[:he]Halit Yanai-Loizon interviews Yair Levy Published in Globes 10/02/2019, 08:43
Yair Levy, CEO of Yair Levy Strategy in Real Estate, believes that the purchase prices of logistics real estate in the central area, which are currently at 36- 42 shekels per square meter, this year they will reach a record of 50 shekels per square meter “mainPartContent”>
Yair Levy, CEO of Yair Levy Real Estate Strategy / Photo: Public Relations
What do you think will happen with the real estate “What is profitable in 2019?
“The year 2018 ends with changes in the yielding real estate map: in the field of logistics, we saw during the year an increase in demand for logistics centers, for the automatic warehouse in particular, and an increase in logistics activity in the north of the country. In the field of offices, we have experienced a gradual increase in shared office spaces, also in the periphery. For logistics, we will see a decrease in the demand for real estate for industry and commerce”. The small ones will be swallowed up by large entities and the number of players in the industry will decrease significantly. As a result, we will see a sharp increase in the demand for large, modern storage areas, when the storage ratio between the automated warehouse and ‘normal’ storage areas reaches 1:3. The severe lack of manpower for operation will continue to make it difficult Operating normal warehouses, something that will contribute to their disappearance”. Shekel per square meter. At the same time, following the expansion of Route 6 and the move of a young and educated population to the northern periphery, we will see more logistics activity and automated warehouses there. The rent for logistics areas is expected to increase by about 20%, which will cause an increase in the prices of logistics services for importers, as a result of which prices may increase further in all branches of the economy. The dangers in the field of marlogs are in the technology – as soon as the technology allows the use of a greater height at lower costs, less space will be needed. Because in the field of marlogs, utilization and efficiency are the keys to profit. But it requires a considerable investment in equipment”.
And what do you see in the office sector?
“After Finance Minister Kahlon threatened a third apartment tax, the market panicked and many investors moved there. That’s why I think that in the offices that are Class B, the prices will drop because there is a lot of supply and many investors will try to rent. They have a vacant property for themselves, so they rush to find a tenant, even if it involves a lower rent than the prices in the area.”
How will the trend of co-working spaces affect it?
“There is no doubt that this is an interesting field. More and more small companies are expected to move to a model of renting a shared workspace, which will lead to an increase in the supply of small offices for rent and a decrease in rental prices. But shared workspaces are a concept that only supports relatively small office spaces. 500-700 square meters and no more.
Only the big companies and their relative advantage increases, since all the offices that market in purchasing groups cannot compete with them in the size of the areas. As long as high-tech flourishes – they have an advantage”. “The long schedule for receiving an apartment in the housing price program will lead to an increase in the demand for land for entrepreneurial construction. We will see an increase in the prices of residential plots in all parts of the country and an influx of a young population from outside the central region, mainly to the northern periphery. In the south, we will see more land designated for attached land.”
After the sharp declines we saw in December in the capital market, will real estate still be seen as an attractive investment?
“In my estimation, we will see a further increase in demand for yielding properties, especially among investors Institutional and REIT funds. The supply of yields is expected to remain low in all industries, except for the trading sector, and as a result yields will decline. All this on the assumption that the bank interest rate will remain as it is. if it rises, the situation will change. Higher than all the rest”.
Yair Levy, CEO of Yair Levy Real Estate Strategy / Photo: Public Relations
What do you think will happen with the real estate “What is profitable in 2019?
“The year 2018 ends with changes in the yielding real estate map: in the field of logistics, we saw during the year an increase in demand for logistics centers, for the automatic warehouse in particular, and an increase in logistics activity in the north of the country. In the field of offices, we have experienced a gradual increase in shared office spaces, also in the periphery. For logistics, we will see a decrease in the demand for real estate for industry and commerce”. The small ones will be swallowed up by large entities and the number of players in the industry will decrease significantly. As a result, we will see a sharp increase in the demand for large, modern storage areas, when the storage ratio between the automated warehouse and ‘normal’ storage areas reaches 1:3. The severe lack of manpower for operation will continue to make it difficult Operating normal warehouses, something that will contribute to their disappearance”. Shekel per square meter. At the same time, following the expansion of Route 6 and the move of a young and educated population to the northern periphery, we will see more logistics activity and automated warehouses there. The rent for logistics areas is expected to increase by about 20%, which will cause an increase in the prices of logistics services for importers, as a result of which prices may increase further in all branches of the economy. The dangers in the field of marlogs are in the technology – as soon as the technology allows the use of a greater height at lower costs, less space will be needed. Because in the field of marlogs, utilization and efficiency are the keys to profit. But it requires a considerable investment in equipment”.
And what do you see in the office sector?
“After Finance Minister Kahlon threatened a third apartment tax, the market panicked and many investors moved there. That’s why I think that in the offices that are Class B, the prices will drop because there is a lot of supply and many investors will try to rent. They have a vacant property for themselves, so they rush to find a tenant, even if it involves a lower rent than the prices in the area.”
How will the trend of co-working spaces affect it?
“There is no doubt that this is an interesting field. More and more small companies are expected to move to a model of renting a shared workspace, which will lead to an increase in the supply of small offices for rent and a decrease in rental prices. But shared workspaces are a concept that only supports relatively small office spaces. 500-700 square meters and no more.
Only the big companies and their relative advantage increases, since all the offices that market in purchasing groups cannot compete with them in the size of the areas. As long as high-tech flourishes – they have an advantage”. “The long schedule for receiving an apartment in the housing price program will lead to an increase in the demand for land for entrepreneurial construction. We will see an increase in the prices of residential plots in all parts of the country and an influx of a young population from outside the central region, mainly to the northern periphery. In the south, we will see more land designated for attached land.”
After the sharp declines we saw in December in the capital market, will real estate still be seen as an attractive investment?
“In my estimation, we will see a further increase in demand for yielding properties, especially among investors Institutional and REIT funds. The supply of yields is expected to remain low in all industries, except for the trading sector, and as a result yields will decline. All this on the assumption that the bank interest rate will remain as it is. if it rises, the situation will change. Higher than all the rest”.
