Protection-tech growth pushes up Tel Aviv workplace rents
The warfare and protection wants in Israel and the West are affecting the workplace actual property market in Israel. Protection-tech firms have rescued the Tel Aviv workplace market from the disaster it has undergone lately, based on a survey of the primary half of 2026, performed by workplace administration and analysis firm Newmark Natam..
In keeping with the survey, the market’s major progress engine has shifted. Whereas conventional tech firms are decreasing area, defense-tech and cybersecurity firms are driving demand. Nonetheless, demand is of a really particular nature, and alongside the growth in new and renewed areas of Tel Aviv, that are near public transport traces, there’s a hanging decline hitting the workplace market in comparatively outdated areas of town, in surrounding cities and within the periphery.
A take a look at rents and occupancy charges in high-end workplace towers (Class A) reveals a blended image. Whereas towers Within the Metropolis space (Rothschild and Ahad Ha’am) and the courts space (Weizmann Avenue, Museum Tower, and many others.) rents are sustaining the degrees of current years, however with a sluggish downward development. Within the redeveloped areas, and particularly on the Menachem Start Avenue space, which incorporates Sarona, the Azrieli space, Yigal Alon and the brand new towers being constructed there – there’s a noticeable enhance in demand and rents.
Rises on Menachem Start Avenue
On Menachem Start Avenue, rents rose 3% between the second half of 2025 and the primary half of 2026 to NIS 151 per sq. meter, and in Yigal Alon by 1.5% to NIS 139 per sq. meter. One other notable Tel Aviv enterprise space is new towers in Hassan Arafa and Yitzhak Sade Avenue, the place rents fell about 3%, however it’s nonetheless the second highest in rents at NIS 144 per sq. meter.
Newmark Natam VP actual property companies Or Ben Zvi Klein says, “We see variations between the areas that embrace new towers, primarily the Menachem Start Avenue space, that are additionally near public transport and really accessible, in contrast with areas that haven’t undergone renewal, such because the Weizmann space and town middle, that are thought-about comparatively much less accessible, and subsequently are much less wanted.”
He sees the decline within the Hassan Arafa space as a pure correction after the height ranges recorded there within the earlier quarter. The transfer of a number of firms to the Menachem Start space, together with the entry of further rental area onto the market, has elevated provide workplace area within the space, and likewise contributed to the correction in rents. However it’s nonetheless one of the vital costly locations within the metropolis.
The excessive rents are the results of excessive demand, which was additionally mirrored in occupancy charges. General, occupancy charges in Tel Aviv elevated by about 3% from 96% to 99%, which signifies the extent of demand that has poured onto this market. However simply as with costs, demand flowed selectively: within the Start, Hassan Arapa and Yigal Allon areas, they reached a really excessive stage of 99% of all area within the first half of the 12 months, whereas in much less sought-after areas of town, occupancy reaches ranges of 93%-95%, and it comes primarily from long-time tenants.
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“Excessive provide of area”
Nonetheless, on the whole, the assessment writes, “Property homeowners are nonetheless coping with a excessive provide of latest area that has come onto the market, which leaves the facility primarily within the palms of tenants and creates erosion in rents in secondary properties exterior the primary circle (exterior Tel Aviv).”
In terms of the primary circle, surrounding Tel Aviv, the place a blended development was recorded, which primarily contains decreases. In Rehovot and Ness Ziona, the most important lower of 9% was recorded to a median value stage of NIS 73.80 per sq. meter. In Rosh HaAyin rents fell 7% to NIS 52.8 per sq. meter, in Bnei Brak by 2% to NIS 67.9 per sq. meter and in Herzliya Pituah by 4% to NIS 96.8 per sq. meter.
A lower of three%-5% was seen in peripheral areas between the second half of 2025 and the primary half of 2026.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on September 3, 2026.
© Copyright of Globes Writer Itonut (1983) Ltd., 2026.
