mukmel.  (photo credit: ALONI MOR)
CBRE ISRAEL chairman Jacky Mukmel.
(photo credit: ALONI MOR)
CBRE Israel chairman Jacky Mukmel was interviewed Wednesday by Maariv economic correspondent Yehuda Sharoni, at the Maariv 2019 Leadership Conference.
CBRE Israel is a subsidiary of CBRE, the world’s leading commercial real estate company. Mukmel is regarded as Israel’s leading expert in the commercial real estate field. He advises leading companies in Israel and abroad regarding office space and logistics centers.
You had a comment about the interview at the conference with Finance Minister Moshe Kahlon.
This is a leadership conference. If so, why are we going to elections for the third time? Where are the leaders? Apparently, they did not come. I am trying to compare the office sector with that of the housing sector. In the housing sector, apartments are built that need to be occupied. In the office sector as well, we need offices to be filled. We see cranes everywhere.
All of the construction is very beneficial for the local municipalities. The banks are providing whatever is needed, but my biggest worry is how to make sure that the office space will be occupied. How do we bring it to a point that it can lead to greater employment?
Are you worried about a situation in which office buildings will become ghost towers?
Israel’s major export was its human talent, and it left the country. We had the diamond business, and then we brought in Indian workers. After speaking with CEOs of hi-tech companies, I have no doubt that we will start importing Indian workers. These workers will meet the employment needs in hi-tech because we are not preparing our youth for this work.
Are you worried that one of the construction companies will collapse because there won’t be enough demand?
There will not be demand – not because the market is not good enough, but because there is not enough manpower. The manpower quota in the country is limited, and in the past 10 years, there have not been any colleges and universities opened to train the next generation.
What do you expect prices to be in 2020?
Currently, young workers are flocking to Tel Aviv. Companies are giving in to their demands and hiring, and the prices are rising. The peripheries, such as Ramat Gan, Givatayim, Ra’anana and Haifa failed to create complexes with the proper work environment. They want to come with their electric bikes, take showers in the building, and have expensive dining services. Hiring an employee in Petah Tikva or Ra’anana is more expensive than in Tel Aviv. If I were to come to Petah Tikva as an employee, I would come with demands and requirements.
What does a hi-tech building look like today?
Hi-tech employees never leave the building. Everything is there. Big Brother checks what they eat and provides everything. Employees work 12 hours a day even though they are supposed to work eight hours. Big Brother sees all.
What will happen in the next decade? Will we become the next Tokyo?
2030 will be a very significant year. We are entering the rail sector. The transportation minister has provided an excellent infrastructure but forgot where to put the cars that arrive at the destination. There is no parking. We didn’t think of parking lots.
Is there a correlation between office and housing prices?
There will be a revolution in the prices of office and housing sectors. We have to create mixed office and residential complexes. The first 20 floors will be offices, and everything from the 20th floor and up will be residential space.