Boston, MA -- (ReleaseWire) -- 06/30/2014 -- Our overall forecast for the Israeli commercial real estate market is stability. However, increasing exports, fixed capital formation, consumer spending and tourist numbers should all boost the growth of the commercial real estate sector in the long term.
Commercial real estate expansion depends on a healthy macroeconomic environment. Although we expect real GDP growth to be sluggish in 2014 and into 2015, over our medium-term forecast period it should pick up, averaging 4% between 2014 and 2018. This will be underpinned by an uptick in exports and fixed capital investment, both good news for real estate sector.
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Meanwhile, good consumer spending growth, a reduction in the government's austerity policies and the increasing numbers of tourists coming to the country will benefit Israel's already-mature retail market.
However, the key downside risk to our forecasts remains the security situation, both within Israel and the Palestinian Territories and the wider Middle East. Any serious upsurge in violence could affect investor appetite. However, democratic Israel's stability in the face of its neighbour's domestic turmoil during the Arab Spring does present a clear contrast for investors willing to do business in the country and accept the political consequences.
Israel's real estate investment trust (REIT) market remains immature, with only three REITs listed in the country. Our view is that as the commercial real estate market develops, so the number of REITs will grow, creating a virtuous cycle of development.
Key BMI Forecasts
- In the office sector, BMI predicts no rise in rental rates in any of the three cities we cover in 2014 and 2015. Rental rates will remain highest in Jerusalem, at between USD24 and USD45/square metre/month.
- In the retail sector we forecast that rents in Tel Aviv will increase by 5% in 2015, although we see stability for the other two cities over our 2014-2015 forecast period.
- In the industrial sector BMI forecast a...
The Israel Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's Israel Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Israel.
- Benchmark BMI's independent real estate industry forecasts for Israel to test other views - a key input for successful budgeting and strategic business planning in the Israeli real estate market.
- Target business opportunities and risks in Israel through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.
Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.
Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.
Industry Forecast Scenario
Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:
Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)
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