20 Sep The Commercial Rental Market in Herzliya Pituach – General View
The Commercial Rental Market in Herzliya Pituach – General View
Herzliya is the capital of the Sharon region and has a population of more than 90,000, the city’s industrial zone is an icon among the high-tech industry in Israel. The city is bordered to the south by Ramat Hasharon and to the north by Ra’anana. Herzliya is considered one of the best cities in Israel due to the high socioeconomic status of its population and because of its attractive and accessible location on the coastal plain, when enjoying the best of parks and green areas, a vibrant industrial area, commercial and entertainment areas, a marina and developed beaches, luxury neighborhoods and proximity to Tel Aviv. Herzliya’s industrial zone is located in the western part of the city, next to Highway 2 and the Sira Interchange and bordered by the residential neighborhood of Herzliya Pituach in the west. This is in addition to the railway terminal, which is located east to Highway 2, close to the Sira Interchange. The built area in Herzliya industrial zone for offices amount to 620,000 square meters, concentrated in a relatively small and defined area. The industrial zone can be divided into two parts, North and South, with Abba Eban Boulevard crossing it in its center and constituting a major traffic artery, including for the western residential neighborhoods. In the distant past, the area was used for traditional industry, workshops, and garages. With the development of the city and the high-tech industry, over the past two decades, the region has changed its character and has become one of the most desired employment areas in Israel among the hi-tech industry and in general.
In terms of accessibility, the area is bordered by Highway 2 with entrances to the south and north through the Sira interchange and through a secondary interchange located in the northern area. In addition, the northern part of the industrial zone is connected to the eastern neighborhoods of the city by a pedestrian bridge that passes over Highway 2 and leads directly to the employment area. To the east, a 10-minute walk will lead you to the Herzliya train station directly. In addition, for the benefit of the workers of the Herzliya Pituach industrial zone, the Herzliya municipality operates a system of shuttles at rush hour from the railway terminal. This is in addition to the extensive public transport system that passes through the area.
The Commercial Market for Rent in Herzliya Pituach – as of February 2018
The industrial zone of Herzliya Pituach is one of the most developed in Israel. Alongside the large supply of offices, the area offers a wide variety of restaurants, entertainment areas, and the full scope of amenities for employees and casual visitors. Another advantage is the relatively available supply of public and private parking solutions at a reasonable cost (especially on the southern side of Herzliya Pituach). It should be noted that high-tech companies enjoy the availability of high-quality workers for recruitment both from the Sharon region and from the Tel Aviv area. The mix of tenants is varied and includes many high-tech companies / international biotech companies, start-ups and financial institutions such as international banks and investment funds, retail companies, free professionals and service providers. For example: Microsoft, EMC, Apple, Broadcom, Playtika, Wework, Mercedes, DSP, 3M, SolarEdge, Pfizer, UBS, Nike, Dell, Miterley Group, Fundtech, verint etc. In light of the high demand, the office occupancy rate in Herzliya Pituach stands at 97%, as we have seen a steady rise in prices over the last two-three years. In this respect, the rental office market in Herzliya Pituah thrived phenomenally in 2015 and 2016 and the prices in the area were closing the gap from Tel Aviv area. This phenomenon can be explained in Herzliya by the relatively low supply of new projects in 2015-6, alongside the growing demand for the area, among high-tech companies. Toward 2017 and the completion of major projects in Tel Aviv such as Sarona Tower, Alon Towers, Ha’arbaa Towers, Midtown and more, some demand and interest shifted of the from Hertzliya to Tel Aviv, stabilizing the price increases of 2015-6 in Herzliya.
It should be noted that in recent years the number of permits granted for new construction has been limited until the completion of another new interchange whose purpose is to reduce congestion at the entrance and exit of Herzliya Pituach. Nevertheless, there are a number of new projects for lease of offices in Herzliya which are expected to meet the market during 2017-2018. Today, rental prices for offices in Herzliya for (Class A) buildings at Core & Shell level are at NIS 80 per square meter, while offices for rent as “As Is” will move according to the type of building and the interior level at a cost between NIS 90-110, this is in addition to the prices of underground parking 550 – 650 NIS. As the high-tech industry continues to thrive, we believe that this area will maintain a high level of rental prices and will continue to lead the employment and recreation area in Israel.