Natam's Report – Second Half of 2021

Insights from NATAM Report, No. 48 – second half of 2021

General Trends

The Office Market – Demand by High-Tech and Technology Companies

The dominant factor in the office market during 2021 was the increase in demand for offices by technological companies. Despite the transition towards partial work from home, most companies did not significantly reduce the office space they rent. High liquidity along with fierce competition over skilled personnel have led to high demand and rising rental prices – primarily for Class A offices in Tel Aviv and Herzliya Pituach, and in locations adjacent to train stations or the light rail.

The Industrial/Logistics Market – COVID-19 as an Accelerating Factor

As a result of the increase in demand for storage areas, the trend of factories and storage areas relocating from the center of the country to the peripheral areas, and due to the fact that the logistics field requires large areas of land compared to other sectors – the prices of land and of industrial and logistics buildings increased this year by up to dozens of percentages.

Commerce – Stability in Commercial Centers

The prices of commercial assets reflect a return of approximately 6%-6.5% in central urban locations and in neighborhood centers, and a return of approximately 7% in secondary urban locations.

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