A general photo of Tel Aviv, showing a group of towers (Reuters)

The Israeli newspaper "Globes" said that the office towers that used to be thriving in Tel Aviv and Ramat Gan are now bearing the burden of an escalating crisis.

An investigative report conducted by the newspaper reveals that prestigious office space, which was previously in high demand, is now deserted with tens of thousands of empty square meters, and the newspaper indicates that what is more worrying is that about 500,000 additional square meters are currently under construction.

The report pointed out that two years ago, these towers were enjoying full occupancy rates, as companies were barely securing space in them. But now, entire floors in such prominent towers as the Azrieli Center and along Yigal Allon Street are deserted, an indication of a major downturn in the market.

A report by the Geocartography Research Center indicates that about 80,000 square meters of office space are still unoccupied in Tel Aviv and Ramat Gan. While the former CEO of CBRA Israel, Jackie Mockmel, estimates that the real number is at least five times higher, reaching 1.7 million square meters between Netanya and Holon, and about a quarter of Tel Aviv’s towers.

The report indicates a decrease in rental prices by rates of up to 30% in some offices (Al Jazeera)

Al-Aqsa flood exacerbates the crisis

The Globes report states that fundamental changes led to a shift in demand for offices, the most important of which was the consolidation of the principle of remote work, the effects of which were accelerated by the Corona pandemic that spread in 2020 and 2021, and its pace escalated further after the Al-Aqsa Flood operation launched by the Palestinian resistance against the occupation. And the fierce Israeli aggression against the Gaza Strip that followed.

A Globes survey reveals that prestigious office towers in Tel Aviv and Ramat Gan are experiencing an area increase of more than 15%. Many offices appear half-empty due to employees working remotely, and companies bound by lease contracts have not returned the surplus space to property owners, and recent events in light of the war have stopped many people’s efforts to increase investment, waiting for what will turn out.

While the report indicates a decline in rental prices of up to 30% in some offices.

In a previous report, Globes newspaper considered 2023 to be the worst year for the real estate market in Israel since the second Palestinian Intifada in 2000, after adding data from last December.

This Israeli newspaper specializing in economics adds that the data denies the claims of Israeli real estate developers that there is a recovery in the market, despite the fact that the latest report of the chief financial economist indicates some improvement last November, compared to the previous October, which witnessed the start of the aggression on the Gaza Strip. .

Source: Israeli press