Office tower parking prices rise in Tel Aviv as rents fall

Office towers at entrance to Tel Aviv  credit: Shutterstock
Office towers at entrance to Tel Aviv credit: Shutterstock

Parking prices have been rising even though office rents have been falling and the Tel Aviv light rail was due to start operations.

Office tower parking prices in Tel Aviv continued to rise in the first half of 2023, even though rents for those offices fell, Newmark Natam Real Estate Services reports, and even though the Tel Aviv light rail Red Line was due to start in 2023.

The most glaring example of this was a 30% rise in parking prices in Tel Aviv's Ramat Hahayal district over the past three years, although this is far from the Red Line.

The average rent for a parking space in a Grade A office tower in Tel Aviv in the first half of this year reached NIS 1,118 per month, up 3% compared with the first half of last year and 5% up from the first half of 2020. While office rental prices have decreased 11% compared with 2022, and increased by about 20% compared with 2020 (the year of the Covid pandemic, which was a low year for office rents).

In the first half of 2023, office tenants in Tel Aviv knew that the light rail Red Line was due to start operating in the second half of the year, so in many places in the city the parking prices should in theory have decreased. However, the reality is a little more complex.

"The Red Line is only relevant to workers who come from Petah Tikva or from Bat Yam. It is not relevant for those who come from Herzliya, for example. For the light rail to have a greater effect, we must wait for the Green Line," says Newmark Natam VP real estate services Or Ben Zvi Klein.

Ramat Hahayal is a district that is cut off from the city in general and the light rail in particular. The severe lack of parking encourages the office tower owners to raise parking prices there at rates that exceed anywhere else in the city.

But why do the office tower owners prefer to rent the parking spaces under the towers to companies, and not allow the general public to park there, for NIS 30 an hour or more?

Real Estate Appraiser's Bureau Nechama Bugin said, "The contribution of parking to the value of the office is much higher than its hourly or daily cost. If an office markets without parking, its price drops accordingly."

Published by Globes, Israel business news - en.globes.co.il - on September 13, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Office towers at entrance to Tel Aviv  credit: Shutterstock
Office towers at entrance to Tel Aviv credit: Shutterstock
Forbes Rich List credit: Shutterstock Maslowski Marcin Wiz founders ranked in Forbes 2025 Rich List

There are a few dozen Israelis listed in the 2025 Forbes Real-Time Billionaires List including Wiz founders Assaf Rappaport, Yinon Costica, Roy Reznik and Ami Luttwak.

SatixFy CEO Nir Barkan credit: Ariel Barkan Canada's MDA Space to buy Israeli satcom co SatixFy

MDA Space will pay $269 million for the Israeli company, including taking on a $76 million debt and a 75% premium on SatixFy's closing price on Nasdaq yesterday.

Raising dollars credit: Shutterstock Israeli startups raised over $1b in March

Israeli privately-held tech companies have raised $2.1 billion in the first three months of 2025, according to IVC-LeumiTech, up 24% from the corresponding quarter of 2024.

Terminal 1 credit: Personal image Terminal 1 reopening revives Israel low-cost fare options

With the opening of the terminal for international flights, the Irish low-cost airline Ryanair has returned to Israel and with it, double-digit US dollar round-trip fares.

Arkady Volozh  credit: Shlomi Yosef Analysts see Israel-linked Nebius challenging CoreWeave

Nebius, founded by Yandex founder Arkady Volozh, operates in CoreWeave's AI server market, but is growing "more rationally", and has far less debt.

Bezalel Smotrich and Amir Yaron credit: Knesset Spokesperson and Tali Bogdanovsky Retail chains, credit card cos could soon act as banks

Israel's financial regulators have proposed that supermarket chains, credit card companies and investment houses will be able to accept deposits and offer credit.

Elbit Systems rocket launcher  credit: Elbit Systems Elbit Systems wins $130m European rocket order

The order is for the supply of rockets for Elbit's Precise and Universal Launching System (PULS), which has an effective range of up to 300 kilometers.

Nvidia VP Ali Kani credit: Nvidia Nvidia intensifies efforts to compete with Mobileye

"Globes" talks to Nvidia VP and automotive team head Ali Kani about the chipmaker's autonomous vehicle activities and assesses the threat to Mobileye.

Fitch ratings agency credit: Shutterstock Fitch reaffirms Israel's A rating with negative outlook

The ratings agency said, "The negative outlook reflects rising public debt, domestic political and governance challenges and uncertain prospects for the conflict in Gaza."

Tamar rig credit: PR Sovereign Wealth Fund earned handsome returns in 2024

Israel's Sovereign Wealth Fund, known as the Citizens' Fund, had assets worth about $2 billion at the end of 2024, the Ministry of Finance reports.

Fencing goes up Petah Tikva's Segula neighborhood  credit: NTA Work on Metro to begin in Petah Tikva

The first work on the Tel Aviv Metropolitan underground railways system will begin on the M2 line depot in Petah Tikva.

Startups credit: Shutterstock/NicoElNino IVC-LeumiTech: Tech fund raising jumps 24% in Q1

Israeli privately-held tech companies raised $2.13 billion in the first quarter of 2025, up 24% from the corresponding quarter of 2024, but down 12% from the preceding quarter.

Miri Regev and Yitzhak Rochberger credit: Yediot Ahronot/ Reuven Kapuchinsky and Amit Shabi Ramat Hasharon wants railway station for the Mossad

Ramat Hasharon is pushing for a station in Glilot neat the Mossad headquarters, even though a new station is also planned for Glilot South, 1.6 kilometers away.

Prime Minister Benjamin Netanyahu credit: Reuven Kastro Police call Netanyahu for testimony as aides arrested

Jonatan Urich and Eli Feldstein are being held over alleged payments received from Qatar while working in the prime minister's bureau.

Highcon chairperson Shlomo Nimrodi  credit: PR Packaging tech co Highcon winding down

The company, which numbers Benny Landa and JVP among its investors, is laying off most of its workforce, having lost 99.9% of its value since its flotation.

MK Almog Cohen  credit: Danny Shem-Tov, Knesset Spokesperson's Office Netanyahu halts Nevatim airport bill

Legislation mandating construction of an airport at Nevatim, near Beersheva, is ready for final Knesset approval, but the prime minister blocked it after a security cabinet meeting.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018