The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.
BMI is optimistic about the prospects for Israels commercial real estate sector over the next five years:
• In general, demand is growing, leading to high occupancy rates and increasing rents.
• The outlook for the industrial sector is also positive, due to low vacancy levels and higher demand, as the manufacturing sector continues to grow.
• The retail sector in Israel has undergone significant consolidation in terms of ownership of malls in 2011 with the merger of two leading property companies, British-Israel and the Azreili Group. It is likely this will result in improved returns for the major players and higher rental rates. A strong consumer spending environment will also support this.
• Although the economic outlook has dimmed since 2011, growth is expected. BMIs 2012 real GDP growth forecast is 3.4%. Unemployment declined to 6% in Q111 and is forecast to remain at 6.5% until 2015. However, elevated risks of instability in Israels neighbours, including Jordan, Lebanon, Syria, the West Bank and Gaza, have raised political risks in Israel. The Israel-Palestinian conflict remains unresolved, and the risk of militant attacks in Israel cannot be ruled out.
BMI sees Israels economic growth slowing from 4.8% in 2011 to 3.4% in 2012, with a widening budget deficit, rising unemployment and falling central bank policy rate. Public protests centred on economic inequality and high inflation in 2011 led to the commissioning of the Trajtenberg report. This, in turn, led to the cancellation of a planned increase in the fuel excise tax (gasoline, diesel) and an increase in corporate tax rates.
Interest rate policy is also a key area to watch. Consumer Price Index (CPI)-linked mortgage interest rates have been rising for seven consecutive months. The Bank of Israel increased the benchmark interest rate by 25 basis points to 3.25% on May 23 2011. However, on August 29 the Bank of Israel decided to leave its benchmark interest rate unchanged at 3.25%. The central bank also recently changed its tone in regard to its monetary policy stance, suggesting that further rate hikes may not be on the way soon.
Click for Report details:Israel Real Estate Report Q2 2012