The steps taken in Istanbul for the purpose of increasing the supply of quality office space are achieving results. The capacity is set to increase by 2.3 million square meters to close to 7 million square meters in the next 3 years.
The supply of quality office space, being developed by various companies in different regions of Istanbul, is growing with every passing day. In 3 years time, it is planned that this figure will increase by half of the existing amount. Eva Real Estate Appraisal has published the “2016 2nd Quarter Istanbul Office Market Sector Report”, where it has analyzed the sector by separating buildings into category A and category B according to the age and location of the building and the per unit rental value.
According to the analysis, which deals with the rental, stock and occupancy rates of the offices, there is currently 2.3 million square meters of office space, which has either just been developed or is currently being built. When all of this space has been completed and gone into service, the current 4.5 million square meters of office space stock will rise to approximately 6.9 million square meters in 3 years. Istanbul Finance Center is expected to house an estimated 1 million square meters of this on its own.
CBA is comprised of Levent – Etiler
According to the report, which evaluates the Istanbul office market, the Şişli – Mecidiyeköy axis, which is the region of the European side with the highest occupancy rate, comes to the fore among category A offices. The Levent – Etiler region has reached 30,2 dollars in terms of average unit rents per square meter, which is the highest in that respect. While there are some differences on the European side, the average for category A offices ranges between 16-33 dollars. This rises up to 45 dollars in some special projects and buildings, but there are not enough of these to be able to classify it as a general level. On the other hand, rents at the category B offices in Maslak are at around 16 dollars on average.
The airport and its surronding areas are the weakest points on the European side
The report defines the Airport, Güneşli and Halkalı regions as the Western region, and it is stated that they have the lowest unit rental values. At the same time, this region also has the lowest prices in category B offices. Rents, which are 12 dollars for category A offices, fall as far as 9 dollars for category B.
Ataşehir and Kozyatağı have risen to the top in terms of rental values
The report also dealt with the position of the category A offices on the Anatolian side. While Kavacık had the highest occupancy rate, the highest unit rental values were mostly in the Ataşehir and Kadıköy – Kozyatağı regions. While progressing, the weakest region on the Anatolian side was the Kartal – Maltepe axis. While category B rents in this region fall to as low as 5-6 dollars/m2 per month, category A offices are only slightly above these figures. However, despite this, it is expected that the Anatolian side will develop in the field of offices in the near future, and reach a significant size.
In conclusion, the weighted average m2 unit rental values o category A offices on the Anatolian side is around 22 dollars/month in the Araşehir and Kozyatağı regions, and is lower than the rates on the European side.
Differences of the Anatolian side
The weighted averages of square meter unit rents in category B offices on the Anatolian side, on the other hand, are fixed between 6-16 dollars. The region currently has an excess stock of 700 thousand square meters, and with the coming new offices, it is expected to take on a new identity. The completion of the Istanbul Finance Center and the other projects being developed by the private sector on the E5 axis are significant in this respect.