Real estate agencies operating in the area around Ben Gurion Airport believe that demand for office space from high-tech companies has revived in the past six months, boosting rents. The agencies claim that a shortage of office space in Airport City is boosting demand for space in the north Lod industrial zone.
Alon Assets CEO Alon Reuven recently marketed 8,000 sq.m. in Airport City. He says, "I believe that there is a shortage of 10,000 sq.m. in the area, which could be marketed now, had it existed. For example, the 7,500-sq.m. Unitronics Industrial Automation(EuroNM: UNITB; TASE: UNIT) building, which is now being completed, has been fully leased. Xtend Networks and an Israel Airports Authority franchisee are expected to occupy the building in April."
Reuven added, "When the marketing of space in Airport City began, the north Lod Industrial zone lost 35% of its tenants, who moved to the new site. Today, due to the limited supply of office space in Airport City, many companies are leasing space in Lod. The supply of available space has fallen to 15%, only 10,000 sq.m.
"A year ago, there was plenty of space available in Africa-Israel Investments' (TASE: AFIL) Global Park project and in the Israel Geophysical Institute building, amounting to 20,000 sq.m. altogether, and prices were fairly low for the area. Africa-Israel recently raised prices for fully finished space from $8.75 per sq.m. to $9.50 per sq.m., and raised management fees from $1.95 per sq.m. to $2.20 per sq.m. These two projects now have only 2,500 sq.m. of available space."
Published by Globes [online], Israel business news - www.globes.co.il - on March 20, 2005