English
A.T.
Despite the crisis affecting all aspects of the real estate market, the office rental segment continues to function well. Transactions are still getting finalized, even though demand has decreased by 25-30% from last year, according to the real estate agency Esop. Many customers have become aware of the opportunities that emerge during a crisis and are actively pursuing them.
Generally speaking, rents have decreased by 15-25% on all segments of the market compared to the corresponding period of 2008, amid excessive supply and a smaller customer base. According to a press release to BURSA, the customers who are not necessarily pressured to relocate are waiting for further price reductions in order to seize the best offer.
While the waiting game makes sense for the tenants, it is also the worst decision for the owners, according to Esop. As the entire economy is on a downward trend that will continue throughout 2010, it is hard to believe that the owners are going to find better opportunities in the near future. In the meantime, an empty building produces nothing and puts more pressure on the owner.
While conditions imposed on the tenants were rather rigid, at least for A Class office space, until end-2008 (3 months in advance, 3 months deposits and a firm contract for 3-5 years), many owners are now evidently flexible to make serious compromises.
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