Natam’s Report – First Half 2019

From current Natam Report – First half of 2019 | No.43:

General Trends

• There is a demonstrated increase in average rental prices and occupancy rates in Class A office buildings in the Tel Aviv area – and this trend is expected to also continue during the second half of 2019.
• The high occupancy rates in the new building in expected to result in an increase in demand for offices and in an increase in rental prices in this market’ for Class B office buildings in the Tel Aviv area.
• The upward trend of prices of industrial and logistics lots in the areas of high demand also continued during this six month period. We expect this trend to also continue during the second half og 2019, primarily due to quick growth of E-commerce and distribution companies, and as a result of the recent technological changes and improvments in the field of logistics.

Real Estate Purchase Transactions – A Review of First Half of 2019

The first half of 2019 was characterizaed by continued significant demand for invetments in income bearing real estate, particularly in the fields of logistics and offices. On the other hand, the supply of income bearing real estate was relatively limited, thus contributing to the continued upward trend of asset prices.
The continued increase in prices, and the corresponding decline in returns from income bearing assets, result in a decline in the in the financial spread for investors financig their investment through loans. Additionally, the recent increase in the risk spread on loas and debentures, which is a result of the market fluanctuations, narrows the profit spread for investors in income bearing real estate.

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