An analysis of the market data of Istanbul A Class office market in the second quarter of 2017 shows that the asking rents have decreased in all regions compared to the previous quarter. During the same period, we observe that the vacancy rates declined on the Asian side, while on the European side, all regions except Maslak recorded an upward trend.Due to the recent office rentals that are concentrated in high quality office buildings on the Asian side, we observe a decrease in the vacancy rates of the region. Additionally, the investors’ incline to lower rents in these newly built high quality office buildings in order to decrease the vacancy rates has been the primary reason for the increase of the tenants’ demand in the region. On the European side, we see that the vacancy rates are
only declining in Maslak region. As the rents in Maslak region have recently fallen dramatically, the region has become a center of attraction for companies with lower budgets. An analysis of the asking rates shows that the rental rates both in the European and Asian sides are declining. Looking back to 2015 and 2016, we can see that in both years, leasing transactions in A Class office buildings had reached the level of 100,000 sqm. However, in previous years during favorable market conditions, when the demand was stronger (especially between 2011 and 2014) these figures were realized around 200,000 - 250,000 sqm on annual basis. In addition to the drop in the rental transactions, the continuing trend of increase in the office supply and the recent appreciation of US dollar can be stated as the main reasons that caused the decline in the average rents.
2017 Newsletter Spring/Summer
Date Published: 05/06/2017